Document:

Exhibit
10.1

2007 Bonus Plan

On February 1, 2007, the Compensation Committee
recommended that the Board of Directors approve a new Bonus Plan (the “Bonus
Plan”) for the fiscal year ending September 30, 2007.  The Bonus Plan
was approved by the Board of Directors on the same date.  Under the Bonus
Plan, bonuses may be awarded to the Company’s employees, including the Company’s
executive officers, upon the satisfaction of certain goals based on a
percentage of annual base salaries.  The goals include attaining measured
results for some or all of the following categories: cash flow, capital and
research and development budgets, revenues, research and development and
operations performance, and safety.

Under the terms of the Bonus Plan, the Company’s
employees, including its executive officers, may receive a bonus calculated
based on a percentage of their annual base salary.  The ultimate
percentage of annual base salary used to calculate bonuses, if any bonuses are
paid, will be at the sole discretion of the Compensation Committee.  The
target percentage and the high percentage of base salary set by the
Compensation Committee to be used for purposes of calculating bonuses to the
Company’s employees, including its executive officers, are as follows:

	
   

  	
   

  	
  Target Percentage

  	
   

  	
  High Percentage

  	
   

  
	
  Staff (Operations,
  Accounting & Administrative)

  	
   

  	
  10

  	
  %

  	
  20

  	
  %

  
	
  Manager

  	
   

  	
  15

  	
  %

  	
  30

  	
  %

  
	
  Senior Manager

  	
   

  	
  25

  	
  %

  	
  40

  	
  %

  
	
  Executive (other than
  President and Chief Executive Officer)

  	
   

  	
  40

  	
  %

  	
  80

  	
  %

  
	
  President and Chief Executive Officer

  	
   

  	
  50

  	
  %

  	
  100

  	
  %Exhibit 10.2

PARTICLE DRILLING TECHNOLOGIES, INC.

2007 STOCK INCENTIVE PLAN

I.                                         PURPOSE

The purpose of the PARTICLE DRILLING TECHNOLOGIES, INC. 2007
STOCK INCENTIVE PLAN (the “Plan”) is to provide a means through
which PARTICLE
DRILLING TECHNOLOGIES, INC., a Nevada corporation (the “Company”),
and its Affiliates may attract able persons to serve as Directors or
Consultants or to enter the employ of the Company and its Affiliates and to
provide a means whereby those individuals upon whom the responsibilities of the
successful administration and management of the Company and its Affiliates
rest, and whose present and potential contributions to the Company and its
Affiliates are of importance, can acquire and maintain stock ownership, thereby
strengthening their concern for the welfare of the Company and its
Affiliates.  A further purpose of the
Plan is to provide such individuals with additional incentive and reward
opportunities designed to enhance the profitable growth of the Company and its
Affiliates.  Accordingly, the Plan
provides for granting Incentive Stock Options, options that do not constitute
Incentive Stock Options, Restricted Stock Awards, or any combination of the
foregoing, as is best suited to the circumstances of the particular employee,
Consultant or Director as provided herein.

II.                                     DEFINITIONS

The following definitions shall be applicable
throughout the Plan unless specifically modified by any paragraph:

(a)           “Affiliate”
means any corporation, partnership, limited liability company or partnership,
association, trust or other organization which, directly or indirectly,
controls, is controlled by, or is under common control with, the Company.  For purposes of the preceding sentence, “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any entity or organization,
shall mean the possession, directly or indirectly, of the power (i) to vote
more than 50% of the securities having ordinary voting power for the election
of directors of the controlled entity or organization, or (ii) to direct or
cause the direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by contract
or otherwise.

(b)           “Award”
means, individually or collectively, any Option or Restricted Stock Award.

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

(d)           “Code”
means the Internal Revenue Code of 1986, as amended.  Reference in the Plan to any section of the
Code shall be deemed to include any amendments or successor provisions to such
section and any regulations under such section.

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(e)           “Committee”
means a committee of the Board that is selected by the Board as provided in
Paragraph IV(a).

(f)            “Common
Stock” means the common stock, par value $0.001 per share, of
the Company, or any security into which such common stock may be changed by
reason of any transaction or event of the type described in Paragraph IX.

(g)           “Company”
means Particle Drilling Technologies, Inc., a Nevada corporation, and any
successor thereto that adopts the Plan.

(h)           “Consultant”
means any person who is not an employee or a Director and who is providing
advisory or consulting services to the Company or any Affiliate.

(i)            “Corporate
Change” shall have the meaning assigned to such term in
Paragraph IX(c) of the Plan.

(j)            “Director”
means an individual who is a member of the Board.

(k)           An “employee”
means any person (including a Director) in an employment relationship with the
Company or any Affiliate.

(l)            “Fair
Market Value” means, as of any specified date, the mean of the
high and low sales prices of the Common Stock (i) reported by the National
Market System of NASDAQ on that date or (ii) if the Common Stock is listed on a
national stock exchange, reported on the stock exchange composite tape on that
date (or such other reporting service approved by the Committee); or, in either
case, if no prices are reported on that date, on the last preceding date on
which such prices of the Common Stock are so reported.  If the Common Stock is traded over the
counter at the time a determination of its fair market value is required to be
made hereunder, its fair market value shall be deemed to be equal to the
average between the reported high and low or closing bid and asked prices of
Common Stock on the most recent date on which Common Stock was publicly
traded.  In the event Common Stock is not
publicly traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the
Committee in such manner as it deems appropriate.

(m)          “Incentive
Stock Option” means an incentive stock option within the meaning
of section 422 of the Code.

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

(o)           “Option”
means an Award granted under Paragraph VII of the Plan and includes both
Incentive Stock Options to purchase Common Stock and Options that do not
constitute Incentive Stock Options to purchase Common Stock.

(p)           “Option
Agreement” means a written agreement between the Company and a
Participant with respect to an Option.

(q)           “Participant”
means an employee, Consultant, or Director who has been granted an Award.

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(r)            “Plan”
means the Particle Drilling Technologies, Inc. 2007 Stock Incentive Plan, as amended
from time to time.

(s)           “Restricted
Stock Agreement” means a written agreement between the Company
and a Participant with respect to a Restricted Stock Award.

(t)            “Restricted
Stock Award” means an Award granted under Paragraph VIII of the
Plan.

(u)           “Rule
16b-3” means SEC Rule 16b-3 promulgated under the 1934 Act, as
such may be amended from time to time, and any successor rule, regulation or
statute fulfilling the same or a similar function.

(v)           “Stock
Appreciation Right” shall have the meaning assigned to such term
in Paragraph VII(d) of the Plan.

III.                                 EFFECTIVE
DATE AND DURATION OF THE PLAN

The Plan shall become effective upon the date of its
adoption by the Board, provided the Plan is approved by the stockholders of the
Company within 12 months thereafter. Notwithstanding any provision in the Plan,
in any Option Agreement or in any Restricted Stock Agreement, no Option shall
be exercisable and no Restricted Stock Award shall be granted prior to such
stockholder approval.  No further Awards
may be granted under the Plan after 10 years from the date the Plan is adopted
by the Board.  The Plan shall remain in
effect until all Options granted under the Plan have been satisfied or expired,
and all Restricted Stock Awards granted under the Plan have vested or been
forfeited.

IV.                                ADMINISTRATION

(a)           Composition of Committee.  The Plan shall be administered by a committee
of, and appointed by, the Board that shall be comprised solely of two or more
outside Directors (within the meaning of the term “outside directors” as used
in section 162(m) of the Code and applicable interpretive authority thereunder
and within the meaning of the term “Non-Employee Director” as defined in Rule
16b-3).

(b)           Powers. 
Subject to the express provisions of the Plan, the Committee shall have
authority, in its discretion, to determine which employees, Consultants, or
Directors shall receive an Award, the time or times when such Award shall be
made, whether an Incentive Stock Option or nonqualified Option shall be
granted, and the number of shares to be subject to each Option or Restricted
Stock Award.  In making such
determinations, the Committee shall take into account the nature of the
services rendered by the respective employees, Consultants, or Directors, their
present and potential contribution to the Company’s success and such other
factors as the Committee in its discretion shall deem relevant.

(c)           Additional Powers.  The Committee shall have such additional
powers as are delegated to it by the other provisions of the Plan.  Subject to the express provisions of the
Plan, this shall include the power to construe the Plan and the respective
agreements executed hereunder, to prescribe rules and regulations relating to
the Plan, and to determine the terms, restrictions and provisions of the
agreement relating to each Award, including such terms, restrictions and 

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provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock
Options, and to make all other determinations necessary or advisable for
administering the Plan.  The Committee
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any agreement relating to an Award in the manner and to the
extent it shall deem expedient to carry it into effect.  The determinations of the Committee on the
matters referred to in this Paragraph IV shall be conclusive.

V.                                    SHARES
SUBJECT TO THE PLAN; AWARD LIMITS;

GRANT OF AWARDS

(a)           Shares Subject to the Plan and Award Limits.  Subject to adjustment in the same manner as
provided in Paragraph IX with respect to shares of Common Stock subject to
Options then outstanding, the aggregate number of shares of Common Stock that
may be issued under the Plan, and the aggregate maximum number of shares of Common
Stock that may be issued under the Plan through Incentive Stock Options, shall
not exceed 1,500,000 shares.  Shares
shall be deemed to have been issued under the Plan only to the extent actually
issued and delivered pursuant to an Award. 
To the extent that an Award lapses or the rights of its holder
terminate, any shares of Common Stock subject to such Award shall again be
available for the grant of an Award under the Plan.  In addition, shares issued under the Plan and
forfeited back to the Plan, shares surrendered in payment of the exercise price
or purchase price of an Award, and shares withheld for payment of applicable
employment taxes and/or withholding obligations associated with an Award shall
again be available for the grant of an Award under the Plan.  Notwithstanding any provision in the Plan to
the contrary, the maximum number of shares of Common Stock that may be subject
to Awards granted to any one individual during any calendar year may not exceed
250,000 shares of Common Stock (as adjusted from time to time in accordance
with the provisions of the Plan).  The
limitation set forth in the preceding sentence shall be applied in a manner
that will permit compensation generated under the Plan to constitute “performance-based”
compensation for purposes of section 162(m) of the Code, including, without
limitation, counting against such maximum number of shares, to the extent
required under section 162(m) of the Code and applicable interpretive authority
thereunder, any shares subject to Options that are canceled or repriced.

(b)           Grant of Awards. The Committee may from
time to time grant Awards to one or more employees, Consultants, or Directors
determined by it to be eligible for participation in the Plan in accordance
with the terms of the Plan.

(c)           Stock Offered.  Subject to the limitations set forth in
Paragraph V(a), the stock to be offered pursuant to the grant of an Award may
be authorized but unissued Common Stock or Common Stock previously issued and
outstanding and reacquired by the Company. 
Any of such shares which remain unissued and which are not subject to
outstanding Awards at the termination of the Plan shall cease to be subject to
the Plan but, until termination of the Plan, the Company shall at all times
make available a sufficient number of shares to meet the requirements of the
Plan.

VI.                                ELIGIBILITY

Awards may be granted only to persons who, at the time
of grant, are employees, Consultants, or Directors.  An Award may be granted on more than one
occasion to the same person, and, subject to the limitations set forth in the
Plan, such Award may include an Incentive

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 Stock Option,
an Option that is not an Incentive Stock Option, a Restricted Stock Award, or
any combination thereof.

VII.                            STOCK
OPTIONS

(a)           Option Period.  The term of each Option shall be as specified
by the Committee at the date of grant; provided, however, that each such Option
by its terms shall not be exercisable after the expiration of ten years from
the date of grant.

(b)           Limitations on Exercise of Option.  An Option shall be exercisable in whole or in
such installments and at such times as determined by the Committee.

(c)           Special Limitations on Incentive Stock Options.  An Incentive Stock Option may be granted only
to an individual who is employed by the Company or any parent or subsidiary
corporation (as defined in section 424 of the Code) of the Company at the time
the Option is granted. To the extent that the aggregate fair market value
(determined at the time the respective Incentive Stock Option is granted) of stock
with respect to which Incentive Stock Options are exercisable for the first
time by an individual during any calendar year under all incentive stock option
plans of the Company and its parent and subsidiary corporations exceeds
$100,000, such Incentive Stock Options shall be treated as Options which do not
constitute Incentive Stock Options. The Committee shall determine, in
accordance with applicable provisions of the Code, Treasury Regulations and
other administrative pronouncements, which of a Participant’s Incentive Stock
Options will not constitute Incentive Stock Options because of such limitation
and shall notify the Participant of such determination as soon as practicable
after such determination.  No Incentive Stock
Option shall be granted to an individual if, at the time the Option is granted,
such individual owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of its parent or
subsidiary corporation, within the meaning of section 422(b)(6) of the Code,
unless (i) at the time such Option is granted the option price is at least 110%
of the Fair Market Value of the Common Stock subject to the Option and (ii)
such Option by its terms is not exercisable after the expiration of five years
from the date of grant.  An Incentive
Stock Option shall not be transferable otherwise than by will or the laws of
descent and distribution, and shall be exercisable during the Participant’s
lifetime only by such Participant or the Participant’s guardian or legal
representative.

(d)           Option Agreement.  Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code.  Each
Option Agreement shall specify the effect of termination of (i) employment,
(ii) the consulting or advisory relationship, or (iii) membership on the Board,
as applicable, on the exercisability of the Option.  An Option Agreement may provide for the
payment of the option price, in whole or in part, by the delivery of a number
of shares of Common Stock (plus cash if necessary) having a Fair Market Value
equal to such option price.  Moreover, an
Option Agreement may provide for a “cashless exercise” of the Option by
establishing procedures satisfactory to the Committee with respect
thereto.  Further, an Option Agreement
may provide for the surrender of the right to purchase shares under the Option
in return for a payment in cash or shares of Common Stock or a combination of
cash and shares of Common Stock equal in value to the excess of the Fair Market
Value of the shares with respect to which the right to purchase is surrendered
over the option price therefor (“Stock Appreciation Rights”), on 

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such terms and conditions as the Committee in its sole
discretion may prescribe.  In the case of
any such Stock Appreciation Right that is granted in connection with an Incentive
Stock Option, such right shall be exercisable only when the Fair Market Value
of the Common Stock exceeds the price specified therefor in the Option or the
portion thereof to be surrendered.  The
terms and conditions of the respective Option Agreements need not be
identical.  Subject to the consent of the
Participant, the Committee may, in its sole discretion, amend an outstanding
Option Agreement from time to time in any manner that is not inconsistent with
the provisions of the Plan (including, without limitation, an amendment that
accelerates the time at which the Option, or a portion thereof, may be
exercisable).

(e)           Option Price and Payment.  The price at which a share of Common Stock
may be purchased upon exercise of an Option shall be determined by the
Committee but, subject to adjustment as provided in Paragraph IX, such purchase
price shall not be less than the Fair Market Value of a share of Common Stock
on the date such Option is granted.  The
Option or portion thereof may be exercised by delivery of an irrevocable notice
of exercise to the Company, as specified by the Committee.  The purchase price of the Option or portion
thereof shall be paid in full in the manner prescribed by the Committee.  If permitted by applicable law, the Company may
assist a Participant who has received an Option in the payment of such Option’s
purchase price by lending the amount of some or all of such purchase price to
such Participant on such terms and such rates of interest and upon such
security (or unsecured) as shall have been authorized by or under authority of
the Board; provided, however, that the Company may not under any circumstances
lend any amount or otherwise extend credit or arrange for the extension of
credit to any Participant who is a Director or an executive officer of the
Company.  Separate stock certificates
shall be issued by the Company for those shares acquired pursuant to the
exercise of an Incentive Stock Option and for those shares acquired pursuant to
the exercise of any Option that does not constitute an Incentive Stock Option.

(f)            Stockholder Rights and Privileges.  The Participant shall be entitled to all the
privileges and rights of a stockholder only with respect to such shares of
Common Stock as have been purchased under the Option and for which certificates
of stock have been registered in the Participant’s name.

(g)           Options and Rights in Substitution for Options Granted by
Other Employers. 
Options and Stock Appreciation Rights may be granted under the Plan from
time to time in substitution for options held by individuals providing services
to corporations or other entities who become employees, Consultants, or
Directors as a result of a merger or consolidation or other business
transaction with the Company or any Affiliate.

VIII.                        RESTRICTED
STOCK AWARDS

(a)           Forfeiture Restrictions To Be Established by the Committee.  Shares of Common Stock that are the subject
of a Restricted Stock Award shall be subject to restrictions on disposition by
the Participant and an obligation of the Participant to forfeit and surrender
the shares to the Company under certain circumstances (the “Forfeiture
Restrictions”).  The Forfeiture
Restrictions shall be determined by the Committee in its sole discretion, and
the Committee may provide that the Forfeiture Restrictions shall lapse upon (i)
the attainment of one or more performance targets established by the Committee
that are based on (1) the price of a share of Common Stock, (2) the Company’s
earnings per share, (3) the Company’s market share, (4) the market share of a
business 

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unit of the Company designated by the Committee, (5)
the Company’s sales, (6) the sales of a business unit of the Company designated
by the Committee, (7) the net income (before or after taxes) of the Company or
any business unit of the Company designated by the Committee, (8) the cash flow
return on investment of the Company or any business unit of the Company
designated by the Committee, (9) the earnings before or after interest, taxes,
depreciation, and/or amortization of the Company or any business unit of the
Company designated by the Committee, (10) the economic value added, (11) the
return on stockholders’ equity achieved by the Company, or (12) the total
stockholders’ return achieved by the Company, (13) the achievement of certain
commercial milestones such as first revenue, (14) certain technology
enhancements to the PID system such as better PID bit performance, continuous
particle injection or successfully testing a new particle injector, or (15)
enhancing the Company’s customer base through additional contractual
relationships, (ii) the Participant’s continued employment with the Company or
an Affiliate or continued service as a Consultant or Director for a specified
period of time, (iii) the occurrence of any event or the satisfaction of any
other condition specified by the Committee in its sole discretion, or (iv) a
combination of any of the foregoing.  The
performance measures described in clause (i) of the preceding sentence may be
subject to adjustment for specified significant extraordinary items or events,
and may be absolute, relative to one or more other companies, or relative to
one or more indexes, and may be contingent upon future performance of the
Company or any Affiliate, division, or department thereof.  Each Restricted Stock Award may have
different Forfeiture Restrictions, in the discretion of the Committee.

(b)           Other Terms and Conditions.  Common Stock awarded pursuant to a Restricted
Stock Award shall be represented by a stock certificate registered in the name
of the Participant.  Unless provided
otherwise in a Restricted Stock Agreement, the Participant shall have the right
to receive dividends with respect to Common Stock subject to a Restricted Stock
Award, to vote Common Stock subject thereto and to enjoy all other stockholder
rights, except that (i) the Participant shall not be entitled to delivery of
the stock certificate until the Forfeiture Restrictions have expired, (ii) the
Company shall retain custody of the stock until the Forfeiture Restrictions
have expired, (iii) the Participant may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the stock until the Forfeiture Restrictions
have expired, and (iv) a breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture
of the Restricted Stock Award.  At the
time of such Award, the Committee may, in its sole discretion, prescribe
additional terms, conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the termination of
employment or service as a Consultant or Director (by retirement, disability,
death or otherwise) of a Participant prior to expiration of the Forfeitures
Restrictions.  Such additional terms,
conditions or restrictions shall be set forth in a Restricted Stock Agreement
made in conjunction with the Award.

(c)           Payment for Restricted Stock.  The Committee shall determine the amount and
form of any payment for Common Stock received pursuant to a Restricted Stock
Award, provided that in the absence of such a determination, a Participant
shall not be required to make any payment for Common Stock received pursuant to
a Restricted Stock Award, except to the extent otherwise required by law.

(d)           Committee’s Discretion to Accelerate Vesting of Restricted
Stock Awards.  The
Committee may, in its discretion and as of a date determined by the Committee,
fully vest any or all Common Stock awarded to a Participant pursuant to a
Restricted Stock Award and, upon such vesting, all restrictions applicable to
such Restricted Stock Award shall terminate as of such date.

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Any action by the Committee pursuant to this
Subparagraph may vary among individual Participants and may vary among the
Restricted Stock Awards held by any individual Participant.  Notwithstanding the preceding provisions of
this Subparagraph, the Committee may not take any action described in this
Subparagraph with respect to a Restricted Stock Award that has been granted to
a “covered employee” (within the meaning of Treasury Regulation section
1.162-27(c)(2)) if such Award has been designed to meet the exception for
performance-based compensation under section 162(m) of the Code.

(e)           Restricted Stock Agreements.   At the time any Award is made under this
Paragraph VIII, the Company and the Participant shall enter into a Restricted
Stock Agreement setting forth each of the matters contemplated hereby and such
other matters as the Committee may determine to be appropriate.  The terms and provisions of the respective
Restricted Stock Agreements need not be identical.  Subject to the consent of the Participant and
the restriction set forth in the last sentence of Subparagraph (d) above, the
Committee may, in its sole discretion, amend an outstanding Restricted Stock
Agreement from time to time in any manner that is not inconsistent with the
provisions of the Plan.

IX.                                RECAPITALIZATION
OR REORGANIZATION

(a)           No Effect on Right or Power.  The existence of the Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Board
or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s or any
Affiliate’s capital structure or its business, any merger or consolidation of
the Company or any Affiliate, any issue of debt or equity securities ahead of
or affecting Common Stock or the rights thereof, the dissolution or liquidation
of the Company or any Affiliate or any sale, lease, exchange or other disposition
of all or any part of its assets or business or any other corporate act or
proceeding.

(b)           Subdivision or Consolidation of Shares; Stock Dividends.  The shares with respect to which Options may
be granted are shares of Common Stock as presently constituted, but if, and
whenever, prior to the expiration of an Option theretofore granted, the Company
shall effect a subdivision or consolidation of shares of Common Stock or the
payment of a stock dividend on Common Stock without receipt of consideration by
the Company, the number of shares of Common Stock with respect to which such
Option may thereafter be exercised (i) in the event of an increase in the
number of outstanding shares shall be proportionately increased, and the
purchase price per share shall be proportionately reduced, and (ii) in the
event of a reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall be
proportionately increased.  Any fractional
share resulting from such adjustment shall be rounded up to the next whole
share.

(c)           Recapitalizations and Corporate Changes.  If the Company recapitalizes, reclassifies
its capital stock, or otherwise changes its capital structure (a “recapitalization”),
the number and class of shares of Common Stock covered by an Option theretofore
granted shall be adjusted so that such Option shall thereafter cover the number
and class of shares of stock and securities to which the Participant would have
been entitled pursuant to the terms of the recapitalization if, immediately
prior to the recapitalization, the Participant had been the holder of record of
the number of shares of Common Stock then covered by such Option.  If (i) the Company shall not be the surviving
entity in any merger or consolidation (or survives only as a subsidiary of 

 8
 

an entity), (ii) the Company sells, leases or
exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any other person or entity, (iii) the Company is to be dissolved and
liquidated, (iv) any person or entity, including a “group” as contemplated by
Section 13(d)(3) of the 1934 Act, acquires or gains ownership or control
(including, without limitation, power to vote) of more than 50% of the
outstanding shares of the Company’s voting stock (based upon voting power), or
(v) as a result of or in connection with a contested election of Directors, the
persons who were Directors of the Company before such election shall cease to
constitute a majority of the Board (each such event is referred to herein as a “Corporate
Change”), no later than (x) 10 days after the approval by the stockholders of
the Company of such merger, consolidation, reorganization, sale, lease or
exchange of assets or dissolution or such election of Directors or (y) 30 days
after a Corporate Change of the type described in clause (iv), the Committee,
acting in its sole discretion without the consent or approval of any
Participant, shall effect one or more of the following alternatives, which
alternatives may vary among individual Participants and which may vary among
Options held by any individual Participant: 
(1) accelerate the time at which Options then outstanding may be
exercised so that such Options may be exercised in full for a limited period of
time on or before a specified date (before or after such Corporate Change)
fixed by the Committee, after which specified date all unexercised Options and
all rights of Participants thereunder shall terminate, (2) require the
mandatory surrender to the Company by selected Participants of some or all of
the outstanding Options held by such Participants (irrespective of whether such
Options are then exercisable under the provisions of the Plan) as of a date,
before or after such Corporate Change, specified by the Committee, in which event
the Committee shall thereupon cancel such Options and cause the Company to pay
to each Participant an amount of cash per share equal to the excess, if any, of
the amount calculated in Subparagraph (d) below (the “Change of Control Value”)
of the shares subject to such Option over the exercise price(s) under such
Options for such shares, or (3) make such adjustments to Options then
outstanding as the Committee deems appropriate to reflect such Corporate Change
(provided, however, that the Committee may determine in its sole discretion
that no adjustment is necessary to Options then outstanding), including,
without limitation, adjusting an Option to provide that the number and class of
shares of Common Stock covered by such Option shall be adjusted so that such
Option shall thereafter cover securities of the surviving or acquiring
corporation or other property (including, without limitation, cash) as
determined by the Committee in its sole discretion.

(d)           Change of Control Value.  For the purposes of clause (2) in
Subparagraph (c) above, the “Change of Control Value” shall equal the amount
determined in clause (i), (ii) or (iii), whichever is applicable, as follows:
(i) the per share price offered to stockholders of the Company in any such
merger, consolidation, sale of assets or dissolution transaction, (ii) the per
share price offered to stockholders of the Company in any tender offer or
exchange offer whereby a Corporate Change takes place, or (iii) if such
Corporate Change occurs other than pursuant to a tender or exchange offer, the
fair market value per share of the shares into which such Options being
surrendered are exercisable, as determined by the Committee as of the date
determined by the Committee to be the date of cancellation and surrender of such
Options.  In the event that the
consideration offered to stockholders of the Company in any transaction
described in this Subparagraph (d) or Subparagraph (c) above consists of
anything other than cash, the Committee shall determine the fair cash equivalent
of the portion of the consideration offered which is other than cash.

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                (e)           Other Changes in the Common
Stock.  In the event of
changes in the outstanding Common Stock by reason of recapitalizations,
reorganizations, mergers, consolidations, combinations, split-ups, split-offs,
spin-offs, exchanges or other relevant changes in capitalization or
distributions to the holders of Common Stock occurring after the date of the
grant of any Award and not otherwise provided for by this Paragraph IX, such
Award and any agreement evidencing such Award shall be subject to adjustment by
the Committee at its discretion as to the number and price of shares of Common
Stock or other consideration subject to such Award.  In the event of any such change in the
outstanding Common Stock or distribution to the holders of Common Stock, or
upon the occurrence of any other event described in this Paragraph IX, the
aggregate number of shares available under the Plan, the aggregate number of
shares that may be issued under the Plan through Incentive Stock Options, and
the maximum number of shares that may be subject to Awards granted to any one
individual shall be appropriately adjusted to the extent, if any, determined by
the Committee, whose determination shall be conclusive.

(f)            Stockholder Action.  Any adjustment provided for in the above
Subparagraphs shall be subject to any required stockholder action.

(g)           No Adjustments unless Otherwise Provided.  Except as hereinbefore expressly provided,
the issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or
not for fair value, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of shares of Common Stock subject to Awards
theretofore granted or the purchase price per share, if applicable.

X.                                    AMENDMENT
AND TERMINATION OF THE PLAN

The Board in its discretion may terminate the Plan at
any time with respect to any shares of Common Stock for which Awards have not
theretofore been granted.  The Board
shall have the right to alter or amend the Plan or any part thereof from time
to time; provided that no change in the Plan may be made that would impair the
rights of a Participant with respect to an Award theretofore granted without
the consent of the Participant, and provided, further, that the Board may not,
without approval of the stockholders of the Company, amend the Plan to increase
the maximum aggregate number of shares that may be issued under the Plan,
increase the maximum number of shares that may be issued under the Plan through
Incentive Stock Options or change the class of individuals eligible to receive
Awards under the Plan.

XI.                                MISCELLANEOUS

(a)           No Right To An Award.  Neither the adoption of the Plan nor any
action of the Board or of the Committee shall be deemed to give an employee,
Consultant, or Director any right to be granted an Option, a right to a
Restricted Stock Award, or any other rights hereunder except as may be
evidenced by an Option Agreement or a Restricted Stock Agreement duly executed
on behalf of the Company, and then only to the extent and on the terms and
conditions expressly set forth therein. 
The Plan shall be unfunded.  The
Company shall not be required to establish any special or separate fund or to
make any other segregation of funds or assets to assure the performance of its
obligations under any Award.

 10
 

(b)           No Employment/Membership Rights Conferred.  Nothing contained in the Plan shall (i)
confer upon any employee or Consultant any right with respect to continuation
of employment or of a consulting or advisory relationship with the Company or
any Affiliate or (ii) interfere in any way with the right of the Company or any
Affiliate to terminate his or her employment or consulting or advisory
relationship at any time.  Nothing
contained in the Plan shall confer upon any Director any right with respect to
continuation of membership on the Board.

(c)           Other Laws; Withholding.  The Company shall not be obligated to issue
any Common Stock pursuant to any Award granted under the Plan at any time when
the shares covered by such Award have not been registered under the Securities
Act of 1933, as amended, and such other state and federal laws, rules and
regulations as the Company or the Committee deems applicable and, in the
opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules and regulations available for the
issuance and sale of such shares.  No
fractional shares of Common Stock shall be delivered, nor shall any cash in
lieu of fractional shares be paid.  The
Company shall have the right to deduct in connection with all Awards any taxes
required by law to be withheld and to require any payments required to enable
it to satisfy its withholding obligations.

(d)           No Restriction on Corporate Action.  Nothing contained in the Plan shall be
construed to prevent the Company or any Affiliate from taking any action which
is deemed by the Company or such Affiliate to be appropriate or in its best
interest, whether or not such action would have an adverse effect on the Plan
or any Award made under the Plan.  No
Participant, beneficiary or other person shall have any claim against the
Company or any Affiliate as a result of any such action.

(e)           Restrictions on Transfer.  An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in
Paragraph VII(c)) shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with
the consent of the Committee.

(f)            Governing Law.  The Plan shall be governed by, and construed in accordance with, the
laws of the State of Nevada, without regard to conflicts of law principles
thereof.

 11

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