ex41.htm


     

     

    EXHIBIT
4.1

    2009
STOCK OPTION PLAN

    

      
        American
Security Resources Corp.

        2009
Stock Option Plan

        


        ARTICLE
I - PLAN



      1.1           Purpose.  This
Plan is a plan for key employees, officers, directors, and consultants of the
Company and its Affiliates and is intended to advance the best interests of the
Company, its Affiliates, and its stockholders by providing those persons who
have substantial responsibility for the management and growth of the Company and
its Affiliates with additional incentives and an opportunity to obtain or
increase their proprietary interest in the Company, thereby encouraging them to
continue in the employ of the Company or any of its Affiliates.

      


      1.2           Rule
16b-3 Plan.  The Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”), and therefore the Plan is intended to comply with all applicable
conditions of Rule 16b-3 (and all subsequent revisions thereof) promulgated
under the 1934 Act.  To the extent any provision of the Plan or action
by the Board of Directors or Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.  In addition, the Board of Directors may amend the Plan
from time to time, as it deems necessary in order to meet the requirements of
any amendments to Rule 16b-3 without the consent of the shareholders of the
Company.

      


      1.3           Effective
Date of Plan.   The Plan shall be effective the earlier of
January 15, 2009 or the day the shareholders of the Company approve the Plan
(the “Effective Date”).  No Award shall be granted pursuant to the
Plan ten years after the Effective Date.

      


      ARTICLE
II - DEFINITIONS

      


      The words
and phrases defined in this Article shall have the meaning set out in these
definitions throughout this Plan, unless the context in which any such word or
phrase appears reasonably requires a broader, narrower, or different
meaning.

      


      2.1           “Affiliate”
means any subsidiary corporation.  The term “subsidiary corporation”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the action or
transaction, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.

      


                 2.2           “Award”
means each of the following granted under this Plan: Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award,
Performance Stock Award or Stock Award.

      


      2.3           “Board
of Directors” means the board of directors of the Company.

      


      2.4           “Code”
means the Internal Revenue Code of 1986, as amended.

      


      2.5           “Committee”
means the Compensation Committee of the Board of Directors, or if no
Compensation Committee has been formed, then it shall mean the entire Board of
Directors.

      


      2.6           “Company”
means American Security Resources Corp., a Nevada corporation.

      


      2.7           “Consultant”
means any person, including an advisor, engaged by the Company or Affiliate to
render services and who is compensated for such services.

      


      2.8           “Eligible
Persons” shall mean, with respect to the Plan, those persons who, at the time
that an Award is granted, are (i) Employees and all other key personnel,
including officers and directors, of the Company or Affiliate, or (ii)
Consultants or independent contractors who provide valuable services to the
Company or Affiliate as determined by the Committee.

      


      2.9           “Employee”
means a person employed by the Company or any Affiliate to whom an Award is
granted.

      


      2.10           “Fair
Market Value” of the Stock as of any date means (a) the average of the high and
low sale prices of the Stock on that date on the principal securities exchange
on which the Stock is listed; or (b) if the Stock is not listed on a securities
exchange, the average of the high and low sale prices of the Stock on that date
as reported on the Nasdaq; or (c) if the Stock is not listed on the Nasdaq, the
average of the high and low bid quotations for the Stock on that date as
reported by the National Quotation Bureau Incorporated; or (d) if none of the
foregoing is applicable, an amount at the election of the Committee equal to
(x), the average between the closing bid and ask prices per share of Stock on
the last preceding date on which those prices were reported or (y) that amount
as determined by the Committee in good faith.

      


      2.11           “Incentive
Option” means an option to purchase Stock granted under this Plan which is
designated as an “Incentive Option” and satisfies the requirements of Section
422 of the Code.

      


      2.12           “Non-Employee
Directors” means that term as defined in Rule 16b-3 under the 1934
Act.

      


      2.13           “Nonqualified
Option” means an option to purchase Stock granted under this Plan other than an
Incentive Option.

      


      2.14           “Option”
means both an Incentive Option and a Nonqualified Option granted under this Plan
to purchase shares of Stock.

      


      2.15           “Option
Agreement” means the written agreement by and between the Company and an
Eligible Person, which sets out the terms of an Option.

      


      2.16           “Outside
Director” shall mean a member of the Board of Directors serving on the Committee
who satisfies Section 162(m) of the Code.

      


                 2.17           “Plan”
means the American Security Resources Corp. 2009 Stock Option Plan, as set out
in this document and as it may be amended from time to time.

      


                 2.18           “Plan
Year” means the Company’s fiscal year.

      


                 2.19           “Performance
Stock Award” means an award of shares of Stock to be issued to an Eligible
Person if specified predetermined performance goals are satisfied as described
in Article VII.

      


                 2.20           “Restricted
Stock” means Stock awarded or purchased under a Restricted Stock Agreement
entered into pursuant to this Plan, together with (i) all rights, warranties or
similar items attached or accruing thereto or represented by the certificate
representing the stock and (ii) any stock or securities into which or for which
the stock is thereafter converted or exchanged.  The terms and
conditions of the Restricted Stock Agreement shall be determined by the
Committee consistent with the terms of the Plan.

      


                 2.21           “Restricted
Stock Agreement” means an agreement between the Company or any Affiliate and the
Eligible Person pursuant to which the Eligible Person receives a Restricted
Stock Award subject to Article VI.

      


                 2.22           “Restricted
Stock Award” means an Award of Restricted Stock.

      


                 2.23           “Restricted
Stock Purchase Price” means the purchase price, if any, per share of Restricted
Stock subject to an Award.  The Committee shall determine the
Restricted Stock Purchase Price.  It may be greater than or less than
the Fair Market Value of the Stock on the date of the Stock Award.

      


                  2.24                      “Stock”
means the common stock of the Company, $.001 par value, or, in the event that
the outstanding shares of common stock are later changed into or exchanged for a
different class of stock or securities of the Company or another corporation,
that other stock or security.

      


                 2.25           “Stock
Appreciation Right” and “SAR” means the right to receive the difference between
the Fair Market Value of a share of Stock on the grant date and the Fair Market
Value of the share of Stock on the exercise date.

      


      2.26           “Stock
Award” means an Award of Stock to an Eligible Person.

      


                 2.27           “10%
Stockholder” means an individual who, at the time the Option is granted, owns
Stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of any Affiliate.  An individual shall be
considered as owning the Stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its stockholders, partners, or
beneficiaries.

      


      ARTICLE III -
ELIGIBILITY

      


      The
individuals who shall be eligible to receive Awards shall be those Eligible
Persons of the Company or any of its Affiliates as the Committee shall determine
from time to time. However, no member of the Committee shall be eligible to
receive any Award or to receive Stock, Options, Stock Appreciation Rights, or
any Performance Stock Award under any other plan of the Company or any of its
Affiliates, if to do so would cause the individual not to be a Non-Employee
Director or Outside Director.  The Board of Directors may designate
one or more individuals who shall not be eligible to receive any Award under
this Plan or under other similar plans of the Company.

      


      ARTICLE
IV - GENERAL PROVISIONS RELATING TO AWARDS

      


                 4.1           Authority
to Grant Awards.   The Committee may grant to those
Eligible Persons of the Company or any of its Affiliates, as it shall from time
to time determine, Awards under the terms and conditions of this
Plan.  The Committee shall determine subject only to any applicable
limitations set out in this Plan, the number of shares of Stock to be covered by
any Award to be granted to an Eligible Person.

      


                 4.2           Dedicated
Shares.   The total number of shares of Stock with respect
to which Awards may be granted under the Plan shall be 200,000,000 shares. The
shares may be treasury shares or authorized but unissued shares.  The
number of shares stated in this Section 4.2 shall be subject to adjustment in
accordance with the provisions of Section 4.5.  In the event that any
outstanding Award shall expire or terminate for any reason or any Award is
surrendered, the shares of Stock allocable to the unexercised portion of that
Award may again be subject to an Award under the Plan.

      


                 4.3           Non-transferability.  Awards
shall not be transferable by the Eligible Person otherwise than by will or under
the laws of descent and distribution, or pursuant to a qualified domestic
relations order (as defined by the
Code or the rules thereunder), and shall be exercisable, during the
Eligible Person’s lifetime, only by him or a transferee permitted by this
Section 4.  Any attempt to transfer an Award other than under the
terms of the Plan and the Agreement shall terminate the Award and all rights of
the Eligible Person to that Award.

      


                 4.4           Requirements
of Law.  The Company shall not be required to sell or issue any
Stock under any Award if issuing that Stock would constitute or result in a
violation by the Eligible Person or the Company of any provision of any law,
statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option or pursuant to any
Award, the Company shall not be required to issue any Stock unless the Committee
has received evidence satisfactory to it to the effect that the holder of that
Option or Award will not transfer the Stock except in accordance with applicable
law, including receipt of an opinion of counsel satisfactory to the Company to
the effect that any proposed transfer complies with applicable
law.  The determination by the Committee on this matter shall be
final, binding, and conclusive. The Company may, but shall in no event be
obligated to, register any Stock covered by this Plan pursuant to applicable
securities laws of any country or any political subdivision.  In the
event the Stock issuable on exercise of an Option or pursuant to an Award is not
registered, the Company may imprint on the certificate evidencing the Stock any
legend that counsel for the Company considers necessary or advisable to comply
with applicable law. The Company shall not be obligated to take any other
affirmative action in order to cause the exercise of an Option or vesting under
an Award, or the issuance of shares pursuant thereto, to comply with any law or
regulation of any governmental authority.

      


                 4.5           Changes
in the Company’s Capital Structure.

      


                 (a)           The
existence of outstanding Options or Awards shall not affect in any way the right
or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Stock or its rights, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.  If the Company shall effect a
subdivision or consolidation of shares or other capital readjustment, the
payment of a Stock dividend, or other increase or reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money,
services or property, then (a) the number, class, and per share price of shares
of Stock subject to outstanding Options under this Plan shall be appropriately
adjusted in such a manner as to entitle an Eligible Person to receive upon
exercise of an Option, for the same aggregate cash consideration, the equivalent
total number and class of shares he would have received had he exercised his
Option in full immediately prior to the event requiring the adjustment; and (b)
the number and class of shares of Stock then reserved to be issued under the
Plan shall be adjusted by substituting for the total number and class of shares
of Stock then reserved, that number and class of shares of Stock that would have
been received by the owner of an equal number of outstanding shares of each
class of Stock as the result of the event requiring the adjustment.

      


                 (b)           If
the Company is merged or consolidated with another corporation and the Company
is not the surviving corporation, or if the Company is liquidated or sells or
otherwise disposes of substantially all its assets while unexercised Options
remain outstanding under this Plan (each of the foregoing referred to as a
“Corporate Transaction”):

      


      (i)           Subject
to the provisions of clause (ii) below, in the event of such a Corporate
Transaction, any unexercised Options shall automatically accelerate so that they
shall, immediately prior to the specified effective date for the Corporate
Transaction become 100% vested and exercisable; provided, however, that any
unexercised Options shall not accelerate if and to the extent such Option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof (the “Successor Corporation”) or to be replaced
with a comparable award for the purchase of shares of the capital stock of the
Successor Corporation.  Whether or not any unexercised Option is
assumed or replaced shall be determined by the Company and the Successor
Corporation in connection with the Corporate Transaction.  The Board
of Directors shall make the determination of what constitutes a comparable award
to the unexercised Option, and its determination shall be conclusive and
binding.  The unexercised Option shall terminate and cease to remain
outstanding immediately following the consummation of the Corporate Transaction,
except to the extent assumed by the Successor Corporation.

      


      (ii)           All
outstanding Options may be canceled by the Board of Directors as of the
effective date of any Corporate Transaction, if (i) notice of cancellation shall
be given to each holder of an Option and (ii) each holder of an Option shall
have the right to exercise that Option in full (without regard to any
limitations set out in or imposed under this Plan or the Option Agreement
granting that Option) during a period set by the Board of Directors preceding
the effective date of the merger, consolidation, liquidation, sale, or other
disposition and, if in the event all outstanding Options may not be exercised in
full under applicable securities laws without registration of the shares of
Stock issuable on exercise of the Options, the Board of Directors may limit the
exercise of the Options to the number of shares of Stock, if any, as may be
issued without registration.  The method of choosing which Options may
be exercised, and the number of shares of Stock for which Options may be
exercised, shall be solely within the discretion of the Board of
Directors.

      


                 (c)           After
a merger of one or more corporations into the Company or after a consolidation
of the Company and one or more corporations in which the Company shall be the
surviving corporation, each Eligible Person shall be entitled to have his
Restricted Stock and shares earned under a Performance Stock Award appropriately
adjusted based on the manner the Stock was adjusted under the terms of the
agreement of merger or consolidation.

      


      (d)           In
each situation described in this Section 4.5, the Committee will make similar
adjustments, as appropriate, in outstanding Stock Appreciation
Rights.

      


      (e)           The
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe for them, or upon conversion of shares or obligations of
the Company convertible into shares or other securities, shall not affect, and
no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding
Awards.

      


      4.6           Election
under Section 83(b) of the Code.  No Employee shall exercise
the election permitted under Section 83(b) of the Code without written approval
of the Committee.  Any Employee doing so shall forfeit all Awards
issued to him under this Plan.

      


      ARTICLE
V - OPTIONS AND STOCK APPRECIATION RIGHTS

      


                 5.1           Type of
Option.  The Committee shall specify at the time of grant
whether a given Option shall constitute an Incentive Option or a Nonqualified
Option.  Incentive Stock Options may only be granted to
Employees.

      


      5.2           Option
Exercise Price.  The price at which Stock may be purchased
under an Incentive Option shall not be less than the greater of:  (a)
100% of the Fair Market Value of the shares of Stock on the date the Option is
granted or (b) the aggregate par value of the shares of Stock on the date the
Option is granted.  The Committee in its discretion may provide that
the price at which shares of Stock may be purchased under an Incentive Option
shall be more than 100% of Fair Market Value.  In the case of any 10%
Stockholder, the price at which shares of Stock may be purchased under an
Incentive Option shall not be less than 110% of the Fair Market Value of the
Stock on the date the Incentive Option is granted.   The price at
which shares of Stock may be purchased under a Nonqualified Option shall be such
price as shall be determined by the Committee in its sole discretion but in no
event lower than the par value of the shares of Stock on the date the Option is
granted.

      


      5.3           Duration
of Options and SARS.  No Option or SAR shall be exercisable
after the expiration of ten (10) years from the date the Option or SAR is
granted.  In the case of a 10% Stockholder, no Incentive Option shall
be exercisable after the expiration of five years from the date the Incentive
Option is granted.

      


      5.4           Amount
Exercisable -- Incentive Options.   Each Option may be
exercised from time to time, in whole or in part, in the manner and subject to
the conditions the Committee, in its sole discretion, may provide in the Option
Agreement, as long as the Option is valid and outstanding.  To the
extent that the aggregate Fair Market Value (determined as of the time an
Incentive Option is granted) of the Stock with respect to which Incentive
Options first become exercisable by the optionee during any calendar year (under
this Plan and any other incentive stock option plan(s) of the Company or any
Affiliate) exceeds $100,000, the portion in excess of $100,000 of the Incentive
Option shall be treated as a Nonqualified Option.  In making this
determination, Incentive Options shall be taken into account in the order in
which they were granted.

      


      5.5           Exercise
of Options.  Each Option shall be exercised by the delivery of
written notice to the Committee setting forth the number of shares of Stock with
respect to which the Option is to be exercised, together with:

      


                 (a)           cash,
certified check, bank draft, or postal or express money order payable to the
order of the Company for an amount equal to the option price of the
shares;

      


      (b)           stock
at its Fair Market Value on the date of exercise (if approved in advance in
writing by the Committee);

      


                 (c)           an
election to make a cashless exercise through a registered broker-dealer (if
approved in advance in writing by the Committee);

      


      (d)           an
election to have shares of Stock, which otherwise would be issued on exercise,
withheld in payment of the exercise price (if approved in advance in writing by
the Committee); and/or

      


      (e)           any
other form of payment which is acceptable to the Committee, including without
limitation, payment in the form of a promissory note, and specifying the address
to which the certificates for the shares are to be mailed.

      


      As
promptly as practicable after receipt of written notification and payment, the
Company shall deliver to the Eligible Person certificates for the number of
shares with respect to which the Option has been exercised, issued in the
Eligible Person’s name. If shares of Stock are used in payment, the aggregate
Fair Market Value of the shares of Stock tendered must be equal to or less than
the aggregate exercise price of the shares being purchased upon exercise of the
Option, and any difference must be paid by cash, certified check, bank draft, or
postal or express money order payable to the order of the
Company.  Delivery of the shares shall be deemed effected for all
purposes when a stock transfer agent of the Company shall have deposited the
certificates in the United States mail, addressed to the Eligible Person, at the
address specified by the Eligible Person.

      


      Whenever
an Option is exercised by exchanging shares of Stock owned by the Eligible
Person, the Eligible Person shall deliver to the Company certificates registered
in the name of the Eligible Person representing a number of shares of Stock
legally and beneficially owned by the Eligible Person, free of all liens,
claims, and encumbrances of every kind, accompanied by stock powers duly
endorsed in blank by the record holder of the shares represented by the
certificates (with signature guaranteed by a commercial bank or trust company or
by a brokerage firm having a membership on a registered national stock
exchange).  The delivery of certificates upon the exercise of Options
is subject to the condition that the person exercising the Option provides the
Company with the information the Company might reasonably request pertaining to
exercise, sale or other disposition.

      


      5.6           Stock
Appreciation Rights.  All Eligible Persons shall be eligible to
receive Stock Appreciation Rights.  The Committee shall determine the
SAR to be awarded from time to time to any Eligible Person.  The grant
of a SAR to be awarded from time to time shall neither entitle such person to,
nor disqualify such person from, participation in any other grant of awards by
the Company, whether under this Plan or any other plan of the
Company.  If granted as a stand-alone SAR Award, the terms of the
Award shall be provided in a Stock Appreciation Rights Agreement.

      


      5.7           Stock
Appreciation Rights in Tandem with Options.  Stock Appreciation
Rights may, at the discretion of the Committee, be included in each Option
granted under the Plan to permit the holder of an Option to surrender that
Option, or a portion of the part which is then exercisable, and receive in
exchange, upon the conditions and limitations set by the Committee, an amount
equal to the excess of the Fair Market Value of the Stock covered by the Option,
or the portion of it that was surrendered, determined as of the date of
surrender, over the aggregate exercise price of the Stock.  In the
event of the surrender of an Option, or a portion of it, to exercise the Stock
Appreciation Rights, the shares represented by the Option or that part of it
which is surrendered, shall not be available for reissuance under the
Plan.  Each Stock Appreciation Right issued in tandem with an Option
(a) will expire not later than the expiration of the underlying Option, (b) may
be for no more than 100% of the difference between the exercise price of the
underlying Option and the Fair Market Value of a share of Stock at the time the
Stock Appreciation Right is exercised, (c) is transferable only when the
underlying Option is transferable, and under the same conditions, and (d) may be
exercised only when the underlying Option is eligible to be
exercised.

      


      5.8           Conditions
of Stock Appreciation Rights.  All Stock Appreciation Rights
shall be subject to such terms, conditions, restrictions or limitations as the
Committee deems appropriate, including by way of illustration but not by way of
limitation, restrictions on transferability, requirement of continued
employment, individual performance, financial performance of the Company, or
payment of any applicable employment or withholding taxes.

      


      5.9           Payment
of Stock Appreciation Rights.  The amount of payment to which
the Eligible Person who reserves an SAR shall be entitled upon the exercise of
each SAR shall be equal to the amount, if any by which the Fair Market Value of
the specified shares of Stock on the exercise date exceeds the Fair Market Value
of the specified shares of Stock on the date of grant of the SAR.  The
SAR shall be paid in either cash or Stock, as determined in the discretion of
the Committee as set forth in the SAR agreement.  If the payment is in
Stock, the number of shares to be paid shall be determined by dividing the
amount of such payment by the Fair Market Value of Stock on the exercise date of
such SAR.

      


      5.10           Exercise
on Termination of Employment.  Unless it is expressly provided
otherwise in the Option or SAR agreement, Options and SAR’s granted to Employees
shall terminate three months after severance of employment of the Employee from
the Company and all Affiliates for any reason, with or without Cause (defined
below), other than death, retirement under the then established rules of the
Company, or severance for disability.  The Committee shall determine
whether authorized leave of absence or absence on military or government service
shall constitute severance of the employment of the Employee at that
time.  Notwithstanding anything contained herein, no Option or SAR may be exercised
after termination of employment for any reason (whether by death, disability,
retirement or otherwise) if it has not vested as at the date of termination of
employment. Cause shall mean any of the
following: (A) conviction of a crime (including conviction on a nolo contendere plea)
involving a felony or dishonesty, or moral turpitude; (B) deliberate and
continual refusal to perform employment duties reasonably requested by the
Company or an affiliate after thirty (30) days’ written notice by certified mail
of such failure to perform, specifying that the failure constitutes cause (other
than as a result of vacation, sickness, illness or injury); (C) fraud or
embezzlement as determined by an independent certified public accountant firm;
or (D) gross misconduct or gross negligence in connection with the business of
the Company or an affiliate which has substantial effect on the Company or the
affiliate.

      


                     
5.11           Death.  If,
before the expiration of an Option or SAR, the Eligible Person, whether in the
employ of the Company or after he has retired or was severed for disability, or
otherwise dies, the Option or SAR may be exercised until the earlier of the
Option’s or SAR’s expiration date or six months following the date of his death,
unless it is expressly provided otherwise in the Option or SAR
agreement.  After the death of the Eligible Person, his executors,
administrators, or any persons to whom his Option or SAR may be transferred by
will or by the laws of descent and distribution shall have the right, at any
time prior to the Option’s or SAR’s expiration or termination, whichever is
earlier, to exercise it, to the extent to which he was entitled to exercise it
immediately prior to his death, unless it is expressly provided otherwise in the
Option or SAR’s agreement.

      


      5.12           Retirement.  Unless
it is expressly provided otherwise in the Option Agreement, before the
expiration of an Option or SAR, the Employee shall be retired in good standing
from the employ of the Company under the then established rules of the Company,
the Option or SAR may be exercised until the earlier of the Option’s or SAR’s
expiration date or three months following the date of his retirement, unless it
is expressly provided otherwise in the Option or SAR agreement.

      


      5.13           Disability.  If,
before the expiration of an Option or SAR, the Employee shall be severed from
the employ of the Company for disability, the Option or SAR shall terminate on
the earlier of the Option’s or SAR’s expiration date or six months after the
date he was severed because of disability, unless it is expressly provided
otherwise in the Option or SAR agreement.

      


      5.14           Substitution
Options.  Options may be granted under this Plan from time to
time in substitution for stock options held by employees of other corporations
who are about to become employees of or affiliated with the Company or any
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company.  The terms and
conditions of the substitute Options granted may vary from the terms and
conditions set out in this Plan to the extent the Committee, at the time of
grant, may deem appropriate to conform, in whole or in part, to the provisions
of the stock options in substitution for which they are granted.

      


      5.15           Reload
Options.   Without in any way limiting the authority of
the Board of Directors or Committee to make or not to make grants of Options
hereunder, the Board of Directors or Committee shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision entitling
the Eligible Person to a further Option (a “Reload Option”) in the event the
Eligible Person exercises the Option evidenced by the Option Agreement, in whole
or in part, by surrendering other shares of Stock in accordance with this Plan
and the terms and conditions of the Option Agreement.  Any such Reload
Option (a) shall be for a number of shares equal to the number of shares
surrendered as part or all of the exercise price of such Option; (b) shall have
an expiration date which is the greater of (i) the same expiration date of the
Option the exercise of which gave rise to such Reload Option or (ii) one year
from the date of grant of the Reload Option; and (c) shall have an exercise
price which is equal to one hundred percent (100%) of the Fair Market Value of
the Stock subject to the Reload Option on the date of exercise of the original
Option.   Notwithstanding the foregoing, a Reload Option which is
an Incentive Option and which is granted to a 10% Stockholder, shall have an
exercise price which is equal to one hundred ten percent (110%) of the Fair
Market Value of the Stock subject to the Reload Option on the date of exercise
of the original Option and shall have a term which is no longer than five (5)
years.

      


      Any such
Reload Option may be an Incentive Option or a Nonqualified Option, as the Board
of Directors or Committee may designate at the time of the grant of the original
Option; provided, however, that the designation of any Reload Option as an
Incentive Option shall be subject to the provisions of the Code. There shall be
no Reload Options on a Reload Option.  Any such Reload Option shall be
subject to the availability of sufficient shares under Section 4.2 herein and
shall be subject to such other terms and conditions as the Board of Directors or
Committee may determine which are not inconsistent with the express provisions
of the Plan regarding the terms of Options.

      


      5.16           No Rights
as Stockholder.  No Eligible Person shall have any rights as a
stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.

       

       

      ARTICLE
VI - AWARDS

      


      6.1           Restricted
Stock Awards.  The Committee may issue shares of Stock to an
Eligible Person subject to the terms of a Restricted Stock Agreement. The
Restricted Stock may be issued for no payment by the Eligible Person or for a
payment below the Fair Market Value on the date of grant.  Restricted
Stock shall be subject to restrictions as to sale, transfer, alienation, pledge
or other encumbrance and generally will be subject to vesting over a period of
time specified in the Restricted Stock Agreement.  The Committee shall
determine the period of vesting, the number of shares, the price, if any, of
Stock included in a Restricted Stock Award, and the other terms and provisions
which are included in a Restricted Stock Agreement.

      


      6.2           Restrictions.  Restricted
Stock shall be subject to the terms and conditions as determined by the
Committee, including without limitation, any or all of the
following:

      


      (a)           a
prohibition against the sale, transfer, alienation, pledge, or other encumbrance
of the shares of Restricted Stock, such prohibition to lapse (i) at such time or
times as the Committee shall determine (whether in annual or more frequent
installments, at the time of the death, disability, or retirement of the holder
of such shares, or otherwise);

      


      (b)           a
requirement that the holder of shares of Restricted Stock forfeit, or in the
case of shares sold to an Eligible Person, resell back to the Company at his
cost, all or a part of such shares in the event of termination of the Eligible
Person’s employment during any period in which the shares remain subject to
restrictions;

      


      (c)           a
prohibition against employment of the holder of Restricted Stock by any
competitor of the Company or its Affiliates, or against such holder’s
dissemination of any secret or confidential information belonging to the Company
or an Affiliate;

      


      (d)           unless
stated otherwise in the Restricted Stock Agreement, (i) if restrictions remain
at the time of severance of employment with the Company and all Affiliates,
other than for reason of disability or death, the Restricted Stock shall be
forfeited; and (ii) if severance of employment is by reason of disability or
death, the restrictions on the shares shall lapse and the Eligible Person or his
heirs or estate shall be 100% vested in the shares subject to the Restricted
Stock Agreement.

      


      6.3           Stock
Certificate.   Shares of Restricted Stock shall be
registered in the name of the Eligible Person receiving the Restricted Stock
Award and deposited, together with a stock power endorsed in blank, with the
Company. Each such certificate shall bear a legend in substantially the
following form:

      


      “The
transferability of this certificate and the shares of Stock represented by it is
restricted by and subject to the terms and conditions (including conditions of
forfeiture) contained in the American Security Resources Corp. 2009 Stock Option
Plan and an agreement entered into between the registered owner and the
Company.  A copy of the Plan and agreement is on file in the office of
the Secretary of the Company.”

      


      6.4           Rights as
Stockholder.   Subject to the terms and conditions of the
Plan, each Eligible Person receiving a certificate for Restricted Stock shall
have all the rights of a stockholder with respect to the shares of Stock
included in the Restricted Stock Award during any period in which such shares
are subject to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares.  Dividends paid with
respect to shares of Restricted Stock in cash or property other than Stock in
the Company or rights to acquire stock in the Company shall be paid to the
Eligible Person currently.  Dividends paid in Stock in the Company or
rights to acquire Stock in the Company shall be added to and become a part of
the Restricted Stock.

      


      6.5           Lapse of
Restrictions.  At the end of the time period during which any
shares of Restricted Stock are subject to forfeiture and restrictions on sale,
transfer, alienation, pledge, or other encumbrance, such shares shall vest and
will be delivered in a certificate, free of all restrictions, to the Eligible
Person or to the Eligible Person’s legal representative, beneficiary or heir;
provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably required by applicable law.  By accepting a
Stock Award and executing a Restricted Stock Agreement, the Eligible Person
agrees to remit when due any federal and state income and employment taxes
required to be withheld.

      


      6.6           Restriction
Period.  No Restricted Stock Award may provide for restrictions
continuing beyond ten (10) years from the date of grant.

      


      6.7           Award of
Stock.  The Committee may award shares of Stock, without any
cash payment for such shares or without any restrictions, to designated Eligible
Persons for services rendered to the Company. The Stock may be awarded at, above
or below the Fair Market Value on the date of grant.  The designation
of a Stock Award shall be made by the Committee in writing at any time after
such Eligible Person has provided value to the Company (or within such period as
permitted by IRS regulations).  The Committee reserves the right to
make adjustments in the amount of an Award if in its discretion unforeseen
events make such adjustment appropriate.

       

      ARTICLE
VII - PERFORMANCE STOCK AWARDS

      


      7.1           Award of
Performance Stock.  The Committee may award shares of Stock,
without any payment for such shares, to designated Eligible Persons if specified
performance goals established by the Committee are satisfied. The terms and
provisions herein relating to these performance-based awards are intended to
satisfy Section 162(m) of the Code and regulations issued
thereunder.  The designation of an employee eligible for a specific
Performance Stock Award shall be made by the Committee in writing prior to the
beginning of the period for which the performance is measured (or within such
period as permitted by IRS regulations).  The Committee shall
establish the maximum number of shares of Stock to be issued to a designated
Employee if the performance goal or goals are met.  The Committee
reserves the right to make downward adjustments in the maximum amount of an
Award if in its discretion unforeseen events make such adjustment
appropriate.

      


      7.2           Performance
Goals.  Performance goals determined by the Committee may be
based on specified increases in cash flow; net profits; Stock price; Company,
segment, or Affiliate sales; market share; earnings per share; return on assets;
and/or return on stockholders’ equity.

      


      7.3           Eligibility.  The
employees eligible for Performance Stock Awards are the senior officers (i.e.,
chief executive officer, president, vice presidents, secretary, treasurer, and
similar positions) of the Company and its Affiliates, and such other employees
of the Company and its Affiliates as may be designated by the
Committee.

      


      7.4           Certificate
of Performance.  The Committee must certify in writing that a
performance goal has been attained prior to issuance of any certificate for a
Performance Stock Award to any Employee.  If the Committee certifies
the entitlement of an Employee to the Performance Stock Award, the certificate
will be issued to the Employee as soon as administratively practicable, and
subject to other applicable provisions of the Plan, including but not limited
to, all legal requirements and tax withholding.  However, payment may
be made in shares of Stock, in cash, or partly in cash and partly in shares of
Stock, as the Committee shall decide in its sole discretion.  If a
cash payment is made in lieu of shares of Stock, the number of shares
represented by such payment shall not be available for subsequent issuance under
this Plan.

       

       

      ARTICLE
VIII - ADMINISTRATION

      


      The Committee shall administer the
Plan.   All questions of interpretation and application of the
Plan and Awards shall be subject to the determination of the
Committee.  A majority of the members of the Committee shall
constitute a quorum.  All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to
writing and signed by a majority of the members shall be as effective as if it
had been made by a majority vote at a meeting properly called and
held.  This Plan shall be administered in such a manner as to permit
the Options, which are designated to be Incentive Options, to qualify as
Incentive Options.  In carrying out its authority under this Plan, the
Committee shall have full and final authority and discretion, including but not
limited to the following rights, powers and authorities, to:

      


      (a)           determine
the Eligible Persons to whom and the time or times at which Options or Awards
will be made;

      


                    
 (b)           determine
the number of shares and the purchase price of Stock covered in each Option or
Award, subject to the terms of the Plan;

      


      (c)           determine
the terms, provisions, and conditions of each Option and Award, which need not
be identical;

      


      (d)           accelerate
the time at which any outstanding Option or SAR may be exercised, or Restricted
Stock Award will vest;

      


      (e)           define
the effect, if any, on an Option or Award of the death, disability, retirement,
or termination of employment of the Employee;

      


      (f)           prescribe,
amend and rescind rules and regulations relating to administration of the Plan;
and

      


      (g)           make
all other determinations and take all other actions deemed necessary,
appropriate, or advisable for the proper administration of this
Plan.

      


      The actions of the Committee in
exercising all of the rights, powers, and authorities set out in this Article
and all other Articles of this Plan, when performed in good faith and in its
sole judgment, shall be final, conclusive and binding on all
parties.

       

       

      ARTICLE
IX - AMENDMENT OR TERMINATION OF PLAN

      


      The Board of Directors of the Company
may amend, terminate or suspend this Plan at any time, in its sole and absolute
discretion; provided, however, that to the extent required to qualify this Plan
under Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of
1934, as amended, no amendment that would (a) materially increase the number of
shares of Stock that may be issued under this Plan, (b) materially modify the
requirements as to eligibility for participation in this Plan, or (c) otherwise
materially increase the benefits accruing to participants under this Plan, shall
be made without the approval of the Company’s stockholders; provided further,
however, that to the extent required to maintain the status of any Incentive
Option under the Code, no amendment that would (a) change the aggregate number
of shares of Stock which may be issued under Incentive Options, (b) change the
class of employees eligible to receive Incentive Options, or (c) decrease the
Option price for Incentive Options below the Fair Market Value of the Stock at
the time it is granted, shall be made without the approval of the Company’s
stockholders.  Subject to the preceding sentence, the Board of
Directors shall have the power to make any changes in the Plan and in the
regulations and administrative provisions under it or in any outstanding
Incentive Option as in the opinion of counsel for the Company may be necessary
or appropriate from time to time to enable any Incentive Option granted under
this Plan to continue to qualify as an incentive stock option or such other
stock option as may be defined under the Code so as to receive preferential
federal income tax treatment.

      


      


      


      ARTICLE
X - MISCELLANEOUS

      


      10.1           No
Establishment of a Trust Fund.   No property shall be set
aside nor shall a trust fund of any kind be established to secure the rights of
any Eligible Person under this Plan.  All Eligible Persons shall at
all times rely solely upon the general credit of the Company for the payment of
any benefit which becomes payable under this Plan.

      


      10.2           No
Employment Obligation.  The granting of any Option or Award
shall not constitute an employment contract, express or implied, nor impose upon
the Company or any Affiliate any obligation to employ or continue to employ any
Eligible Person.  The right of the Company or any Affiliate to
terminate the employment of any person shall not be diminished or affected by
reason of the fact that an Option or Award has been granted to him.

      


      10.3           Forfeiture.  Notwithstanding
any other provisions of this Plan, if the Committee finds by a majority vote
after full consideration of the facts that an Eligible Person, before or after
termination of his employment with the Company or an Affiliate for any reason
(a) committed or engaged in fraud, embezzlement, theft, commission of a felony,
or proven dishonesty in the course of his employment by the Company or an
Affiliate, which conduct damaged the Company or Affiliate, or disclosed trade
secrets of the Company or an Affiliate, or (b) participated, engaged in or had a
material, financial, or other interest, whether as an employee, officer,
director, consultant, contractor, stockholder, owner, or otherwise, in any
commercial endeavor in the United States which is competitive with the business
of the Company or an Affiliate without the written consent of the Company or
Affiliate, the Eligible Person shall forfeit all outstanding Options and all
outstanding Awards, and including all exercised Options and other situations
pursuant to which the Company has not yet delivered a stock
certificate.  Clause (b) shall not be deemed to have been violated
solely by reason of the Eligible Person’s ownership of stock or securities of
any publicly owned corporation, if that ownership does not result in effective
control of the corporation.

      


      The decision of the Committee as to the
cause of an Employee’s discharge, the damage done to the Company or an
Affiliate, and the extent of an Eligible Person’s competitive activity shall be
final.  No decision of the Committee, however, shall affect the
finality of the discharge of the Employee by the Company or an Affiliate in any
manner.

      


      10.4           Tax
Withholding.  The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Eligible Person any sums required
by federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option or SAR, lapse of restrictions on Restricted Stock, or
award of Performance Stock.  In the alternative, the Company may
require the Eligible Person (or other person exercising the Option, SAR or
receiving the Stock) to pay the sum directly to the employer corporation. If the
Eligible Person (or other person exercising the Option or SAR or receiving the
Stock) is required to pay the sum directly, payment in cash or by check of such
sums for taxes shall be delivered within 10 days after the date of exercise or
lapse of restrictions. The Company shall have no obligation upon exercise of any
Option or lapse of restrictions on Stock until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise or lapse of restrictions is sufficient to cover all sums due with
respect to that exercise.  The Company and its Affiliates shall not be
obligated to advise an Eligible Person of the existence of the tax or the amount
which the employer corporation will be required to withhold.

      


      10.5           Written
Agreement or Course of Conduct.  Each Option and Award shall be
embodied in a written agreement which shall be subject to the terms and
conditions of this Plan and shall be signed by the Eligible Person and by a
member of the Committee on behalf of the Committee and the Company or an
executive officer of the Company, other than the Eligible Person, on behalf of
the Company.  The agreement may contain any other provisions that the
Committee in its discretion shall deem advisable which are not inconsistent with
the terms of this Plan.  Notwithstanding the foregoing, a written
agreement is not required if the Option or Award is granted in the ordinary
course of conduct of the business and the Company has sufficient accounting
records reflecting the services rendered in connection with the
grant.

      


      10.6           Indemnification
of the Committee and the Board of Directors.  With
respect  to administration of this Plan, the Company shall indemnify
each present and future member of the Committee and the Board of Directors
against, and each member of the Committee and the Board of Directors shall be
entitled without further act on his part to indemnity from the Company for, all
expenses (including attorney’s fees, the amount of judgments, and the amount of
approved settlements made with a view to the curtailment of costs of litigation,
other than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses,
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors.  However, this indemnity shall not include any expenses
incurred by any member of the Committee and/or the Board of Directors in respect
of matters as to which he shall be finally adjudged in any action, suit or
proceeding to have been guilty of gross negligence or willful misconduct in the
performance of his duty as a member of the Committee and the Board of
Directors.  In addition, no right of indemnification under this Plan
shall be available to or enforceable by any member of the Committee and the
Board of Directors unless, within 60 days after institution of any action, suit
or proceeding, he shall have offered the Company, in writing, the opportunity to
handle and defend same at its own expense.  This right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each member of the Committee and the Board of Directors and
shall be in addition to all other rights to which a member of the Committee and
the Board of Directors may be entitled as a matter of law, contract, or
otherwise.

      


      10.7           Gender.  If
the context requires, words of one gender when used in this Plan shall include
the others and words used in the singular or plural shall include the
other.

      


      10.8           Headings.  Headings
of Articles and Sections are included for convenience of reference only and do
not constitute part of the Plan and shall not be used in construing the terms of
the Plan.

      


      10.9           Other
Compensation Plans.  The adoption of this Plan shall not affect
any other stock option, incentive or other compensation or benefit plans in
effect for the Company or any Affiliate, nor shall the Plan preclude the Company
from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.

      


                 10.10                      Other
Options or Awards.  The grant of an Option or Award shall not
confer upon the Eligible Person the right to receive any future or other Options
or Awards under this Plan, whether or not Options or Awards may be granted to
similarly situated Eligible Persons, or the right to receive future Options or
Awards upon the same terms or conditions as previously granted.

      


                 10.11                      Governing
Law.  The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.