Exhibit 10.11 




EQUITY INCENTIVE PLAN


effective May 30, 2007







Table of
Contents


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Page


	
 

	
 

	
 

	



	
 

	
 

	
 

	
 

	
 


	
ARTICLE I
 INTRODUCTION

	
1

	
 


	
1.1

	
 

	
Purposes

	
1

	
 


	
1.2

	
 

	
Effective
 Date

	
1

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE II
 DEFINITIONS 

	
1

	
 


	
2.1

	
 

	
Definitions

	
1

	
 


	
2.2

	
 

	
Gender and
 Number

	
3

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE III
 PLAN ADMINISTRATION

	
3

	
 


	
3.1 

	
 

	
General

	
3

	
 


	
3.2

	
 

	
Delegation
 by Committee

	
4

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE IV
 STOCK SUBJECT TO THE PLAN

	
4

	
 


	
4.1

	
 

	
Number of
 Shares

	
4

	
 


	
4.2

	
 

	
Limit on
 Option Grants

	
4

	
 


	
4.3

	
 

	
Other Shares
 of Stock

	
4

	
 


	
4.4

	
 

	
Adjustments
 for Stock Split, Stock Dividend, Etc.

	
4

	
 


	
4.5

	
 

	
General
 Adjustment Rules

	
5

	
 


	
4.6

	
 

	
Determination
 by the Committee, Etc.

	
5

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE V
 CORPORATE REORGANIZATION; CHANGE IN CONTROL

	
5

	
 


	
5.1

	
 

	
Adjustment
 of Awards

	
5

	
 


	
5.2

	
 

	
Assumption
 or Substitution of Options and Other Awards

	
5

	
 


	
5.3

	
 

	
Corporate
 Transaction

	
6

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE VI
 PARTICIPATION

	
6

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE VII
 OPTIONS

	
7

	
 


	
7.1

	
 

	
Grant of
 Options

	
7

	
 


	
7.2

	
 

	
Stock Option
 Agreements

	
7

	
 


	
7.3

	
 

	
Restrictions
 on Incentive Options

	
9

	
 


	
7.4

	
 

	
Transferability

	
9

	
 


	
7.5

	
 

	
Shareholder
 Privileges

	
9

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE VIII
 RESTRICTED STOCK AWARDS

	
10

	
 


	
8.1

	
 

	
Grant of
 Restricted Stock Awards

	
10

	
 


	
8.2

	
 

	
Restrictions

	
10

	
 


	
8.3

	
 

	
Privileges
 of a Stockholder, Transferability

	
10

	
 


	
8.4

	
 

	
Enforcement
 of Restrictions

	
10

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE IX
 STOCK BONUSES

	
11

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE X
 OTHER COMMON STOCK GRANTS

	
11

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE XI
 RIGHTS OF PARTICIPANTS

	
11

	
 


	
11.1

	
 

	
Service

	
11

	
 


	
11.2

	
 

	
Nontransferability
 of Awards Other Than Options

	
11

	
 











	
 

	
 

	
 

	
 

	
 


	
11.3

	
 

	
No Plan
 Funding

	
11

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE XII
 GENERAL RESTRICTIONS

	
12

	
 


	
12.1

	
 

	
Investment
 Representations

	
12

	
 


	
12.2

	
 

	
Compliance
 with Securities Laws

	
12

	
 


	
12.3

	
 

	
Changes in
 Accounting Rules

	
12

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE XIII
 PLAN AMENDMENT, MODIFICATION AND TERMINATION

	
12

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE XIV
 WITHHOLDING

	
13

	
 


	
14.1

	
 

	
Withholding
 Requirement

	
13

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE XV
 REQUIREMENTS OF LAW

	
13

	
 


	
15.1

	
 

	
Requirements
 of Law

	
13

	
 


	
15.2

	
 

	
Federal
 Securities Law Requirements

	
13

	
 


	
15.3

	
 

	
Governing
 Law

	
13

	
 


	
 

	
 

	
 

	
 

	
 


	
ARTICLE XVI
 DURATION OF THE PLAN

	
13

	
 











IPTIMIZE, INC.


EQUITY INCENTIVE PLAN


ARTICLE I

INTRODUCTION


          1.1    Purposes.
The
purposes of the Plan are to provide those who are selected for participation in
the Plan with added incentives to continue in the long-term service of the
Company and to create in such persons a more direct interest in the future
success of the operations of the Company by relating incentive compensation to
increases in shareholder value, so that the remuneration of those participating
in the Plan is more closely aligned with the value of the Company’s stock. The
Plan is also designed to provide a financial incentive that will help the
Company attract, retain and motivate the most qualified employees and
consultants.


          1.2    Effective
Date. The
Plan was adopted by the Board of Directors effective May 30, 2007. Incentive
options may be granted after the shareholders approve the Plan.


ARTICLE II

DEFINITIONS


          2.1    Definitions.
The
following terms shall have the meanings set forth below:


                    (a)       “Affiliated
Corporation” means any corporation or other entity that
is affiliated with the Company through stock ownership or otherwise and is
designated as an “Affiliated Corporation” by the Board, provided, however, that
for purposes of Incentive Options granted pursuant to the Plan, an “Affiliated
Corporation” means any parent or subsidiary of the Company as defined in
Section 424 of the Code.


                    (b)       “Award”
means an Option, grant of Stock pursuant to ARTICLE IX or other issuances of
Stock hereunder.


                    (c)       “Board”
means the Board of Directors of Iptimize, Inc., a Minnesota corporation.


                    (d)       “Code”
means the Internal Revenue Code of 1986, as it may be amended from time to
time.


                    (e)       “Committee”
means a committee consisting of members of the Board who are empowered
hereunder to take actions in the administration of the Plan. If applicable, the
Committee shall be so constituted at all times as to permit the Plan to comply
with Rule 16b-3 or any successor rule promulgated under the Exchange Act.
Except as provided in Section 3.2, the Committee shall select Participants from
Eligible Directors, Eligible Employees and Eligible Consultants of the Company
and shall determine the awards to be made pursuant to the Plan and the terms
and conditions thereof.


                    (f)       “Company”
means Iptimize, Inc., a Minnesota corporation, and the Affiliated Corporations.



                    (g)       “Disabled”
or “Disability”
shall have the meaning given to such terms in Section 22(e)(3) of the Code.


1 







                    (h)       “Effective
Date”
means the effective date of the Plan, May 30, 2007.


                    (i)       “Eligible
Consultants” means those consultants and advisors to the
Company who are determined, by the Committee, to be individuals whose services
are important to the Company and who are eligible to receive Awards, other than
Incentive Options, under the Plan.


                    (j)       “Eligible
Directors” means those members of the Board who
are determined by the Board to be individuals whose services are important to
the Company and who are eligible to receive Awards under the Plan. Eligible
Directors who are not also Eligible Employees may not receive Incentive
Options.


                    (k)       “Eligible
Employees”
means those employees (including, without limitation, officers and directors
who are also employees) of the Company or any subsidiary or division thereof,
upon whose judgment, initiative and efforts the Company is, or will become,
largely dependent for the successful conduct of its business. For purposes of
the Plan, an employee is any individual who provides services to the Company or
any subsidiary or division thereof as a common law employee and whose
remuneration is subject to the withholding of federal income tax pursuant to
Section 3401 of the Code.


                    (l)       “Exchange
Act”
shall mean the Securities Exchange Act of 1934, as it may be amended from time
to time.


                    (m)       “Fair
Market Value”
means, as of a given date, (i) the closing price of a Share on the principal
stock exchange on which Shares are then trading, if any (or as reported on any
composite index that includes such principal exchange) on such date, or if
Shares were not traded on such date, then on the next preceding date on which a
trade occurred; or (ii) if the Stock is not traded on an exchange but is quoted
on Nasdaq, the OTC Bulletin Board or a successor quotation system, the mean
between the closing representative bid and asked prices for the Stock on such
date as reported by Nasdaq, the OTC Bulletin Board or such successor quotation
system; or (iii) if the Stock is not publicly traded on an exchange and not
quoted on an electronic quotation system, the Fair Market Value of a Share
shall be determined by the Committee acting in good faith.


                    (n)       “Incentive
Option”
means an Option designated as such and granted in accordance with Section 422
of the Code. Incentive Options maybe granted only after the shareholders
approve the amendment to the Plan that adds Incentive Options to the Awards
that may be granted under the Plan.


                    (o)       “Non-Qualified
Option” means any Option other than an Incentive Option.


                    (p)       “Option”
means a right to purchase Stock at a stated or formula price for a specified
period of time. Options granted under the Plan shall be either Incentive
Options or Non-Qualified Options.


                    (q)       “Option
Agreement”
shall have the meaning given to such term in Section 7.2 hereof.


                    (r)       “Option
Holder”
means a Participant who has been granted one or more Options under the Plan.


                    (s)       “Option
Period”
means the period of time, determined by the Committee, during which an Option
may be exercised by the Option Holder.


2







                    (t)       “Option
Price”
means the price at which each share of Stock subject to an Option may be
purchased, determined in accordance with subsection 7.2(b).


                    (u)       “Participant”
means an Eligible Director, Eligible Employee or Eligible Consultant designated
by the Committee from time to time during the term of the Plan to receive one
or more of the Awards provided under the Plan.


                    (v)       “Restricted
Stock
Award” means an award of Stock granted to a Participant
pursuant to ARTICLE VIII that is subject to certain restrictions imposed in
accordance with the provisions of such Section.


                    (w)       “Securities
Act”
means the Securities Act of 1933, as it may be amended from time to time.


                    (x)       “Share”
means one whole share of Stock.


                    (y)       “Stock”
means the common stock of the Company.


                    (z)       “Stock
Bonus”
means either an outright grant of Stock or a grant of Stock subject to and
conditioned upon certain employment or performance related goals.


          2.2    Gender and
Number.
Except when otherwise indicated by the context, the masculine gender shall also
include the feminine gender, and the definition of any term herein in the
singular shall also include the plural.


ARTICLE III

PLAN ADMINISTRATION


          3.1    General.
The Plan
shall be administered by the Committee, or in the absence of appointment of a
Committee, by the entire Board. All references in the Plan to the Committee
shall include the entire Board if no Committee is appointed. In accordance with
the provisions of the Plan, the Committee shall, in its sole discretion, select
the Participants from among the Eligible Directors, Eligible Employees and
Eligible Consultants, determine the Awards to be made pursuant to the Plan, or
shares of Stock to be issued thereunder and the time at which such Awards are
to be made, fix the Option Price, period and manner in which an Option becomes
exercisable, establish the duration and nature of Restricted Stock Award
restrictions, establish the terms and conditions applicable to Stock Bonuses,
and establish such other terms and requirements of the various compensation
incentives under the Plan as the Committee may deem necessary or desirable and
consistent with the terms of the Plan. The Committee shall determine the form
or forms of the agreements with Participants that shall evidence the particular
provisions, terms, conditions, rights and duties of the Company and the
Participants with respect to Awards granted pursuant to the Plan, which
provisions need not be identical except as may be provided herein; provided,
however, that Eligible Consultants and Eligible Directors who are not also
Eligible Employees shall not be eligible to receive Incentive Options. The
Committee may from time to time adopt such rules and regulations for carrying
out the purposes of the Plan as it may deem proper and in the best interests of
the Company. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any agreement entered into
hereunder in the manner and to the extent it shall deem expedient and it shall
be the sole and final judge of such expediency. No member of the Committee
shall be liable for any action or determination made in good faith. The
determinations, interpretations and other actions of the Committee pursuant to
the provisions of the Plan shall be binding and conclusive for all purposes and
on all persons.


3







          3.2    Delegation by
Committee.
The Committee may, from time to time, delegate, to specified officers of the
Company, the power and authority to grant Awards under the Plan to specified
groups of Eligible Employees and Eligible Consultants, subject to such
restrictions and conditions as the Committee, in its sole discretion, may
impose. The delegation shall be as broad or as narrow as the Committee shall
determine. To the extent that the Committee has delegated the authority to
determine certain terms and conditions of an Award, all references in the Plan
to the Committee’s exercise of authority in determining such terms and
conditions shall be construed to include the officer or officers to whom the
Committee has delegated the power and authority to make such determination. The
power and authority to grant Awards to any Eligible Employee or Eligible
Consultant who is covered by Section 16(b) of the Exchange Act or who is or may
become covered by Code section 162(m) shall not be delegated by the Committee.


ARTICLE IV

STOCK SUBJECT TO THE PLAN


          4.1    Number of
Shares. The
maximum aggregate number of Shares issuable under the Plan pursuant to Awards
is 2 million Shares.


Notwithstanding
anything to the contrary contained herein, no Award granted hereunder shall
become void or otherwise be adversely affected solely because of a change in
the number of Shares of the Company that are issued and outstanding from time
to time, provided that changes to the issued and outstanding Shares may result
in adjustments to outstanding Awards in accordance with the provisions of this
ARTICLE IV. The Shares may be either authorized and unissued Shares or
previously issued Shares acquired by the Company. Such maximum numbers may be
increased from time to time by approval of the Board and by the stockholders of
the Company if, in the opinion of counsel for the Company, stockholder approval
is required. The Company shall at all times during the term of the Plan and
while any Options are outstanding retain as authorized and unissued Stock at
least the number of Shares from time to time required under the provisions of
the Plan, or otherwise assure itself of its ability to perform its obligations
hereunder.


          4.2    Limit on Option
Grants.
The maximum number of Shares with respect to which a Participant may receive
Options under the Plan during a calendar year is 200,000 Shares. The maximum
number may be increased from time to time by approval of the Board and by the
stockholders of the Company. No Options may be granted with respect to any
increased number of Shares until such increase has been approved by the
stockholders. Stockholder approval shall not be required for increases solely
pursuant to Section 4.4 below.


          4.3    Other Shares of
Stock.
Any Shares that are subject to an Option that expires or for any reason is
terminated unexercised and any Shares that are subject to an Award (other than
an Option) and that are forfeited shall automatically become available for use
under the Plan, provided, however, that no more than 4 million Shares may be
issued under Incentive Options.


          4.4    Adjustments for
Stock Split, Stock
Dividend, Etc. If the Company shall at any time increase or
decrease the number of its outstanding Shares or change in any way the rights
and privileges of such Shares by means of the payment of a stock dividend or
any other distribution upon such Shares payable in Stock, or through a stock
split, subdivision, consolidation, combination, reclassification or
recapitalization involving the Stock, then in relation to the Stock that is
affected by one or more of the above events, the numbers, rights and privileges
of the following shall be increased, decreased or changed in like manner as if
they had been issued and outstanding, fully paid and nonassessable at the time
of such occurrence: (i) the Shares as
to which Awards may be granted under the Plan, (ii) the Shares then included in
each outstanding Award granted hereunder, (iii) the maximum number of Shares
available for 


4







grant to any
one person in a calendar year pursuant to Section 4.2, (iv) the maximum number
of Shares available for grant pursuant to Incentive Options, and (v) the number
of Shares subject to a delegation of authority under Section 3.2 of this Plan.


          4.5    General
Adjustment Rules. No adjustment or substitution
provided for in this ARTICLE IV shall require the Company to sell a fractional
Share under any Option, or otherwise issue a fractional Share, and the total
substitution or adjustment with respect to each Option and other Award shall be
limited by deleting any fractional Share. In the case of any such substitution
or adjustment, the aggregate Option Price for the total number of Shares then
subject to an Option shall remain unchanged but the Option Price per Share
under each such Option shall be adjusted by the Committee to reflect the
greater or lesser number of Shares or other securities into which the Stock
subject to the Option may have been changed, and appropriate adjustments shall
be made to other Awards to reflect any such substitution or adjustment. All
adjustments to Options shall be made according to Section 1.424-1 of the
Treasury Regulations.


          4.6    Determination
by the Committee, Etc.
Adjustments under this ARTICLE IV shall be made by the Committee, whose
determinations with regard thereto shall be final and binding upon all parties
thereto.


ARTICLE V

CORPORATE REORGANIZATION; CHANGE IN CONTROL


          5.1    Adjustment of
Awards.
Upon the occurrence of a Corporate Transaction (as defined in Section 5.3), the
Committee may take any one or more of the following actions with respect to
outstanding Awards:


                    (a)       Provide
that any or all Options shall become fully exercisable regardless of whether
all conditions of exercise relating to length of service, attainment of financial
performance goals or otherwise have been satisfied;


                    (b)       Provide
that any or all restrictions with respect to Restricted Stock and other Awards
shall lapse;


                    (c)       Provide
for the assumption or substitution of any or all Awards as described in Section
5.2;


                    (d)       Make
any other provision for outstanding Awards as the Committee deems appropriate
and consistent with applicable law.


The Committee
may also provide that any Awards that are outstanding at the time the Corporate
Transaction is closed shall expire at the time of the closing. The Committee
need not take the same action with respect to all outstanding Awards or to all
outstanding Awards of the same type.


          5.2    Assumption or
Substitution of
Options and Other Awards. (a) The Company, or the successor
or purchaser, as the case may be, may make adequate provision for the
assumption of the outstanding Options or the substitution of new options for
the outstanding Options on terms comparable to the outstanding Options or
(b) the Company, or the successor or purchaser, as the case may be, may
make adequate provision for the equitable adjustment of outstanding Awards
(other than Options). Any assumption or substitution of Options shall be made
according to section 1.424-1 of the Treasury Regulations.


5







          5.3    Corporate
Transaction.
A Corporate Transaction shall include the following:


                    (a)       Merger;
Reorganization:
the merger or consolidation of the Company with or into another corporation or
other reorganization (other than a reorganization under the United States
Bankruptcy Code) of the Company (other than a consolidation, merger, or
reorganization in which the Company is the continuing corporation and which
does not result in any reclassification or change of outstanding shares of
Stock); or


                    (b)       Sale:
the sale or
conveyance of the property of the Company as an entirety or substantially as an
entirety (other than a sale or conveyance in which the Company continues as a
holding company of an entity or entities that conduct the business or
businesses formerly conducted by the Company);


                    (c)       Liquidation:
the
dissolution or liquidation of the Company; or


                    (d)       Change
in Control: A
“Change in Control” shall be deemed to have occurred if either (i) any
individual, entity, or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, acquires beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of fifty percent (50%) or more of either (a) the then-outstanding shares of
Stock (“Outstanding Shares”) or (b) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (“Voting Power”) or (ii) at any time during any
period of two consecutive years (not including any period prior to the
Effective Date), individuals who at the beginning of such period constitute the
Board (and any new director whose election by the Board or whose nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority thereof. 


ARTICLE VI

PARTICIPATION


          Participants
in the Plan shall be those Eligible Employees who, in the judgment of the
Committee, are performing, or during the term of their incentive arrangement
will perform, vital services in the management, operation and development of
the Company, and significantly contribute, or are expected to significantly
contribute, to the achievement of long-term corporate economic objectives.
Eligible Consultants shall be selected from those non-employee consultants or
advisors to the Company who are performing services important to the operation and
growth of the Company. Eligible Directors are those whose services, in the
judgment of the Committee, are important to the Company. Participants may be
granted from time to time one or more Awards; provided, however, that the grant
of each such Award shall be separately approved by the Committee and receipt of
one such Award shall not result in automatic receipt of any other Award. Upon
determination by the Committee that an Award is to be granted to a Participant,
written notice shall be given to such person, specifying the terms, conditions,
rights and duties related thereto. Each Participant shall, if required by the
Committee, enter into an agreement with the Company, in such form as the
Committee shall determine and which is consistent with the provisions of the
Plan, specifying such terms, conditions, rights and duties. Awards shall be
deemed to be granted as of the date specified in the grant resolution of the
Committee, which date shall be the date of any related agreement with the
Participant. In the event of any inconsistency between the provisions of the
Plan and any such agreement entered into hereunder, the provisions of the Plan
shall govern. 


6







ARTICLE VII


OPTIONS


          7.1     Grant
of Options.
Coincident with or following designation for participation in the Plan, a
Participant may be granted one or more Options. The Committee in its sole
discretion shall designate whether an Option is an Incentive Option or a
Non-Qualified Option; provided, however, that only Non-Qualified Options may be
granted to Eligible Consultants and to Eligible Directors who are not also
Eligible Employees; and further provided that Incentive Options may be granted
only after the shareholders have approved the amendment to the Plan to add
Incentive Options. The Committee may grant both an Incentive Option and a
Non-Qualified Option to an Eligible Employee at the same time or at different
times. Incentive Options and Non-Qualified Options, whether granted at the same
time or at different times, shall be deemed to have been awarded in separate
grants and shall be clearly identified, and in no event shall the exercise of
one Option affect the right to exercise any other Option or affect the number
of shares for which any other Option may be exercised. An Option shall be
considered as having been granted on the date specified in the grant resolution
of the Committee. 


          7.2     Stock
Option Agreements.
Each Option granted under the Plan shall be evidenced by a written stock option
certificate or agreement (an “Option Agreement”). An Option Agreement shall be
issued by the Company in the name of the Participant to whom the Option is
granted (the “Option Holder”) and in such form as may be approved by the
Committee. The Option Agreement shall incorporate and conform to the conditions
set forth in this Section 7.2 as well as such other terms and conditions that
are not inconsistent as the Committee may consider appropriate in each case. 


                    (a)        Number
of Shares.
Each Option Agreement shall state that it covers a specified number of shares
of Stock, as determined by the Committee. 


                    (b)        Price.
The price at
which each share of Stock covered by an Option may be purchased shall be
determined in each case by the Committee and set forth in the Option Agreement,
but in no event shall the price be less than 100 percent of the Fair Market
Value of the Stock on the date the Option is granted. 


                    (c)        Duration
of Options; Restrictions on
Exercise. Each Option Agreement shall state the Option Period.
The Option Period must end, in all cases, not more than ten years from the date
the Option is granted. The Option Agreement shall also set forth any
installment or other restrictions on exercise of the Option during such period,
if any, as may be determined by the Committee. Each Option shall become
exercisable (vest) over such period of time, if any, or upon such events, as
determined by the Committee. 


                    (d)        Termination
of Services, Death,
Disability, Etc. The Committee may specify the period, if any,
during which an Option may be exercised following termination of the Option
Holder’s services. The effect of this subsection 7.2(d) shall be limited to
determining the consequences of a termination and nothing in this subsection
7.2(d) shall restrict or otherwise interfere with the Company’s discretion with
respect to the termination of any individual’s services. If the Committee does
not otherwise specify, the following shall apply: 


                                 (i)        If
the services of the Option Holder are terminated within the Option Period for
“cause”, as determined by the Company, the Option shall thereafter be void for
all purposes. 


                                 (ii)        If
the Option Holder dies during the Option Period while still performing services
for the Company or within the three-month period referred to in (iii) below,
the Option may be exercised by those entitled to do so under the Option
Holder’s will or by the laws of descent and 


7 







distribution
within one year following the Option Holder’s death, (provided that such
exercise must occur within the Option Period), but not thereafter. In any such
case, the Option may be exercised only as to the shares as to which the Option
had become exercisable on or before the date of the Option Holder’s death. 


                                 (iii)        If
the services of the Option Holder are terminated (which for this purpose means
that the Option Holder is no longer employed by the Company or performing
services for the Company) by the Company within the Option Period for any
reason other than cause or death, the Option may be exercised by the Option
Holder within three months following the date of such termination (provided
that such exercise must occur within the Option Period), but not thereafter. In
any such case, the Option may be exercised only as to the shares as to which
the Option had become exercisable on or before the date of termination of
employment or services. 


                    (e)        Exercise,
Payments, Etc. 


                                 (i)         Manner
of Exercise.
The method for exercising each Option granted hereunder shall be by delivery to
the Company of written notice specifying the number of Shares with respect to
which such Option is exercised. The purchase of such Shares shall take place at
the principal offices of the Company within thirty (30) days following delivery
of such notice, at which time the Option Price of the Shares shall be paid in
full by any of the methods set forth below or a combination thereof. Except as
set forth in the next sentence, the Option shall be exercised when the Option
Price for the number of shares as to which the Option is exercised is paid to
the Company in full. If the Option Price is paid by means of a broker’s
transaction described in subsection 7.2(e)(ii)(C), in whole or in part, the
closing of the purchase of the Stock under the Option shall take place (and the
Option shall be treated as exercised) on the date on which, and only if, the
sale of Stock upon which the broker’s transaction was based has been closed and
settled, unless the Option Holder makes an irrevocable written election, at the
time of exercise of the Option, to have the exercise treated as fully effective
for all purposes upon receipt of the Option Price by the Company regardless of
whether or not the sale of the Stock by the broker is closed and settled. A
properly executed certificate or certificates representing the Shares shall be
delivered to or at the direction of the Option Holder upon payment therefor. If
Options on less than all shares evidenced by an Option Certificate are
exercised, the Company shall deliver a new Option Certificate evidencing the
Option on the remaining shares upon delivery of the Option Certificate for the
Option being exercised. 


                                 (ii)        If
the exercise price is $2,000 or less, the exercise price shall be paid by one
or a combination of the methods set forth in subsections 7.2(e)(ii)(A) or (B)
below. If the exercise price is more than $2,000, the exercise price shall be
paid by any of the following methods or any combination of the following
methods at the election of the Option Holder, or by any other method approved
by the Committee upon the request of the Option Holder: 


                                             (A)        in
cash; 


                                             (B)        by
certified check, cashier’s check or other check acceptable to the Company,
payable to the order of the Company; or 


                                             (C)        by
delivery to the Company of a properly executed notice of exercise together with
irrevocable instructions to a broker to deliver to the Company promptly the
amount of the proceeds of the sale of all or a portion of the Stock or of a
loan from the broker to the Option Holder required to pay the Option Price. 


                    (f)        Date
of Grant. An
Option shall be considered as having been granted on the date specified in the
grant resolution of the Committee. 


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                    (g)        Withholding.



                                 (i)        Non-Qualified
Options.
Upon exercise of an Option, the Option Holder shall make appropriate
arrangements with the Company to provide for the amount of additional
withholding required by Sections 3102 and 3402 of the Code and applicable state
income tax laws. 


                                 (ii)        Incentive
Options. If
an Option Holder makes a disposition (as defined in Section 424(c) of the Code)
of any Stock acquired pursuant to the exercise of an Incentive Option prior to
the expiration of two years from the date on which the Incentive Option was
granted or prior to the expiration of one year from the date on which the
Option was exercised, the Option Holder shall send written notice to the
Company at the Company’s principal place of business of the date of such
disposition, the number of shares disposed of, the amount of proceeds received
from such disposition and any other information relating to such disposition as
the Company may reasonably request. The Option Holder shall, in the event of
such a disposition, make appropriate arrangements with the Company to provide
for the amount of additional withholding, if any, required by Sections 3102 and
3402 of the Code and applicable state income tax laws. 


          7.3     Restrictions
on Incentive Options.



                    (a)        Initial
Exercise. The
aggregate Fair Market Value of the Shares with respect to which Incentive
Options are exercisable for the first time by an Option Holder in any calendar
year, under the Plan or otherwise, shall not exceed $100,000. For this purpose,
the Fair Market Value of the Shares shall be determined as of the date of grant
of the Option and Incentive Options shall be taken into account in the order
granted. 


                    (b)       Ten
Percent Stockholders.
Incentive Options granted to an Option Holder who is the holder of record of
more than 10% of the total combined voting power of all classes of stock of the
Company shall have an Option Price equal to at least 110% of the Fair Market
Value of the Shares on the date of grant of the Option and the Option Period
for any such Option shall not exceed five years. 


          7.4     Transferability.



                    (a)        General
Rule: No Lifetime Transfers.
An Option shall not be transferable by the Option Holder except by will or
pursuant to the laws of descent and distribution. An Option shall be
exercisable during the Option Holder’s lifetime only by him or her, or in the
event of Disability or incapacity, by his or her guardian or legal
representative. The Option Holder’s guardian or legal representative shall have
all of the rights of the Option Holder under this Plan. 


                    (b)        No
Assignment. No
right or interest of any Option Holder in an Option granted pursuant to the
Plan shall be assignable or transferable during the lifetime of the Option
Holder, either voluntarily or involuntarily, or be subjected to any lien,
directly or indirectly, by operation of law, or otherwise, including execution,
levy, garnishment, attachment, pledge or bankruptcy, except as set forth above.



          7.5     Shareholder
Privileges.
No Option Holder shall have any rights as a shareholder with respect to any
shares of Stock covered by an Option until the Option Holder becomes the holder
of record of such Stock, and no adjustments shall be made for dividends or
other distributions or other rights as to which there is a record date
preceding the date such Option Holder becomes the holder of record of such
Stock. 


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ARTICLE VIII 

RESTRICTED STOCK AWARDS


          8.1     Grant
of Restricted Stock Awards.
Coincident with or following designation for participation in the Plan, the
Committee may grant a Participant one or more Restricted Stock Awards
consisting of Shares of Stock. The number of Shares granted as a Restricted
Stock Award shall be determined by the Committee. 


          8.2     Restrictions.
A
Participant’s right to retain a Restricted Stock Award granted to him under
Section 8.1 shall be subject to such restrictions, including but not limited to
his continuous employment by or performance of services for the Company for a
restriction period specified by the Committee or the attainment of specified
performance goals and objectives, as may be established by the Committee with
respect to such Award. The Committee may in its sole discretion require
different periods of service or different performance goals and objectives with
respect to different Participants, to different Restricted Stock Awards or to
separate, designated portions of the Shares constituting a Restricted Stock
Award. In the event of the death or Disability of a Participant, or the
retirement of a Participant in accordance with the Company’s established
retirement policy, all required periods of service and other restrictions
applicable to Restricted Stock Awards then held by him shall lapse with respect
to a pro rata part of each such
Award based on the ratio between the number of full months of employment or
services completed at the time of termination of services from the grant of each
Award to the total number of months of employment or continued services
required for such Award to be fully nonforfeitable, and such portion of each
such Award shall become fully nonforfeitable. The remaining portion of each
such Award shall be forfeited and shall be immediately returned to the Company.
If a Participant’s employment or consulting services terminate for any other
reason, any Restricted Stock Awards as to which the period for which services
are required or other restrictions have not been satisfied (or waived or
accelerated as provided herein) shall be forfeited, and all shares of Stock
related thereto shall be immediately returned to the Company. 


          8.3     Privileges
of a Stockholder,
Transferability. A Participant shall have all voting, dividend,
liquidation and other rights with respect to Stock in accordance with its terms
received by him as a Restricted Stock Award under this ARTICLE VIII upon his
becoming the holder of record of such Stock; provided, however, that the Participant’s
right to sell, encumber, or otherwise transfer such Stock shall be subject to
the limitations of Section 11.2. 


          8.4     Enforcement
of Restrictions.
The Committee shall cause a legend to be placed on the Stock certificates
issued pursuant to each Restricted Stock Award referring to the restrictions
provided by Sections 8.2 and 8.3 and, in addition, may in its sole discretion
require one or more of the following methods of enforcing the restrictions
referred to in Sections 8.2 and 8.3: 


                    (a)       Requiring
the Participant to keep the Stock certificates, duly endorsed, in the custody
of the Company while the restrictions remain in effect; or 


                    (b)       Requiring
that the Stock certificates, duly endorsed, be held in the custody of a third
party while the restrictions remain in effect. 


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ARTICLE IX 

STOCK BONUSES


          The
Committee may award Stock Bonuses to such Participants, subject to such
conditions and restrictions, as it determines in its sole discretion. Stock
Bonuses may be either outright grants of Stock, or may be grants of Stock
subject to and conditioned upon certain employment or performance related
goals. 


ARTICLE X 

OTHER COMMON STOCK GRANTS


          From
time to time during the duration of this Plan, the Board may, in its sole
discretion, adopt one or more incentive compensation arrangements for
Participants pursuant to which the Participants may acquire shares of Stock,
whether by purchase, outright grant, or otherwise. Any such arrangements shall
be subject to the general provisions of this Plan and all shares of Stock
issued pursuant to such arrangements shall be issued under this Plan. 


ARTICLE XI 

RIGHTS OF PARTICIPANTS


          11.1     Service.
Nothing
contained in the Plan or in any Option, or other Award granted under the Plan
shall confer upon any Participant any right with respect to the continuation of
his employment by, or consulting or advisory relationship with, the Company, or
membership on the Board or interfere in any way with the right of the Company,
subject to the terms of any separate employment agreement or other contract to
the contrary, at any time to terminate such services or to increase or decrease
the compensation of the Participant from the rate in existence at the time of
the grant of an Award. Whether an authorized leave of absence, or absence in
military or government service, shall constitute a termination of service shall
be determined by the Committee at the time. 


          11.2     Nontransferability
of Awards Other
Than Options. Except as provided otherwise at the time of grant
or thereafter, no right or interest of any Participant in a Restricted Stock
Award (prior to the completion of the restriction period applicable thereto),
or other Award (excluding Options) granted pursuant to the Plan, shall be
assignable or transferable during the lifetime of the Participant, either
voluntarily or involuntarily, or subjected to any lien, directly or indirectly,
by operation of law, or otherwise, including execution, levy, garnishment,
attachment, pledge or bankruptcy. In the event of a Participant’s death, a
Participant’s rights and interests in Options, Restricted Stock Awards and
other Awards shall, to the extent provided in ARTICLE VII, ARTICLE VIII,
ARTICLE IX, and ARTICLE X, be transferable by will or the laws of descent and
distribution, and payment of any amounts due under the Plan shall be made to,
and exercise of any Options may be made by, the Participant’s legal
representatives, heirs or legatees. If in the opinion of the Committee a person
entitled to payments or to exercise rights with respect to the Plan is disabled
from caring for his affairs because of mental condition, physical condition or
age, payment due such person may be made to, and such rights shall be exercised
by, such person’s guardian, conservator or other legal personal representative
upon furnishing the Committee with evidence satisfactory to the Committee of
such status. 


          11.3     No
Plan Funding.
Obligations to Participants under the Plan will not be funded, trusteed,
insured or secured in any manner. The Participants under the Plan shall have no
security interest in any assets of the Company, and shall be only general
creditors of the Company. 


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ARTICLE XII


GENERAL RESTRICTIONS


          12.1     Investment
Representations.
The Company may require any person to whom an Option, Restricted Stock Award,
or Stock Bonus is granted, as a condition of exercising such Option, or
receiving such Restricted Stock Award or Stock Bonus, to give written
assurances in substance and form satisfactory to the Company and its counsel to
the effect that such person is acquiring the Stock for his own account for
investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems necessary
or appropriate in order to comply with Federal and applicable state securities
laws. Legends evidencing such restrictions may be placed on the Stock certificates.



          12.2     Compliance
with Securities Laws.
Each Option, Restricted Stock Award, and Stock Bonus grant shall be subject to
the requirement that, if at any time counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
Option, Restricted Stock Award or Stock Bonus grant upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in
connection with, the issuance or purchase of shares thereunder, such Option,
Restricted Stock Award, or Stock Bonus grant may not be accepted or exercised
in whole or in part unless such listing, registration, qualification, consent
or approval shall have been effected or obtained on conditions acceptable to
the Committee. Nothing herein shall be deemed to require the Company to apply
for or to obtain such listing, registration or qualification. 


          12.3     Changes
in Accounting Rules.
Except as provided otherwise at the time an Award is granted, notwithstanding
any other provision of the Plan to the contrary, if, during the term of the
Plan, any changes in the financial or tax accounting rules applicable to
Options, Restricted Stock Awards, or other Awards shall occur which, in the
sole judgment of the Committee, may have a material adverse effect on the
reported earnings, assets or liabilities of the Company, the Committee shall
have the right and power to modify as necessary, any then outstanding and
unexercised Options, outstanding Restricted Stock Awards, and other outstanding
Awards as to which the applicable services or other restrictions have not been
satisfied. 


ARTICLE XIII


PLAN AMENDMENT, MODIFICATION AND TERMINATION


          The
Board may at any time terminate, and from time to time may amend or modify the
Plan provided, however, that no amendment or modification may become effective
without approval of the amendment or modification by the shareholders if
shareholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, or if the Company, on the advice of
counsel, determines that shareholder approval is otherwise necessary or
desirable. 


          No
amendment, modification or termination of the Plan shall in any manner
adversely affect any Options, Restricted Stock Awards, Stock Bonuses or other
Award theretofore granted under the Plan, without the consent of the
Participant holding such Options, Restricted Stock Awards, Stock Bonuses or
other Awards. 


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ARTICLE XIV


WITHHOLDING


          14.1     Withholding
Requirement.
The Company’s obligation to deliver shares of Stock upon the exercise of any
Option, the vesting of any Restricted Stock Award, or the grant of Stock shall
be subject to the Participant’s satisfaction of all applicable federal, state
and local income and other tax withholding requirements. 


ARTICLE XV 

REQUIREMENTS OF LAW


          15.1     Requirements
of Law.
The issuance of Stock and the payment of cash pursuant to the Plan shall be
subject to all applicable laws, rules and regulations. 


          15.2     Federal
Securities Law Requirements.
If a Participant is an officer or director of the Company within the meaning of
Section 16, Awards granted hereunder shall be subject to all applicable
conditions required under Rule 16b-3, or any successor rule promulgated under
the Exchange Act, to qualify the Award for any exception from the provisions of
Section 16(b) of the Exchange Act available under that Rule. Such conditions
shall be set forth in the agreement with the Participant which describes the
Award or other document evidencing or accompanying the Award. 


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


ARTICLE XVI


DURATION OF THE PLAN


          Unless
sooner terminated by the Board of Directors, the Plan shall terminate at the
close of business on May 30, 2017 and no Option, Restricted Stock Award, Stock
Bonus, other Award or Stock shall be granted, or offer to purchase Stock made,
after such termination. Options, Restricted Stock Awards, and other Awards
outstanding at the time of the Plan termination may continue to be exercised,
or become free of restrictions, or paid, in accordance with their terms. 


Dated: May
30, 2007


	
 

	
 

	
 


	
 

	
IPTIMIZE, INC.


	
 

	
a Minnesota
 corporation


	
 

	
 


	
 

	
By: 

	
  /s/ Clinton J. Wilson


	
 

	
 

	


	
 

	
 

	
Name: Clinton J. Wilson





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