Document:

ex10-10.htm

    Exhibit
10.10

    

    Form
of Agreement with Mr. Page

    

    AGREEMENT

    

    This Agreement is entered into as of
the 29th day of September, 2009 by and between Digital Lifestyles Group, Inc., a
Delaware corporation (the "Corporation"), and Mr. Ken Page, an executive
officer, director and employee of the Corporation.

    

    WHEREAS, pursuant to the terms
of that certain Employment Agreement dated as of September 27, 2007 by and
between the Corporation and Mr. Page, Mr. Page is owed $141,000 in accrued and
unpaid compensation through the date hereof.

    

    WHEREAS, Mr. Page has agreed
to forgive a portion of such accrued but unpaid compensation and to accept five
year non-qualified options as full and complete payment for the balance of the
accrued but unpaid compensation owed him.

    

    NOW, THEREFORE, in
consideration of the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

    

    1.           Recitals.  The
foregoing recitals are true and correct.

    

    2.           Forgiveness of Accrued
Compensation.  Mr. Page hereby irrevocably forgives an
aggregate of $44,000 of accrued but unpaid compensation due him.

    

    3.           Issuance of Options in
Settlement of Accrued Compensation.  Mr. Page hereby accepts
five year non-qualified options to purchase an aggregate of 388,000 shares of
the Corporation’s common stock to be granted under the Corporation’s 2009 Stock
Compensation Plan as full and complete payment for the balance of $97,000 in
accrued but unpaid compensation due him.  Mr. Page acknowledges his
understanding that such options and the shares issuable upon the exercise
thereof shall be “restricted securities” as that term is defined under the
Securities Act of 1933 and that these shares may not be sold, transferred,
pledged or otherwise disposed of or encumbered by me except pursuant to the
applicable rules and regulations under the Securities Act of 1933 or applicable
state securities laws.

    

    4.           Amendment or
Assignment.  No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is evidenced by a
written instrument, executed by the party against which such modification,
waiver, amendment, discharge, or change is sought.

    

    5.           Notices.  All
notices, demands or other communications given hereunder shall be in writing and
shall be deemed to have been duly given on the day when delivered in person or
transmitted by confirmed facsimile transmission or on the third calendar day
after being mailed by United States registered or certified mail, return receipt
requested, postage prepaid, to the 649 Sparta Highway, Suite 102, Crossville,
TN  38555 or to such other address as any party hereto shall designate
to the other for such purpose in the manner herein set forth.

    

    6.           Entire Agreement.
This Agreement contains all of the understandings and agreements of the
parties with respect to the subject matter discussed herein.  All
prior agreements, whether written or oral, are merged herein and shall be of no
force or effect.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    7.           Severability.  The
invalidity, illegality or unenforceability of any provision or provisions of
this Agreement will not affect any other provision of this Agreement, which will
remain in full force and effect, nor will the invalidity, illegality or
unenforceability of a portion of any provision of this Agreement affect the
balance of such provision.  In the event that any one or more of the
provisions contained in this Agreement or any portion thereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision had never been contained herein.

    

    8.           Construction and
Enforcement.  This Agreement shall be construed in accordance
with the laws of the State of Delaware, without and application of the
principles of conflicts of laws.  If it becomes necessary for any
party to institute legal action to enforce the terms and conditions of this
Agreement, and such legal action results in a final judgment in favor of such
party ("Prevailing Party"), then the party or parties against whom said final
judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred, including, but not limited to, all
attorney's fees, court costs and other expenses incurred throughout all
negotiations, trials or appeals undertaken in order to enforce the Prevailing
Party's rights hereunder.  Any suit, action or proceeding with respect
to this Agreement shall be brought in the state or federal courts located in
Cumberland County in the State of Tennessee.  The parties hereto
hereby accept the exclusive jurisdiction and venue of those courts for the
purpose of any such suit, action or proceeding.  The parties hereto
hereby irrevocably waive, to the fullest extent permitted by law, any objection
that any of them may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any
judgment entered by any court in respect thereof brought in Cumberland County,
Tennessee, and hereby further irrevocably waive any claim that any suit, action
or proceeding brought in Cumberland County, Tennessee, has been brought in an
inconvenient forum.

    

    9.           Access to Independent
Advisors.  Mr. Page acknowledges that, in executing this
agreement, he has had the opportunity to seek the advice of such independent
legal counsel and/or tax professionals as he deemed necessary and appropriate to
the full understanding of the terms of this agreement, and he has read and
understood all of the terms and provisions of this agreement.

    

    10.           Binding Nature, No Third
Party Beneficiary. The terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the parties, and their respective
successors and assigns, and is made solely and specifically for their
benefit.  No other person shall have any rights, interest or claims
hereunder or be entitled to any benefits under or on account of this Agreement
as a third-party beneficiary or otherwise.

    

    11.           Counterparts.  This
Agreement may be executed in any number of counterparts, including facsimile
signatures which shall be deemed as original signatures.  All executed
counterparts shall constitute one Agreement, notwithstanding that all
signatories are not signato­ries to the original or the same
counterpart.

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above
written.

     

    
      
        	 	

                DIGITAL
      LIFESTYLES GROUP, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	Brad McNeil,
      Director	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	Ken
      Page	 

      

    

     

     

     

    2ex10-12.htm

    Exhibit
10.12

    

    DIGITAL
LIFESTYLES GROUP, INC.

    2009
EQUITY COMPENSATION PLAN

    

    1.           Purpose.

    

    1.1           Purpose. The purpose
of the Digital Lifestyles Group, Inc. 2009 Equity Compensation Plan is to enable
the Company to offer to its employees, officers, directors and consultants whose
past, present and/or potential contributions to the Company and its Subsidiaries
have been, are or will be important to the success of the Company, an
opportunity to acquire a proprietary interest in the Company. The types of
long-term incentive Awards that may be provided under the Plan will enable the
Company to respond to changes in compensation practices, tax laws, accounting
regulations and the size and diversity of its businesses.

    

    2.           Definitions.

    

    2.1           Definitions. For
purposes of the Plan, the following terms shall be defined as set
forth below:

    

    (a)           “Agreement” means the
agreement between the Company and the Holder setting forth the terms and
conditions of an Award under the Plan. Agreements shall be in the form(s)
attached hereto.

    

    (b)           “Award” means Stock
Options, Restricted Stock and/or other Stock Based Awards awarded under the
Plan.

    

    (c)           “Board” means the
Board of Directors of the Company.

    

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

    

    (e)           “Committee” means the
Compensation Committee of the Board or any other committee of the Board that the
Board may designate to administer the Plan or any portion thereof.  If
no Committee is so designated, then all references in this Plan to “Committee”
shall mean the Board.

    

    (f)           “Common Stock” means
the common stock of the Company, $0.03 par value per share.

    

    (g)           “Company” means
Digital Lifestyles Group, Inc., a corporation organized under the laws of the
State of Delaware.

    

    (h)           “Disability” means
physical or mental impairment as determined under procedures established by the
Committee for purposes of the Plan.

    

    (i)           “Effective Date” means
the date set forth in Section 12.1, below.

    

    (j)           “Fair Market Value”,
unless otherwise required by any applicable provision of the Code or any
regulations issued thereunder, means, as of any given date: (i) if the Common
Stock is listed on a national securities exchange, the closing price of the
Common Stock in the principal trading market for the Common Stock on such date,
as reported by the exchange (or on the last preceding trading date if such
security was not traded on such date); (ii) if the Common Stock is not listed on
a national securities exchange, but is traded in the over-the-counter market,
the closing bid price for the Common Stock on such date, as reported by the OTC
Bulletin Board or the Pink OTC Markets Inc. or similar publisher of such
quotations; and (iii) if the fair market value of the Common Stock cannot be
determined pursuant to clause (i) or (ii) above, such price as the Committee
shall determine, in good faith.

    

    
      
        
        

      

      
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    (k)           “Holder” means a
person who has received an Award under the Plan.

    

    (l)           “Incentive Stock
Option” means any Stock Option intended to be and designated as an
“incentive stock option” within the meaning of Section 422 of the
Code.

    

    (m)           “Nonqualified Stock
Option” means any Stock Option that is not an Incentive Stock
Option.

    

    (n)           “Normal Retirement”
means retirement from active employment with the Company or any Subsidiary,
other than for Cause or due to death or disability, of a Holder who; (i) has
reached the age of 65; (ii) has reached the age of 62 and has completed 5 years
of service with the Company; or (iii) has reached the age of 60 and has
completed 10 years of service with the Company.

    

    (o)           “Other Stock-Based
Award” means an Award under Section 9, below, that is valued in whole or
in part by reference to, or is otherwise based upon, Common Stock.

    

    (p)           “Parent” means any
present or future “parent corporation” of the Company, as such term is defined
in Section 424(e) of the Code.

    

    (q)           “Plan” means the
Digital Lifestyles Group, Inc. 2009 Equity Compensation Plan, as hereinafter
amended from time to time.

    

    (r)           “Repurchase Value”
shall mean the Fair Market Value in the event the Award to be repurchased under
Section 10.2 is comprised of shares of Common Stock and the difference between
Fair Market Value and the Exercise Price (if lower than Fair Market Value) in
the event the Award is a Stock Option or Stock Appreciation Right; in each case,
multiplied by the number of shares subject to the Award.

    

    (s)           “Restricted Stock”
means Common Stock, received under an Award made pursuant to Section 8, below
that is subject to restrictions under said Section 8.

    

    (t)           “SAR Value” means the
excess of the Fair Market Value (on the exercise date) over the exercise price
that the participant would have otherwise had to pay to exercise the related
Stock Option, multiplied by the number of shares for which the Stock
Appreciation Right is exercised.

    

    (u)           “Stock Appreciation
Right” means the right to receive from the Company, on surrender of all
or part of the related Stock Option, without a cash payment to the Company, a
number of shares of Common Stock equal to the SAR Value divided by the Fair
Market Value (on the exercise date).

    

    (v)           “Stock Option” or
“Option” means
any option to purchase shares of Common Stock that is granted pursuant to the
Plan.

    

    (w)           “Subsidiary” means any
present or future “subsidiary corporation” of the Company, as such term is
defined in Section 424(f) of the Code.

    

    3.           Administration.

    

    3.1           Committee Membership.
The Plan shall be administered by the Committee, the Board or a committee
designated by the Board. Committee members shall serve for such term as the
Board may in each case determine, and shall be subject to removal at any time by
the Board. The Committee members, to the extent deemed to be appropriate by the
Board, shall be “non-employee directors” as defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and
“outside directors” within the meaning of Section 162(m) of the Code. The
Committee shall conduct itself in conformance with the provisions of the
Compensation Committee Charter.

    

    
      
        
        

      

      
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    3.2           Powers of Committee.
The Committee shall have the authority and responsibility to recommend to the
Board for approval, Awards for Board members, executive officers, non-executive
employees and consultants of the Company, pursuant to the terms of the Plan: (i)
Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, and/or
(iv) Other Stock-Based Awards. For purposes of illustration and not of
limitation, the Committee shall have the authority (subject to the express
provisions of this Plan):

    

    (a)           to
select the officers, employees, directors and consultants of the Company or any
Subsidiary to whom Stock Options, Stock Appreciation Rights, Restricted Stock,
and/or Other Stock-Based Awards may from time to time be awarded
hereunder.

    

    (b)           to
determine the terms and conditions, not inconsistent with the terms of the Plan
or requisite Board approval, of any Award granted hereunder including, but not
limited to, number of shares, share exercise price or types of consideration
paid upon exercise of Stock Options and the purchase price of Common Stock
awarded under the Plan (including without limitation by a Holder’s conversion of
deferred salary or other indebtedness of the Company to the Holder), such as
other securities of the Company or other property, any restrictions or
limitations, and any vesting, exchange, surrender, cancellation, acceleration,
termination, exercise or forfeiture provisions, as the Committee shall
determine;

    

    (c)           to
determine any specified performance goals or such other factors or criteria
which need to be attained for the vesting of an Award granted
hereunder;

    

    (d)           to
determine the terms and conditions under which Awards granted hereunder are to
operate on a tandem basis and/or in conjunction with or apart from other equity
awarded under this Plan and cash Awards made by the Company or any Subsidiary
outside of this Plan; and

    

    (e)           to
determine the extent and circumstances under which Common Stock and
other amounts payable with respect to an Award hereunder shall be deferred
that may be either automatic or at the election of the Holder; and

    

    3.3           Interpretation
of Plan.

    

    3.1           Committee Authority.
Subject to Section 11, below, the Committee shall have the authority to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall, from time to time, deem advisable, to interpret the terms
and provisions of the Plan and any Award issued under the Plan (and to determine
the form and substance of all Agreements relating thereto), and to otherwise
supervise the administration of the Plan. Subject to Section 11, below, all
decisions made by the Committee pursuant to the provisions of the Plan shall be
made in the Committee’s sole discretion, subject to Board authorization if
indicated, and shall be final and binding upon all persons, including the
Company, its Subsidiaries and Holders.

    

    3.2           Incentive Stock
Options. Anything in the Plan to the contrary notwithstanding, no
term or provision of the Plan relating to Incentive Stock Options (including but
limited to Stock Appreciation rights granted in conjunction with an Incentive
Stock Option) or any Agreement providing for Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of the Holder(s) affected, to disqualify
any Incentive Stock Option under such Section 422.

    

    
      
        
        

      

      
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    4.           Stock
Subject to Plan.

    

    4.1           Number of Shares. The
total number of shares of Common Stock reserved and available for issuance under
the Plan shall be four million eight hundred thousand (4,800,000) shares. Shares
of Common Stock under the Plan may consist, in whole or in part, of authorized
and unissued shares or treasury shares. If any shares of Common Stock that have
been granted pursuant to a Stock Option cease to be subject to a Stock Option,
or if any shares of Common Stock that are subject to any Stock Appreciation
Right, Restricted Stock, Deferred Stock Award, or Other Stock-Based Award
granted hereunder are forfeited or any such Award otherwise terminates without a
payment being made to the Holder in the form of Common Stock, such shares shall
again be available for distribution in connection with future grants and Awards
under the Plan.

    

    4.2           Adjustment Upon Changes in
Capitalization, Etc. In the event of any dividend (other than a cash
dividend) payable on shares of Common Stock, stock split, reverse stock split,
combination or exchange of shares, or other similar event (not addressed in
Section 4.3, below) occurring after the grant of an Award, which results in a
change in the shares of Common Stock of the Company as a whole, (i) the number
of shares issuable in connection with any such Award and the purchase price
thereof, if any, shall be proportionately adjusted to reflect the occurrence of
any such event and (ii) the Committee shall determine whether such change
requires an adjustment in the aggregate number of shares reserved for issuance
under the Plan or to retain the number of shares reserved and available under
the Plan in their sole discretion. Any adjustment required by this Section 4.2
shall be made by the Committee, in good faith, subject to Board authorization if
indicated, whose determination will be final, binding and
conclusive.

    

    4.3           Certain Mergers and Similar
Transactions. In the event of (a) a dissolution or liquidation of the
Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company or their relative stock holdings and the Awards granted under this
Plan are assumed, converted or replaced by the successor corporation, which
assumption will be binding on all Awardees, (c) a merger in which the Company is
the surviving corporation but after which the stockholders of the Company
immediately prior to such merger (other than any stockholder that merges, or
which owns or controls another corporation that merges, with the Company in such
merger) cease to own their shares or other equity interest in the Company, (d)
the sale of substantially all of the assets of the Company, or (e) the
acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction, any or all outstanding Awards
may be assumed, converted or replaced by the successor corporation (if any),
which assumption, conversion or replacement will be binding on all Awardees. In
the alternative, the successor corporation may substitute equivalent Awards or
provide substantially similar consideration to Awardees as was provided to
stockholders (after taking into account the existing provisions of the Awards).
The successor corporation may also issue, in place of outstanding Shares of the
Company held by the Holder, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Holder. In the event
such successor corporation (if any) refuses or otherwise declines to assume or
substitute Awards, as provided above, (i) the vesting of any or all Awards
granted pursuant to this Plan will accelerate immediately prior to the effective
date of a transaction described in this Section 4.3 and (ii) any or all Options
granted pursuant to this Plan will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the Committee
determines. If such Options are not exercised prior to the consummation of the
corporate transaction, they shall terminate at such time as determined by the
Committee. Subject to any greater rights granted to Awardees under the foregoing
provisions of this Section 4.3, in the event of the occurrence of any
transaction described in this Section 4.3, any outstanding Awards will be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, or sale of assets.

    

    
      
        
        

      

      
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    5.           Eligibility.

    

    Awards may be made or granted to
employees, officers, directors and consultants who are deemed to have rendered
or to be able to render significant services to the Company or its Subsidiaries
and who are deemed to have contributed or to have the potential to contribute to
the success of the Company. No Incentive Stock Option shall be granted to any
person who is not an employee of the Company or a Subsidiary at the time of
grant. Notwithstanding anything to the contrary contained in the Plan, Awards
covered or to be covered under a registration statement on Form S-8 may be made
under the Plan only if (a) they are made to natural persons, (b) who provide
bona fide services to the Company or its Subsidiaries, and (c) the services are
not in connection with the offer and sale of securities in a capital raising
transaction, and do not directly or indirectly promote or maintain a market for
the Company’s securities.

    

    6.           Stock
Options.

    

    6.1           Grant and Exercise.
Stock Options granted under the Plan may be of two types: (i) Incentive Stock
Options and (ii) Nonqualified Stock Options. Any Stock Option granted under the
Plan shall contain such terms, not inconsistent with this Plan, or with respect
to Incentive Stock Options, not inconsistent with the Plan and the Code, as the
Committee may from time to time approve. The Committee shall have the authority
to grant Incentive Stock Options or Non-qualified Stock Options, or both types
of Stock Options, which may be granted alone or in addition to other Awards
granted under the Plan. To the extent that any Stock Option intended to qualify
as an Incentive Stock Option does not so qualify, it shall constitute a separate
Nonqualified Stock Option.

    

    6.2           Terms and Conditions.
Stock Options granted under the Plan shall be subject to the following terms and
conditions:

    

    (a)           Option Term. The term
of each Stock Option shall be fixed by the Committee; provided, however, that an
Incentive Stock Option may be granted only within the ten-year period commencing
from the Effective Date and may only be exercised within ten years of the date
of grant (or five years in the case of an Incentive Stock Option granted to an
optionee who, at the time of grant, owns Common Stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (“10%
Stockholder”).

    

    (b)           Exercise Price. The
exercise price per share of Common Stock purchasable under a Stock Option
shall be determined by the Committee at the time of grant and may not be less
than 100% of the Fair Market Value on the day of grant; provided, however, that
the exercise price of an Incentive Stock Option granted to a 10% Stockholder
shall not be less than 110% of the Fair Market Value on the date of
grant.

    

    (c)           Exercisability. Stock
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee and as set forth in Section
10, below. If the Committee provides, in its discretion, that any Stock Option
is exercisable only in installments, i.e., that it vests over time, the
Committee may waive such installment exercise provisions at any time at or after
the time of grant in whole or in part, based upon such factors as the Committee
shall determine.

    

    (d)           Method of Exercise.
Subject to whatever installment, exercise and waiting period provisions are
applicable in a particular case; Stock Options may be exercised in whole or in
part at any time during the term of the Option, by giving written notice of
exercise to the Company specifying the number of shares of Common Stock to be
purchased. Such notice shall be accompanied by payment in full of the purchase
price, which shall be in cash or, if provided in the Agreement, either in shares
of Common Stock (including Restricted Stock and other contingent Awards under
this Plan) or partly in cash and partly in such Common Stock, or such other
means which the Committee determines are consistent with the Plan’s purpose and
applicable law. Cash payments shall be made by wire transfer, certified or bank
check or personal check, in each case payable to the order of the Company;
provided, however, that the Company shall not be required to deliver
certificates for shares of Common Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Common
Stock shall be valued at the Fair Market Value on the date prior to the date of
exercise. Such payments shall be made by delivery of stock certificates in
negotiable form that are effective to transfer good and valid title thereto to
the Company, free of any liens or encumbrances. A Holder shall have none of the
rights of a Stockholder with respect to the shares subject to the Option until
such shares shall be transferred to the Holder upon the exercise of the
Option.

    

    
      
        
        

      

      
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    (e)           Transferability.
Except as may be set forth in the Agreement, no Stock Option shall be
transferable by the Holder other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the Holder’s
lifetime, only by the Holder (or, to the extent of legal incapacity or
incompetency, the Holder’s guardian or legal representative).

    

    (f)           Termination by Reason of
Death. If a Holder’s employment by the Company or a Subsidiary terminates
by reason of death, any Stock Option held by such Holder, unless otherwise
determined by the Committee at the time of grant and set forth in the Agreement,
shall thereupon automatically terminate, except that the portion of such Stock
Option that has vested on the date of death may thereafter be exercised by the
legal representative of the estate or by the legatee of the Holder under the
will of the Holder, for a period of one year (or such other greater or lesser
period as the Committee may specify at grant) from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter.

    

    (g)           Termination by Reason of
Disability. If a Holder’s employment by the Company or any Subsidiary
terminates by reason of Disability, any Stock Option held by such Holder, unless
otherwise determined by the Committee at the time of grant and set forth in the
Agreement, shall there upon automatically terminate, except that the portion of
such Stock Option that has vested on the date of termination may thereafter be
exercised by the Holder for a period of one year (or such other greater or
lesser period as the Committee may specify at the time of grant) from the date
of such termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.

    

    (h)           Other Termination.
Subject to the provisions of Section 13, below, and unless otherwise determined
by the Committee at the time of grant and set forth in the Agreement, if a
Holder is an employee of the Company or a Subsidiary at the time of grant and if
such Holder’s employment by the Company or any Subsidiary terminates for any
reason other than death or Disability, the Stock Option shall thereupon
automatically terminate, except that if the Holder’s employment is terminated by
the Company or a Subsidiary without cause or due to Normal Retirement, then the
portion of such Stock Option that has vested on the date of termination of
employment may be exercised for the lesser of three months after termination of
employment or the balance of such Stock Option’s term.

    

    (i)           Additional Incentive Stock
Option Limitation. In the case of an Incentive Stock Option, the
aggregate Fair Market Value (on the date of grant of the Option) with respect to
which Incentive Stock Options become exercisable for the first time by a Holder
during any calendar year (under all such plans of the Company and its Parent and
Subsidiary) shall not exceed $100,000.

    

    (j)           Buyout and Settlement
Provisions. The Committee may at any time, subject to Board
authorization, if indicated, offer to repurchase a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.

    

    7.           Stock
Appreciation Rights.

    

    7.1           Grant and Exercise.
The Committee, subject to Board authorization, if indicated, may grant Stock
Appreciation Rights to participants who have been, or are being granted, Stock
Options under the Plan as a means of allowing such participants to exercise
their Stock Options without the need to pay the exercise price in cash. In the
case of a Nonqualified Stock Option, a Stock Appreciation Right may be granted
either at or after the time of the grant of such Nonqualified Stock Option. In
the case of an Incentive Stock Option, a Stock Appreciation Right may be granted
only at the time of the grant of such Incentive Stock Option.

    

    
      
        
        

      

      
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    7.2           Terms and Conditions.
Stock Appreciation Rights shall be subject to the following terms and
conditions:

    

    (a)           Exercisability. Stock
Appreciation Rights shall be exercisable as shall be determined by the Committee
and set forth in the Agreement, subject to the limitations, if any, imposed by
the Code, with respect to related Incentive Stock Options.

    

    (b)           Termination. A Stock
Appreciation Right shall terminate and shall no longer be exercisable upon the
termination or exercise of the related Stock Option.

    

    (c)           Method of Exercise.
Stock Appreciation Rights shall be exercisable upon such terms and conditions as
shall be determined by the Committee and set forth in the Agreement and by
surrendering the applicable portion of the related Stock Option. Upon such
exercise and surrender, the Holder shall be entitled to receive a number of
shares of Common Stock equal to the SAR Value divided by the Fair Market Value
on the date the Stock Appreciation Right is exercised.

    

    (d)           Shares Affected Upon
Plan. The granting of a Stock Appreciation Right shall not affect the
number of shares of Common Stock available for Awards under the Plan. The number
of shares available for Awards under the Plan will, however, may be reduced by
the number of shares of Common Stock acquirable upon exercise of the Stock
Option to which such Stock Appreciation Right relates.

    

    8.           Restricted
Stock.

    

    8.1           Grant. Shares of
Restricted Stock may be awarded either alone or in addition to other Awards
granted under the Plan. The Committee, subject to Board authorization, if
indicated, shall determine the eligible persons to whom, and the time or times
at which, grants of Restricted Stock will be awarded, the number of shares to be
awarded, the price (if any) to be paid by the Holder, the time or times within
which such Awards may be subject to forfeiture (“Restriction Period”), the
vesting schedule and rights to acceleration thereof, and all other terms and
conditions of the Awards.

    

    8.2           Terms and Conditions.
Each Restricted Stock Award shall be subject to the following terms and
conditions:

    

    (a)           Certificates.
Restricted Stock, when issued, will be represented by a stock certificate or
certificates registered in the name of the Holder to whom such Restricted Stock
shall have been awarded. During the Restriction Period, certificates
representing the Restricted Stock and any securities constituting Retained
Distributions (as defined below) shall bear a legend to the effect that
ownership of the Restricted Stock (and such Retained Distributions), and the
enjoyment of all rights appurtenant thereto, are subject to the restrictions,
terms and conditions provided in the Plan and the Agreement. Such certificates
shall be deposited by the Holder with the Company, together with stock powers or
other instruments of assignment, each endorsed in blank, which will permit
transfer to the Company of all or any portion of the Restricted Stock and any
securities constituting Retained Distributions that shall be forfeited or that
shall not become vested in accordance with the Plan and the
Agreement.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (b)           Rights of Holder.
Restricted Stock shall constitute issued and outstanding shares of Common Stock
for all corporate purposes. The Holder will have the right to vote such
Restricted Stock, to receive and retain all regular cash dividends and other
cash equivalent distributions as the Board may in its sole discretion designate,
pay or distribute on such Restricted Stock and to exercise all other rights,
powers and privileges of a holder of Common Stock with respect to such
Restricted Stock, with the exceptions that (i) the Holder will not be entitled
to delivery of the stock certificate or certificates representing such
Restricted Stock until the Restriction Period shall have expired and unless all
other vesting requirements with respect thereto shall have been fulfilled; (ii)
the Company will retain custody of the stock certificate or certificates
representing the Restricted Stock during the Restriction Period; (iii) other
than regular cash dividends and other cash equivalent distributions as the Board
may in its sole discretion designate, pay or distribute, the Company will retain
custody of all distributions (“Retained Distributions”) made or declared with
respect to the Restricted Stock (and such Retained Distributions will be subject
to the same restrictions, terms and conditions as are applicable to the
Restricted Stock) until such time, if ever, as the Restricted Stock with respect
to which such Retained Distributions shall have been made, paid or declared
shall have become vested and with respect to which the Restriction Period shall
have expired; (iv) a breach of any of the restrictions, terms or conditions
contained in this Plan or the Agreement or otherwise established by the
Committee with respect to any Restricted Stock or Retained Distributions will
cause a forfeiture of such Restricted Stock and any Retained Distributions with
respect thereto.

    

    (c)           Vesting; Forfeiture.
Upon the expiration of the Restriction Period with respect to each Award of
Restricted Stock and the satisfaction of any other applicable restrictions,
terms and conditions (i) all or part of such Restricted Stock shall become
vested in accordance with the terms of the Agreement, subject to Section 10,
below, and (ii) any Retained Distributions with respect to such Restricted Stock
shall become vested to the extent that the Restricted Stock related thereto
shall have become vested, subject to Section 10, below. Any such Restricted
Stock and Retained Distributions that do not vest shall be forfeited to the
Company and the Holder shall not thereafter have any rights with respect to such
Restricted Stock and Retained Distributions that shall have been so
forfeited.

    

    9.           Other
Stock-Based Awards.

    

    Other Stock-Based Awards may be
awarded, subject to limitations under applicable law, that are denominated or
payable in, valued in whole or in part by reference to, or otherwise based on,
or related to, shares of Common Stock, as deemed by the Committee to be
consistent with the purposes of the Plan, including, without limitation,
purchase rights, shares of Common Stock awarded which are not subject to any
restrictions or conditions, or other rights convertible into shares of Common
Stock and Awards valued by reference to the value of securities of or the
performance of specified Subsidiaries. Other Stock-Based Awards may be awarded
either alone or in addition to or in tandem with any other Awards under this
Plan or any other plan of the Company. Each other Stock-Based Award shall be
subject to such terms and conditions as may be determined by the
Committee.

    

    10.         Accelerated
Vesting and Exercisability.

    

    10.1           Non-Approved
Transactions. If any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act of 1934, as amended (“Exchange Act”)), is or becomes
the “beneficial owner” (as referred in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company’s then outstanding securities in one or
more transactions, and the Board does not authorize or otherwise approve such
acquisition, then the vesting periods of any and all Stock Options and other
Awards granted and outstanding under the Plan shall be accelerated and all such
Stock Options and Awards will immediately and entirely vest, and the respective
holders thereof will have the immediate right to purchase and/or receive any and
all Common Stock subject to such Stock Options and Awards on the terms set
forth in this Plan and the respective agreements respecting such Stock Options
and Awards.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    10.2           Approved
Transactions. The Committee may, subject to Board authorization,
if indicated, in the event of an acquisition of substantially all of the
Company’s assets or at least 50% of the combined voting power of the Company’s
then outstanding securities in one or more transactions (including by way of
merger or reorganization) which has been approved by the Company’s Board of
Directors, (i) accelerate the vesting of any and all Stock Options and other
Awards granted and outstanding under the Plan, and (ii) require a Holder of any
Award granted under this Plan to relinquish such Award to the Company upon the
tender by the Company to Holder of cash in an amount equal to the Repurchase
Value of such Award.

    

    11.           Amendment
and Termination.

    

    The Board may at any time, and from
time to time, amend alter, suspend or discontinue any of the provisions of the
Plan, but no amendment, alteration, suspension or discontinuance shall be made
that would impair the rights of a Holder under any Agreement theretofore entered
into hereunder, without the Holder’s consent.

    

    12.           Term
of Plan.

    

    12.1           Effective Date. The
Plan shall become effective at such time as the Plan is approved and adopted by
the Company’s Board of Directors (the “Effective Date”), subject to the
following provisions:

    

    (a)           to
the extent that the Plan authorizes the Award of Incentive Stock Options,
stockholder approval for the Plan shall be obtained within 12 months of the
Effective Date; and

    

    (b)           the
failure to obtain stockholder for the Plan as contemplated by subparagraph (a)
of this Section 12 shall not invalidate the Plan; provided, however, that (i) in
the absence of such stockholder approval, Incentive Stock Options may not be
awarded under the Plan and (ii) any Incentive Stock Options theretofore awarded
under the Plan shall be converted into Non-Qualified Options upon terms and
conditions determined by the Committee to reflect, as nearly as is reasonably
practicable in its sole determination, the terms and conditions of the Incentive
Stock Options being so converted.

    

    12.2           Termination Date.
Unless otherwise terminated by the Board, this Plan shall continue to remain
effective until the earlier of ten (10) years from the Effective Date or such
time as no further Awards may be granted and all Awards granted under the Plan
are no longer outstanding. Notwithstanding the foregoing, grants of Incentive
Stock Options may be made only during the ten-year period following the
Effective Date.

    

    13.           General
Provisions.

    

    13.1           Written Agreements.
Each Award granted under the Plan shall be confirmed by, and shall be subject to
the terms, of the Agreement executed by the Company and the Holder. The
Committee may terminate any Award made under the Plan if the Agreement relating
thereto is not executed and returned to the Company within 10 days after the
Agreement has been delivered to the Holder for his or her
execution.

    

    13.2           Unfunded Status of
Plan. The Plan is intended to constitute an “unfunded” plan for incentive
and deferred compensation. With respect to any payments not yet made to a Holder
by the Company, nothing contained herein shall give any such Holder any rights
that are greater than those of a general creditor of the Company.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    13.3           Employees.

    

    (a)           Engaging in Competition with
the Company; Disclosure of Confidential Information. If a Holder’s
employment with the Company or a Subsidiary is terminated for any reason
whatsoever, and within three months after the date thereof such Holder either
(i) accepts employment with any competitor of, or otherwise engages in
competition with, the Company or (ii) discloses to anyone outside the Company or
uses any confidential information or material of the Company in violation of the
Company’s policies or any agreement between the Holder and the Company, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any Award that was realized or obtained by such
Holder at any time during the period beginning on that date that is six months
prior to the date such Holder’s employment with the Company is
terminated.

    

    (b)           Termination for
Cause. The Committee may, if a Holder’s employment with the Company
or a Subsidiary is terminated for cause, annul any Award granted under this Plan
to such employee and, in such event, the Committee, in its sole discretion, may
require such Holder to return to the Company the economic value of any Award
that was realized or obtained by such Holder at any time during the period
beginning on that date that is six months prior to the date such Holder’s
employment with the Company is terminated.

    

    (c)           No Right of
Employment. Nothing contained in the Plan or in any Award hereunder shall
be deemed to confer upon any Holder who is an employee of the Company or
any

    Subsidiary
any right to continued employment with the Company or any Subsidiary, nor shall
it interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of any Holder who is an employee at any
time.

    

    13.4          
Investment
Representations; Company Policy. The Committee may require each person
acquiring shares of Common Stock pursuant to a Stock Option or other Award under
the Plan to represent to and agree with the Company in writing that the Holder
is acquiring the shares for investment without a view to distribution thereof.
Each person acquiring shares of Common Stock pursuant to a Stock Option or other
Award under the Plan shall be required to abide by all policies of the Company
in effect at the time of such acquisition and thereafter with respect to the
ownership and trading of the Company’s securities.

    

    13.5           Additional Incentive
Arrangements. Nothing contained in the Plan shall prevent the Board
from adopting such other or additional incentive arrangements as it may deem
desirable, including, but not limited to, the granting of Stock Options and the
Awarding of Common Stock and cash otherwise than under the Plan; and such
arrangements may be either generally applicable or applicable only in specific
cases.

    

    13.6           Withholding Taxes.
Not later than the date as of which an amount must first be included in the
gross income of the Holder for Federal income tax purposes with respect to any
option or other Award under the Plan, the Holder shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. If permitted by the Committee, tax withholding
or payment obligations may be settled with Common Stock, including Common Stock
that is part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditioned upon such payment
or arrangements and the Company or the Holder’s employer (if not the Company)
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Holder from the Company or any
Subsidiary.

    

    13.7           Governing Law. The
Plan and all Awards made and actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Delaware.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    13.8           Other Benefit Plans.
Any Award granted under the Plan shall not be deemed compensation for purposes
of computing benefits under any retirement plan of the Company or any Subsidiary
and shall not affect any benefits under any other benefit plan now or
subsequently in effect under which the availability or amount of benefits is
related to the level of compensation (unless required by specific reference in
any such other plan to Awards under this Plan).

    

    13.9           Non-Transferability.
Except as otherwise expressly provided in the Plan or the Agreement, no
right or benefit under the Plan may be alienated, sold, assigned, hypothecated,
pledged, exchanged, transferred, encumbered or charged, and any attempt to
alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or
charge the same shall be void.

    

    13.10         Applicable Laws. The
obligations of the Company with respect to all Stock Options and Awards under
the Plan shall be subject to (i) all applicable laws, rules and regulations and
such approvals by any governmental agencies as may be required, including,
without limitation, the Securities Act of 1933, as amended, and (ii) the rules
and regulations of any securities exchange on which the Common Stock may be
listed.

    

    13.11         Conflicts. If any of
the terms or provisions of the Plan or an Agreement conflict with the
requirements of Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with such requirements.
Additionally, if this Plan or any Agreement does not contain any provision
required to be included herein under Section 422 of the Code, such provision
shall be deemed to be incorporated herein and therein with the same force and
effect as if such provision had been set out at length herein and therein. If
any of the terms or provisions of any Agreement conflict with any terms or
provisions of the Plan, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of the Plan.
Additionally, if any Agreement does not contain any provision required to be
included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.

    

    13.12         Non-Registered Stock.
The shares of Common Stock to be distributed under this Plan have not been, as
of the Effective Date, registered under the Securities Act of 1933, as amended,
or any applicable state or foreign securities laws and the Company has no
obligation to any Holder to register the Common Stock or to assist the Holder in
obtaining an exemption from the various registration requirements, or to list
the Common Stock on a national securities exchange or any other trading or
quotation system.

    

    Plan
Amendments

    

    
      
        
          
            
              	
                      Date
      

                      Approved
      by 

                      Board

                    	 	
                      Date
      

                      Approved
      by 

                      Stockholders,
      

                      if
      necessary

                    	 	
                       

                      Sections
      

                      Amended

                    	 	
                       

                       

                       

                      Description
      of Amendment(s)

                    
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      

            

          

        

      

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    FORM
OF OPTION AWARD AGREEMENT

    

    DIGITAL
LIFESTYLES GROUP, INC.

    649
Sparta Highway, Suite 102,

    Crossville,
Tennessee  38555

    

    

    [DATE]

    
      
        

      

      
        

        

      

    

    

    Re:           Stock
Option

    

    Dear
__________:

    

    We are pleased to advise you that, on
[_______], the Board of Directors of DIGITAL LIFESTYLES GROUP, INC. (the
“Company”) authorized the Award to you of an option to purchase [_______] shares
of our common stock, par value $0.03 per share (the “Option”), upon the
following terms and conditions:

    

    1.           The
Option is granted in accordance with and subject to the terms and conditions of
the Company’s 2009 Equity Compensation Plan (the “Plan”).

    

    2.           The
Option is [an incentive] [non-qualified] stock option.

    

    3.           The
Option is exercisable commencing on [__________] and terminating at 5:00
pm New York time on [__________].

    

    4.           The
price at which the Option may be exercised is $[_____] per share.

    

    5.           The
Option is non-transferable and may be exercised, in whole or in part, during the
exercise period, only by you, except that upon your death, the Option may be
exercised strictly in accordance with the terms and conditions of the
Plan.

    

    6.           The
exercise price and number of shares issuable upon exercise of the Option
(the “Option Shares”) are subject to adjustment in accordance with the Plan
in the event of stock splits, dividends, reorganizations and similar corporate
events.

    

    7.           If,
neither the Option nor the Option Shares have been registered under the
Securities Act of 1933, as amended (the “Act”), and the Option Shares may not be
sold, assigned, pledged, transferred or otherwise disposed of absent
registration under the Act or the availability of an applicable exemption from
registration. All certificates evidencing the Option Shares will contain a
legend describing this restriction on resale of the Option Shares. There is no
assurance that there will be a public market into which you may sell the Option
Shares or that you will be able to sell your Option Shares at a profit or at
all.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    8.           In
order to exercise the Option, you must provide us with written notice that you
are exercising all or a portion of your Option. The written notice must specify
the number of Option Shares that you are exercising your Option for, and must be
accompanied by the exercise price described in paragraph 4, above. Your Option
Shares will be issued to you within approximately one week following our receipt
of your exercise notice and cleared funds evidencing the exercise
price.

    

    9.           No
rights or privileges of a stockholder of the Company are conferred by reason of
the grant of the Option to you. You will have no rights of a stockholder until
you have delivered your exercise notice to us and we have received the exercise
price of the Option in cleared funds.

    

    10.         You
understand that the Plan contains important information about your Option and
your rights with respect to the Option. The Plan includes terms relating to your
right to exercise the Option; important restrictions on your ability to transfer
the Option or Option Shares; provisions relating to adjustments in the number of
Option Shares and the exercise price; and early termination of the Option
following the occurrence of certain events; including the termination of your
relationship with us. By signing below, you acknowledge your receipt of a copy
of the Plan. By acceptance of your Option, you agree to abide by the terms and
conditions of the Plan.

    

    11.         We
file financial reports and other information with the United States Securities
and Exchange Commission (“SEC”). The reports that we file contain
information that is important in making a decision whether to exercise the
Option or to sell the Option Shares. We urge you to review our reports and other
information we file with the SEC. These documents may be viewed at the SEC’s
website at www.sec.gov.

    

    12.         The
Option will become effective upon your acknowledgment of the terms and
conditions of this Agreement and your delivery to us of a signed counterpart of
this Agreement.

    

    13.         This
Agreement and Plan contain all of the terms and conditions of your Option and
supersedes all prior agreements or understandings relating to your Option. This
Agreement shall be governed by the laws of the State of Delaware without regard
to the conflicts of law provisions thereof.

    

    14.         This
Agreement may not be amended orally.

     

    
      
        
          
            
              
                
                  
                    
                      	 	 Very
      truly yours,	 
	 	 	 
	
                               

                            	 	 
	 	
                                    
                                
      

                              Chief
      Executive Officer

                            	 

                    

                  

                

              

            

          

        

      

    
      
        
          
            
              
                
                  
                    
                      
                        	 	 	 	 	 
	
                                
                                  AGREED
      TO AND ACCEPTED THIS

                                

                              	 	
                                 

                              	 	
                                 

                              
	
                                _____
      DAY OF ________ 20__

                              	 	 	 	 
	 	 	 	 	 
	
                                 

                                
                                  
      

                                (Signature)

                              	 	
                                 

                              	 	
                                 

                              
	 	 	 	 	 
	
                                 

                                
                                  
      

                                (Print
      Name)

                              	 	
                                 

                              	 	
                                 

                              
	
                              	 	 	 	 

                      

                    

                  

                

              

            

          

        

      

    

     

     

    2

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