ESIP Montavo







 





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

3

2.


PURPOSE
OF PLAN

3.

ADMINISTRATION
AND DELEGATION

4.

INDEMNIFICATION
OF BOARD OF DIRECTORS, COMMITTEE MEMBERS AND EXECUTIVE OFFICERS  

5.

MAXIMUM
NUMBER OF SHARES SUBJECT TO PLAN

6.

PARTICIPANTS

7.


WRITTEN
AGREEMENT

8.

ALLOTMENT
OF SHARES

9.

STOCK
OPTION PRICE

10.
AWARDING AND EXERCISING OF STOCK OPTIONS

11.
PAYMENT OF STOCK OPTION PRICE

12.
GENERAL PROVISIONS APPLICABLE TO AWARDS

13.


NON-TRANSFERABILITY
OF STOCK OPTIONS AND RESALE RESTRICTIONS

14.
TERM OF STOCK

15.
TAX EFFECTS OF PLAN PARTICIPATION

16.
CONTINUATION OF EMPLOYMENT OR OTHER RELATIONSHIP

17. TERMINATION OF EMPLOYMENT OR OTHER
RELATIONSHIP

18.
RIGHTS TO CONTINUED EMPLOYMENT OR OTHER STATUS

19.
ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS

  

20.
TERMINATION, DURATION AND AMENDMENT OF PLAN

21.
GOVERNING LAW

22.
EFFECTIVENESS OF PLAN








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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 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.








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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 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.








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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.  




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 





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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
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 





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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

Endnotes

                                     

 




 





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