Document:

ex4-1.htm

    

      URBAN
BARNS FOODS INC.

       

      2010
STOCK PLAN

       

      1. Purpose.

       

      The purpose of this plan (the
"Plan") is to secure for Urban Barns Foods Inc. (the "Corporation") and its
stockholders the benefits arising from capital stock ownership by employees,
officers and directors of, and consultants or advisors to, the Corporation and
its subsidiary corporations who are expected to contribute to the Corporation's
future growth and success.  The Plan permits grants of options to
purchase shares of Common Stock, $0.001 par value per share, of the Corporation
(“Common Stock”) and awards of shares of Common Stock that are restricted as
provided in Section 12 (“Restricted Shares”).  Those provisions of the
Plan which make express reference to Section 422 of the Internal Revenue Code of
1986, as amended or replaced from time to time (the "Code"), shall apply only to
Incentive Stock Options (as that term is defined in the
Plan).

       

      2.
Type
of Options and Administration.

       

               
(a)           Types
of Options.  Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Corporation (or a
Committee designated by the Board of Directors) and may be either incentive
stock options ("Incentive Stock Options") meeting the requirements of Section
422 of the Code or non-statutory options which are not intended to meet the
requirements of Section 422 of the Code.

       

                (b)           Administration.  The
Plan will be administered by the Board of Directors of the Corporation, whose
construction and interpretation of the terms and provisions of the Plan shall be
final and conclusive.  The Board of Directors may in its sole
discretion grant Restricted Shares and options to purchase shares of Common
Stock and issue shares upon exercise of such options as provided in the
Plan.  The Board shall have authority, subject to the express
provisions of the Plan, to construe the respective option and Restricted Share
agreements and the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the respective
option and Restricted Share agreements, which need not be identical, and to make
all other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the Plan.  The Board of Directors
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any option or Restricted Share agreement in the manner and to the
extent it shall deem expedient to carry the Plan into effect and it shall be the
sole and final judge of such expediency.  No director or person acting
pursuant to authority delegated by the Board of Directors shall be liable for
any action or determination under the Plan made in good faith.  The
Board of Directors may, to the full extent permitted by or consistent with
applicable laws or regulations (including, without limitation, applicable state
law and Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), or any successor rule ("Rule 16b-3")), delegate any or all of
its powers under the Plan to a committee (the "Committee") appointed by the
Board of Directors, and if the Committee is so appointed all references to the
Board of Directors in the Plan shall mean and relate to such Committee with
respect to the powers so delegated.  Any director to whom an option or
stock grant is awarded shall be ineligible to vote upon his or her option or
stock grant, but such option or stock grant may be awarded any such director by
a vote of the remainder of the directors, except as limited
below.

       

               
(c)           Applicability
of Rule 16b-3.  Those provisions of the Plan which make express
reference to Rule 16b-3 shall apply to the Corporation only at such time as the
Corporation's Common Stock is registered under the Exchange Act, and then only
to such persons as are required to file reports under Section 16(a) of the
Exchange Act (a "Reporting Person").

       

               
(d)           Compliance
with Section 162(m) of the Code.  Section 162(m) of the Code,
added by the Omnibus Budget Reconciliation Act of 1993, generally limits the tax
deductibility to publicly held companies of compensation in excess of $1,000,000
paid to certain “covered employees” (“Covered Employees”).  It is the
Corporation’s intention to preserve the deductibility of such compensation to
the extent it is reasonably practicable and to the extent it is consistent with
the Corporation’s compensation objectives.  For purposes of this Plan,
Covered Employees of the Corporation shall be those employees of the Corporation
described in Section 162(m)(3) of the Code.

       

               
(e)           Special
Provisions Applicable to Options Granted to Covered
Employees.  In order for the full value of options granted to
Covered Employees to be deductible by the Corporation for federal income tax
purposes, the Corporation may intend for such options to be treated as
“qualified performance based compensation” as described in Treas. Reg.
§1.162-27(e) (or any successor regulation).  In such case, options
granted to Covered Employees shall be subject to the following additional
requirements:

       

      (i)           such
options and rights shall be granted only by a committee comprised solely of two
or more “outside directors”, within the meaning of Treas. Reg. § 1.162.27

                                          
(e)(3); and

       

      (ii)           the
exercise price of such options shall in no event be less than the Fair Market
Value (as defined below) of the Common Stock as of the date of grant of such

                                           
options.

       

                (f)           Section
409A of the Code.  The Board of Directors may only grant those
awards that either comply with the applicable requirements of Section 409A of
the Code, or do not result in the deferral of compensation within the meaning of
Section 409A of the Code.

       

      3.
Eligibility.

       

               (a)      General.  Options
and Restricted Shares may be granted to persons who are, at the time of grant,
in a Business Relationship (as defined below) with the Corporation; provided,
that Incentive Stock Options may only be granted to individuals who are
employees of the Corporation (within the meaning of Section 3401(c) of the
Code).  A person who has been granted an option or Restricted Shares
may, if he or she is otherwise eligible, be granted additional options or
Restricted Shares if the Board of Directors shall so determine.  For
purposes of the Plan, “Business Relationship” means that a person is serving the
Corporation, its parent, if applicable, or any of its subsidiaries, if
applicable, in the capacity of an employee, officer, director, advisor or
consultant.

       

              
(b)           Grant
of Options to Reporting Persons.  From and after the
registration of the Common Stock of the Corporation under the Exchange Act, the
selection of a director or an officer who is a Reporting Person (as the terms
"director" and "officer" are defined for purposes of Rule 16b-3) as a recipient
of an option or Restricted Shares, the timing of the option or Restricted Share
grant, the exercise price of the option and the number of Restricted Shares or
shares subject to the option shall be determined either (i) by the Board of
Directors, or (ii) by a committee consisting of two or more "Non-Employee
Directors" having full authority to act in the matter.  For the
purposes of the Plan, a director shall be deemed to be a "Non-Employee Director"
only if such person qualifies as a "Non-Employee Director" within the meaning of
Rule 16b-3, as such term is interpreted from time to time.

       

      
        
          
          

        

        
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      4.
Stock
Subject to Plan.

       

      The stock subject
to options granted under the Plan or grants of Restricted Shares shall be shares
of authorized but unissued or reacquired Common Stock.  Subject to
adjustment as provided in Section 16 below, the maximum number of shares of
Common Stock of the Corporation (“Shares”) which may be issued and sold under
the Plan is 4,000,000
Shares.  If any Restricted Shares shall be reacquired by the
Corporation, forfeited or an option granted under the Plan shall expire,
terminate or is canceled for any reason without having been exercised in full,
the forfeited Restricted Shares or unpurchased Shares subject to such option
shall again be available for subsequent option or Restricted Share grants under
the Plan. Subject to adjustment in accordance with Section 16:

       

      (a)           No
more than an aggregate of
2,000,000 Shares may be issued under Stock Options during the term of the
Plan;

       

      (b)           No
more than an aggregate of
2,000,000 Shares may be issued in the form of Restricted Shares during
the term of the Plan; and

       

      (c)           The
maximum number of Shares with respect to which options may be granted to any one
person during any fiscal year of the Corporation may not exceed 5% of the
Corporation’s issued and outstanding shares at the time of grant.

       

      These limits shall be applied and
construed consistently with Section 162(m) of the Code.

       

      5.
Forms
of Option and Restricted Share Agreements.

       

      As a condition to the grant of
Restricted Shares or an option under the Plan, each recipient of Restricted
Shares or an option shall execute an option or Restricted Share or Stock
Option  agreement in such form not inconsistent with the Plan as may
be approved by the Board of Directors.  Such Option or Restricted
Share agreements may differ among recipients.

       

      6.
Purchase
Price.

       

      (a)           General.  The
purchase price per Share deliverable upon the exercise of an option shall be
determined by the Board of Directors at the time of grant of such option; provided,
however,
that the exercise price of an option shall not be less than 100% of the Fair
Market Value (as hereinafter defined) of a Share, at the time of grant of such
option, or not less than 110% of such Fair Market Value in the case of an
Incentive Stock Option described in Section 11(b).  "Fair Market
Value" of a Share as of a specified date for the purposes of the Plan shall mean
the closing price of a Share on the principal securities exchange on which such
Shares are traded on the day immediately preceding the date as of which Fair
Market Value is being determined, or on the next preceding date on which such
Shares are traded if no shares were traded on such immediately preceding day, or
if the Shares are not traded on a securities exchange, Fair Market Value shall
be deemed to be the average of the high bid and low asked prices of the Shares
in the over-the-counter market on the day immediately preceding the date as of
which Fair Market Value is being determined or on the next preceding date on
which such high bid and low asked prices were recorded.  In no case
shall Fair Market Value be determined with regard to restrictions other than
restrictions which, by their terms, will never lapse.  The Board of
Directors may also permit optionees, either on a selective or aggregate basis,
to simultaneously exercise options and sell the Shares thereby acquired,
pursuant to a brokerage or similar arrangement, approved in advance by the Board
of Directors, and to use the proceeds from such sale as payment of the purchase
price of such shares.

       

      (b)           Payment
of Purchase Price.  Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Corporation in an amount equal to the exercise price of such
options, or, to the extent provided in the applicable option agreement, (i) by
delivery to the Corporation of Shares having a Fair Market Value on the date of
exercise equal in amount to the exercise price of the options being exercised,
(ii) through any cashless exercise feature that may be included in the option
agreement covering a particular option grant, (iii) by any other
means  which the Board of Directors determines are consistent with the
purpose of the Plan and with applicable laws and regulations (including, without
limitation, the provisions of Rule 16b-3 and Regulation T promulgated by the
Federal Reserve Board) or (iv) by any combination of such methods of
payment.

       

      7.
Option
Period.

       

      Subject to earlier termination as
provided in the Plan, each option and all rights thereunder shall expire on such
date as determined by the Board of Directors and set forth in the applicable
option agreement, provided,
that such date shall not be later than (10) ten years after the date on which
the option is granted.

       

      8.
Exercise
of Options.

       

      Each option granted under the Plan
shall be exercisable either in full or in installments at such time or times and
during such period as shall be set forth in the option agreement evidencing such
option, subject to the provisions of the Plan.  No option granted to a
Reporting Person for purposes of the Exchange Act, however, shall be exercisable
during the first six months after the date of grant.  Subject to the
requirements in the immediately preceding sentence, if an option is not at the
time of grant immediately exercisable, the Board of Directors may (i) in the
agreement evidencing such option, provide for the acceleration of the exercise
date or dates of the subject option upon the occurrence of specified events,
and/or (ii) at any time prior to the complete termination of an option,
accelerate the exercise date or dates of such option, unless it would cause an
option that otherwise qualified as an Incentive Stock Option to lose Incentive
Stock Option treatment by application of Section 422(d)(1) of the Code and
Section 11(c) of the Plan.

       

      9.
Non-transferability
of Options.

       

      No option granted under this Plan
shall be assignable or otherwise transferable by the optionee except by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), or the rules
thereunder.  An option may be exercised during the lifetime of the
optionee only by the optionee.  In the event an optionee dies during
his employment by the Corporation or any of its subsidiaries, or during the
three-month period following the date of termination of such employment, his
option shall thereafter be exercisable, during the period specified to the full
extent to which such option was exercisable by the optionee at the time of his
death during the periods set forth in Section 10 or 11(d).  If any
optionee should attempt to dispose of or encumber his or her options, other than
in accordance with the applicable terms of this Plan or the applicable option
agreement, his or her interest in such options shall
terminate.

       

      10.
Effect
of Termination of Employment or Other Relationship.

       

      Except as provided in Section 11(d)
with respect to Incentive Stock Options, and subject to the provisions of the
Plan and the applicable option agreement, an optionee may exercise an option
(but only to the extent such option was exercisable at the time of termination
of the optionee’s employment or other relationship with the Corporation) at any
time within three (3) months following the termination of the optionee's
employment or other relationship with the Corporation or within one (1) year if
such termination was due to the death or disability of the optionee, but, except
in the case of the optionee's death, in no event later than the expiration date
of the Option.  If the termination of the optionee's employment is for
cause or is otherwise attributable to a breach by the optionee of an employment
or confidentiality or non-disclosure agreement, the option shall expire
immediately upon such termination.  The Board of Directors shall have
the power to determine what constitutes a termination for cause or a breach of
an employment or confidentiality or non-disclosure agreement, whether an
optionee has been terminated for cause or has breached such an agreement, and
the date upon which such termination for cause or breach occurs.  Any
such determinations shall be final and conclusive and binding upon the
optionee.

       

      
        
          
          

        

        
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      11.
Incentive
Stock Options.

       

      Options granted under the Plan which
are intended to be Incentive Stock Options shall be subject to the following
additional terms and conditions:

       

      (a)           Express
Designation.  All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.

       

      (b)           10%
Stockholder.  If any employee to whom an Incentive Stock Option
is to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Corporation (after taking into account the
attribution of stock ownership rules of Section 424(d) of the Code), then the
following special provisions shall be applicable to the Incentive Stock Option
granted to such individual:

       

      
                                 
(i)        The purchase price
per share of the Common Stock subject to such Incentive Stock Option shall not
be less than 110% of the Fair Market Value of one share of 

                                            
Common Stock at the time of grant; and

      

       

      
                                 
(ii)        the option exercise
period shall not exceed five years from the date of grant  
..

      

       

      (c)           Dollar
Limitation.  For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Corporation) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate Fair Market Value, as
of the respective date or dates of grant, of more than $100,000 (or such other
limitations as the Code may provide).

       

      (d)           Termination
of Employment, Death or Disability.  No Incentive Stock Option
may be exercised unless, at the time of such exercise, the optionee is, and has
been continuously since the date of grant of his or her option, employed by the
Corporation, except that, unless otherwise specified in the applicable option
agreement:

       

      
                                 
(i)          an Incentive Stock
Option may be exercised within the period of three months after the date the
optionee ceases to be an employee of the Corporation (or within such lesser
period as may be specified in the applicable option agreement), provided,
that the agreement with respect to such option may designate a longer exercise
period and that the exercise after such three-month period shall be treated as
the exercise of a non-statutory option under the Plan;

      

       

      
                                 
(ii)          if the optionee
dies while in the employ of the Corporation, or within three months after the
optionee ceases to be such an employee, the Incentive Stock Option may be
exercised by the person to whom it is transferred by will or the laws of descent
and distribution within the period of one year after the date of death (or
within such lesser period as may be specified in the applicable option
agreement); and

      

       

      
                                 
(iii)         if
the optionee becomes disabled (within the meaning of Section 22(e)(3) of the
Code or any successor provisions thereto) while in the employ of the
Corporation, the Incentive Stock Option may be exercised within the period of
one year after the date the  optionee ceases to be such an employee because
of such disability (or within such lesser period as may be specified in the
applicable option agreement).

      

       

      For all purposes of
the Plan and any option granted hereunder, "employment" shall be defined in
accordance with the provisions of Section 1.421-1(h) of the Income Tax
Regulations (or any successor regulations).  Notwithstanding the
foregoing provisions no Incentive Stock Option may be exercised after its
expiration date.

       

      12.
Restricted
Shares.

       

      (a)          
Awards.  The
Board of Directors may from time to time in its discretion award Restricted
Shares to persons having a Business Relationship with the Corporation and may
determine the number of Restricted Shares awarded and the terms and conditions
of, and the amount of payment, if any, to be made by such
persons.  Each award of Restricted Shares will be evidenced by a
written agreement executed on behalf of the Corporation and containing terms and
conditions not inconsistent with the Plan as the Board of Directors shall
determine to be appropriate in its sole discretion.

       

      (b)           Restricted
Period; Lapse of Restrictions.  At the time an award of
Restricted Shares is made, the Board of Directors shall establish a period of
time (the “Restricted Period”) applicable to such award which shall not be more
than ten years.  Each award of Restricted Shares may have a different
Restricted Period.  In lieu of establishing a Restricted Period, the
Board of Directors may establish restrictions based only on the achievement of
specified performance measures or a time release schedule.  At the
time an award is made, the Board of Directors may, in its discretion, prescribe
conditions for the incremental lapse of restrictions during the Restricted
Period and for the lapse or termination of restrictions upon the occurrence of
other conditions in addition to or other than the expiration of the Restricted
Period with respect to all or any portion of the Restricted
Shares.  Such conditions may include, without limitation, the death or
disability of the participant to whom Restricted Shares are awarded, retirement
of the participant pursuant to normal or early retirement under any retirement
plan of the Corporation or termination by the Corporation of the participant’s
employment other than for cause, or the occurrence of a change in control of the
Corporation.  Such conditions may also include performance measures,
which, in the case of any such award of Restricted Shares to a participant who
is a “covered employee” within the meaning of Section 162(m) of the Code, shall
be based on one or more of the following criteria:  earnings per
share, market value per share, return on invested capital, return on operating
assets and return on equity.  The Board of Directors may also, in its
discretion, shorten or terminate the Restricted Period or waive any conditions
for the lapse or termination of restrictions with respect to all or any portion
of the Restricted Shares at any time after the date the award is
made.

       

      (c)           Rights
of Holder; Limitations Thereon.  Upon
an award of Restricted Shares, a stock certificate representing the number of
Restricted Shares awarded to the participant shall be registered in the
participant’s name and, at the discretion of the Board of Directors, will be
either delivered to the participant with an appropriate legend or held in
custody by the Corporation or a bank for the participant’s
account.  The participant shall generally have the rights and
privileges of a stockholder as to such Restricted Shares, including the right to
vote such Restricted Shares, except that the following restrictions shall apply:
(i) with respect to each Restricted Share, the participant shall not be entitled
to delivery of an unlegended certificate until the expiration nor termination of
the Restricted Period, and the satisfaction of any other conditions prescribed
by the Board of Directors, relating to such Restricted Share; (ii) with respect
to each Restricted Share, such share may not be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of until the expiration of the
Restricted Period, and the satisfaction of any other conditions prescribed by
the Board of Directors, relating to such Restricted Share (except, subject to
the provisions of the participant’s stock restriction agreement, by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA or the rules promulgated
thereunder) and (iii) all of the Restricted Shares as to which restrictions have
not at the time lapsed shall be forfeited and all rights of the participant to
such Restricted Shares shall terminate without further obligation on the part of
the Corporation unless the participant has remained in a Business Relationship
with the Corporation or any of its subsidiaries until the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Board of Directors applicable to such Restricted
Shares.  Upon the forfeiture of any Restricted Shares, such forfeited
shares shall be transferred to the Corporation without further action by the
participant.  At the discretion of the Board of Directors, cash and
stock dividends with respect to the Restricted Shares may be either currently
paid or withheld by the Corporation for the participant’s account, and interest
may be paid on the amount of cash dividends withheld at a rate and subject to
such terms as determined by the Board of Directors.  The participant
shall have the same rights and privileges, and be subject to the same
restrictions, with respect to any shares received pursuant to Section 16
hereof.

       

      (d)           Delivery
of Unrestricted Shares.  Upon
the expiration or termination of the Restricted Period and the satisfaction of
any other conditions prescribed by the Board of Directors, the restrictions
applicable to the Restricted Shares shall lapse and a stock certificate for the
number of Restricted Shares with respect to which the restrictions have lapsed
shall be delivered, free of all such restrictions, except any that may be
imposed by law including without limitation securities laws, to the participant
or the participant’s beneficiary or estate, as the case may be.  The
Corporation shall not be required to deliver any fractional share of Common
Stock but will pay, in lieu thereof, the fair market value (determined as of the
date the restrictions lapse) of such fractional share to the participant or the
participant’s beneficiary or estate, as the case may be.

       

      
        
          
          

        

        
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      13.
Additional
Provisions.

       

      (a)           Additional
Provisions.  The Board of Directors may, in its sole
discretion, include additional provisions in option or Restricted Stock
agreements covering options or Restricted Stock granted under the Plan,
including without limitation, restrictions on transfer, repurchase rights,
rights of first refusal, commitments to pay cash bonuses, to make, arrange for
or guaranty loans or to transfer other property to optionees upon exercise of
options, or such other provisions as shall be determined by the Board of
Directors; provided,
that such additional provisions shall not be inconsistent with any other term or
condition of the Plan and such additional provisions shall not cause any
Incentive Stock Option granted under the Plan to fail to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code or result in the
imposition of an additional tax under Section 409A of the
Code.

       

      (b)           Acceleration,
Extension, Etc.  The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised if it would not cause any Incentive Stock Option granted
under the Plan to fail to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Code or result in the imposition of an additional
tax under Section 409A of the Code.

       

      14. General
Restrictions.

       

      (a)           Investment
Representations.  The Corporation may require any person to
whom Restricted Shares or an option is granted, as a condition of receiving such
Restricted Shares or exercising such option, to give written assurances in
substance and form satisfactory to the Corporation to the effect that such
person is acquiring the Restricted Shares or Common Stock subject to the option
for his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Corporation deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Corporation in connection with any public offering of its Common
Stock.

       

      (b)           Compliance
with Securities Law.  Each option and grant of Restricted
Shares shall be subject to the requirement that if, at any time, counsel to the
Corporation shall determine that the listing, registration or qualification of
the Restricted Shares or shares subject to such option upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with the issuance or purchase of shares
thereunder, such Restricted Shares shall not be granted and such option may not
be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board of
Directors.  Nothing herein shall be deemed to require the Corporation
to apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.

       

      15.
Rights
as a Stockholder.

       

      The holder of an option shall have
no rights as a stockholder with respect to any shares covered by the option
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares) until the date of issue of a stock
certificate to him or her for such shares.  No adjustment shall be
made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.

       

      
        16.
Adjustment
Provisions for Recapitalization, Reorganizations and Related
Transactions.

      

       

      (a)           Recapitalization
and Related Transactions.  If, through or as a result of any
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Corporation, or (ii) additional shares or new or
different shares or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in (x) the maximum number and kind of shares reserved
for issuance under the Plan, (y) the number and kind of Restricted Shares
granted and shares or other securities subject to any then outstanding options
under the Plan, and (z) the exercise price for each share subject to any then
outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable.  Notwithstanding
the foregoing, no adjustment shall be made pursuant to this Section 16 if such
adjustment (i) would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 or (ii) would be considered as the adoption of a new
plan requiring stockholder approval.

       

      (b)           Reorganization,
Merger and Related Transactions.  If the Corporation shall be
the surviving corporation in any reorganization, merger or consolidation of the
Corporation with one or more other corporations, any then outstanding Restricted
Shares or option granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
such Restricted Shares or options would have been entitled immediately following
such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the purchase price as to which such options may be
exercised so that the aggregate purchase price as to which such options may be
exercised shall be the same as the aggregate purchase price as to which such
options may be exercised for the shares remaining subject to the options
immediately prior to such reorganization, merger, or
consolidation.

       

      (c)  Board
Authority to Make Adjustments.  Any adjustments made under this
Section 16 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive.  No fractional shares will be issued under the
Plan on account of any such adjustments.

       

      
        17.
Merger,
Consolidation, Asset Sale, Liquidation, Etc.

      

       

      (a)           General.  In
the event of a consolidation or merger in which the Corporation is not the
surviving corporation, or sale of all or substantially all of the assets of the
Corporation in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Corporation (collectively, a "Corporate
Transaction"), the Board of Directors of the Corporation, or the board of
directors of any corporation assuming the obligations of the Corporation, may,
in its discretion, take any one or more of the following actions, as to
outstanding options: (i) provide that such Restricted Shares or options shall be
assumed, or equivalent Restricted Shares or options shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof), provided
that any such options substituted for Incentive Stock Options shall meet the
requirements of Section 424(a) of the Code, (ii) upon written notice, provide
that all unexercised options and Restricted Shares will terminate immediately
prior to the consummation of such transaction unless such options are exercised
by the optionee within a specified period following the date of such notice,
(iii) in the event of a Corporate Transaction under the terms of which holders
of the Common Stock of the Corporation will receive upon consummation thereof a
cash payment for each share surrendered in the Corporate Transaction (the
"Transaction Price"), make or provide for a cash payment to the optionees equal
to the difference between (A) the Transaction Price times the number of shares
of Common Stock subject to such outstanding options (to the extent then
exercisable at prices not in excess of the Transaction Price) and (B) the
aggregate exercise price of all such outstanding options in exchange for the
termination of such options, and (iv) provide that all restrictions on
Restricted Shares shall lapse in full or in part and all or any outstanding
options shall become exercisable in full or in part immediately prior to such
event.

       

      (b)           Substitute
Restricted Shares or Options.  The Corporation may grant
Restricted Shares or options under the Plan in substitution for Restricted
Shares or options held by persons in a Business Relationship with another
corporation who enter into a Business Relationship with the Corporation, or a
subsidiary of the Corporation, as the result of a merger or consolidation of the
employing corporation with the Corporation or a subsidiary of the Corporation,
or as a result of the acquisition by the Corporation, or one of its
subsidiaries, of property or stock of the other corporation.  The
Corporation may direct that substitute Restricted Shares or options be granted
on such terms and conditions as the Board of Directors considers appropriate in
the circumstances.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      18.
No
Special Employment Rights.

       

      Nothing contained in the Plan or in
any Restricted Share or option agreement shall confer upon any holder of
Restricted Shares or optionee any right with respect to the continuation of his
or her employment by, or other Business Relationship with, the Corporation or
interfere in any way with the right of the Corporation at any time to terminate
such employment or Business Relationship or to increase or decrease the
compensation of the optionee.

       

      19.
Other
Employee Benefits.

       

      Except as to plans which by their
terms include such amounts as compensation, the amount of any compensation
deemed to be received by an employee as a result of the grant of Restricted
Shares or lapse of restrictions thereon, the exercise of an option or the sale
of shares received upon such exercise will not constitute compensation with
respect to which any other employee benefits of such employee are determined,
including, without limitation, benefits under any bonus, pension,
profit-sharing, life insurance or salary continuation plan, except as otherwise
specifically determined by the Board of Directors.

       

      20. Amendment
of the Plan.

       

      (a)           The
Board of Directors may at any time, and from time to time, modify or amend the
Plan in any respect, except that if at any time the approval of the stockholders
of the Corporation is required under Section 422 of the Code or any successor
provision with respect to Incentive Stock Options, or the legal requirements
relating to the administration of equity compensation plans, if any, under
applicable provisions of federal securities laws, applicable state corporate and
securities laws, the Code, the rules of any applicable stock exchange or
national market system or quotation system on which the Common Stock is listed
or quoted, and the applicable laws and rules of any foreign country or
jurisdiction where awards are, or will be, granted under the
Plan.

       

      (b)           The
termination or any modification or amendment of the Plan shall not, without the
consent of an optionee or holder of Restricted Shares, affect his or her rights
under an option or grant of Restricted Shares previously granted to him or
her.  With the consent of the optionee or holder of Restricted Shares
affected, the Board of Directors may amend outstanding option or Restricted
Share agreements in a manner not inconsistent with the Plan.  The
Board of Directors shall have the right to amend or modify the terms and
provisions of the Plan and of any outstanding Incentive Stock Options granted
under the Plan to the extent necessary to qualify any or all such options for
such favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code.

       

      21. Withholding.

       

      (a)           The
Corporation shall have the right to deduct from payments of any kind otherwise
due to the optionee or holder of Restricted Shares any federal, state or local
taxes of any kind required by law to be withheld with respect to any shares
issued upon exercise of options or lapse of restrictions on Restricted Shares
under the Plan.  Subject to the prior approval of the Corporation,
which may be withheld by the Corporation in its sole discretion, the optionee or
holder of Restricted Shares may elect to satisfy such obligations, in whole or
in part, (i) by causing the Corporation to withhold shares of Common Stock
otherwise issuable pursuant to the exercise of an option or lapse of
restrictions on Restricted Shares or (ii) by delivering to the Corporation
shares of Common Stock already owned by the optionee or holder of Restricted
Shares.  The shares so delivered or withheld shall have a Fair Market
Value equal to such withholding obligation as of the date that the amount of tax
to be withheld is to be determined.  An optionee who has made an
election pursuant to this Section 21(a) may satisfy his or her withholding
obligation only with shares of Common Stock which are not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar
requirements.

       

      (b)           The
acceptance of shares of Common Stock upon exercise of an Incentive Stock Option
shall constitute an agreement by the optionee (i) to notify the Corporation if
any or all of such shares are disposed of by the optionee within two years from
the date the option was granted or within one year from the date the shares were
transferred to the optionee pursuant to the exercise of the option, and (ii) if
required by law, to remit to the Corporation, at the time of and in the case of
any such disposition, an amount sufficient to satisfy the Corporation's federal,
state and local withholding tax obligations with respect to such disposition,
whether or not, as to both (i) and (ii), the optionee is in the employ of the
Corporation at the time of such disposition.

       

      (c)           Notwithstanding
the foregoing, in the case of a Reporting Person whose options have been granted
in accordance with the provisions of Section 3(b) herein, no election to use
shares for the payment of withholding taxes shall be effective unless made in
compliance with any applicable requirements of Rule 16b-3.

       

      22.Section
162(m) of the Code.  

       

                  
The Board of Directors, in its sole discretion, may require that one or
more agreements contain provisions which provide that, in the event Section
162(m) of the Code, or any successor provision relating to excessive employee
remuneration, would operate to disallow a deduction by the Corporation for all
or part of any payment of an award under the Plan, a grantee’s receipt of the
portion that would not be deductible by the Corporation shall be deferred to
either the earliest date at which the Board reasonably anticipates that the
grantee's remuneration either does not exceed the limit set forth in Section
162(m) of the Code or is not subject to Section 162(m) of Code, or the calendar
year in which the grantee separates from service.  This Section 22
shall be applied and construed consistently with Section 409A of the Code and
the regulations (and guidance) thereunder.

       

      23. Effective
Date and Duration of the Plan.

       

      (a)           Effective
Date.  The Plan shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Corporation's stockholders.  If such stockholder approval is not
obtained within twelve (12) months after the date of the Board's adoption of the
Plan, no options previously granted under the Plan shall be deemed to be
Incentive Stock Options and no Incentive Stock Options shall be granted
thereafter.  Amendments to the Plan not requiring stockholder approval
shall become effective when adopted by the Board of Directors; amendments
requiring stockholder approval (as provided in Section 20) shall become
effective when adopted by the Board of Directors, but no Incentive Stock Option
granted after the date of such amendment shall become exercisable (to the extent
that such amendment to the Plan was required to enable the Corporation to grant
such Incentive Stock Option to a particular optionee) unless and until such
amendment shall have been approved by the Corporation's
stockholders.  If such stockholder approval is not obtained within
twelve (12) months of the Board's adoption of such amendment, any Incentive
Stock Options granted on or after the date of such amendment shall terminate to
the extent that such amendment to the Plan was required to enable the
Corporation to grant such option to a particular optionee.  Subject to
this limitation, options may be granted under the Plan at any time after the
effective date and before the date fixed for termination of the
Plan.

       

      (b)           Termination.  Unless
sooner terminated in accordance with Section 17, the Plan shall terminate upon
the earlier of (i) the close of business on the day next preceding the tenth
anniversary of the date of its adoption by the Board of Directors, or (ii) the
date on which all shares available for issuance under the Plan shall have been
issued pursuant to the exercise or cancellation of Restricted Shares or options
granted under the Plan.  If the date of termination is determined
under (i) above, then Restricted Shares or options outstanding on such date
shall continue to have force and effect in accordance with the provisions of the
instruments evidencing such Restricted Shares or options.

       

      24. Governing
Law.

       

                 
The provisions of this Plan shall be governed and construed in accordance with
the laws of the State of Nevada without regard to the principles of conflicts of
laws.

       

       Adopted by the
Board of Directors on March 6, 2010

       

       

       

5ex4-2.htm

    

      URBAN
BARNS FOODS INC.

       

      NOTICE OF
GRANT

       

      Capitalized but
otherwise undefined terms in this Notice of Grant and the attached Stock Option
Agreement shall have the same defined meanings as in the 2010 Stock
Plan.

       

      Name: _____________________   Address:__________________________________________________________________________________________________________________________________                                                                                                

       

      You have been
granted an option (the “Option”) to purchase Common Stock of the Corporation,
subject to the terms and conditions of the Plan and the attached Stock Option
Agreement, as follows:

      

        
          	
                  Date of
      Grant:

                	 
    
	
                  Vesting
      Commencement Date:

                	 
    
	
                  Option Price
      per Share:

                	
                  $

                
	
                  Total Number
      of Shares Granted:

                	 
    
	
                  Total Option
      Price:

                	
                  $

                
	
                  Type of
      Option:

                	
                               Incentive Stock
      Option

                
	 
    	
                               Nonqualified
      Stock Option

                
	
                  Term/Expiration
      Date:

                	
                         Five
      (5)    years after Date of
      Grant

                

        

      

       

      Vesting
Schedule:

       

      The Option shall
vest, in whole or in part, in accordance with the following
schedule:

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      URBAN
BARNS FOODS INC.

       

      2010 STOCK PLAN

       

      STOCK
OPTION AGREEMENT

       

       

      This STOCK
OPTION AGREEMENT (“Agreement”), dated as of the ___ day of ________, 2010
is made by and between URBAN BARNS FOODS INC., a Nevada corporation (the
“Corporation”), and ____________________ (the “Optionee,” which term as used
herein shall be deemed to include any successor to the Optionee by will or by
the laws of descent and distribution, unless the context shall otherwise
require).

       

      BACKGROUND

       

      Pursuant to the Corporation’s 2010
Stock Plan (the “Plan”), the Corporation, acting through the Committee of the
Board of Directors (if a committee has been formed to administer the Plan) or
its entire Board of Directors (if no such committee has been formed) responsible
for administering the Plan (in either case, referred to herein as the
“Committee”), approved the issuance to the Optionee, ___________________ share
options at $_____ per share, effective as of the date set forth above, of a
stock option to purchase shares of Common Stock of the Corporation at the price
(the “Option Price”) set forth in the attached Notice of Grant (which is
expressly incorporated herein and made a part hereof, the “Notice of Grant”),
upon the terms and conditions hereinafter set forth.

       

       

      NOW,
THEREFORE, in consideration of the mutual premises and undertakings
hereinafter set forth, the parties hereto agree as follows:

       

      1. Option;
Option Price.  On behalf of the Corporation, the Committee
hereby grants to the Optionee the option (the “Option”) to purchase, subject to
the terms and conditions of this Agreement and the Plan (which is incorporated
by reference herein and which in all cases shall control in the event of any
conflict with the terms, definitions and provisions of this Agreement), that
number of shares of Common Stock of the Corporation set forth in the Notice of
Grant, at an exercise price per share equal to the Option Price as is set forth
in the Notice of Grant (the “Optioned Shares”).  If designated in the
Notice of Grant as an “incentive stock option,” the Option is intended to
qualify for Federal income tax purposes as an “incentive stock option” within
the meaning of Section 422 of the Code.  A copy of the Plan as in
effect on the date hereof has been supplied to the Optionee, and the Optionee
hereby acknowledges receipt thereof.

       

      2. Term.  The
term (the “Option Term”) of the Option shall commence on the date of this
Agreement and shall expire on the Expiration Date set forth in the Notice of
Grant unless such Option shall theretofore have been terminated in accordance
with the terms of the Notice of Grant, this Agreement or of the
Plan.

       

      3. Time
of Exercise.

       

      (a) Unless accelerated
in the discretion of the Committee or as otherwise provided herein, the Option
shall become exercisable during its term in accordance with the Vesting Schedule
set out in the Notice of Grant.  Subject to the provisions of Sections
5 and 8 hereof, shares as to which the Option becomes exercisable pursuant to
the foregoing provisions may be purchased at any time thereafter prior to the
expiration or termination of the Option.

       

      (b) Anything contained
in this Agreement to the contrary notwithstanding, to the extent the Option is
intended to be an Incentive Stock Option, the Option shall not be exercisable as
an Incentive Stock Option, and shall be treated as a Non-Statutory Option, to
the extent that the aggregate Fair Market Value on the date hereof of all stock
with respect to which Incentive Stock Options are exercisable for the first time
by the Optionee during any calendar year (under the Plan and all other plans of
the Corporation, its parent and its subsidiaries, if any) exceeds
$100,000.

       

      4. Termination
of Option.

       

      (a)  The Optionee
may exercise the Option (but only to the extent the Option was exercisable at
the time of termination of the Optionee’s Business Relationship with the
Corporation, its parent or any of its subsidiaries) at any time within three (3)
months following the termination of the Optionee’s Business Relationship with
the Corporation, its parent or any of its subsidiaries, but not later than the
scheduled expiration date.  If the termination of the Optionee’s
employment is for cause or is otherwise attributable to a breach by the Optionee
of an employment, non-competition, non-disclosure or other material agreement,
the Option shall expire immediately upon such termination.  If the
Optionee is a natural person who dies while in a Business Relationship with the
Corporation, its parent or any of its subsidiaries, this option may be
exercised, to the extent of the number of shares with respect to which the
Optionee could have exercised it on the date of his death, by his estate,
personal representative or beneficiary to whom this option has been assigned
pursuant to Section 9 of the Plan, at any time within the twelve (12) month
period following the date of death.  If the Optionee is a natural
person whose Business Relationship with the Corporation, its parent or any of
its subsidiaries is terminated by reason of his disability, this Option may be
exercised, to the extent of the number of shares with respect to which the
Optionee could have exercised it on the date the Business Relationship was
terminated, at any time within the twelve (12) month period following the date
of such termination, but not later than the scheduled expiration
date.  At the expiration of such three (3) or twelve (12) month period
or the scheduled expiration date, whichever is the earlier, this Option shall
terminate and the only rights hereunder shall be those as to which the Option
was properly exercised before such termination.

       

      (b) Anything contained
herein to the contrary notwithstanding, the Option shall not be affected by any
change of duties or position of the Optionee (including a transfer to or from
the Corporation, its parent or any of its subsidiaries) so long as the Optionee
continues in a Business Relationship with the Corporation, its parent or any of
its subsidiaries.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      5. Procedure
for Exercise.

       

      (a) The Option may be
exercised, from time to time, in whole or in part (but for the purchase of whole
shares only), by delivery of a written notice in the form attached as Exhibit
A hereto (the “Notice”) from the Optionee to the Secretary of the
Corporation, which Notice shall:

       

      (i) state that the
Optionee elects to exercise the Option;

       

      (ii) state the number of
shares with respect to which the Option is being exercised (the “Optioned
Shares”);

       

      (iii) state the method of
payment for the Optioned Shares pursuant to Section 5(b);

       

      (iv) state the date upon
which the Optionee desires to consummate the purchase of the Optioned Shares
(which date must be prior to the termination of such Option and no later than 30
days from the delivery of such Notice);

       

      (v) include any
representations of the Optionee required under Section 8(b);

       

      (vi) if the Option shall
be exercised in accordance with Section 9 of the Plan by any person other than
the Optionee, include evidence to the satisfaction of the Committee of the right
of such person to exercise the Option; and

       

      (b) Payment of the
Option Price for the Optioned Shares shall be made either (i) by delivery of
cash or a check to the order of the Corporation in an amount equal to the Option
Price, (ii) if approved by the Committee, by delivery to the Corporation of
shares of Common Stock of the Corporation having a Fair Market Value on the date
of exercise equal in amount to the Option Price of the options being exercised,
(iii) by any other means which the Board of Directors determines are consistent
with the purpose of the Plan and with applicable laws and regulations
(including, without limitation, the provisions of Rule 16b-3 and Regulation T
promulgated by the Federal Reserve Board), or (iv) by any combination of such
methods of payment.

       

      (c) The Corporation
shall issue a stock certificate in the name of the Optionee (or such other
person exercising the Option in accordance with the provisions of Section 9 of
the Plan) for the Optioned Shares as soon as practicable after receipt of the
Notice and payment of the aggregate Option Price for such shares.

       

      6. No
Rights as a Stockholder.  The Optionee shall
not have any privileges of a stockholder of the Corporation with respect to any
Optioned Shares until the date of issuance of a stock certificate pursuant to
Section 5(c).

       

      7.  Adjustments.
The
Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and mergers.  Provisions in the
Plan for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Corporation are
hereby made applicable hereunder and are incorporated herein by
reference.  In general, the Optionee should not assume that options
would survive the acquisition of the Corporation.

       

      8. Additional
Provisions Related to Exercise.

       

      (a) The Option shall be
exercisable only on such date or dates and during such period and for such
number of shares of Common Stock as are set forth in this
Agreement.

       

      (b) To exercise the
Option, the Optionee shall follow the procedures set forth in Section 5
hereof.  Upon the exercise of the Option at a time when there is not
in effect a registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), relating to the shares of Common Stock issuable upon
exercise of the Option, the Committee in its discretion may, as a condition to
the exercise of the Option, require the Optionee (i) to execute an Investment
Representation Statement substantially in the form set forth in Exhibit
B hereto and (ii) to make such other representations and warranties as
are deemed appropriate by counsel to the Corporation.

       

      (c) Stock certificates
representing shares of Common Stock acquired upon the exercise of Options that
have not been registered under the Securities Act shall, if required by the
Committee, bear an appropriate restrictive legend referring to the Securities
Act.  No shares of Common Stock shall be issued and delivered upon the
exercise of the Option unless and until the Corporation and/or the Optionee
shall have complied with all applicable Federal or state registration, listing
and/or qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction.

       

      9.   No
Evidence of Employment or Service.  Nothing
contained in the Plan or this Agreement shall confer upon the Optionee any right
to continue in a Business Relationship with the Corporation, its parent or any
of its subsidiaries or interfere in any way with the right of the Corporation,
its parent or its subsidiaries (subject to the terms of any separate agreement
to the contrary) to terminate the Optionee’s Business Relationship or to
increase or decrease the Optionee’s compensation at any time.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      10. Restriction
on Transfer.  The
Option may not be transferred, pledged, assigned, hypothecated or otherwise
disposed of in any way by the Optionee, except by will or by the laws of descent
and distribution, and may be exercised during the lifetime of the Optionee only
by the Optionee.  If the Optionee dies, the Option shall thereafter be
exercisable, during the period specified in Section 4, by his executors or
administrators to the full extent to which the Option was exercisable by the
Optionee at the time of his death.  The Option shall not be subject to
execution, attachment or similar process.  Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without
effect.  The words “transfer” and “dispose” include without limitation
the making of any sale, exchange, assignment, gift, security interest, pledge or
other encumbrance, or any contract therefor, any voting trust or other agreement
or arrangement with respect to the transfer of any interest, beneficial or
otherwise, in the Option, the creation of any other claim thereto or any other
transfer or disposition whatsoever, whether voluntary or involuntary, affecting
the right, title, interest or possession with respect to the
Option.

       

      11. Specific
Performance.  Optionee expressly agrees that the Corporation
will be irreparably damaged if the provisions of this Agreement and the Plan are
not specifically enforced.  Upon a breach or threatened breach of the
terms, covenants and/or conditions of this Agreement or the Plan by the
Optionee, the Corporation shall, in addition to all other remedies, be entitled
to a temporary or permanent injunction, without showing any actual damage,
and/or decree for specific performance, in accordance with the provisions hereof
and thereof.  The Board of Directors shall have the power to determine
what constitutes a breach or threatened breach of this Agreement or the
Plan.  Any such determinations shall be final and conclusive and
binding upon the Optionee.

       

      12. Disqualifying
Dispositions.  To the extent the Option is intended to be an
Incentive Stock Option, and if the Optioned Shares are disposed of within two
years following the date of this Agreement or one year following the issuance
thereof to the Optionee (a “Disqualifying Disposition”), the Optionee shall,
immediately prior to such Disqualifying Disposition, notify the Corporation in
writing of the date and terms of such Disqualifying Disposition and provide such
other information regarding the Disqualifying Disposition as the Corporation may
reasonably require.

       

      13. Notices.  All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if (i) personally delivered or sent by telecopy,
(ii) sent by nationally-recognized overnight courier or (iii) sent by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:

       

      if to the Optionee, to the address
(or telecopy number) set forth on the Notice of Grant; and

       

      if to the Corporation, to its
principal executive office as specified in any report filed by the Corporation
with the Securities and Exchange Commission or to such address as the
Corporation may have specified to the Optionee in writing, Attention: Corporate
Secretary.

       

       

      or to such other
address as the party to whom notice is to be given may have furnished to the
other party in writing in accordance herewith.  Any such communication
shall be deemed to have been given (i) when delivered, if personally delivered,
or when telecopied, if telecopied, (ii) on the first Business Day (as
hereinafter defined) after dispatch, if sent by nationally-recognized overnight
courier and (iii) on the third Business Day following the date on which the
piece of mail containing such communication is posted, if sent by
mail.  As used herein, “Business Day” means a day that is not a
Saturday, Sunday or a day on which banking institutions in the city to which the
notice or communication is to be sent are not required to be open.

       

      14. No
Waiver.  No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or
different nature.

       

      15. Optionee
Undertaking.  The
Optionee hereby agrees to take whatever additional actions and execute whatever
additional documents the Corporation may in its reasonable judgment deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on the Optionee pursuant to the express
provisions of this Agreement.

       

      16. Modification
of Rights.  The
rights of the Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.

       

      17. Governing
Law.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Nevada applicable to contracts made and to be wholly performed
therein, without giving effect to its conflicts of laws principles.

       

      18. Counterparts;
Facsimile Execution.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.  Facsimile execution and delivery of this Agreement
is legal, valid and binding execution and delivery for all
purposes.

       

      19. Entire
Agreement.  This
Agreement (including the Notice of Grant) and the Plan, and, upon execution, the
Notice and Investment Representation Statement, constitute the entire agreement
between the parties with respect to the subject matter hereof, and supersede all
previously written or oral negotiations, commitments, representations and
agreements with respect thereto.

       

      20. Severability.  In
the event one or more of the provisions of this Agreement should, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.

       

      21. WAIVER
OF JURY TRIAL.  THE
OPTIONEE HEREBY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.

       

       

      [signature page
follows]

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

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

       

       

      URBAN BARNS FOODS
INC.

       

      By: ____________________________

      Name:

      Title:

       

      Optionee:

      _____________________________

      Name:
_____________________

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      NOTE
RE: EXHIBITS

       

      EXHIBITS A AND B ARE TO BE
SIGNED

      WHEN
OPTIONS ARE EXERCISED,

      NOT
WHEN OPTION AGREEMENT IS SIGNED.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
A

       

      WOLVERINE
EXPLORATION INC.

      2010 STOCK PLAN

      EXERCISE
NOTICE

       

      URBAN BARNS FOODS
INC.

      Attention:  Chief
Executive Officer

       

      1.           Exercise
of Option.  Effective as of today, _______________________,
20__ , the undersigned (the “Optionee”) hereby elects to exercise the Optionee’s
option to purchase ________________  shares of the Common Stock (the
“Shares”) of URBAN BARNS FOODS INC. (the “Corporation”) under and pursuant to
the 2010 Stock Plan (the “Plan”) and the Stock Option Agreement dated _________
(the “Stock Option Agreement”), with the purchase of the Shares to be
consummated on ______________ ___, ____ (the “Effective Date”), which date is
prior to the termination of the Option and no later than 30 days from the date
of delivery of this Notice.

       

      2.           Representations
of the Optionee.  The Optionee acknowledges that the Optionee
has received, read and understood the Plan and the Stock Option Agreement and
agrees to abide by and be bound by their terms and
conditions.

       

      3.           Rights
as Shareholder; Shares Subject to Stockholders
Agreement.  Until the stock certificate evidencing such Shares
is issued (as evidenced by the appropriate entry on the books of the Corporation
or of a duly authorized transfer agent of the Corporation), no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Shares, notwithstanding the exercise of the Option.  The
Corporation shall issue (or cause to be issued) such stock certificate promptly
after the Effective Date, provided the applicable price has been paid and the
required documents have been received.  No adjustment will be made for
a dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as otherwise provided in the
Plan.  Unless waived by the Corporation in writing, the Shares shall
automatically become subject to the terms and conditions of any stockholders
agreement or similar agreement to which a majority of the outstanding capital
stock of the Corporation is subject at the time of exercise and the Optionee
shall sign as a condition to the issuance of the Shares such joinder agreement,
signature pages or other documents in order to evidence the Optionee’s agreement
to be so bound.

       

      4.           Tax
Consultation.  The Optionee understands that the Optionee may
suffer adverse tax consequences as a result of the Optionee’s purchase or
disposition of the Shares.  The Optionee represents that the Optionee
has consulted with any tax consultants the Optionee deems advisable in
connection with the purchase or disposition of the Shares and that the Optionee
is not relying on the Corporation for any tax advice.

       

      5.           Successors
and Assigns.  The Corporation may assign any of its rights
under the Stock Option Agreement to single or multiple assignees (who may be
stockholders, officers, directors, employees or consultants of the Corporation),
and this Agreement shall inure to the benefit of the successors and assigns of
the Corporation.  Subject to the restrictions on transfer set forth in
the Stock Option Agreement, this Agreement shall be binding upon the Optionee
and his or her heirs, executors, administrators, successors and
assigns.

       

      6.           Interpretation.
Any dispute regarding the interpretations of this Agreement shall be submitted
by the Optionee or by the Corporation forthwith to the Committee, which shall
review such dispute at its next regular meeting.  The resolution of
such a dispute by the Committee shall be final and binding on the Corporation
and on the Optionee.

       

      7.           Governing
Laws: Severability.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts made and to be wholly performed therein, without giving effect to its
conflicts of laws principles.  Should any provision of this Agreement
be determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain
enforceable.

       

      8.           Notices.  Any
notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given if given in the manner specified in the Stock Option
Agreement.

       

      9.           Further
Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

       

      10.          Delivery
of Payment.  The Optionee herewith delivers to the Corporation
the full Option Price for the Shares.

       

      11.          Entire
Agreement.  The Plan, the Notice of Grant, and the Stock Option
Agreement are incorporated herein by reference.  This Agreement, the
Plan, the Notice of Grant, the Stock Option Agreement, and the Investment
Representation Statement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the
Corporation and the Optionee with respect to the subject matter
hereof.

       

      Submitted
by:                                                    Accepted
by:

       

      
        	
                OPTIONEE:

              	
                URBAN BARNS
      FOODS INC.

              

      

       

       

      By:_____________________________

       

      ___________________________                         Its:______________________________

      Name:
__________________

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

       

      2010 STOCK PLAN

      INVESTMENT
REPRESENTATION STATEMENT

       

      OPTIONEE :                      ________________________

       

      CORPORATION :              
URBAN BARNS FOODS INC.

       

      SECURITY :                      
Common Stock

       

      AMOUNT
:                          _______________________

       

      DATE
:                               _______________________

       

      In connection with
the purchase of the above-listed Securities, the undersigned Optionee represents
to the Corporation the following:

       

      (a)           The
Optionee is aware of the Corporation’s business affairs and financial condition
and has acquired sufficient information about the Corporation to reach an
informed and knowledgeable decision to acquire the Securities.  The
Optionee is acquiring these Securities for investment for the Optionee’s own
account only and not with a view to, or for resale in connection with, a
“distribution” thereof within the meaning of the Securities Act of 1933, as
amended (the “Securities Act”).

       

      (b)           The
Optionee acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Optionee’s
investment intent as expressed herein.  In this connection, the
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if the
Optionee’s representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future.  The Optionee further understands that the
Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available.  The Optionee further acknowledges and understands that the
Corporation is under no obligation to register the Securities.  The
Optionee understands that the certificate evidencing the Securities will be
imprinted with a legend which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of
counsel satisfactory to the Corporation and other legends required under the
applicable state or federal securities laws.

       

       

      Signature of
Optionee: _____________________________

       

      Date:__________________

       

8

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