2009 ESIP revised
















4957 Lakemont Blvd SE

C-4 Suite #239

Bellevue, WA 98006

 


P · 425·747·5500

f · 425·747·5501














MONTAVO, INC. 

2009 STOCK INCENTIVE PLAN FOR EMPLOYEES, CONTRACTORS,
CONSULTANTS, ADVISERS, BOARD ADVISORS, BOARD MEMBERS, AND OTHERS










CONTENTS 

1.

Definitions:

2

2.

Purpose
of Plan:

3

3.

Administration:

3

4.

Indemnification
of Committee Members:

3

5.

Maximum
Number of Shares Subject to Plan:

3

6.

Participants:

4

7.

Written
Agreement:

4

8.

Allotment
of Shares:

4

9.

Stock
Option Price:

4

10.

Stock
Price:

4

11.

Payment
of Stock Option Price:

5

11.

Granting
and Exercising of Stock Options:

5

12.

Non-transferability
of Stock Options:

6

13.

Term
of Stock:

6

14.

Reclassification,
Consolidation Or Merger:

6

15.

Non-transferability
of Stock Rights:

6

16.

Continuation
of Employment:

6

17.

Rights
to Continued Employment:

7

18.

Effectiveness
of Plan:

7

19.

Termination,
Duration and Amendments of Plan:

7










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1.

Definitions:
 

As used herein, the
following definitions shall apply:




(a)

"Board of Directors" shall mean the Board of Directors of
the Corporation.




(b)

 "Committee" shall mean the Compensation Committee
designated by the Board of Directors of the Corporation, or such other committee
as shall be specified by the Board of Directors to perform the functions and
duties of the Committee under the Plan; provided, however, that, the Committee
shall comply with the requirements of (i) Rule 16b-3 of the Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (ii) Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations
thereunder.




(c)

"Corporation" shall mean Montavo, Inc., a Delaware
corporation, or any successor thereof.




(d)

"Discretion" shall mean in the sole discretion of the
Committee, with no requirement whatsoever that the Committee follow past
practices, act in a manner consistent with past practices, or treat an employee
or consultant in a manner consistent with the treatment afforded other employees
or consultants with respect to the Plan.




(e)

"Participant" shall mean any individual designated by the
Committee under Paragraph 6 for participation in the Plan.




(f)

"Plan" shall mean this Montavo, Inc. 2009 Stock Incentive
Plan for Employees and Consultants, as amended.




(g)

"Subsidiary" shall mean any corporation or similar entity
in which the Corporation owns, directly or indirectly, stock or other equity
interest ("Stock") possessing more than 25% of the combined voting power
of all classes of Stock; provided, however, that an Incentive Option may be
granted to an employee of a Subsidiary only if the Subsidiary is a corporation
and the Corporation owns, directly or indirectly, 50% or more of the total
combined voting power of all classes of Stock of the Subsidiary.




(h)

"Incentive Option" shall mean an option to purchase Common
Stock of the Corporation which meets the requirements set forth in the Plan and
also meets the definition of an incentive stock option within the meaning of
Section 422 of the Code.  The stock option agreement for an Incentive
Option shall state that the option is intended to be an Incentive Option.








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(i)

"Nonqualified Option" shall mean an option to purchase
Common Stock of the Corporation which meets the requirements set forth in the
Plan but does not meet the definition of an incentive stock option within the
meaning of Section 422 of the Code.  The stock option agreement for a
Nonqualified Option shall state that the option is intended to be a Nonqualified
Option.

2.

Purpose
of Plan:  

The purpose of the Plan is to provide employees and consultants of
the Corporation and its Subsidiaries with an increased incentive to make
significant and extraordinary contributions to the long-term performance and
growth of the Corporation and its Subsidiaries, to join the interests of
employees and consultants with the interests of the shareholders of the
Corporation, and to facilitate attracting and retaining employees and
consultants of exceptional ability.  

3.

Administration:
 

The Plan shall be administered by the Committee.  Subject to
the provisions of the Plan, the Committee shall determine, from those eligible
to be Participants under the Plan, the persons to be granted stock or stock
options, the amount of stock or options to be granted to each such person, and
the terms and conditions of any grant.  Subject to the provisions of the
Plan, the Committee is authorized to interpret the Plan, to make, amend and
rescind rules and regulations relating to the Plan and to make all other
determinations necessary or advisable for the Plan's administration.
 Interpretation and construction of any provision of the Plan by the
Committee shall, unless otherwise determined by the Board of Directors of the
Corporation, be final and conclusive.  A majority of the Committee shall
constitute a quorum, and the acts approved by a majority of the members present
at any meeting at which a quorum is present, or acts approved in writing by a
majority of the Committee, shall be the acts of the Committee.

4.

Indemnification
of Committee Members:  

In addition to such other rights of indemnification as they may
have, the members of the Committee shall be indemnified by the Corporation in
connection with any claim, action, suit or proceeding relating to any action
taken or failure to act under or in connection with the Plan or any stock or
option granted hereunder to the full extent permitted by applicable law or
provided for under the Corporation's Articles of Incorporation or Bylaws with
respect to indemnification of directors of the Corporation.

5.

Maximum
Number of Shares Subject to Plan:  

The maximum number of shares and/or stock options which may be
granted under the Plan shall be 6,000,000 shares in the aggregate of Common
Stock of the Corporation. 




The number of shares subject to each outstanding stock option
shall be subject to such adjustment as the Committee, in its Discretion, deems
appropriate to reflect such events as stock dividends, stock splits,
recapitalizations, mergers, consolidations or reorganizations of or by the
Corporation; provided, however, that no fractional shares shall be issued
pursuant 





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to the Plan, no rights may be granted under the Plan with respect
to fractional shares, and any fractional shares resulting from such adjustments
shall be eliminated from any outstanding stock option.

6.

Participants:
 

The Committee shall determine and designate from time to time, in
its Discretion, those employees and consultants of the Corporation or any
Subsidiary to receive stock or options that, in the judgment of the Committee,
are or will become responsible for the direction and financial success of the
Corporation or any Subsidiary.

7.

Written
Agreement:  

Each stock or option award shall be evidenced by a written
agreement (each a "Corporation-Participant Agreement") containing such
provisions as may be approved by the Committee.  Each such
Corporation-Participant Agreement shall constitute a binding contract between
the Corporation and the Participant and every Participant, upon acceptance of
such Agreement, shall be bound by the terms and restrictions of the Plan and of
such Agreement.  The terms of each such Corporation-Participant Agreement
shall be in accordance with the Plan, but each Corporation- Participant
Agreement may include such additional provisions and restrictions determined by
the Committee, in its Discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan.

8.

Allotment
of Shares:  

The Committee shall determine and fix, in its Discretion, the
number of shares of Common Stock or options to purchase shares of Common Stock
with respect to which a Participant may be granted.

9.

Stock
Option Price:  

The Committee, in its Discretion, shall establish the price per
share for which the shares covered by the option may be purchased.

10.

Stock
Price:  

The initial and standard price per share of common stock to be
issued directly shall be the Fair Market Value per share, but may be changed in
each case by the Board, or its designee, from time to time. If the share price
is changed, the Board, or its designee, shall determine the share price no later
than the date of the issuance of the shares and at such other times as the
Board, or its designee, deems necessary. The Board shall have absolute final
discretion to determine the price of the common stock under the Plan. In the
absence of such specific determination, the share price will be the Fair Market
Value per share. "Fair Market Value" shall mean, if there is an established
market for the Company's Common Stock on a stock exchange, in an
over-the-counter market or otherwise, the Closing Bid Price of the Company's
stock for the trading day which is the valuation date, provided that the Board
may, in its discretion provide an alternative definition for Fair Market Value
in the instrument granting the right. Unless otherwise specified by the Board at
the time of grant (or 





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in the formula applicable to such grant), the valuation date for
purposes of determining the stock price shall be the date of grant. The Board
may specify that, instead of the date of grant, the valuation date shall be a
valuation period of up to ninety (90) days prior to the date of grant, and Fair
Market Value for purposes of such grant shall be the average over the valuation
period of the mean of the highest and lowest quoted selling prices on each date
on which sales were made in the valuation period. If there is no established
market for the Company's Common Stock, or if there were no sales during the
applicable valuation period, the determination of Fair Market Value shall be
established by the Board in its sole discretion, considering the criteria set
forth in Treas. Reg. Section 20.2031-2 or successor regulations.

11.

Payment
of Stock Option Price:  

To exercise in whole or in part any stock option granted
hereunder, payment of the option price in full in cash or, with the consent of
the Committee, in Common Stock of the Corporation or by a promissory note
payable to the order of the Corporation in a form acceptable to the Committee,
shall be made by the Participant for all shares so purchased.  Such payment
may, with the consent of the Committee, also consist of a cash down payment and
delivery of such promissory note in the amount of the unpaid exercise price.
 In the Discretion of and subject to such conditions as may be established
by the Committee, payment of the option price may also be made by the
Corporation retaining from the shares to be delivered upon exercise of the stock
option that number of shares having a fair market value on the date of exercise
equal to the option price of the number of shares with respect to which the
Participant exercises the stock option.   Such payment may also be
made in such other manner as the Committee determines is appropriate, in its
Discretion.   No Participant shall have any of the rights of a
shareholder of the Corporation under any stock option until the actual issuance
of shares to said Participant, and prior to such issuance no adjustment shall be
made for dividends, distributions or other rights in respect of such shares,
except as provided in Paragraph 5.

11.

Granting
and Exercising of Stock Options:  

Subject to the provisions of this Paragraph 11, each stock option
granted hereunder shall be exercisable at any such time or times or in any such
installments as may be determined by the Committee at the time of the grant.
 If the Common Stock of the Corporation is publicly traded and if a
Participant who is granted a stock option is a person who is regularly required
to report his or her ownership and changes in ownership of Common Stock of the
Corporation to the Securities and Exchange Commission and is subject to
short-swing profit liability under the provisions of Section 16(b) of the
 Exchange Act, then any election to exercise as well as any actual exercise
of such Participant's stock option shall be made only during the period
beginning on the third business day and ending on the twelfth business day
following the release for publication by the Corporation of quarterly or annual
summary statements of sales and earnings. Notwithstanding anything contained in
the Plan to the contrary, if the Common Stock of the Corporation is publicly
traded, stock options shall always be granted and exercised in such a manner as
to conform to the provisions of Rule 16b-3(e), or any replacement rule, adopted
pursuant to the provisions of the Exchange Act.  





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A Participant may exercise a stock option, if then exercisable, in
whole or in part by delivery to the Corporation of written notice of the
exercise, in such form as the Committee may prescribe, accompanied, in the case
of a stock option, by (i) payment for the shares with respect to which
the stock option is exercised in accordance with Paragraph 11, or (ii) in
the Discretion of the Committee, irrevocable instructions to a stock broker to
promptly deliver to the Corporation full payment for the shares with respect to
which the stock option is exercised from the proceeds of the stock broker's sale
of or loan against the shares.  Except as provided in Paragraph 15, stock
options may be exercised only while the Participant is an employee or consultant
of the Corporation or a Subsidiary.




Successive stock options may be granted to the same Participant,
whether or not the stock option(s) previously granted to such Participant remain
unexercised.  A Participant may exercise a stock option, if then
exercisable, notwithstanding those stock options previously granted to such
Participant remain unexercised.

12.

Non-transferability
of Stock Options:   

No stock option granted under the Plan to a Participant shall be
transferable by such Participant otherwise than by will or by the laws of
descent and distribution, and stock options shall be exercisable, during the
lifetime of the Participant, only by the Participant.

13.

Term
of Stock:  

If not sooner terminated, each stock option granted hereunder
shall expire not more than five (5) years from the date of the granting
thereof.




14.

Reclassification,
Consolidation Or Merger:  

If and to the extent that the number of issued shares of common
stock of the Company shall be increased or reduced by change in par value,
split-up reclassification, distribution of a dividend payable in stock, or the
like, the number of shares subject to direct issuance held by a person and the
price per share shall be proportionately adjusted. If the Company is reorganized
or consolidated or merged with another corporation, the person shall be entitled
to receive direct issuance covering shares of such reorganized, consolidated, or
merged company in the same proportion, at an equivalent price, and subject to
the same conditions.

15.

Non-transferability
of Stock Rights:   

No stock right granted under the Plan to a Participant shall be
transferable by such Participant otherwise than by will or by the laws of
descent and distribution.  However, any stock issued shall be freely
transferable after issuance.

16.

Continuation
of Employment:  

The Committee may require, in its Discretion, that any Participant
under the Plan to whom a stock or option shall be granted shall agree in writing
as a condition of the granting 





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of such stock or option award to remain in the employ or to remain
as a consultant of the Corporation or a Subsidiary for a designed minimum period
from the date of the granting of such stock or option award as shall be fixed by
the Committee.

17.

Rights
to Continued Employment:  

Nothing contained in the Plan or in any stock or option granted or
awarded pursuant to the Plan, nor any action taken by the Committee hereunder,
shall confer upon any Participant any right with respect to continuation of
employment or consultancy by the Corporation or a Subsidiary nor interfere in
any way with the right of the Corporation or a Subsidiary to terminate such
person's employment or consultancy at any time.

18.

Effectiveness
of Plan:  

The Plan shall be effective on the date the Board of Directors of
the Corporation adopts the Plan.

19.

Termination,
Duration and Amendments of Plan:  

The Plan may be abandoned or terminated at any time by the Board
of Directors of the Corporation.  Unless sooner terminated, the Plan shall
terminate on the date ten years after its adoption by the Board of Directors,
and no stock or option may be granted or awarded thereafter.  The
termination of the Plan shall not affect the validity of any stock or option
grant outstanding on the date of termination.




For the purpose of conforming to any changes in applicable law or
governmental regulations, or for any other lawful purpose, the Board of
Directors shall have the right, with or without approval of the shareholders of
the Corporation, to amend or revise the terms of the Plan at any time; provided,
however, that no such amendment or revision shall (i) without approval or
ratification of the shareholders of the Corporation (A) increase the maximum
number of shares in the aggregate which are subject to the Plan (subject,
however, to the provisions of Paragraph 5), (B) increase the maximum number of
shares for which any Participant may be granted stock or option under the Plan
(except as contemplated by Paragraph 5), (C) change the class of persons
eligible to be Participants under the Plan, or (D) materially increase the
benefits accruing to Participants under the Plan, or (ii) without the
consent of the holder thereof, change the stock price (except as contemplated by
Paragraph 5) or alter or impair any stock which shall have been previously
granted or awarded under the Plan.







BOARD OF DIRECTORS:







/s/ Brook Lang

 

                                     

 




 








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