ex4-1.htm


    
      
        

      
Exhibit 4.1

     

    PACIFIC
ASIA PETROLEUM, INC.

     

    2009
EQUITY INCENTIVE PLAN

     

    


     

    
      	
              1.

            	
              Purposes of the
      Plan.  Pacific Asia Petroleum, Inc., a Delaware
      corporation (the “Company”)
      hereby establishes the PACIFIC ASIA PETROLEUM, INC. 2009 EQUITY INCENTIVE
      PLAN (the “Plan”). The
      purposes of this Plan are to attract and retain the best available
      personnel for positions of substantial responsibility, to provide
      additional incentive to Employees, Directors and Consultants, and to
      promote the long-term growth and profitability of the
      Company.  The Plan permits the grant of Incentive Stock Options,
      Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units,
      Stock Appreciation Rights, Performance Units and Performance Shares as the
      Administrator may determine.

            


    

    


    2.           Definitions.  The
following definitions will apply to the terms in the Plan:

    


    “Administrator” means
the Board or any of its Committees as will be administering the Plan, in
accordance with Section
4.

    


    “Applicable Laws”
means the requirements relating to the administration of equity-based awards
under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed
or quoted and the applicable laws of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan.

    


    “Award” means,
individually or collectively, a grant under the Plan of Options, SARs,
Restricted Stock, Restricted Stock Units, Performance Units or Performance
Shares.

    


    “Award Agreement”
means the written or electronic agreement setting forth the terms and provisions
applicable to each Award granted under the Plan. The Award Agreement is subject
to the terms and conditions of the Plan.

    


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

    


    “Change in Control” means the
occurrence of any of the following events:

    


    (i)           Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company's then
outstanding voting securities; provided however, that for purposes of this
subsection (i) any acquisition of securities directly from the Company shall not
constitute a Change in Control; or

    


    (ii)           The
consummation of the sale or disposition by the Company of all or substantially
all of the Company's assets;

    


    (iii)           A
change in the composition of the Board occurring within a two-year period, as a
result of which fewer than a majority of the directors are
Incumbent


    
      
         


      

      
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    Directors.  “Incumbent Directors”
means directors who either (A) are Directors as of the effective date of the
Plan, or (B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but will not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company);
or

    


    (iv)           The
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation.

    


    For
avoidance of doubt, a transaction will not constitute a Change in Control if:
(i) its sole purpose is the change the state of the Company’s incorporation, or
(ii) its sole purpose is to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction.

    


    “Code” means the
Internal Revenue Code of 1986, as amended.  Any reference in the Plan
to a section of the Code will be a reference to any successor or amended section
of the Code.

    


    “Committee” means a
committee of Directors or of other individuals satisfying Applicable Laws
appointed by the Board in accordance with Section 4 hereof.

    


    “Common Stock” means
the common stock of the Company.

    


    “Company” means
Pacific Asia Petroleum, Inc., a Delaware corporation, or any successor
thereto.

    


    “Consultant” means any
person, including an advisor, engaged by the Company or a Parent or Subsidiary
to render services to such entity.

    


    “Director” means a
member of the Board.

    


    “Disability” means
a medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, and that either (1) renders a Participant unable to engage in
any substantial gainful activity or (2) results in a Participant receiving
income replacement benefits for a period of not less than three months under an
employee accident and health plan covering the Participant.

    


    “Employee” means any
person, including Officers and Directors, employed by the Company or any Parent
or Subsidiary of the Company. Neither service as a Director nor payment of a
director's fee by the Company will be sufficient to constitute “employment” by
the Company.

    


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

    


    “Fair Market Value”
means, as of any date, the value of Common Stock determined as
follows:

     

    
      
         

      

      
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    (i)           If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation any division or subdivision of the
Nasdaq Stock Market, its Fair Market Value will be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

    


    (ii)           If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, including without limitation quotation through
the over the counter bulletin board (“OTCBB”) quotation service administered by
the Financial Industry Regulatory Authority (“FINRA”), the Fair Market Value of
a Share will be the mean between the high bid and low asked prices for the
Common Stock on the day of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or

    


    (iii)           In
the absence of an established market for the Common Stock, the Fair Market Value
will be determined in good faith by the Administrator, and to the extent Section
15 applies (a) with respect to ISOs, the Fair Market Value shall be determined
in a manner consistent with Code section 422 or (b) with respect to NSOs or
SARs, the Fair Market Value shall be determined in a manner consistent with Code
section 409A.

    


    “Fiscal Year” means
the fiscal year of the Company.

    


    “Grant Date” means,
for all purposes, the date on which the Administrator determines to grant an
Award, or such other later date as is determined by the Administrator, provided
that the Administrator cannot grant an Award prior to the date the material
terms of the Award are established.  Notice of the Administrator’s
determination to grant an Award will be provided to each Participant within a
reasonable time after the Grant Date.

    


    “Incentive Stock
Option” or “ISO” means an Option
that by its terms qualifies and is otherwise intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

    


    “Nonstatutory Stock
Option” or “NSO” means an Option
that by its terms does not qualify or is not intended to qualify as an
ISO.

    


    “Officer” means a
person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.

    


    “Option” means a stock
option granted pursuant to the Plan.

    


    “Optioned Shares”
means the Common Stock subject to an Option.

    


    “Optionee” means the
holder of an outstanding Option.

    


    “Parent” means a
“parent corporation,” whether now or hereafter existing, as defined in Section
424(e) of the Code.

    


    “Participant” means
the holder of an outstanding Award.

     

    
      
         

      

      
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    “Performance Share” means an
Award denominated in Shares which may vest in whole or in part upon attainment
of performance goals or other vesting criteria as the Administrator may
determine pursuant to Section
10.

    


    “Performance Unit”
means an Award which may vest in whole or in part upon attainment of performance
goals or other vesting criteria as the Administrator may determine and which may
be settled for cash, Shares or other securities or a combination of the
foregoing pursuant to
Section 10.

    


    “Period of
Restriction” means the period
during which Shares of Restricted Stock are subject to forfeiture or
restrictions on transfer pursuant to Section
7.

    


    “Plan” means this 2009
Equity Incentive Plan.

    


    “Restricted Stock”
means Shares awarded to a Participant which are subject to forfeiture and
restrictions on transferability in accordance with Section 7.

    


    “Restricted Stock
Unit” means the right to receive one Share at the end of a specified
period of time, which right is subject to forfeiture in accordance with
Section 8 of the Plan.

    


    “Rule 16b-3” means
Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3.

    


    “Section” means a
paragraph or section of this Plan.

    


    “Section 16(b)” means
Section 16(b) of the Exchange Act.

    


    “Service Provider”
means an Employee, Director or Consultant.

    


    “Share” means a share
of the Common Stock, as adjusted in accordance with Section
13.

    


    “Stock Appreciation
Right” or “SAR” means the right
to receive payment from the Company in an amount no greater than the excess of
the Fair Market Value of a Share at the date the SAR is exercised over a
specified price fixed by the Administrator in the Award Agreement, which shall
not be less than the Fair Market Value of a Share on the Grant
Date.  In the case of a SAR which is granted in connection with an
Option, the specified price shall be the Option exercise price.

    


    “Subsidiary” means a
“subsidiary corporation,” whether now or hereafter existing, as defined in
Section 424(f) of the Code.

    


    “Ten Percent Owner”
means any Service Provider who is, on the grant date of an ISO, the owner of
Shares (determined with application of ownership attribution rules of Code
Section 424(d)) possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any of its Subsidiaries.

    


    3.           Stock Subject to the
Plan.

    


    
      	
               
      

            	
              a.

            	
              Stock Subject to the
      Plan.  Subject to the provisions of Section 13, the
      maximum aggregate number of Shares that may be issued under the Plan is
      six million (6,000,000) Shares. The Shares may be authorized but
      unissued, or reacquired Common
Stock.

            


    

     

     

    
      
         

      

      
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              b.

            	
              Lapsed
      Awards.  If an Award expires or becomes unexercisable
      without having been exercised in full or, with respect to Restricted
      Stock, Restricted Stock Units, Performance Shares or Performance Units, is
      forfeited in whole or in part to the Company, the unpurchased Shares (or
      for Awards other than Options and SARs, the forfeited or unissued Shares)
      which were subject to the Award will become available for future grant or
      sale under the Plan (unless the Plan has terminated). With respect to
      SARs, only Shares actually issued pursuant to a SAR will cease to be
      available under the Plan; all remaining Shares subject to the SARs will
      remain available for future grant or sale under the Plan (unless the Plan
      has terminated). Shares that have actually been issued under the Plan
      under any Award will not be returned to the Plan and will not become
      available for future distribution under the Plan; provided, however, that
      if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock
      Units, Performance Shares or Performance Units are forfeited to the
      Company, such Shares will become available for future grant under the
      Plan. Shares withheld by the Company to pay the exercise price of an Award
      or to satisfy tax withholding obligations with respect to an Award will
      become available for future grant or sale under the Plan. To the extent an
      Award under the Plan is paid out in cash rather than Shares, such cash
      payment will not result in reducing the number of Shares available for
      issuance under the Plan.

            


    

    


    
      	
               
      

            	
              c.

            	
              Share Reserve.
      The Company, during the term of this Plan, will at all times reserve and
      keep available such number of Shares as will be sufficient to satisfy the
      requirements of the Plan.

            


    

    


    4.           Administration of the
Plan.

    


    
      	
               
      

            	
              a.

            	
              Procedure.  The
      Plan shall be administered by the Board or a Committee (or Committees)
      appointed by the Board, which Committee shall be constituted to comply
      with Applicable Laws.  If and so long as the Common Stock is
      registered under Section 12(b) or 12(g) of the Exchange Act, the Board
      shall consider in selecting the Administrator and the membership of any
      committee acting as Administrator the requirements regarding: (i)
      “nonemployee directors” within the meaning of Rule 16b-3 under the
      Exchange Act; (ii) “independent directors” as described in the listing
      requirements for any stock exchange on which Shares are listed; and (iii)
      Section
      15(b)(i) of the Plan, if the Company pays salaries for which it
      claims deductions that are subject to the Code section 162(m) limitation
      on its U.S. tax returns.  The Board may delegate the
      responsibility for administering the Plan with respect to designated
      classes of eligible Participants to different committees consisting of two
      or more members of the Board, subject to such limitations as the Board or
      the Administrator deems appropriate.  Committee members shall
      serve for such term as the Board may determine, subject to removal by the
      Board at any time.

            


    

    


    
      	
               
      

            	
              b.

            	
              Powers of the
      Administrator.  Subject to the provisions of the Plan and
      the approval of any relevant authorities, and in the case of a Committee,
      subject to the specific duties delegated by the Board to such Committee,
      the Administrator will have the authority, in its
    discretion:

            


    

    


    i.           to
determine the Fair Market Value;

    


    ii.           to
select the Service Providers to whom Awards may be granted
hereunder;

     

     

    
      
         

      

      
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              iii.

            	
              to
      determine the number of Shares to be covered by each Award granted
      hereunder;

            


    

    


    
      	
               
      

            	
              iv.

            	
              to
      approve forms of agreement for use under the
  Plan;

            


    

    


    v.           to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder.  Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Awards may be
exercised (which may be based on continued employment, continued service
or  performance criteria), any vesting acceleration (whether by reason
of a Change of Control or otherwise) or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Award or the Shares relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, will determine;

    


    vi.           to
construe and interpret the terms of the Plan and Awards granted pursuant to the
Plan, including the right to construe disputed or doubtful Plan and Award
provisions;

    


    vii.           to
prescribe, amend and rescind rules and regulations relating to the
Plan;

    


    viii.           to
modify or amend each Award (subject to Section 19(c)) to the
extent any modification or amendment is consistent with the terms of the
Plan.  The Administrator shall have the discretion to extend the
exercise period of Options generally provided the exercise period is not
extended beyond the earlier of the original term of the Option or 10 years from
the original grant date, or specifically (1) if the exercise period of an Option
is extended (but to no more than 10 years from the original grant date) at a
time when the exercise price equals or exceeds the fair market value of the
Optioned Shares or (2) an Option cannot be exercised because such exercise would
violate Applicable Laws, provided that the exercise period is not extended more
than 30 days after the exercise of the Option would no longer violate Applicable
Laws.

    


    ix.           to
allow Participants to satisfy withholding tax obligations in such manner as
prescribed in Section
14;

    


    x.           to
authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the
Administrator;

    


    xi.           to
delay issuance of Shares or suspend Participant’s right to exercise an Award as
deemed necessary to comply with Applicable Laws; and

    


    xii.           to
make all other determinations deemed necessary or advisable for administering
the Plan.

    


    
      	
              c.

            	
              Effect of
      Administrator's Decision.  The Administrator’s decisions,
      determinations and interpretations will be final and binding on all
      Participants and any other holders of Awards.  Any decision or
      action taken or to be taken by the Administrator, arising out of or in
      connection with the construction, administration, interpretation and
      effect of the Plan and of its rules and regulations, shall, to the maximum
      extent permitted by Applicable Laws, be within its absolute discretion
      (except as otherwise specifically provided in the Plan) and shall be
      final, binding and conclusive upon the Company, all Participants and any
      person claiming under or through any
  Participant.

            


    

     

     

    
      
         

      

      
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              5.

            	
              Eligibility.  NSOs,
      Restricted Stock, Restricted Stock Units, SARs, Performance Units and
      Performance Shares may be granted to Service Providers.  ISOs
      may be granted as specified in Section
      15(a).

            


    

    


    6.           Stock
Options.

    


    
      	
              a.

            	
              Grant of
      Options.  Subject to the terms and conditions of the
      Plan, the Administrator, at any time and from time to time, may grant
      Options to Service Providers in such amounts as the Administrator will
      determine in its sole discretion.  For purposes of the foregoing
      sentence, Service Providers shall include prospective employees or
      consultants to whom Options are granted in connection with written offers
      of employment or engagement of services, respectively, with the Company;
      provided that no Option granted to a prospective employee or consultant
      may be exercised prior to the commencement of employment or services with
      the Company.  The Administrator may grant NSOs, ISOs, or any
      combination of the two.  ISOs shall be granted in accordance
      with Section
      15(a) of the Plan.

            


    

    


    
      	
              b.

            	
              Option Award
      Agreement.  Each Option shall be evidenced by an Award
      Agreement that shall specify the type of Option granted, the Option price,
      the exercise date, the term of the Option, the number of Shares to which
      the Option pertains, and such other terms and conditions (which need not
      be identical among Participants) as the Administrator shall determine in
      its sole discretion.  If the Award Agreement does not specify
      that the Option is to be treated as an ISO, the Option shall be deemed a
      NSO.

            


    

    


    
      	
              c.

            	
              Exercise
      Price.  The per Share exercise price for the Shares to be
      issued pursuant to exercise of an Option will be no less than the Fair
      Market Value per Share on the Grant
Date.

            


    

    


    
      	
              d.

            	
              Term of
      Options.  The term of each Option will be stated in the
      Award Agreement.  Unless terminated sooner in accordance with
      the remaining provisions of this Section 6, each Option shall expire
      either ten (10) years after the Grant Date, or after a shorter term as may
      be fixed by the Board.

            


    

    


    
      	
              e.

            	
              Time and Form of
      Payment.

            


    

    


    i.           Exercise
Date.  Each Award Agreement shall specify how and when Shares
covered by an Option may be purchased.  The Award Agreement may
specify waiting periods, the dates on which Options become exercisable or
“vested” and, subject to the termination provisions of this section, exercise
periods.  The Administrator may accelerate the exercisability of any
Option or portion thereof.

    


    ii.           Exercise of
Option.  Any Option granted hereunder will be exercisable
according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award
Agreement.  An Option may not be exercised for a fraction of a
Share.  An Option will be deemed exercised when the Company receives:
(1) notice of exercise (in such form as the Administrator shall specify from
time to time) from the person entitled to exercise the Option, and (2) full
payment for the Shares with respect to which the Option is exercised (together
with all applicable withholding taxes).  Full payment may consist of
any consideration and method of payment authorized by the Administrator and
permitted by the Award Agreement and the Plan (together with all applicable
withholding taxes).  Shares issued upon exercise of an Option will be
issued in the name of the Optionee or, if requested by the Optionee, in the name
of the Optionee and his or her spouse.  Until the Shares are issued
(as evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder will exist with respect to the
Optioned Shares, notwithstanding the exercise of the Option.  The
Company will issue (or cause to be issued) such Shares promptly after the Option
is exercised.  No adjustment will be made for a dividend or other
right for which the record date is prior to the date the Shares are issued,
except as provided in Section
13.

     

     

    
      
         

      

      
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    iii.           Payment. The
Administrator will determine the acceptable form of consideration for exercising
an Option, including the method of payment.  Such consideration may
consist entirely of:

    


    (1)           cash;

    


    (2)           check;

    


    (3)           to
the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, a
promissory note;

    


    (4)           other
Shares, provided Shares have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option will be
exercised;

    


    (5)           to
the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, in
accordance with any broker-assisted cashless exercise procedures approved by the
Company and as in effect from time to time;

    


    (6)           by
asking the Company to withhold Shares from the total Shares to be delivered upon
exercise equal to the number of Shares having a value equal to the aggregate
Exercise Price of the Shares being acquired;

    


    (7)           any
combination of the foregoing methods of payment; or

    


    (8)           such
other consideration and method of payment for the issuance of Shares to the
extent permitted by Applicable Laws.

    


    
      	
              f.

            	
              Forfeiture of
      Options.  All unexercised Options shall be forfeited to
      the Company in accordance with the terms and conditions set forth in the
      Award Agreement and again will become available for grant under the
      Plan.

            


    

    


    
      	
              7.

            	
              Restricted
      Stock.

            


    

    


    
      	
              a.

            	
              Grant of Restricted
      Stock.  Subject to the terms and conditions of the Plan,
      the Administrator, at any time and from time to time, may grant Shares of
      Restricted Stock to Service Providers in such amounts as the Administrator
      will determine in its sole
discretion.

            


    

    


    
      	
              b.

            	
              Restricted Stock Award
      Agreement.  Each Award of Restricted Stock will be
      evidenced by an Award Agreement that will specify the Period of
      Restriction, the number of Shares granted, and such other terms and
      conditions (which need not be identical among Participants) as the
      Administrator will determine in its sole discretion. Unless the
      Administrator determines otherwise, the Company as escrow agent will hold
      Shares of Restricted Stock until the restrictions on such Shares have
      lapsed.

            


    

     

     

    
      
         

      

      
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              c.

            	
              Vesting Conditions and
      Other Terms.

            


    

    


    i.           Vesting
Conditions.  The Administrator, in its sole discretion, may
impose such conditions on the vesting of Shares of Restricted Stock as it may
deem advisable or appropriate, including but not limited to, achievement of
Company-wide, business unit, or individual goals (including, but not limited to,
continued employment or service), or any other basis determined by the
Administrator in its discretion.  The Administrator, in its
discretion, may accelerate the time at which any restrictions will lapse or be
removed.  The Administrator may, in its discretion, also provide for
such complete or partial exceptions to an employment or service restriction as
it deems equitable.

    


    ii.           Voting
Rights.  During the Period of Restriction, Service Providers
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless the Administrator determines
otherwise.

    


    iii.           Dividends and Other
Distributions.  During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all
dividends and other distributions paid with respect to such Shares, unless the
Administrator determines otherwise. If any such dividends or distributions are
paid in Shares, the Shares will be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.

    


    iv.           Transferability.  Except
as provided in this Section, Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

    


    
      	
              d.

            	
              Removal of
      Restrictions.  All restrictions imposed on Shares of
      Restricted Stock shall lapse and the Period of Restriction shall end upon
      the satisfaction of the vesting conditions imposed by the
      Administrator.  Vested Shares of Restricted Stock will be
      released from escrow as soon as practicable after the last day of the
      Period of Restriction or at such other time as the Administrator may
      determine, but in no event later than the 15th
      day of the third month following the end of the year in which vesting
      occurred.

            


    

    


    
      	
              e.

            	
              Forfeiture of
      Restricted
      Stock.  On the date set forth in the Award Agreement, the
      Shares of Restricted Stock for which restrictions have not lapsed will be
      forfeited and revert to the Company and again will become available for
      grant under the Plan.

            


    

    


    
      	
              8.

            	
              Restricted Stock
      Units.

            


    

    


    
      	
              a.

            	
              Grant of Restricted
      Stock Units.  Subject to the terms and conditions of the
      Plan, the Administrator, at any time and from time to time, may grant
      Restricted Stock Units to Service Providers in such amounts as the
      Administrator will determine in its sole
  discretion.

            


    

    


    
      	
              b.

            	
              Restricted Stock Units
      Award Agreement.  Each Award of Restricted Stock Units
      will be evidenced by an Award Agreement that will specify the number of
      Restricted Stock Units granted, vesting criteria, form of payout, and such
      other terms and conditions (which need not be identical among
      Participants) as the Administrator will determine in its sole
      discretion.

            


    

     

     

    
      
         

      

      
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              c.

            	
              Vesting
      Conditions.  The Administrator shall set vesting criteria
      in its discretion, which, depending on the extent to which the criteria
      are met, will determine the number of Restricted Stock Units that will be
      paid out to the Participant. The Administrator may set vesting criteria
      based upon the achievement of Company-wide, business unit, or individual
      goals (including, but not limited to, continued employment or service), or
      any other basis determined by the Administrator in its
      discretion.  At any time after the grant of Restricted Stock
      Units, the Administrator, in its sole discretion, may reduce or waive any
      vesting criteria that must be met to receive a
  payout.

            


    

    


    
      	
              d.

            	
              Time and Form of
      Payment.  Upon satisfaction of the applicable vesting
      conditions, payment of vested Restricted Stock Units shall occur in the
      manner and at the time provided in the Award Agreement, but in no event
      later than the 15th
      day of the third month following the end of the year in which vesting
      occurred.  Except as otherwise provided in the Award Agreement,
      Restricted Stock Units may be paid in cash, Shares, or a combination
      thereof at the sole discretion of the Administrator.  Restricted
      Stock Units that are fully paid in cash will not reduce the number of
      Shares available for issuance under the
Plan.

            


    

    


    
      	
              e.

            	
              Forfeiture of
      Restricted Stock Units.  All unvested Restricted Stock
      Units shall be forfeited to the Company on the date set forth in the Award
      Agreement and again will become available for grant under the
      Plan.

            


    

    


    
      	
              9.

            	
              Stock Appreciation
      Rights.

            


    

    


    
      	
              a.

            	
              Grant of
      SARs.  Subject to the terms and conditions of the Plan,
      the Administrator, at any time and from time to time, may grant SARs to
      Service Providers in such amounts as the Administrator will determine in
      its sole discretion.

            


    

    


    
      	
              b.

            	
              Award
      Agreement.  Each SAR grant will be evidenced by an Award
      Agreement that will specify the exercise price, the number of Shares
      underlying the SAR grant, the term of the SAR, the conditions of exercise,
      and such other terms and conditions (which need not be identical among
      Participants) as the Administrator will determine in its sole
      discretion.

            


    

    


    
      	
              c.

            	
              Exercise Price and Other
      Terms.  The per Share exercise price for the exercise of
      an SAR will be no less than the Fair Market Value per Share on the Grant
      Date.

            


    

    


    
      	
              d.

            	
              Time and Form of
      Payment of SAR Amount.  Upon exercise of a SAR, a
      Participant will be entitled to receive payment from the Company in an
      amount no greater than: (i) the difference between the Fair Market Value
      of a Share on the date of exercise over the exercise price; times (ii) the
      number of Shares with respect to which the SAR is exercised.  An
      Award Agreement may provide for a SAR to be paid in cash, Shares of
      equivalent value, or a combination
thereof.

            


    

    


    
      	
              e.

            	
              Forfeiture of
      SARs.  All unexercised SARs shall be forfeited to the
      Company in accordance with the terms and conditions set forth in the Award
      Agreement and again will become available for grant under the
      Plan.

            


    

    


    
      	
              10.

            	
              Performance Units and
      Performance Shares.

            


    

    


    
      	
              a.

            	
              Grant of Performance
      Units and Performance Shares.  Performance Units or
      Performance Shares may be granted to Service Providers at any time and
      from time to time, as will be determined by the Administrator, in its sole
      discretion. The Administrator will have complete discretion in determining
      the number of Performance Units and Performance Shares granted to each
      Participant.

            


    

     

     

    
      
         

      

      
        - 10
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              b.

            	
              Award
      Agreement.  Each Award of Performance Units and Shares
      will be evidenced by an Award Agreement that will specify the initial
      value, the Performance Period, the number of Performance Units or
      Performance Shares granted, and such other terms and conditions (which
      need not be identical among Participants) as the Administrator will
      determine in its sole discretion.

            


    

    


    
      	
              c.

            	
              Value of Performance
      Units and Performance Shares.  Each Performance Unit will
      have an initial value that is established by the Administrator on or
      before the Grant Date. Each Performance Share will have an initial value
      equal to the Fair Market Value of a Share on the Grant
    Date.

            


    

    


    
      	
              d.

            	
              Vesting Conditions and
      Performance Period.  The Administrator will set
      performance objectives or other vesting provisions (including, without
      limitation, continued status as a Service Provider) in its discretion
      which, depending on the extent to which they are met, will determine the
      number or value of Performance Units or Performance Shares that will be
      paid out to the Service Providers. The time period during which the
      performance objectives or other vesting provisions must be met will be
      called the “Performance Period.”  The Administrator may set
      performance objectives based upon the achievement of Company-wide,
      divisional, or individual goals or any other basis determined by the
      Administrator in its discretion.

            


    

    


    
      	
              e.

            	
              Time and Form of
      Payment.  After the applicable Performance Period has
      ended, the holder of Performance Units or Performance Shares will be
      entitled to receive a payout of the number of vested Performance Units or
      Performance Shares by the Participant over the Performance Period, to be
      determined as a function of the extent to which the corresponding
      performance objectives or other vesting provisions have been
      achieved.  Vested Performance Units or Performance Shares will
      be paid as soon as practicable after the expiration of the applicable
      Performance Period, but in no event later than the 15th
      day of the third month following the end of the year the applicable
      Performance Period expired.   An Award Agreement may
      provide for the satisfaction of Performance Unit or Performance Share
      Awards in cash or Shares (which have an aggregate Fair Market Value equal
      to the value of the vested Performance Units or Performance Shares at the
      close of the applicable Performance Period) or in a combination
      thereof.

            


    

    


    
      	
              f.

            	
              Forfeiture of
      Performance Units and Performance Shares.  All unvested
      Performance Units or Performance Shares will be forfeited to the Company
      on the date set forth in the Award Agreement, and again will become
      available for grant under the Plan.

            


    

    


    
      	
              11.

            	
              Leaves of
      Absence/Transfer Between Locations.  Unless the
      Administrator provides otherwise or as required by Applicable Laws,
      vesting of Awards will be suspended during any unpaid leave of absence. An
      Employee will not cease to be an Employee in the case of (i) any leave of
      absence approved by the Company or (ii) transfers between locations of the
      Company or between the Company, its Parent, or any
    Subsidiary.

            


    

    


    
      	
              12.

            	
              Transferability of
      Awards.  Unless determined otherwise by the
      Administrator, an Award may not be sold, pledged, assigned, hypothecated,
      transferred, or disposed of in any manner other than by will or by the
      laws of descent or distribution and may be exercised, during the lifetime
      of the Participant, only by the Participant.  If the
      Administrator makes an Award transferable, such Award will contain such
      additional terms and conditions as the Administrator deems
      appropriate.

            


    

    


     

    
      
         

      

      
        - 11
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    13.         Adjustments; Dissolution or
Liquidation; Merger or Change in Control.

    


    
      	
              a.

            	
              Adjustments.  In
      the event that any dividend or other distribution (whether in the form of
      cash, Shares, other securities, or other property), recapitalization,
      stock split, reverse stock split, reorganization, merger, consolidation,
      split-up, spin-off, combination, repurchase, or exchange of Shares or
      other securities of the Company, or other change in the corporate
      structure of the Company affecting the Shares occurs, the Administrator,
      in order to prevent diminution or enlargement of the benefits or potential
      benefits intended to be made available under the Plan, shall appropriately
      adjust the number and class of Shares that may be delivered under the Plan
      and/or the number, class, and price of Shares covered by each
      outstanding Award.

            


    

    


    
      	
              b.

            	
              Dissolution or
      Liquidation.  In the event of the proposed dissolution or
      liquidation of the Company, the Administrator will notify each Participant
      as soon as practicable prior to the effective date of such proposed
      transaction.  To the extent it has not been previously
      exercised, an Award will terminate immediately prior to the consummation
      of such proposed action.

            


    

    


    
      	
              c.

            	
              Change in
      Control. In the event of a merger or Change in Control, any or all
      outstanding Awards may be assumed by the successor corporation, which
      assumption shall be binding on all Participants. In the alternative, the
      successor corporation may substitute equivalent Awards (after taking into
      account the existing provisions of the Awards). The successor
      corporation may also issue, in place of outstanding Shares of the Company
      held by the Participant, substantially similar shares or other property
      subject to vesting requirements and repurchase restrictions no less
      favorable to the Participant than those in effect prior to the merger or
      Change in Control.

            


    

    


    
      	
               
      

            	
              In
      the event that the successor corporation does not assume or substitute for
      the Award, unless the Administrator provides otherwise, the Participant
      will fully vest in and have the right to exercise all of his or her
      outstanding Options and SARs, including Shares as to which such Awards
      would not otherwise be vested or exercisable, all restrictions on
      Restricted Stock and Restricted Stock Units will lapse, and, with respect
      to Performance Shares and Performance Units, all Performance Goals or
      other vesting criteria will be deemed achieved at target levels and all
      other terms and conditions met. In addition, if an Option or SAR is not
      assumed or substituted in the event of a Change in Control, the
      Administrator will notify the Participant in writing or electronically
      that the Option or SAR will be exercisable for a period of time determined
      by the Administrator in its sole discretion, and the Option or SAR will
      terminate upon the expiration of such
period.

            


    

    


    
      	
               
      

            	
              For
      the purposes of this Section 13(c),
      an Award will be considered assumed if, following the Change in Control,
      the Award confers the right to purchase or receive, for each Share subject
      to the Award immediately prior to the Change in Control, the consideration
      (whether stock, cash, or other securities or property) or, in the case of
      a SAR upon the exercise of which the Administrator determines to pay cash
      or a Performance Share or Performance Unit which the Administrator can
      determine to pay in cash, the fair market value of the consideration
      received in the merger or Change in Control by holders of Common Stock for
      each Share held on the effective date of the transaction (and if holders
      were offered a choice of consideration, the type of consideration chosen
      by the holders of a majority of the outstanding Shares); provided,
      however, that if such consideration received in the Change in Control is
      not solely common stock of the successor corporation or its Parent, the
      Administrator may, with the consent of the successor corporation, provide
      for the consideration to be received upon the  exercise of an
      Option or SAR or upon the payout of a Restricted Stock Unit, Performance
      Share or Performance Unit, for each Share subject to such Award (or in the
      case of Restricted Stock Units and Performance Units, the number of
      implied shares determined by dividing the value of the Restricted Stock
      Units and Performance Units, as applicable, by the per share consideration
      received by holders of Common Stock in the Change in Control), to be
      solely common stock of the successor corporation or its Parent equal in
      fair market value to the per share consideration received by holders of
      Common Stock in the Change in
Control.

            


    

    


    
      	
               
      

            	
              Notwithstanding
      anything in this Section 13(c) to
      the contrary, an Award that vests, is earned or paid-out upon the
      satisfaction of one or more performance goals will not be considered
      assumed if the Company or its successor modifies any of such performance
      goals without the Participant's consent; provided, however, a modification
      to such performance goals only to reflect the successor corporation's
      post-Change in  Control corporate structure will not be deemed
      to invalidate an otherwise valid Award
  assumption.

            


    

    


     

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

     

    14.         Tax
Withholding.

    


    
      	
              a.

            	
              Withholding
      Requirements.  Prior to the delivery of any Shares or
      cash pursuant to an Award (or exercise thereof), the Company will have the
      power and the right to deduct or withhold, or require a Participant to
      remit to the Company, an amount sufficient to satisfy federal, state,
      local, foreign or other taxes required by Applicable Laws to be withheld
      with respect to such Award (or exercise
  thereof).

            


    

    


    
      	
              b.

            	
              Withholding
      Arrangements.  The Administrator, in its sole discretion
      and pursuant to such procedures as it may specify from time to time, may
      permit a Participant to satisfy such tax withholding obligation, in whole
      or in part by (without limitation) (i) paying cash, (ii) electing to
      have the Company withhold otherwise deliverable Shares having a Fair
      Market Value equal to the amount required to be withheld, or
      (iii) delivering to the Company already-owned Shares having a Fair
      Market Value equal to the amount required to be withheld.  The
      amount of the withholding requirement will be deemed to include any amount
      which the Administrator agrees may be withheld at the time the election is
      made.  The Fair Market Value of the Shares to be withheld or
      delivered will be determined as of the date that the taxes are required to
      be withheld.

            


    

    


    
      	
              15.

            	
              Provisions Applicable
      In the
      Event the Company or the Service Provider is Subject to U.S.
      Taxation.

            


    

    


    
      	
               
      

            	
              a.

            	
              Grant of Incentive
      Stock Options.  If the Administrator grants Options to
      Employees subject to U.S. taxation, the Administrator may grant such
      Employee an ISO and the following terms shall also
  apply:

            


    

    


    i.           Maximum
Amount.  Subject to the provisions of Section 13, to the
extent consistent with Section 422 of the Code, not more than an aggregate of
six million (6,000,000) Shares may be issued as
ISOs under the Plan.

    


    ii.           General Rule.  Only
Employees shall be eligible for the grant of ISOs.

    


    iii.           Continuous
Employment.  The Optionee must remain in the continuous employ
of the Company or its Subsidiaries from the date the ISO is granted until not
more than three months before the date on which it is exercised.  A
leave of absence approved by the Company may exceed ninety (90) days if
reemployment upon expiration of such leave is guaranteed by statute or
contract.  If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then three (3) months following
the ninety-first (91st) day of such leave any ISO held by the Optionee will
cease to be treated as an ISO.

     

     

    
      
         

      

      
        - 13
-

        
          

        

      

      
         

      

    

    
 

    iv.           Award
Agreement.

    


    (1)           The
Administrator shall designate Options granted as ISOs in the Award
Agreement.  Notwithstanding such designation, to the extent that the
aggregate Fair Market Value of the Shares with respect to which ISOs are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds one hundred
thousand dollars ($100,000), Options will not qualify as an ISO.  For
purposes of this section, ISOs will be taken into account in the order in which
they were granted. The Fair Market Value of the Shares will be determined as of
the time the Option with respect to such Shares is granted.

    


    (2)           The
Award Agreement shall specify the term of the ISO.  The term shall not
exceed ten (10) years from the Grant Date or five (5) years from the Grant Date
for Ten Percent Owners.

    


    (3)           The
Award Agreement shall specify an exercise price of not less than the Fair Market
Value per Share on the Grant Date or one hundred ten percent (110%) of the Fair
Market Value per Share on the Grant Date for Ten Percent Owners.

    


    (4)           The
Award Agreement shall specify that an ISO is not transferable except by will,
beneficiary designation or the laws of descent and distribution.

    


    v.           Form of
Payment.  The consideration to be paid for the Shares to be
issued upon exercise of an ISO, including the method of payment, shall be
determined by the Administrator at the time of grant in accordance with Section
6(e)(iii).

    


    vi.           “Disability,” for
purposes of an ISO, means total and permanent disability as defined in Section
22(e)(3) of the Code.

    


    vii.           Notice.  In
the event of any disposition of the Shares acquired pursuant to the exercise of
an ISO within two years from the Grant Date or one year from the exercise date,
the Optionee will notify the Company thereof in writing within thirty (30) days
after such disposition.  In addition, the Optionee shall provide the
Company with such information as the Company shall reasonably request in
connection with determining the amount and character of Optionee’s income, the
Company’s deduction, and the Company’s obligation to withhold taxes or other
amounts incurred by reason of a disqualifying disposition, including the amount
thereof.

    


    
      	
               
      

            	
              b.

            	
              Performance-based
      Compensation.  If the Company pays salaries for which it
      claims deductions that are subject to the Code section 162(m) limitation
      on its U.S. tax returns, then the following terms shall be applied in a
      manner consistent with the requirements of, and only to the extent
      required for compliance with, the exclusion from the limitation on
      deductibility of compensation under Code Section
  162(m):

            


    

     

     

    
      
         

      

      
        - 14
-

        
          

        

      

      
         

      

    

    
 

    i.           Outside
Directors.  The Board shall consider in selecting the
Administrator and the membership of any committee acting as Administrator the
provisions regarding “outside directors” within the meaning of Code Section
162(m).

    


    ii.           Maximum
Amount.

    


    (1)           Subject
to the provisions of Section 13, the
maximum number of Shares that can be awarded to any individual Participant in
the aggregate in any one fiscal year of the Company is  one
million (1,000,000) Shares;

    


    (2)           For
Awards denominated in Shares and satisfied in cash, the maximum Award to any
individual Participant in the aggregate in any one fiscal year of the Company is
the Fair Market Value of one million (1,000,000) Shares on the Grant Date;
and

    


    (3)           The
maximum amount payable pursuant to any cash Awards to any individual Participant
in the aggregate in any one fiscal year of the Company is the Fair Market Value
of one million (1,000,000) Shares on the Grant Date.

    


    iii.           Performance
Criteria.  All performance criteria must be objective and be
established in writing prior to the beginning of the performance period or at
later time as permitted by Code Section 162(m).  Performance criteria
may include alternative and multiple performance goals and may be based on one
or more business and/or financial criteria.  In establishing the
performance goals, the Committee in its discretion may include one or any
combination of the following criteria in either absolute or relative terms, for
the Company or any Subsidiary:

     

                    (1)   Increased
revenue;

     

                    (2)   Net
income measures (including but not limited to income after capital costs and
income before or after taxes);

     

                    (3)   Stock
price measures (including but not limited to growth measures and total
stockholder return);

     

                    (4)   Market
share;

     

                    (5)   Earnings
per Share (actual or targeted growth);

     

                    (6)   Earnings
before interest, taxes, depreciation, and amortization (“EBITDA”);

     

                    (7)   Cash flow
measures (including but not limited to net cash flow and net cash flow before
financing activities);

     

                    (8)   Return
measures (including but not limited to return on equity, return on average
assets, return on capital, risk-adjusted return on capital, return on investors’
capital and return on average equity);

     

                    (9)   Operating
measures (including operating income, funds from operations, cash from
operations, after-tax operating income, sales volumes, production volumes, and
production efficiency);

     

                    (10)   Expense
measures (including but not limited to overhead cost and general and
administrative expense);

     

                  

    
      
         

      

      
        - 15
-

        
          

        

      

      
         

      

    

     

                    (11)   Margins;

     

                    (12)   Stockholder
value;

     

                    (13)   Total
stockholder return;

     

                    (14)   Proceeds
from dispositions;

     

                    (15)   Production
volumes;

     

                    (16)   Total
market value; and

     

                    (17)   Corporate
values measures (including but not limited to ethics compliance, environmental,
and safety).

    


    
      	
               
      

            	
              c.

            	
              Stock Options and SARs
      Exempt from Code section 409A.  If the Administrator
      grants Options or SARs to Employees subject to U.S. taxation the
      Administrator may not modify or amend the Options or SARs to the extent
      that the modification or amendment adds a feature allowing for additional
      deferral within the meaning of Code section
  409A.

            


    

    


    
      	
              16.

            	
              No Effect on
      Employment or Service.  Neither the Plan nor any Award
      will confer upon any Participant any right with respect to continuing the
      Participant's relationship as a Service Provider with the Company or any
      Parent or Subsidiary of the Company, nor will they interfere in any way
      with the Participant's right or the Company's or its Parent’s or
      Subsidiary’s right to terminate such relationship at any time, with or
      without cause, to the extent permitted by Applicable
  Laws.

            


    

    


    
      	
              17.

            	
              Effective
      Date.  The Plan’s effective date is the date on which it
      is adopted by the Board, so long as it is approved by the Company’s
      stockholders at any time within twelve (12) months of such
      adoption.  Upon approval of the Plan by the stockholders of the
      Company, all Awards issued pursuant to the Plan on or after the Effective
      Date shall be fully effective as if the stockholders of the Company had
      approved the Plan on the Effective Date. If the stockholders fail to
      approve the Plan within one year after the Effective Date, any Awards made
      hereunder shall be null and void and of no
  effect.

            


    

    


    
      	
              18.

            	
              Term of
      Plan.  The Plan will terminate 10 years following the
      earlier of (i) the date it was adopted by the Board or (ii) the
      date it became effective upon approval by stockholders of the Company,
      unless sooner terminated by the Board pursuant to Section 19.

            


    

    


    19.         Amendment and Termination of
the Plan.

    


    
      	
              a.

            	
              Amendment and
      Termination.  The Board may at any time amend, alter,
      suspend or terminate the Plan.

            


    

    


    
      	
              b.

            	
              Stockholder
      Approval.  The Company will obtain stockholder approval
      of any Plan amendment to the extent necessary and desirable to comply with
      Applicable Laws.

            


    

    


    
      	
              c.

            	
              Effect of Amendment or
      Termination.  No amendment, alteration, suspension or
      termination of the Plan will impair the rights of any Participant, unless
      mutually agreed otherwise between the Participant and the Administrator,
      which agreement must be in writing and signed by the Participant and the
      Company.  Termination of the Plan will not affect the
      Administrator's ability to exercise the powers granted to it hereunder
      with respect to Awards granted under the Plan prior to the date of such
      termination.

            


    

    


    


    
      
         

      

      
        - 16
-

        
          

        

      

      
         

      

    

     

     

    20.       Conditions Upon Issuance of
Shares.

    


    
      	
              a.

            	
              Legal
      Compliance.  The Administrator may delay or suspend the
      issuance and delivery of Shares, suspend the exercise of Options or SARs,
      or suspend the Plan as necessary to comply Applicable
      Laws.  Shares will not be issued pursuant to the exercise of an
      Award unless the exercise of such Award and the issuance and delivery
      of such Shares will comply with Applicable Laws and will be further
      subject to the approval of counsel for the Company with respect to such
      compliance.

            


    

    


    
      	
              b.

            	
              Investment
      Representations.  As a condition to the exercise of an
      Award, the Company may require the person exercising such Award to
      represent and warrant at the time of any such exercise that the Shares are
      being purchased only for investment and without any present intention to
      sell or distribute such Shares if, in the opinion of counsel for the
      Company, such a representation is
required.

            


    

    


    
      	
              21.

            	
              Inability to Obtain
      Authority.  The inability of the Company to obtain
      authority from any regulatory body having jurisdiction, which authority is
      deemed by the Company’s counsel to be necessary to the lawful issuance and
      sale of any Shares hereunder, will relieve the Company of any liability in
      respect of the failure to issue or sell such Shares as to which such
      requisite authority will not have been
obtained.

            


    

    


    
      	
              22.

            	
              Repricing Prohibited;
      Exchange And Buyout of
      Awards.  The repricing of Options or SARs is prohibited
      without prior stockholder approval.  The Administrator may
      authorize the Company, with prior stockholder approval and the consent of
      the respective Participants, to issue new Option or SAR Awards in exchange
      for the surrender and cancellation of any or all outstanding
      Awards.  The Administrator may at any time repurchase Options
      with payment in cash, Shares or other consideration, based on such terms
      and conditions as the Administrator and the Participant shall
      agree.

            


    

    


    
      	
              23.

            	
              Substitution and
      Assumption of Awards.  The Administrator may make Awards
      under the Plan by assumption, substitution or replacement of performance
      shares, phantom shares, stock awards, stock options, stock appreciation
      rights or similar awards granted by another entity (including an Parent or
      Subsidiary), if such assumption, substitution or replacement is in
      connection with an asset acquisition, stock acquisition, merger,
      consolidation or similar transaction involving the Company (and/or its
      Parent or Subsidiary) and such other entity (and/or its
      affiliate).  The Administrator may also make Awards under the
      Plan by assumption, substitution or replacement of a similar type of award
      granted by the Company prior to the adoption and approval of the Plan.
      Notwithstanding any provision of the Plan (other than the maximum number
      of shares of Common Stock that may be issued under the Plan), the terms of
      such assumed, substituted or replaced Awards shall be as the
      Administrator, in its discretion, determines is
    appropriate.

            


    

    


    
      	
              24.

            	
              Governing
      Law.  The Plan and all Agreements shall be construed in
      accordance with and governed by the laws of the State of
      Delaware.

            


    

    


    Adopted
by the Board of Directors on June 3, 2009

     


    
      
         


      

      
        - 17
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