Exhibit
10.6


 


2004
STOCK INCENTIVE PLAN


OF


GRANT
VENTURES, INC.


 


1.                                       Purposes
of the Plan.  This stock incentive
plan (the “Plan”) is intended to provide an incentive to employees
(including directors and officers who are employees), consultants and non-employee
directors of Grant Ventures, Inc. (the “Company”), a Nevada corporation,
or any Parent or Subsidiaries (as such terms are defined in Paragraph 17), and
to offer an additional inducement in obtaining the services of such
individuals.  The Plan provides for the
grant of “incentive stock options” (“ISOs”) within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”),
stock options which do not qualify as ISOs (“NQSOs”), and shares of
stock of the Company that may be subject to contingencies or restrictions (“Restricted
Stock”; collectively, with an ISO or NQSO, each an “Award”).  The Company makes no representation or
warranty, express or implied, as to the qualification of any option as an
“incentive stock option” or any other treatment of an Award under the Code.


 


2.                                       Stock
Subject to the Plan.  Subject to the
provisions of Paragraph 10, the aggregate number of shares of the Company’s
common stock, par value $.001 per share (“Common Stock”), for which
Awards may be granted under the Plan shall not exceed 25,000,000 shares.  Such shares of Common Stock may, in the
discretion of the Board of Directors of the Company (the “Board of Directors”),
consist either in whole or in part of authorized but unissued shares of Common
Stock or shares of Common Stock held in the treasury of the Company.  Subject to the termination provisions of
Paragraph 11, any shares of Common Stock subject to an Award which for any
reason expires or is forfeited, canceled, or terminated unexercised or which
ceases for any reason to be exercisable, shall again become available for the
granting of Awards under the Plan. 
Subject to the termination provisions of Paragraph 11, unvested shares
issued under the Plan and subsequently repurchased by the Company, pursuant to
the Company’s repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent Award
grants.  The Company shall at all times
during the term of the Plan reserve and keep available such number of shares of
Common Stock as will be sufficient to satisfy the requirements of the
Plan.  As further set forth in Section 9
hereof, all Awards shall be granted by one or more written instruments (the “Contract”)
which shall set forth all terms and conditions of the Award.


 


3.                                       Administration
of the Plan. The Plan will be administered by the Board of Directors, or by
a committee (the “Committee”) consisting of two or more directors
appointed by the Board of Directors. 
Those administering the Plan shall be referred to herein as the “Administrators.”  Notwithstanding the foregoing, if the Company
is or becomes a corporation issuing any class of common equity securities
required to be registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), to the extent necessary to
preserve any deduction under Section 162(m) of the Code or to comply with
Rule 16b-3 promulgated under the Exchange Act, or any successor rule (“Rule
16b-3”), any Committee


 
















 


appointed by the Board of Directors to administer the
Plan shall be comprised of two or more directors each of whom shall be a
“non-employee director,” within the meaning of Rule 16b-3, and an “outside
director,” within the meaning of Treasury Regulation
Section 1.162-27(e)(3), and the delegation of powers to the Committee
shall be consistent with applicable laws and regulations (including, without
limitation, applicable state law and Rule 16b-3).  Unless otherwise provided in the By-Laws of
the Company, by resolution of the Board of Directors or applicable law, a
majority of the members of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, and any acts approved in writing by all members without a meeting,
shall be the acts of the Committee.


 


The Administrators shall
have authority, subject to the express provisions of the Plan, to construe the
respective Contracts and the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Contracts, which need not be identical; and to make all other
determinations in the judgment of the Administrators necessary or desirable for
the administration of the Plan.  The
Administrators may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Contract in the manner and to the extent it
shall deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency.  No
director or person acting pursuant to authority delegated by the Board shall be
liable for any action or determination under the Plan made in good faith.


 


4.                                       Eligibility.  The Administrators may from time to time,
consistent with the purposes of the Plan, grant Awards to (a) employees
(including officers and directors who are employees) of the Company, any Parent
or any of its Subsidiaries, (b) consultants to the Company, any Parent or
any of its Subsidiaries, and/or (c) to such directors of the Company who,
at the time of grant, are not common law employees of the Company or of any of
its Subsidiaries, as the Administrators may determine in their sole discretion
(each, an “Award Holder”).  Such
Awards granted shall cover such number of shares of Common Stock as the
Administrators may determine in their sole discretion; provided, however,
that if on the date of grant of an Award, any class of common stock of the
Company (including without limitation the Common Stock) is required to be
registered under Section 12 of the Exchange Act, the maximum number of
shares subject to an Award that may be granted to any Award Holder during any
calendar year under the Plan shall be 2,500,000 shares (the “Section 162(m)
Maximum”); provided, further, however, that the
aggregate market value (determined at the time the option is granted) of the
shares of Common Stock for which any eligible employee may be granted ISOs
under the Plan or any other plan of the Company, or of a Parent or a Subsidiary
of the Company, which are exercisable for the first time by such employee
during any calendar year shall not exceed $100,000.  The $100,000 ISO limitation amount shall be
applied by taking ISOs into account in the order in which they were
granted.  Any option (or portion thereof)
granted in excess of such ISO limitation amount shall be treated as a NQSO to
the extent of such excess.


 


5.                                       Options.


 


(a)                                  Grant.  The Administrators may from time to time, in
their sole discretion, consistent with the purposes of the Plan, grant options
to one or more Award Holders.


 


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(b)                                 Exercise
Price.  The exercise price of the
shares of Common Stock under each option shall be determined by the
Administrators in their sole discretion; provided, however, that
the exercise price of an ISO, or of any Award intended to satisfy the
performance-based compensation exemption to the deduction limitation under
Section 162(m) of the Code, shall not be less than the fair market value
of the Common Stock subject to such option on the date of grant; and provided,
further, however, that if, at the time an ISO is granted, the
Award Holder owns (or is deemed to own under Section 424(d) of the Code)
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company, of any of its Subsidiaries or of a
Parent, the exercise price of such ISO shall not be less than one hundred ten
percent (110%) of the fair market value of the Common Stock subject to such ISO
on the date of grant.


 


(c)                                  Term.  Each option granted pursuant to the Plan
shall be for such term as is established by the Administrators, in their sole
discretion, at or before the time such option is granted; provided, however,
that the term of each option granted pursuant to the Plan shall be for a period
not exceeding ten (10) years from the date of grant thereof, and provided further, that if, at the time
an ISO is granted, the Award Holder owns (or is deemed to own under
Section 424(d) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company, of
any of its Subsidiaries or of a Parent, the term of the ISO shall be for a
period not exceeding five (5) years from the date of grant.  Options shall be subject to earlier
termination as hereinafter provided.


 


(d)                                 Termination
of Relationship.  (i)  Except as may otherwise be expressly provided
in the applicable Contract or the Award Holder’s written employment or
consulting or termination contract, any Award Holder, whose employment or
consulting or advisory relationship with the Company, any Parent or any of its
Subsidiaries, has terminated for any reason other than the death or Disability
of the Award Holder, may exercise any option granted to the Award Holder as an
employee or consultant, to the extent exercisable on the date of such
termination, at any time within three (3) months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if such relationship is
terminated for Cause (as defined in Paragraph 17), such option shall terminate
immediately.


 


(ii)                                  For
the purposes of the Plan, an employment or consulting relationship shall be
deemed to exist between an individual and the Company if, at the time of the
determination, the individual was an employee of the Company, its Parent, any
of its Subsidiaries or any of its consultants for purposes of
Section 422(a) of the Code.  As a
result, an individual on military leave, sick leave or other bona fide leave of
absence shall continue to be considered an employee or consultant for purposes of
the Plan during such leave if the period of the leave does not exceed ninety
(90) days, or, if longer, so long as the individual’s right to re-employment
with the Company, any of its Subsidiaries or a Parent or consultant is
guaranteed either by statute or by contract. 
If the period of leave exceeds ninety (90) days and the individual’s
right to re-employment is not guaranteed by statute or by contract, the
employment or consulting relationship shall be deemed to have terminated on the
ninety-first (91st) day of such leave.


 


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(iii)                               Except
as may otherwise be expressly provided in the applicable Contract, an Award
Holder whose directorship with the Company has terminated for any reason other
than the Award Holder’s death or Disability, may exercise the options granted
to the Award Holder as a director who was not an employee of or consultant to
the Company or any of its Subsidiaries, to the extent exercisable on the date
of such termination, at any time within three (3) months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if the Award Holder’s
directorship is terminated for Cause, such option shall terminate immediately.


 


(iv)                              Except
as may otherwise be expressly provided in the applicable Contract, options
granted under this Plan to a director, officer, employee, consultant or advisor
shall not be affected by any change in the status of the Award Holder so long
as such Award Holder continues to be a director of the Company, or an officer
or employee of, or a consultant or advisor to, the Company or any of its
Subsidiaries or a Parent (regardless of having changed from one to the other or
having been transferred from one entity to another).


 


(v)                                 Nothing
in the Plan or in any option granted under the Plan shall confer on any person
any right to continue in the employ of or as a consultant or advisor of the
Company, its Parent or any of its Subsidiaries, or as a director of the
Company, or interfere in any way with any right of the Company, any Parent or
any of its Subsidiaries to terminate such relationship at any time for any
reason whatsoever without liability to the Company, any Parent or any of its
Subsidiaries.


 


(e)                                  Death
or Disability of an Award Holder. 
(i)  Except as may otherwise be
expressly provided in the applicable Contract or the Award Holder’s written
employment or consulting or termination contract, if an Award Holder dies (A)
while the Award Holder is employed by, or a consultant to, the Company, any
Parent or any of its Subsidiaries, (B) within three (3) months after the
termination of the Award Holder’s employment or consulting relationship with
the Company, any Parent and its Subsidiaries (unless such termination was for
Cause) or (C) within one (1) year following the termination of such
employment or consulting relationship by reason of the Award Holder’s
Disability, the options granted to the Award Holder as an employee of, or
consultant to, the Company or any Parent or any of its Subsidiaries, may be
exercised, to the extent exercisable on the date of the Award Holder’s death,
by the Award Holder’s Legal Representative (as such term is defined in
Paragraph 17), at any time within one (1) year after death, but not thereafter
and in no event after the date the option would otherwise have expired.  Except as may otherwise be expressly provided
in the applicable Contract or the Award Holder’s written employment or
consulting or termination contract, any Award Holder whose employment or
consulting relationship with the Company, any Parent and its Subsidiaries has
terminated by reason of the Award Holder’s Disability may exercise such
options, to the extent exercisable upon the effective date of such termination,
at any time within one (1) year after such date, but not thereafter and in no
event after the date the option would otherwise have expired.


 


(ii)                                  Except
as may otherwise be expressly provided in the applicable Contract, if an Award
Holder dies (A) while the Award Holder is a director of the Company, (B) within
three (3) months after the termination of the Award Holder’s directorship


 


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with the Company (unless such termination was for
Cause) or (C) within one (1) year after the termination of the Award Holder’s
directorship by reason of the Award Holder’s Disability, the options granted to
the Award Holder as a director who was not an employee of or consultant to the
Company or any Parent or any of its Subsidiaries, may be exercised, to the extent
exercisable on the date of the Award Holder’s death, by the Award Holder’s
Legal Representative at any time within one (1) year after death, but not
thereafter and in no event after the date the option would otherwise have
expired.  Except as may otherwise be
expressly provided in the applicable Contract, an Award Holder whose
directorship with the Company has terminated by reason of Disability, may
exercise such options, to the extent exercisable on the effective date of such
termination, at any time within one (1) year after such date, but not
thereafter and in no event after the date the option would otherwise have
expired.


 


(f)                                    Repurchase
Rights.  The Administrators shall
have the discretion to grant options which are exercisable for shares of Common
Stock subject to certain repurchase rights of the Company.  The terms upon which such repurchase right
shall be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established
by the Administrators and set forth in the Contract evidencing such repurchase
Award.


 


6.                                       Restricted
Stock.  The Administrators, in their
sole discretion, may from time to time, consistent with the purposes of the
Plan, grant shares of Common Stock to persons eligible for such grant pursuant
to Paragraph 4.  The grant may be for no
consideration or may require the Award Holder to pay such price per share
therefor, if any, as the Administrators may determine, in their sole
discretion.  Such shares may be subject
to such contingencies and restrictions as the Administrators may determine, as
set forth in the Contract, including the right to repurchase such shares upon
specified events determined by the Administrators as set forth in the Contract,
or events of forfeiture as determined by the Administrators as set forth in the
Contract.  Such rights of repurchase or
forfeiture may be based on such factors as determined by the Administrators,
including but not limited to factors relating to the tenure of the employment
or consulting relationship between the Award Holder and the Company,
performance criteria related to the Award Holder or the Company, and whether
the relationship between the Award Holder and the Company has terminated with
or without Cause or with or without the Company’s consent.  Upon the issuance of the stock certificate
for a Restricted Stock Award, or in the case of uncertificated shares, the
entry on the books of the Company’s transfer agent representing such shares,
notwithstanding any contingencies or restrictions to which the shares are
subject, the Award Holder shall be considered to be the record owner of the
shares, and subject to the contingencies and restrictions set forth in the
Award Agreement, shall have all rights of a shareholder of record with respect
to such shares, including the right to vote and to receive distributions.  The shares shall vest in the Award Holder
when all of the vesting restrictions and contingencies lapse, including the
lapse of any rights of repurchase or forfeiture as provided in the
Contract.  Until such time, the
Administrators may require that such shares be held by the Company, together
with a stock power duly endorsed in blank by the Award Holder.


 


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7.                                       Rules
of Operation.


 


(a)                                  Fair
Market Value.  The fair market value
of a share of Common Stock on any day shall be (i) if the principal market for
the Common Stock is a national securities exchange, the closing prices per
share of the Common Stock on such day as reported by such exchange or on a
consolidated tape reflecting transactions on such exchange, (ii) if the
principal market for the Common Stock is not a national securities exchange and
the Common Stock is quoted on the Nasdaq Stock Market (“Nasdaq”), and
(A) if actual sales price information is available with respect to the Common
Stock, the closing sales prices per share of the Common Stock on such day on
Nasdaq, or (B) if such information is not available, the closing bid and the
asked prices per share for the Common Stock on such day on Nasdaq, or
(iii) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on Nasdaq, the closing
bid and asked prices per share for the Common Stock on such day as reported on
the OTC Bulletin Board Service or by National Quotation Bureau, Incorporated or
a comparable service; provided, however, that if clauses (i),
(ii) and (iii) of this Paragraph 7(a) are all inapplicable because the
Company’s Common Stock is not publicly traded, or if no trades have been made
or no quotes are available for such day, the fair market value of a share of
Common Stock shall be determined by the Administrators by any method consistent
with any applicable regulations adopted by the Treasury Department relating to
stock options.


 


(b)                                 Notice
and Exercise.  An Award (or any
installment thereof), to the extent then exercisable, shall be exercised by
giving written notice to the Company at its principal office stating which
Award is being exercised, specifying the number of shares of Common Stock as to
which such Award is being exercised and accompanied by payment in full of the
aggregate exercise price therefor (or the amount due on exercise if the
applicable Contract permits installment payments) (i) in cash and/or by
certified check, (ii) with the authorization of the Administrators, with
previously acquired shares of Common Stock having an aggregate fair market
value, on the date of exercise, equal to the aggregate exercise price of all
Awards being exercised, (iii) with the authorization of the Administrators, by
delivering a recourse, interest bearing promissory note payable in one or more
installments and secured by the shares of Common Stock for which the Award is
exercised, or (iv) by any other means which the Administrators determine are
consistent with the purposes of the Plan and with applicable laws and
regulations.  The Company shall not be
required to issue any shares of Common Stock pursuant to the exercise of any
Award until all required payments with respect thereto, including payments for
any required withholding amounts, have been made.


 


To the extent permitted
by applicable laws and regulations, the Administrators may, in their sole
discretion, permit payment of the exercise price of an Award by delivery by the
Award Holder of a properly executed notice, together with a copy of the Award
Holder’s irrevocable instructions to a broker acceptable to the Administrators
to deliver promptly to the Company the amount of sale or loan proceeds
sufficient to pay such exercise price. 
In connection therewith, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.


 


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(c)                                  Fractional
Shares.  In no case may a fraction of
a share of Common Stock be purchased or issued under the Plan.


 


(d)                                 Stockholder
Rights.  An Award Holder shall not
have the rights of a stockholder with respect to such shares of Common Stock to
be received upon the exercise or grant of an Award until the date of issuance
of a stock certificate to the Award Holder for such shares or, in the case of
uncertificated shares, until the date an entry is made on the books of the
Company’s transfer agent representing such shares; provided, however,
that until such stock certificate is issued or until such book entry is made,
any Award Holder using previously acquired shares of Common Stock in payment of
an option exercise price shall continue to have the rights of a stockholder
with respect to such previously acquired shares.


 


8.                                       Compliance
with Securities Laws.


 


(a)                                  Registration.  It is a condition to the receipt or exercise
of any Award that either (i) a Registration Statement under the Securities Act
of 1933, as amended (the “Securities Act”), with respect to the shares
of Common Stock to be issued upon such grant or exercise shall be effective and
current at the time of such grant or exercise, or (ii) there is an
exemption from registration under the Securities Act for the issuance of the
shares of Common Stock upon such grant or exercise.  Nothing herein shall be construed as
requiring the Company to register shares subject to any Award under the
Securities Act or to keep any Registration Statement effective or current.


 


(b)                                 Representations
and Warranties.  The Administrators
may require, in their sole discretion, as a condition to the grant or exercise
of an Award, that the Award Holder execute and deliver to the Company the Award
Holder’s representations and warranties, in form, substance and scope
satisfactory to the Administrators, which the Administrators determine is
necessary or convenient to facilitate the perfection of an exemption from the
registration requirements of the Securities Act, applicable state securities
laws or other legal requirements, including without limitation, that (i) the
shares of Common Stock to be issued upon the receipt or exercise of an Award
are being acquired by the Award Holder for the Award Holder’s own account, for
investment only and not with a view to the resale or distribution thereof, and
(ii) any subsequent resale or distribution of shares of Common Stock by such
Award Holder will be made only pursuant to (A) a Registration Statement under
the Securities Act which is effective and current with respect to the shares of
Common Stock being sold, or (B) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption, the Award
Holder, prior to any offer of sale or sale of such shares of Common Stock, shall
provide the Company with a favorable written opinion of counsel satisfactory to
the Company, in form, substance and scope satisfactory to the Company, as to
the applicability of such exemption to the proposed sale or distribution.


 


(c)                                  Listing
of Shares.  In addition, if at any
time the Administrators shall determine that the listing or qualification of
the shares of Common Stock subject to any Award on any securities exchange,
Nasdaq or under any applicable law, or that the consent or approval of any governmental
agency or regulatory body, is necessary or desirable as a condition to, or in
connection with, the granting of an Award or the issuance of shares of Common
Stock


 


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upon exercise of an Award, such Award may not be
granted or exercised in whole or in part, as the case may be, unless such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Administrators.


 


9.                                       Award
Contracts.  Each Award shall be
evidenced by an appropriate Contract, which shall be duly executed by the
Company and the Award Holder.  Such
Contract shall contain such terms, provisions and conditions not inconsistent
herewith as may be determined by the Administrators in their sole
discretion.  The terms of each Award and
Contract need not be identical.


 


10.                                 Adjustments
upon Changes in Common Stock.


 


(a)                                  Adjustments.  Notwithstanding any other provision of the
Plan, in the event of any change in the outstanding Common Stock by reason of a
stock dividend, recapitalization, merger in which the Company is the surviving
corporation, consolidation, spin-off, split-up, combination or exchange of
shares or the like which results in a change in the number or kind of shares of
Common Stock which are outstanding immediately prior to such event, the
aggregate number and kind of shares subject to the Plan, the aggregate number
and kind of shares subject to each outstanding Award, the exercise price of
each Award, and the maximum number of shares subject to each Award that may be
granted to any employee in any calendar year, and the Section 162(m)
Maximum, shall be appropriately adjusted by the Board of Directors, whose
determination shall be conclusive and binding on all parties.  Such adjustment may provide for the
elimination of fractional shares that might otherwise be subject to options
without payment therefor. 
Notwithstanding the foregoing, no adjustment shall be made pursuant to
this Paragraph 10 if such adjustment (i) would cause the Plan to fail to comply
with Section 422 of the Code or with Rule 16b-3 of the Exchange Act (if
applicable to such Award), and (ii) would be considered as the adoption of
a new plan requiring stockholder approval. 
The conversion of one or more outstanding shares of the Company’s
Preferred Stock, if any, into Common Stock shall not in and of itself require
any adjustment under this Paragraph 10.


 


(b)                                 Acceleration
of Vesting.  Except as may otherwise
be expressly provided in an applicable Contract, in the event of a Corporate
Transaction (as defined in Paragraph 17) (i) the shares subject to each
Restricted Stock Award outstanding under the Plan shall vest in full
immediately prior to the effective date of the Corporate Transaction and (ii)
any options shall vest in full at such date so that each such Award shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for all of the shares of Common Stock at the time subject to
that Award and may be exercised for any or all of those shares as fully-vested
shares of Common Stock and such options shall otherwise terminate as of the
effective date of the Corporate Transaction. 
However, unless the Administrators determine otherwise, the shares
subject to an outstanding Award shall not vest on such an accelerated basis if
and to the extent that:  (A) such
Award is assumed by the successor corporation (or parent thereof) in the
Corporate Transaction and the Company’s repurchase rights, if any, are
concurrently assigned to such successor corporation (or parent thereof) or if
the Corporate Transaction is of the type specified in Paragraph 17(c)(i)(C) the
Company expressly agrees to allow the option to continue or (B) such Award is
to be replaced with a cash incentive program of the successor corporation which
preserves the spread existing on the unvested Award shares at


 


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the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same vesting schedule applicable
to those unvested Award shares, or (C) the acceleration of such Award is
subject to other limitations imposed by the Administrators at the time of the
Award grant.  Unless the Administrators
determine otherwise, all outstanding repurchase rights under an Award or Stock
Purchase Agreement shall also terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest in full, in the
event of a Corporate Transaction, except to the extent that  (x) those repurchase rights are assigned
to the successor corporation (or Parent thereof) in connection with such
transaction or, if the Corporate Transaction is of the type specified in
Paragraph 17(c)(i)(C) the Company expressly agrees to provide for the
continuation of such repurchase rights or (y) such accelerated vesting is
precluded by other limitations imposed by the Administrators at the time the
repurchase right is issued.


 


(c)                                  Termination
of Repurchase Rights.  The
Administrators shall have the discretionary authority, exercisable at the time
the unvested Award shares are issued or any time while the Company’s repurchase
rights with respect to those shares remain outstanding, to provide that those
rights shall automatically terminate on an accelerated basis, and the shares
subject to those terminated rights shall immediately vest, in the event that
the Award Holder’s employment should subsequently be terminated by the Company
without Cause within a designated period (not to exceed eighteen (18) months)
following the effective date of any Corporate Transaction in which those
repurchase rights are assigned to the successor corporation (or parent
thereof).


 


11.                                 Amendments
and Termination of the Plan.  The
Plan was adopted by the Board of Directors on August 2, 2004.  No Award may be granted under the Plan after
August 2, 2014.  The Board of
Directors, without further approval of the Company’s stockholders, may at any
time suspend or terminate the Plan, in whole or in part, or amend it from time
to time in such respects as it may deem advisable, including without
limitation, in order that ISOs granted hereunder meet the requirements for
“incentive stock options” under the Code, or to comply with the provisions of
Rule 16b-3 or Section 162(m) of the Code or any change in applicable laws
or regulations, ruling or interpretation of any governmental agency or
regulatory body; provided, however, that no amendment shall be
effective, without the requisite prior or subsequent stockholder approval,
which would (a) except as contemplated in Paragraph 10, increase the maximum
number of shares of Common Stock for which any Awards may be granted under the
Plan or change the Section 162 Maximum, (b) change the eligibility
requirements for individuals entitled to receive Awards hereunder, or (c) make
any change for which applicable law or any governmental agency or regulatory
body requires stockholder approval.  No
termination, suspension or amendment of the Plan shall adversely affect the
rights of an Award Holder under any Award granted under the Plan without such
Award Holder’s consent.  The power of the
Administrators to construe and administer any Award granted under the Plan
prior to the termination or suspension of the Plan shall continue after such
termination or during such suspension.


 


12.                                 Non-Transferability.  Except as may otherwise be expressly provided
in the applicable Contract, no option granted under the Plan shall be
transferable other than by will


 


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or the laws of descent and distribution, and Awards
may be exercised, during the lifetime of the Award Holder, only by the Award
Holder or the Award Holder’s Legal Representatives.  Except as may otherwise be expressly provided
in the applicable Contract, a Restricted Stock Award, to the extent not vested,
shall not be transferable otherwise than by will or the laws or descent and
distribution.  Except to the extent
provided above, Awards may not be assigned, transferred, pledged, hypothecated
or disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process, and any such
attempted assignment, transfer, pledge, hypothecation or disposition shall be
null and void ab  initio and of no force or effect.


 


13.                                 Withholding
Taxes.  The Company, or its Parent or
Subsidiary, as applicable, may withhold (a) cash or (b) with the consent of the
Administrators (in the Contract or otherwise), shares of Common Stock to be
issued under an Award or a combination of cash and shares, having an aggregate
fair market value equal to the amount which the Administrators determine is
necessary to satisfy the obligation of the Company, a Subsidiary or Parent to
withhold federal, state and local income taxes or other amounts incurred by
reason of the grant, vesting, exercise or disposition of an option or the
disposition of the underlying shares of Common Stock.  Alternatively, the Company may require the
Award Holder to pay to the Company such amount, in cash, promptly upon demand.


 


14.                                 Legends;
Payment of Expenses; Share Escrow. 
The Company may endorse such legend or legends upon the certificates for
shares of Common Stock issued upon the grant or exercise of an Award and may
issue such “stop transfer” instructions to its transfer agent in respect of
such shares as it determines, in its sole discretion, to be necessary or
appropriate to (a) prevent a violation of, or to perfect an exemption from, the
registration requirements of the Securities Act, applicable state securities
laws or other legal requirements, (b) implement the provisions of the Plan or
any agreement between the Company and the Award Holder with respect to such
shares of Common Stock, or (c) permit the Company to determine the occurrence
of a “disqualifying disposition,” as described in Section 421(b) of the
Code, of the shares of Common Stock transferred upon the exercise of an ISO
granted under the Plan.  The Company
shall pay all issuance taxes with respect to the issuance of shares of Common
Stock upon grant or exercise of an Award, as well as all fees and expenses
incurred by the Company in connection with such issuance.  Shares of Restricted Common Stock issued upon
exercise of an Award may, in the Administrator’s discretion, be held in escrow
by the Company until the Award Holder’s interest in such shares vests.


 


15.                                 Use
of Proceeds.  The cash proceeds to be
received upon the grant or exercise of an Award shall be added to the general
funds of the Company and used for such corporate purposes as the Board of
Directors may determine, in its sole discretion.


 


16.                                 Substitutions
and Assumptions of Awards of Certain Constituent Corporations.  Anything in this Plan to the contrary
notwithstanding, the Board of Directors may, without further approval by the
stockholders, substitute new Awards for prior Awards of a Constituent
Corporation (as such term is defined in Paragraph 17) or assume the prior
options or restricted stock of such Constituent Corporation.


 


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17.                                 Definitions.


 


(a)                                  “Cause,”
in connection with the termination of an Award Holder, shall mean (i) “cause,”
as such term (or any similar term, such as “with cause”) is defined in any
employment, consulting or other applicable agreement for services between the
Company and such Award Holder, or (ii) in the absence of such an agreement,
“cause” as such term is defined in the Contract executed by the Company and
such Award Holder, or (iii) in the absence of both of the foregoing or if not
defined in such agreements, (A) conviction of such Award Holder for any
felony or the entering by him of a please of guilty or nolo
contendere with respect thereto, (B) willful and repeated
failures in any material respect of such Award Holder to perform any of the Award
Holder’s reasonable duties and responsibilities assigned to him and the failure
of the Award Holder to cure such failures hereunder within thirty (30) days
after written notice thereof from the Company, (C) the commission of any
act or failure to act by such Award Holder that involves moral turpitude,
dishonesty, theft, destruction of property, fraud, embezzlement or unethical
business conduct, or that is otherwise injurious to the Company, any of its
Subsidiaries or any Parent or any other affiliate of the Company (or its or
their respective employees), whether financially or otherwise, (D) any
material violation by such Award Holder of the requirements of such Contract,
any other contract or agreement between the Company and such Award Holder or
this Plan (as in effect from time to time), (E) a breach by the Award Holder of
any confidentiality or nondisclosure agreement or any other similar agreement
or arrangement; in each case, with respect to subsections (A) through (E), as
determined by the Board of Directors.


 


(b)                                 “Constituent
Corporation” shall mean any corporation which engages with the Company, its
Parent or any Subsidiary in a transaction to which Section 424(a) of the
Code applies (or would apply if the option assumed or substituted were an ISO),
or any Parent or any Subsidiary of such corporation.


 


(c)                                  “Corporate
Transaction” shall mean


 


(i)                                     any
of the following transactions effected with a Person not an Affiliate of the
Company prior to the transaction:


 


(A)                              a
merger, consolidation or combination of the Company with or into another
issuer; (B) the exchange or sale of all or a portion of the outstanding shares
of the Company for securities of another issuer, or other consideration
provided by such issuer or by another party to such transaction; or (C) the
issuance of equity securities of the Company or securities convertible into
equity securities, in exchange for securities of another issuer or other
consideration provided by such issuer or by another party to such transaction;
and in the case of either (A), (B) or (C) the Company’s shareholders prior to
the transaction, do not possess, immediately after such transaction, more than
fifty percent (50%) (not including the holdings of the other issuer or
affiliate thereof, if such Person was a shareholder of the Company prior to the
transaction) of the voting power of any one or more of the following:  (X)  the Company; (Y) such other
issuer; or (Z) such other constituent party to the transaction; or


 


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(ii)                                  a
sale of all or substantially all of the Company’s assets to a third party not
an Affiliate of the Company immediately prior to such transaction.


 


(d)                                 “Disability”
shall mean a permanent and total disability within the meaning of
Section 22(e)(3) of the Code.


 


(e)                                  “Legal
Representative” shall mean the executor, administrator or other person who
at the time is entitled by law to exercise the rights of a deceased or
incapacitated Award Holder with respect to an Award granted under the Plan.


 


(f)                                    “Parent”
shall mean a “parent corporation” within the meaning of Section 424(e) of
the Code.


 


(g)                                 “Subsidiary”
shall mean a “subsidiary corporation” within the meaning of Section 424(f)
of the Code.


 


18.                                 Governing
Law.  The Plan, any Awards granted
hereunder, the Contracts and all related matters shall be governed by, and
construed in accordance with, the laws of the State of Nevada, other than those
laws which would defer to the substantive law of the other jurisdiction.


 


Neither the Plan nor any
Contract shall be construed or interpreted with any presumption against the
Company by reason of the Company causing the Plan or Contract to be
drafted.  Whenever from the context it
appears appropriate, any term stated in either the singular or plural shall
include the singular and plural, and any term stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and neuter.


 


19.                                 Partial
Invalidity.  The invalidity,
illegality or unenforceability of any provision in the Plan, any Award or Contract
shall not affect the validity, legality or enforceability of any other
provision, all of which shall be valid, legal and enforceable to the fullest
extent permitted by applicable law.


 


20.                                 Stockholder
Approval.  The Plan shall be subject
to approval of the Company’s stockholders. 
No options granted hereunder may be exercised prior to such approval, provided,
however, that the date of grant of any option shall be determined as if
the Plan had not been subject to such approval. 
Notwithstanding the foregoing, if the Plan is not approved by a vote of
the stockholders of the Company on or before July 30, 2005, the Plan and
any Awards granted hereunder shall terminate.


 


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