Unassociated Document


    THE
BLACKHAWK FUND

    2009
STOCK INCENTIVE PLAN

      

    1.     Purpose.     The
purpose of the 2009 Stock Incentive Plan of The Blackhawk Fund is to further
align the interests of employees, directors and non-employee Consultants with
those of the stockholders by providing incentive compensation opportunities tied
to the performance of the Common Stock and by promoting increased ownership of
the Common Stock by such individuals.  The Plan is also intended to
advance the interests of the Company and its stockholders by attracting,
retaining and motivating key personnel upon whose judgment, initiative and
effort the successful conduct of the Company’s business is largely
dependent.

     

    2.     Definitions.     Wherever
the following capitalized terms are used in the Plan, they shall have the
meanings specified below:

     

    “Affiliate” means (i) any
entity that would be treated as an “affiliate” of the Company for purposes of
Rule 12b-2 under the Exchange Act and (ii) any joint venture or other entity in
which the Company has a direct or indirect beneficial ownership interest
representing at least one-third (1/3) of the aggregate voting power of the
equity interests of such entity or one-third (1/3) of the aggregate fair market
value of the equity interests of such entity, as determined by the
Committee.

     

    “Award” means an award of a
Stock Option, Stock Award, or Restricted Stock Award granted under the
Plan.

     

    “Award Agreement” means a
written or electronic agreement entered into between the Company and a
Participant setting forth the terms and conditions of an Award granted to a
Participant.

     

    “Board” means the Board of
Directors of the Company.

     

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

     

    “Common Stock” means the
Company’s common stock, $0.001 par value per share.

     

    “Committee” means the
Compensation Committee of the Board, or such other committee of the Board
appointed by the Board to administer the Plan, or if no such committee exists,
the Board.

     

    “Company” means The Blackhawk
Fund, a Nevada corporation.

    


     “Consultant”
means
any person which is a consultant or advisor to the Company and which is a
natural person and who provides bona fide services to the Company which are not
in connection with the offer or sale of securities in a capital-raising
transaction for the Company, and do not directly or indirectly promote or
maintain a market for the Company’s securities.

    


    “Date of Grant” means the
date on which an Award under the Plan is made by the Committee, or such later
date as the Committee may specify to be the effective date of an
Award.

     

    “Disability” means a
Participant being considered “disabled” within the meaning of Section
409A(a)(2)(C) of the Code, unless otherwise provided in an Award
Agreement.

     

    “Eligible Person” means any
person who is an employee of the Company or any Affiliate or any person to whom
an offer of employment with the Company or any Affiliate is extended, as
determined by the Committee, or any person who is a Non-Employee Director, or
any person who is Consultant to the Company..

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

     

    “Fair Market Value” means the
mean between the highest and lowest reported sales prices of the Common Stock on
the New York Stock Exchange Composite Tape or, if not listed on such exchange,
on any other national securities exchange on which the Company’s common stock is
listed or on The Nasdaq Stock Market, or, if not so listed on any other national
securities exchange or The Nasdaq Stock Market, then the average of the bid
price of the Company’s common stock during the last five trading days on the OTC
Bulletin Board immediately preceding the last trading day prior to the date with
respect to which the Fair Market Value is to be determined.   If
the Company’s common stock is not then publicly traded, then the Fair Market
Value of the Common Stock shall be the book value of the Company per share as
determined on the last day of March, June, September, or December in any year
closest to the date when the determination is to be made.   For
the purpose of determining book value hereunder, book value shall be determined
by adding as of the applicable date called for herein the capital, surplus, and
undivided profits of the Company, and after having deducted any reserves
theretofore established; the sum of these items shall be divided by the number
of shares of the Company’s common stock outstanding as of said date, and the
quotient thus obtained shall represent the book value of each share of the
Company’s common stock.

     

    
      
         

      

      
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    “Incentive Stock Option”
means a Stock Option granted under Section 6 hereof that is intended to meet the
requirements of Section 422 of the Code and the regulations
thereunder.

     

    “Non-Employee Director” means
any member of the Board who is not an employee of the Company.

     

    “Nonqualified Stock Option”
means a Stock Option granted under Section 6 hereof that is not an Incentive
Stock Option.

     

    “Participant” means any
Eligible Person who holds an outstanding Award under the Plan.

     

    “Plan” means the 2009 Stock
Incentive Plan of The Blackhawk Fund as set forth herein, as amended from time
to time.

    


    “Restricted Stock Award”
means a grant of shares of Common Stock to an Eligible Person under Section 8
hereof that is issued subject to such vesting and transfer restrictions as the
Committee shall determine and set forth in an Award Agreement.

     

    “Service” means a
Participant’s employment with the Company or any Affiliate or a Participant’s
service as a Non-Employee Director with the Company, as applicable.

     

    “Stock Award” means a grant
of shares of Common Stock to an Eligible Person under Section 7 hereof that are
issued free of transfer restrictions and forfeiture conditions.

     

    “Stock Option” means a
contractual right granted to an Eligible Person under Section 6 hereof to
purchase shares of Common Stock at such time and price, and subject to such
conditions, as are set forth in the Plan and the applicable Award
Agreement.

     

    3.     Administration.

     

    3.1    Committee
Members.     The Plan shall be administered by a
Committee comprised of one or more members of the Board, or if no such committee
exists, the Board.

     

    3.2    Committee
Authority.     The Committee shall have such
powers and authority as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan.  Subject to the
express limitations of the Plan, the Committee shall have authority in its
discretion to determine the Eligible Persons to whom, and the time or times at
which, Awards may be granted, the number of shares, units or other rights
subject to each Award, the exercise, base or purchase price of an Award (if
any), the time or times at which an Award will become vested, exercisable or
payable, the performance goals and other conditions of an Award, the duration of
the Award, and all other terms of the Award.  Subject to the terms of
the Plan, the Committee shall have the authority to amend the terms of an Award
in any manner that is not inconsistent with the Plan, provided that no such
action shall adversely affect the rights of a Participant with respect to an
outstanding Award without the Participant’s consent.   The
Committee shall also have discretionary authority to interpret the Plan, to make
factual determinations under the Plan, and to make all other determinations
necessary or advisable for Plan administration, including, without limitation,
to correct any defect, to supply any omission or to reconcile any inconsistency
in the Plan or any Award Agreement hereunder.   The Committee may
prescribe, amend, and rescind rules and regulations relating to the
Plan.  The Committee’s determinations under the Plan need not be
uniform and may be made by the Committee selectively among Participants and
Eligible Persons, whether or not such persons are similarly
situated.  The Committee shall, in its discretion, consider such
factors as it deems relevant in making its interpretations, determinations and
actions under the Plan including, without limitation, the recommendations or
advice of any officer or employee of the Company or such attorneys, consultants,
accountants or other advisors as it may select.   All
interpretations, determinations and actions by the Committee shall be final,
conclusive, and binding upon all parties.

     

    
      
         

      

      
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    3.3    Delegation
of Authority.     The Committee shall have the
right, from time to time, to delegate to one or more officers of the Company the
authority of the Committee to grant and determine the terms and conditions of
Awards granted under the Plan, subject to the requirements of state law and such
other limitations as the Committee shall determine.  In no event shall
any such delegation of authority be permitted with respect to Awards to any
members of the Board or to any Eligible Person who is subject to Rule 16b-3
under the Exchange Act or Section 162(m) of the Code.  The Committee
shall also be permitted to delegate, to any appropriate officer or employee of
the Company, responsibility for performing certain ministerial functions under
the Plan.  In the event that the Committee’s authority is delegated to
officers or employees in accordance with the foregoing, all provisions of the
Plan relating to the Committee shall be interpreted in a manner consistent with
the foregoing by treating any such reference as a reference to such officer or
employee for such purpose.  Any action undertaken in accordance with
the Committee’s delegation of authority hereunder shall have the same force and
effect as if such action was undertaken directly by the Committee and shall be
deemed for all purposes of the Plan to have been taken by the
Committee.

     

    4.     Shares
Subject to the Plan.

     

    4.1    Maximum
Share Limitations.     Subject to Section 4.3
hereof, the maximum aggregate number of shares of Common Stock that may be
issued and sold under all Awards granted under the Plan shall be two hundred
twenty million five hundred thousand (220,500,000) shares.  Shares of
Common Stock issued and sold under the Plan may be either authorized but
unissued shares or shares held in the Company’s treasury.   To
the extent that any Award involving the issuance of shares of Common Stock is
forfeited, cancelled, returned to the Company for failure to satisfy vesting
requirements or other conditions of the Award, or otherwise terminates without
an issuance of shares of Common Stock being made thereunder, the shares of
Common Stock covered thereby will no longer be counted against the foregoing
maximum share limitations and may again be made subject to Awards under the Plan
pursuant to such limitations.  Any Awards or portions thereof that are
settled in cash and not in shares of Common Stock shall not be counted against
the foregoing maximum share limitations.

     

    4.2    Adjustments.     If
there shall occur any change with respect to the outstanding shares of Common
Stock by reason of any recapitalization, reclassification, stock dividend,
extraordinary dividend, stock split, reverse stock split or other distribution
with respect to the shares of Common Stock, or any merger, reorganization,
consolidation, combination, spin-off or other similar corporate change, or any
other change affecting the Common Stock, the Committee may, in the manner and to
the extent that it deems appropriate and equitable to the Participants and
consistent with the terms of the Plan, cause an adjustment to be made in (i) the
maximum number and kind of shares provided in Section 4.1 hereof, (ii) the
number and kind of shares of Common Stock, or other rights subject to then
outstanding Awards, (iii) the exercise or base price for each share or other
right subject to then outstanding Awards, and (iv) any other terms of an Award
that are affected by the event.   Notwithstanding the foregoing,
in the case of Incentive Stock Options, any such adjustments shall, to the
extent practicable, be made in a manner consistent with the requirements of
Section 424(a) of the Code.

    


    4.3    Anti-Dilution.     Notwithstanding
anything contained in the Plan to cover the contrary, including any adjustments
discussed in this Section 4, the maximum aggregate number of shares of Common
Stock that may be issued and sold under all Awards granted under the Plan shall
be anti-dilutive in the event of a reverse stock split by the Company and shall
not result in any reduction in the number of shares available and authorized
under the Plan at the effective time of such reverse stock
split(s).

    


    5.     Participation
and Awards.

     

    5.1    Designations
of Participants.     All Eligible Persons are
eligible to be designated by the Committee to receive Awards and become
Participants under the Plan.  The Committee has the authority, in its
discretion, to determine and designate from time to time those Eligible Persons
who are to be granted Awards, the types of Awards to be granted and the number
of shares of Common Stock or units subject to Awards granted under the
Plan.  In selecting Eligible Persons to be Participants and in
determining the type and amount of Awards to be granted under the Plan, the
Committee shall consider any and all factors that it deems relevant or
appropriate.

     

    
      
         

      

      
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    5.2    Determination
of Awards.     The Committee shall determine the
terms and conditions of all Awards granted to Participants in accordance with
its authority under Section 3.2 hereof.  An Award may consist of one
type of right or benefit hereunder or of two or more such rights or benefits
granted in tandem or in the alternative.  In the case of any
fractional share or unit resulting from the grant, vesting, payment or crediting
of dividends or dividend equivalents under an Award, the Committee shall have
the discretionary authority to (i) disregard such fractional share or unit, (ii)
round such fractional share or unit to the nearest lower or higher whole share
or unit, or (iii) convert such fractional share or unit into a right to receive
a cash payment.   To the extent deemed necessary by the
Committee, an Award shall be evidenced by an Award Agreement as described in
Section 11.1 hereof.

     

    6.     Stock
Options.

     

    6.1    Grant of
Stock Options.     A Stock Option may be granted
to any Eligible Person selected by the Committee.  Subject to the
provisions of Section 6.8 hereof and Section 422 of the Code, each Stock Option
shall be designated, in the discretion of the Committee, as an Incentive Stock
Option or as a Nonqualified Stock Option.

     

    6.2    Exercise
Price.     The exercise price per share of a
Stock Option shall not be less than 85 percent of the Fair Market Value of the
shares of Common Stock on the Date of Grant, provided that the Committee may in
its discretion specify for any Stock Option an exercise price per share that is
higher than the Fair Market Value on the Date of Grant, except that the price
shall not be less than 110 percent of the Fair Market Value in the case of any
person who owns securities possessing more than 10 percent of the total combined
voting power of all classes of securities of the Company.

     

    6.3    Vesting
of Stock Options.     The Committee shall in its
discretion prescribe the time or times at which, or the conditions upon which, a
Stock Option or portion thereof shall become vested and/or exercisable, and may
accelerate the vesting or exercisability of any Stock Option at any time,
provided, however, that any Stock Option shall vest at the rate of at least
twenty percent (20%) per year over five (5) years from the date the Stock Option
is granted, subject to reasonable conditions as may be provided for in the Award
Agreement.   However, in the case of a Stock Option granted to
officers, Non-employee Directors, managers or Consultants of the Company, the
Stock Option may become fully exercisable, subject to reasonable conditions, at
anytime or during any period established by the Company.   The
requirements for vesting and exercisability of a Stock Option may be based on
the continued Service of the Participant with the Company or its Affiliates for
a specified time period (or periods) or on the attainment of specified
performance goals established by the Committee in its discretion.

     

    6.4    Term of
Stock Options.     The Committee shall in its
discretion prescribe in an Award Agreement the period during which a vested
Stock Option may be exercised, provided that the maximum term of a Stock Option
shall be ten years from the Date of Grant.   Except as otherwise
provided in this Section 6 or as otherwise may be provided by the Committee, no
Stock Option issued to an employee or a Non-Employee Director of the Company may
be exercised at any time during the term thereof unless the employee or a
Non-Employee Director Participant is then in the Service of the Company or one
of its Affiliates.

     

    6.5    Termination
of Service.     Subject to Section 6.8 hereof
with respect to Incentive Stock Options, the Stock Option of any Participant
whose Service with the Company or one of its Affiliates is terminated for any
reason shall terminate on the earlier of (A) the date that the Stock Option
expires in accordance with its terms or (B) unless otherwise provided in an
Award Agreement, and except for termination for cause (as described in Section
10.2 hereof), the expiration of the applicable time period following termination
of Service, in accordance with the following: (1) twelve months if Service
ceased due to Disability, (2) eighteen months if Service ceased at a time when
the Participant is eligible to elect immediate commencement of retirement
benefits at a specified retirement age under a pension plan to which the Company
or any of its Affiliates had made contributions, (3) eighteen months if the
Participant died while in the Service of the Company or any of its Affiliates,
or (iv) three months if Service ceased for any other reason.  During
the foregoing applicable period, except as otherwise specified in the Award
Agreement or in the event Service was terminated by the death of the
Participant, the Stock Option may be exercised by such Participant in respect of
the same number of shares of Common Stock, in the same manner, and to the same
extent as if he or she had remained in the continued Service of the Company or
any Affiliate during the first three months of such period; provided that no
additional rights shall vest after such three months.  The Committee
shall have authority to determine in each case whether an authorized leave of
absence shall be deemed a termination of Service for purposes hereof, as well as
the effect of a leave of absence on the vesting and exercisability of a Stock
Option.  Unless otherwise provided by the Committee, if an entity
ceases to be an Affiliate of the Company or otherwise ceases to be qualified
under the Plan or if all or substantially all of the assets of an Affiliate of
the Company are conveyed (other than by encumbrance), such cessation or action,
as the case may be, shall be deemed for purposes hereof to be a termination of
the Service.

     

    
      
         

      

      
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    6.6    Stock
Option Exercise; Tax Withholding.     Subject to
such terms and conditions as shall be specified in an Award Agreement, a Stock
Option may be exercised in whole or in part at any time during the term thereof
by notice in the form required by the Company, together with payment of the
aggregate exercise price therefor and applicable withholding
tax.  Payment of the exercise price shall be made in the manner set
forth in the Award Agreement, unless otherwise provided by the Committee: (i) in
cash or by cash equivalent acceptable to the Committee, (ii) by payment in
shares of Common Stock that have been held by the Participant for at least six
months (or such period as the Committee may deem appropriate, for accounting
purposes or otherwise) valued at the Fair Market Value of such shares on the
date of exercise, (iii) through an open-market, broker-assisted sales
transaction pursuant to which the Company is promptly delivered the amount of
proceeds necessary to satisfy the exercise price, (iv) by a combination of the
methods described above or (v) by such other method as may be approved by the
Committee and set forth in the Award Agreement.  In addition to and at
the time of payment of the exercise price, the Participant shall pay to the
Company the full amount of any and all applicable income tax, employment tax and
other amounts required to be withheld in connection with such exercise, payable
under such of the methods described above for the payment of the exercise price
as may be approved by the Committee and set forth in the Award
Agreement.

     

    6.7    Limited
Transferability of Nonqualified Stock
Options.     All Stock Options shall be
nontransferable except (i) upon the Participant’s death, in accordance with
Section 11.2 hereof or (ii) in the case of Nonqualified Stock Options only, for
the transfer of all or part of the Stock Option to a Participant’s “family
member” (as defined for purposes of the Form S-8 registration statement under
the Securities Act of 1933), as may be approved by the Committee in its
discretion at the time of proposed transfer.  The transfer of a
Nonqualified Stock Option may be subject to such terms and conditions as the
Committee may in its discretion impose from time to time.  Subsequent
transfers of a Nonqualified Stock Option shall be prohibited other than in
accordance with Section 11.2 hereof.

     

    6.8    Additional
Rules for Incentive Stock Options.

     

    (a)    Eligibility.     An
Incentive Stock Option may only be granted to an Eligible Person who is
considered an employee for purposes of Treasury Regulation §1.421-7(h) with
respect to the Company or any Affiliate that qualifies as a “subsidiary
corporation” with respect to the Company for purposes of Section 424(f) of the
Code.

     

    (b)     Termination
of Employment.     An Award of an Incentive
Stock Option may provide that such Stock Option may be exercised not later than
3 months following termination of employment of the Participant with the Company
and all Subsidiaries, or not later than one year following a permanent and total
disability within the meaning of Section 22(e)(3) of the Code, as and to the
extent determined by the Committee to comply with the requirements of Section
422 of the Code.

     

    (c)    Other
Terms and Conditions;
Nontransferability.     Any Incentive Stock
Option granted hereunder shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as are deemed necessary or desirable by
the Committee, which terms, together with the terms of the Plan, shall be
intended and interpreted to cause such Incentive Stock Option to qualify as an
“incentive stock option” under Section 422 of the Code.  An Award
Agreement for an Incentive Stock Option may provide that such Stock Option shall
be treated as a Nonqualified Stock Option to the extent that certain
requirements applicable to “incentive stock options” under the Code shall not be
satisfied.  An Incentive Stock Option shall by its terms be
nontransferable other than by will or by the laws of descent and distribution,
and shall be exercisable during the lifetime of a Participant only by such
Participant.

     

    (d)    Disqualifying
Dispositions.     If shares of Common Stock
acquired by exercise of an Incentive Stock Option are disposed of within two
years following the Date of Grant or one year following the transfer of such
shares to the Participant upon exercise, the Participant shall, promptly
following such disposition, notify the Company in writing of the date and terms
of such disposition and provide such other information regarding the disposition
as the Company may reasonably require.

     

    
      
         

      

      
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    6.9    Repricing
Prohibited.     Subject to the adjustment
provisions contained in Section 4.2 hereof, without the prior approval of the
Company’s stockholders, evidenced by a majority of votes cast, neither the
Committee nor the Board shall cause the cancellation, substitution or amendment
of a Stock Option that would have the effect of reducing the exercise price of
such a Stock Option previously granted under the Plan, or otherwise approve any
modification to such a Stock Option that would be treated as a “repricing” under
the then applicable rules, regulations or listing requirements.

     

    7.     Stock
Awards.

     

    7.1    Grant of
Stock Awards.     A Stock Award may be granted
to any Eligible Person selected by the Committee.  A Stock Award may
be granted for past services, in lieu of bonus or other cash compensation, as
directors’ compensation or for any other valid purpose as determined by the
Committee.   A Stock Award granted to an Eligible Person
represents shares of Common Stock that are issued without restrictions on
transfer and other incidents of ownership and free of forfeiture conditions,
except as otherwise provided in the Plan and the Award Agreement.  The
deemed issuance price of shares of Common  Stock subject to each Stock
Award shall not be less than 85 percent of the Fair Market Value of the Common
Stock on the date of the grant.  In the case of any person who owns
securities possessing more than ten percent of the combined voting power of all
classes of securities of the issuer or its parent or subsidiaries possessing
voting power, the deemed issuance price of shares of Common Stock subject to
each Stock Award shall be at least 100 percent of the Fair Market Value of the
Common Stock on the date of the grant.  The Committee may, in
connection with any Stock Award, require the payment of a specified purchase
price.

     

    7.2    Rights as
Stockholder.     Subject to the foregoing
provisions of this Section 7 and the applicable Award Agreement, upon the
issuance of the Common Stock under a Stock Award the Participant shall have all
rights of a stockholder with respect to the shares of Common Stock, including
the right to vote the shares and receive all dividends and other distributions
paid or made with respect thereto.

    


    8.    Restricted
Stock Awards.

     

    8.1    Grant of
Restricted Stock Awards.    A Restricted Stock Award
may be granted to any Eligible Person selected by the Committee. The deemed
issuance price of shares of Common  Stock subject to each Restricted
Stock Award shall not be less than 85 percent of the Fair Market Value of the
Common Stock on the date of the grant.  In the case of any person who
owns securities possessing more than ten percent of the combined voting power of
all classes of securities of the issuer or its parent or subsidiaries possessing
voting power, the deemed issuance price of shares of Common Stock subject to
each Restricted Stock Award shall be at least 100 percent of the Fair Market
Value of the Common Stock on the date of the grant.  The Committee may
require the payment by the Participant of a specified purchase price in
connection with any Restricted Stock Award.

     

    8.2    Vesting
Requirements.    The restrictions imposed on shares
granted under a Restricted Stock Award shall lapse in accordance with the
vesting requirements specified by the Committee in the Award Agreement, provided
that the Committee may accelerate the vesting of a Restricted Stock Award at any
time. Such vesting requirements may be based on the continued Service of the
Participant with the Company or its Affiliates for a specified time period (or
periods) or on the attainment of specified performance goals established by the
Committee in its discretion. If the vesting requirements of a Restricted Stock
Award shall not be satisfied, the Award shall be forfeited and the shares of
Common Stock subject to the Award shall be returned to the Company.

     

    8.3    Restrictions.    Shares
granted under any Restricted Stock Award may not be transferred, assigned or
subject to any encumbrance, pledge, or charge until all applicable restrictions
are removed or have expired, unless otherwise allowed by the Committee. Failure
to satisfy any applicable restrictions shall result in the subject shares of the
Restricted Stock Award being forfeited and returned to the Company. The
Committee may require in an Award Agreement that certificates representing the
shares granted under a Restricted Stock Award bear a legend making appropriate
reference to the restrictions imposed, and that certificates representing the
shares granted or sold under a Restricted Stock Award will remain in the
physical custody of an escrow holder until all restrictions are removed or have
expired.

     

    
      
         

      

      
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    8.4    Rights as
Stockholder.    Subject to the foregoing provisions
of this Section 8 and the applicable Award Agreement, the Participant shall have
all rights of a stockholder with respect to the shares granted to the
Participant under a Restricted Stock Award, including the right to vote the
shares and receive all dividends and other distributions paid or made with
respect thereto. The Committee may provide in an Award Agreement for the payment
of dividends and distributions to the Participant at such times as paid to
stockholders generally or at the times of vesting or other payment of the
Restricted Stock Award.

     

    8.5    Section
83(b) Election.    If a Participant makes an election
pursuant to Section 83(b) of the Code with respect to a Restricted Stock Award,
the Participant shall file, within 30 days following the Date of Grant, a copy
of such election with the Company and with the Internal Revenue Service, in
accordance with the regulations under Section 83 of the Code. The Committee may
provide in an Award Agreement that the Restricted Stock Award is conditioned
upon the Participant’s making or refraining from making an election with respect
to the Award under Section 83(b) of the Code.

     

    9.     Change
in Control.

     

    9.1    Effect of
Change in Control.     Except to the extent an
Award Agreement provides for a different result (in which case the Award
Agreement will govern and this Section 9 of the Plan shall not be applicable),
notwithstanding anything elsewhere in the Plan or any rules adopted by the
Committee pursuant to the Plan to the contrary, if a Triggering Event shall
occur within the 12-month period beginning with a Change in Control of the
Company, then, effective immediately prior to such Triggering Event, each
outstanding Stock Option, to the extent that it shall not otherwise have become
vested and exercisable, shall automatically become fully and immediately vested
and exercisable, without regard to any otherwise applicable vesting
requirement.

     

    9.2    Definitions

     

    (a)    Cause.     For
purposes of this Section 9, the term “Cause” shall mean a determination by the
Committee that a Participant (i) has been convicted of, or entered a plea of
nolo contendere to, a crime that constitutes a felony under Federal or state
law, (ii) has engaged in willful gross misconduct in the performance of the
Participant’s duties to the Company or an Affiliate or (iii) has committed a
material breach of any written agreement with the Company or any Affiliate with
respect to confidentiality, noncompetition, nonsolicitation or similar
restrictive covenant.  Subject to the first sentence of Section 9.1
hereof, in the event that a Participant is a party to an employment agreement
with the Company or any Affiliate that defines a termination on account of
“Cause” (or a term having similar meaning), such definition shall apply as the
definition of a termination on account of “Cause” for purposes hereof, but only
to the extent that such definition provides the Participant with greater
rights.  A termination on account of Cause shall be communicated by
written notice to the Participant, and shall be deemed to occur on the date such
notice is delivered to the Participant.

     

    (b)    Change in
Control.     For purposes of this Section 9, a
“Change in Control” shall be deemed to have occurred upon:

     

    (i) the
occurrence of an acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of a percentage of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Company Voting Securities”) (but excluding (1) any
acquisition directly from the Company (other than an acquisition by virtue of
the exercise of a conversion privilege of a security that was not acquired
directly from the Company), (2) any acquisition by the Company or an Affiliate
and (3) any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by the Company or any Affiliate) (an “Acquisition”) that is thirty
percent (30%) or more of the Company Voting Securities;

     

    (ii) at
any time during a period of two (2) consecutive years or less, individuals who
at the beginning of such period constitute the Board (and any new directors
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was so approved) cease for
any reason (except for death, Disability or voluntary retirement) to constitute
a majority thereof;

     

    
      
         

      

      
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    (iii) an
Acquisition that is fifty percent (50%) or more of the Company Voting
Securities;

     

    (iv) the
consummation of a merger, consolidation, reorganization or similar corporate
transaction, whether or not the Company is the surviving company in such
transaction, other than a merger, consolidation, or reorganization that would
result in the Persons who are beneficial owners of the Company Voting Securities
outstanding immediately prior thereto continuing to beneficially own, directly
or indirectly, in substantially the same proportions, at least fifty percent
(50%) of the combined voting power of the Company Voting Securities (or the
voting securities of the surviving entity) outstanding immediately after such
merger, consolidation or reorganization;

     

    (v) the
sale or other disposition of all or substantially all of the assets of the
Company;

     

    (vi) the
approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company; or

     

    (vii) the
occurrence of any transaction or event, or series of transactions or events,
designated by the Board in a duly adopted resolution as representing a change in
the effective control of the business and affairs of the Company, effective as
of the date specified in any such resolution.

     

    (c)    Constructive
Termination.     For purposes of this Section 9,
a “Constructive Termination” shall mean a termination of employment by a
Participant within sixty (60) days following the occurrence of any one or more
of the following events without the Participant’s written consent (i) any
reduction in position, title (for Vice Presidents or above), overall
responsibilities, level of authority, level of reporting (for Vice Presidents or
above), base compensation, annual incentive compensation opportunity, aggregate
employee benefits or (ii) a request that the Participant’s location of
employment be relocated by more than fifty (50) miles.  Subject to the
first sentence of Section 9.1 hereof, in the event that a Participant is a party
to an employment agreement with the Company or any Affiliate (or a successor
entity) that defines a termination on account of “Constructive Termination,”
“Good Reason” or “Breach of Agreement” (or a term having a similar meaning),
such definition shall apply as the definition of “Constructive Termination” for
purposes hereof in lieu of the foregoing, but only to the extent that such
definition provides the Participant with greater rights.  A
Constructive Termination shall be communicated by written notice to the
Committee, and shall be deemed to occur on the date such notice is delivered to
the Committee, unless the circumstances giving rise to the Constructive
Termination are cured within five (5) days of such notice.

     

    (d)    Triggering
Event.     For purposes of this Section 9, a
“Triggering Event” shall mean (i) the termination of Service of a Participant by
the Company or an Affiliate (or any successor thereof) other than on account of
death, Disability or Cause, (ii) the occurrence of a Constructive Termination or
(iii) any failure by the Company (or a successor entity) to assume, replace,
convert or otherwise continue any Award in connection with the Change in Control
(or another corporate transaction or other change effecting the Common Stock) on
the same terms and conditions as applied immediately prior to such transaction,
except for equitable adjustments to reflect changes in the Common Stock pursuant
to Section 4.2 hereof.

     

    9.3    Excise
Tax Limit.     In the event that the vesting of
Awards together with all other payments and the value of any benefit received or
to be received by a Participant would result in all or a portion of such payment
being subject to the excise tax under Section 4999 of the Code, then the
Participant’s payment shall be either (i) the full payment or (ii) such lesser
amount that would result in no portion of the payment being subject to excise
tax under Section 4999 of the Code (the “Excise Tax”), whichever of the
foregoing amounts, taking into account the applicable Federal, state, and local
employment taxes, income taxes, and the Excise Tax, results in the receipt by
the Participant, on an after-tax basis, of the greatest amount of the payment
notwithstanding that all or some portion of the payment may be taxable under
Section 4999 of the Code.  All determinations required to be made
under this Section 9 shall be made by Malone & Bailey, PLLC or any other
accounting firm which is the Company’s outside auditor immediately prior to the
event triggering the payments that are subject to the Excise Tax (the
“Accounting Firm”).  The Company shall cause the Accounting Firm to
provide detailed supporting calculations of its determinations to the Company
and the Participant.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company.  The Accounting Firm’s
determinations must be made with substantial authority (within the meaning of
Section 6662 of the Code).  For the purposes of all calculations under
Section 280G of the Code and the application of this Section 9.3, all
determinations as to present value shall be made using 120 percent of the
applicable Federal rate (determined under Section 1274(d) of the Code)
compounded semiannually, as in effect on December 30, 2004.

     

    
      
         

      

      
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    10.     Forfeirture
Events.

     

    10.1    General.     The
Committee may specify in an Award Agreement at the time of the Award that the
Participant’s rights, payments and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture or recoupment upon the occurrence
of certain specified events, in addition to any otherwise applicable vesting or
performance conditions of an Award.  Such events shall include, but
shall not be limited to, termination of Service for cause, violation of material
Company policies, breach of noncompetition, confidentiality or other restrictive
covenants that may apply to the Participant, or other conduct by the Participant
that is detrimental to the business or reputation of the Company.

     

    10.2    Termination
for Cause.     Unless otherwise provided by the
Committee and set forth in an Award Agreement, if a Participant’s employment
with the Company or any Affiliate shall be terminated for cause, the Company
may, in its sole discretion, immediately terminate such Participant’s right to
any further payments, vesting or exercisability with respect to any Award in its
entirety.  In the event a Participant is party to an employment (or
similar) agreement with the Company or any Affiliate that defines the term
“cause,” such definition shall apply for purposes of the Plan.  The
Company shall have the power to determine whether the Participant has been
terminated for cause and the date upon which such termination for cause
occurs.  Any such determination shall be final, conclusive and binding
upon the Participant.  In addition, if the Company shall reasonably
determine that a Participant has committed or may have committed any act which
could constitute the basis for a termination of such Participant’s employment
for cause, the Company may suspend the Participant’s rights to exercise any
option, receive any payment or vest in any right with respect to any Award
pending a determination by the Company of whether an act has been committed
which could constitute the basis for a termination for “cause” as provided in
this Section 10.2.

     

    11.     General
Provisions.

     

    11.1    Award
Agreement.     To the extent deemed necessary by
the Committee, an Award under the Plan shall be evidenced by an Award Agreement
in a written or electronic form approved by the Committee setting forth the
number of shares of Common Stock or units subject to the Award, the exercise
price, base price, or purchase price of the Award, the time or times at which an
Award will become vested, exercisable or payable and the term of the
Award.  The Award Agreement may also set forth the effect on an Award
of termination of Service under certain circumstances.  The Award
Agreement shall be subject to and incorporate, by reference or otherwise, all of
the applicable terms and conditions of the Plan, and may also set forth other
terms and conditions applicable to the Award as determined by the Committee
consistent with the limitations of the Plan.  Award Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section 422 of the
Code.  The grant of an Award under the Plan shall not confer any
rights upon the Participant holding such Award other than such terms, and
subject to such conditions, as are specified in the Plan as being applicable to
such type of Award (or to all Awards) or as are expressly set forth in the Award
Agreement.  The Committee need not require the execution of an Award
Agreement by a Participant, in which case, acceptance of the Award by the
Participant shall constitute agreement by the Participant to the terms,
conditions, restrictions and limitations set forth in the Plan and the Award
Agreement as well as the administrative guidelines of the Company in effect from
time to time.

     

    11.2    No
Assignment or Transfer;
Beneficiaries.     Except as provided in Section
6.7 hereof, Awards under the Plan shall not be assignable or transferable by the
Participant, except by will or by the laws of descent and distribution, and
shall not be subject in any manner to assignment, alienation, pledge,
encumbrance or charge.  Notwithstanding the foregoing, the Committee
may provide in the terms of an Award Agreement that the Participant shall have
the right to designate a beneficiary or beneficiaries who shall be entitled to
any rights, payments or other benefits specified under an Award following the
Participant’s death.  During the lifetime of a Participant, an Award
shall be exercised only by such Participant or such Participant’s guardian or
legal representative.  In the event of a Participant’s death, an Award
may to the extent permitted by the Award Agreement be exercised by the
Participant’s beneficiary as designated by the Participant in the manner
prescribed by the Committee or, in the absence of an authorized beneficiary
designation, by the legatee of such Award under the Participant’s will or by the
Participant’s estate in accordance with the Participant’s will or the laws of
descent and distribution, in each case in the same manner and to the same extent
that such Award was exercisable by the Participant on the date of the
Participant’s death.

     

    
      
         

      

      
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    11.3    Deferrals
of Payment.     The Committee may in its
discretion permit a Participant to defer the receipt of payment of cash or
delivery of shares of Common Stock that would otherwise be due to the
Participant by virtue of the exercise of a right or the satisfaction of vesting
or other conditions with respect to an Award.  If any such deferral is
to be permitted by the Committee, the Committee shall establish rules and
procedures relating to such deferral in a manner intended to comply with the
requirements of Section 409A of the Code, including, without limitation, the
time when an election to defer may be made, the time period of the deferral and
the events that would result in payment of the deferred amount, the interest or
other earnings attributable to the deferral and the method of funding, if any,
attributable to the deferred amount.

     

    11.4    Rights
as Stockholder.     A Participant shall have no
rights as a holder of shares of Common Stock with respect to any unissued
securities covered by an Award until the date the Participant becomes the holder
of record of such securities.  Except as provided in Section 4.2
hereof, no adjustment or other provision shall be made for dividends or other
stockholder rights, except to the extent that the Award Agreement provides for
dividend payments or dividend equivalent rights.

     

    11.5    Employment
or Service.     Nothing in the Plan, in the
grant of any Award or in any Award Agreement shall confer upon any Eligible
Person any right to continue in the Service of the Company or any of its
Affiliates, or interfere in any way with the right of the Company or any of its
Affiliates to terminate the Participant’s employment or other service
relationship for any reason at any time.

     

    11.6    Securities
Laws.     No shares of Common Stock will be
issued or transferred pursuant to an Award unless and until all then applicable
requirements imposed by Federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any
exchanges upon which the shares of Common Stock may be listed, have been fully
met.  As a condition precedent to the issuance of shares pursuant to
the grant or exercise of an Award, the Company may require the Participant to
take any reasonable action to meet such requirements.  The Committee
may impose such conditions on any shares of Common Stock issuable under the Plan
as it may deem advisable, including, without limitation, restrictions under the
Securities Act of 1933, as amended, under the requirements of any exchange upon
which such shares of the same class are then listed, and under any blue sky or
other securities laws applicable to such shares.  The Committee may
also require the Participant to represent and warrant at the time of issuance or
transfer that the shares of Common Stock are being acquired only for investment
purposes and without any current intention to sell or distribute such
shares.

     

    11.7    Tax
Withholding.     The Participant shall be
responsible for payment of any taxes or similar charges required by law to be
withheld from an Award or an amount paid in satisfaction of an Award, which
shall be paid by the Participant on or prior to the payment or other event that
results in taxable income in respect of an Award.  The Award Agreement
may specify the manner in which the withholding obligation shall be satisfied
with respect to the particular type of Award.

     

    11.8    Unfunded
Plan.     The adoption of the Plan and any
reservation of shares of Common Stock or cash amounts by the Company to
discharge its obligations hereunder shall not be deemed to create a trust or
other funded arrangement.  Except upon the issuance of Common Stock
pursuant to an Award, any rights of a Participant under the Plan shall be those
of a general unsecured creditor of the Company, and neither a Participant nor
the Participant’s permitted transferees or estate shall have any other interest
in any assets of the Company by virtue of the Plan.  Notwithstanding
the foregoing, the Company shall have the right to implement or set aside funds
in a grantor trust, subject to the claims of the Company’s creditors or
otherwise, to discharge its obligations under the Plan.

     

    11.9    Other
Compensation and Benefit Plans.     The adoption
of the Plan shall not affect any other share incentive or other compensation
plans in effect for the Company or any Affiliate, nor shall the Plan preclude
the Company from establishing any other forms of share incentive or other
compensation or benefit program for employees of the Company or any
Affiliate.  The amount of any compensation deemed to be received by a
Participant pursuant to an Award shall not constitute includable compensation
for purposes of determining the amount of benefits to which a Participant is
entitled under any other compensation or benefit plan or program of the Company
or an Affiliate, including, without limitation, under any pension or severance
benefits plan, except to the extent specifically provided by the terms of any
such plan.

     

    
      
         

      

      
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    11.10    Plan
Binding on Transferees.     The Plan shall be
binding upon the Company, its transferees and assigns, and the Participant, the
Participant’s executor, administrator and permitted transferees and
beneficiaries.

     

    11.11    Severability.     If
any provision of the Plan or any Award Agreement shall be determined to be
illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.

     

    11.12    Foreign
Jurisdictions.     The Committee may adopt,
amend and terminate such arrangements and grant such Awards, not inconsistent
with the intent of the Plan, as it may deem necessary or desirable to comply
with any tax, securities, regulatory or other laws of other jurisdictions with
respect to Awards that may be subject to such laws.  The terms and
conditions of such Awards may vary from the terms and conditions that would
otherwise be required by the Plan solely to the extent the Committee deems
necessary for such purpose.  Moreover, the Board may approve such
supplements to or amendments, restatements or alternative versions of the Plan,
not inconsistent with the intent of the Plan, as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of the Plan
as in effect for any other purpose.

     

    11.13    Substitute
Awards in Corporate Transactions.     Nothing
contained in the Plan shall be construed to limit the right of the Committee to
grant Awards under the Plan in connection with the acquisition, whether by
purchase, merger, consolidation or other corporate transaction, of the business
or assets of any corporation or other entity.  Without limiting the
foregoing, the Committee may grant Awards under the Plan to an employee or
director of another corporation who becomes an Eligible Person by reason of any
such corporate transaction in substitution for awards previously granted by such
corporation or entity to such person.  The terms and conditions of the
substitute Awards may vary from the terms and conditions that would otherwise be
required by the Plan solely to the extent the Committee deems necessary for such
purpose.

     

    11.14    Governing
Law.     The Plan and all rights hereunder shall
be subject to and interpreted in accordance with the laws of the State of Utah,
without reference to the principles of conflicts of laws, and to applicable
Federal securities laws.

    


    11.15    Financial
Statements.     All Participants shall receive
the financial statements of the Company at least
annually.  

    


    


    11.16               Performance Based
Awards.    For purposes of Stock Awards and
Restricted Stock Awards granted under the Plan that are intended to qualify as
“performance-based” compensation under Section 162(m) of the Code, such Awards
shall be granted to the extent necessary to satisfy the requirements of Section
162(m) of the Code.

    


    11.17    Stockholder
Approval.     The Plan must be approved by the
stockholders by a majority of all shares entitled to vote within twelve (12)
months after the date the Plan was adopted by the Board.  Any
Incentive Stock Options granted before stockholder approval is obtained shall be
converted into Nonqualified Stock Options if stockholder approval is not
obtained within twelve (12) months before or after the Plan was
adopted.

     

    12.     Effective
Date; Amendment and Termination.

     

    12.1    Effective
Date.     The Plan shall become effective
following its adoption by the Board.  The term of the Plan shall be
ten (10) years from the date of adoption by the Board, subject to Section 12.3
hereof.

     

    12.2    Amendment.     
The Board may at any time and from time to time and in any respect, amend or
modify the Plan.  The Board may seek the approval of any amendment or
modification by the Company’s stockholders to the extent it deems necessary or
advisable in its discretion for purposes of compliance with Section 162(m) or
Section 422 of the Code, or exchange or securities market or for any other
purpose.  No amendment or modification of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.

     

    
      
         

      

      
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    12.3    Termination.     The
Plan shall terminate on the tenth anniversary of the date of its adoption by the
Board.  The Board may, in its discretion and at any earlier date,
terminate the Plan.  Notwithstanding the foregoing, no termination of
the Plan shall adversely affect any Award theretofore granted without the
consent of the Participant or the permitted transferee of the
Award.

     

     

     

     

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