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exhbt4_1.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
4.1

    

    

    

    GeoGlobal
Resources Inc.

    
      2008
STOCK INCENTIVE PLAN

    

    

     

    ARTICLE
ONE

    
      

       

      GENERAL
PROVISIONS

    

    

    

    I.           PURPOSE
OF THE PLAN

     

    This 2008
Stock Incentive Plan is intended to promote the interests of GeoGlobal
Resources, Inc., a Delaware corporation, by providing eligible persons with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation. Capitalized terms shall have the meanings
assigned to such terms in the attached Appendix.

     

    II.           STRUCTURE
OF THE PLAN

     

    A.           The
Plan shall be divided into five separate equity programs:

     

    (i)           the
Discretionary Option Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of
Common Stock,

     

    (ii)           the
Salary Investment Option Grant Program under which eligible employees may elect
to have a portion of their base salary invested each year in special
options,

     

    (iii)           the
Stock Issuance Program under which eligible persons may, at the discretion of
the Plan Administrator, be issued shares of Common Stock directly, either
through the immediate purchase of such shares or as a bonus for services
rendered the Corporation (or any Parent or Subsidiary),

     

    (iv)           the
Automatic Option Grant Program under which eligible non-employee Board members
shall automatically receive options at periodic intervals to purchase shares of
Common Stock, and

     

    (v)           the
Director Fee Option Grant Program under which non-employee Board members may
elect to have all or any portion of any annual retainer fee otherwise payable in
cash applied to special options.

     

    B.           The
provisions of Articles One and Seven shall apply to all equity programs under
the Plan and shall govern the interests of all persons under the
Plan.

     

    III.           ADMINISTRATION
OF THE PLAN

     

    The
following provisions shall govern the administration of the Plan:

     

    (i)           The
Board shall have the authority to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to Section 16 Insiders but may delegate
such authority in whole or in part to the Primary Committee.

     

    (ii)           Administration
of the Discretionary Option Grant and Stock Issuance Programs with respect to
all other persons eligible to participate in those programs may, at the Board’s
discretion, be vested in the Primary Committee or a Secondary Committee, or the
Board may retain the power to administer those programs with respect to all such
persons.

     

    (iii)           The
Primary Committee shall have the sole and exclusive authority to determine which
Section 16 Insiders and other highly compensated Employees shall be eligible for
participation in the Salary Investment Option Grant Program for one or more
calendar years. However, all option grants under the Salary Investment Option
Grant Program shall be made in accordance with the express terms of that
program, and the Primary Committee shall not exercise any discretionary
functions with respect to the option grants made under that
program.

     

    (iv) Administration
of the Automatic Option Grant and Director Fee Option Grant Programs shall be
self-executing in accordance with the terms of those programs.

     

    B.           Each
Plan Administrator shall, within the scope of its administrative jurisdiction
under the Plan, have full power and authority subject to the provisions of the
Plan:

     

    (i) to
establish such rules as it may deem appropriate for proper administration of the
Plan, to make all factual determinations, to construe and interpret the
provisions of the Plan and the awards thereunder and to resolve any and all
ambiguities thereunder;

     

    (ii) to
determine, with respect to awards made under the Discretionary Option Grant and
Stock Issuance Programs, which eligible persons are to receive such awards, the
time or times when such awards are to be made, the number of shares to be
covered by each such award, the vesting schedule (if any) applicable to the
award, the status of a granted option as either an Incentive Option or a
Non-Statutory Option and the maximum term for which the option is to remain
outstanding;

     

    (iii) to amend,
modify or cancel any outstanding award with the consent of the holder or
accelerate the vesting of such award; and

     

    (iv) to take
such other discretionary actions as permitted pursuant to the terms of the
applicable program.

     

    Decisions
of each Plan Administrator within the scope of its administrative functions
under the Plan shall be final and binding on all parties.

     

    C. Members
of the Primary Committee or any Secondary Committee shall serve for such period
of time as the Board may determine and may be removed by the Board at any
time.  The Board may also at any time terminate the functions of any
Secondary Committee and reassume all powers and authority previously delegated
to such committee.

     

    D.           Service
on the Primary Committee or the Secondary Committee shall constitute service as
a Board member, and members of each such committee shall accordingly be entitled
to full indemnification and reimbursement as Board members for their service on
such committee.  No member of the Primary Committee or the Secondary
Committee shall be liable for any act or omission made in good faith with
respect to the Plan or any options or stock issuances under the
Plan.

     

    IV.           ELIGIBILITY

     

    A. The
persons eligible to participate in the Discretionary Option Grant and Stock
Issuance Programs are as follows:

     

    (i) Employees,

     

    (ii)           non-employee
members of the Board or the board of directors of any Parent or Subsidiary,
and

     

    (iii)           consultants
and other independent advisors who provide services to the Corporation (or any
Parent or Subsidiary).

     

    B. Only
Employees who are Section 16 Insiders or other highly compensated individuals
shall be eligible to participate in the Salary Investment Option Grant
Program.

     

    C. Only
non-employee Board members shall be eligible to participate in the Automatic
Option Grant and Director Fee Option Grant Programs.

     

    V.           STOCK
SUBJECT TO THE PLAN

     

    A.           The
stock issuable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the Corporation on the
open market.  The maximum number of shares of Common Stock initially
reserved for issuance over the term of the Plan shall not exceed 12,000,000
shares.

     

    B.           (intentionally
omitted)

     

    C.           Shares
of Common Stock subject to outstanding options shall be available for subsequent
issuance under the Plan to the extent those options expire, terminate or are
cancelled for any reason prior to exercise in full. Unvested shares issued under
the Plan and subsequently repurchased by the Corporation, at the original
exercise or issue price paid per share, pursuant to the Corporation’s repurchase
rights under the Plan shall be added back to the number of shares of Common
Stock reserved for issuance under the Plan and shall accordingly be available
for reissuance through one or more subsequent options or direct stock issuances
under the Plan.  However, should the exercise price of an option under
the Plan be paid with shares of Common Stock or should shares of Common Stock
otherwise issuable under the Plan be withheld by the Corporation in satisfaction
of the withholding taxes incurred in connection with the exercise of an option
or the vesting of a stock issuance under the Plan, then the number of shares of
Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares for which the option is exercised or which vest under the stock
issuance, and not by the net number of shares of Common Stock issued to the
holder of such option or stock issuance.  Shares of Common Stock
underlying one or more stock appreciation rights exercised under the Plan shall
not be available for subsequent issuance.

     

    D.           If
any change is made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, appropriate adjustments shall be made to
(i) the maximum number and/or class of securities issuable under the Plan, (ii)
the number and/or class of securities for which any one person may be granted
options, separately exercisable stock appreciation rights and direct stock
issuances under the Plan per calendar year, (iii) the number and/or class of
securities for which grants are subsequently to be made under the Automatic
Option Grant Program to new and continuing non-employee Board members, and (iv)
the number and/or class of securities and the exercise price per share in effect
under each outstanding option under the Plan.  Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.

     

    

     

    ARTICLE
TWO

     

    
      DISCRETIONARY
OPTION GRANT PROGRAM

       

      

    

    I.           OPTION
TERMS

     

    Each
option shall be evidenced by one or more documents in the form approved by the
Plan Administrator; provided, however, that each such document shall comply with
the terms specified below.  Each document evidencing an Incentive
Option shall, in addition, be subject to the provisions of the Plan applicable
to such options.

     

    A.           Exercise
Price.

     

    1.           The
exercise price per share shall be fixed by the Plan Administrator at the time of
the option grant.

     

    2.           The
exercise price shall become immediately due upon exercise of the option and
shall, subject to the provisions of Section II of Article Seven and the
documents evidencing the option, be payable in cash or check made payable to the
Corporation.  The exercise price may also be paid as
follows:

     

    (i) shares of
Common Stock held for the requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date, or

     

    (ii) to the
extent the option is exercised for vested shares, through a special sale and
remittance procedure pursuant to which the Optionee shall concurrently provide
irrevocable instructions to (a) a Corporation approved brokerage firm to effect
the immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) the Corporation
to deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.

     

    Except to
the extent such sale and remittance procedure is utilized, payment of the
exercise price for the purchased shares must be made on the Exercise
Date.

     

    B. Exercise
and Term of Options.  Each option shall be exercisable at such time or
times, during such period and for such number of shares as shall be determined
by the Plan Administrator and set forth in the documents evidencing the option.
However, no option shall have a term in excess of ten (10) years measured from
the option grant date.

     

    C.           Cessation
of Service.

     

    1.           The
following provisions shall govern the exercise of any options outstanding at the
time of the Optionee’s cessation of Service or death:

     

    (i)           Any
option outstanding at the time of the Optionee’s cessation of Service for any
reason shall remain exercisable for such period of time thereafter as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option, but no such option shall be exercisable after the expiration of the
option term.

     

    (ii)           Any
option exercisable in whole or in part by the Optionee at the time of death may
be subsequently exercised by his or her Beneficiary.

     

    (iii) During
the applicable post-Service exercise period, the option may not be exercised in
the aggregate for more than the number of vested shares for which the option is
exercisable on the date of the Optionee’s cessation of Service.  Upon
the expiration of the applicable exercise period or (if earlier) upon the
expiration of the option term, the option shall terminate and cease to be
outstanding for any vested shares for which the option has not been
exercised.  However, the option shall, immediately upon the Optionee’s
cessation of Service, terminate and cease to be outstanding to the extent the
option is not otherwise at that time exercisable for vested shares.

     

    (iv) Should
the Optionee’s Service be terminated for Misconduct or should the Optionee
engage in Misconduct while his or her options are outstanding, then all such
options shall terminate immediately and cease to be outstanding.

     

    2. The Plan
Administrator shall have complete discretion, exercisable either at the time an
option is granted or at any time while the option remains
outstanding:

     

    (i) to extend
the period of time for which the option is to remain exercisable following the
Optionee’s cessation of Service to such period of time as the Plan Administrator
shall deem appropriate, but in no event beyond the expiration of the option
term, and/or

     

    (ii) to permit
the option to be exercised, during the applicable post-Service exercise period,
for one or more additional installments in which the Optionee would have vested
had the Optionee continued in Service.

     

    D.           Stockholder
Rights.  The holder of an option shall have no stockholder rights with
respect to the shares subject to the option until such person shall have
exercised the option, paid the exercise price and become a holder of record of
the purchased shares.

     

    E.           Repurchase
Rights.  The Plan Administrator shall have the discretion to grant
options which are exercisable for unvested shares of Common
Stock.  Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares.  The terms
upon which such repurchase right shall be exercisable (including the period and
procedure for exercise and the appropriate vesting schedule for the purchased
shares) shall be established by the Plan Administrator and set forth in the
document evidencing such repurchase right.

     

    F.           Limited
Transferability of Options.  During the lifetime of the Optionee,
Incentive Options shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee’s death.  Non-Statutory Options
shall be subject to the same restrictions, except that a Non-statutory Option
may, to the extent permitted by the Plan Administrator, be assigned in whole or
in part during the Optionee’s lifetime to one or more members of the Optionee’s
immediate family or to a trust established exclusively for one or more such
family members.  The terms applicable to the assigned portion shall be
the same as those in effect for the option immediately prior to such assignment
and shall be set forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    II.           INCENTIVE
OPTIONS

     

    The terms
specified below shall be applicable to all Incentive Options.  Except
as modified by the provisions of this Section II, all the provisions of Articles
One, Two and Seven shall be applicable to Incentive Options.  Options
which are specifically designated as Non-Statutory Options when issued under the
Plan shall not be subject to the terms of this Section II.

     

    A. Eligibility.  Incentive
Options may only be granted to Employees.

     

    B. Exercise
Price.  The exercise price per share shall not be less  than
one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the option grant date.

     

    C. Dollar
Limitation.  The aggregate Fair Market Value of the
shares  of Common Stock (determined as of the respective date or dates
of grant) for which one or more options granted to any Employee under the Plan
(or any other option plan of the Corporation or any Parent or Subsidiary) may
for the first time become exercisable as Incentive Options during any one
calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000).  To the extent the Employee holds two (2) or more such
options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability of such options as Incentive
Options shall be applied on the basis of the order in which such options are
granted.

     

    D. 10%
Stockholder.  If any Employee to whom an Incentive Option is granted
is a 10% Stockholder, then the exercise price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value per share of Common
Stock on the option grant date, and the option term shall not exceed five (5)
years measured from the option grant date.

     

    III.           CHANGE
IN CONTROL/HOSTILE TAKE-OVER

     

    A.           Each
option outstanding at the time of a Change in Control but not otherwise
fully-vested shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Change in Control, become
exercisable for all of the shares of Common Stock at the time subject to that
option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock.  However, an outstanding option shall not so
accelerate if and to the extent:  (i) such option is, in connection
with the Change in Control, assumed or otherwise continued in full force and
effect by the successor corporation (or parent thereof) pursuant to the terms of
the Change in Control, (ii) such option is replaced with a cash incentive
program of the successor corporation which preserves the spread existing at the
time of the Change in Control on the shares of Common Stock for which the option
is not otherwise at that time exercisable and provides for subsequent payout in
accordance with the same vesting schedule applicable to those option shares or
(iii) the acceleration of such option is subject to other limitations imposed by
the Plan Administrator at the time of the option grant.

     

    B. All
outstanding repurchase rights shall also terminate automatically, and the shares
of Common Stock subject to those terminated rights shall immediately vest in
full, in the event of any Change in Control, except to the extent: (i) those
repurchase rights are assigned to the successor corporation (or parent thereof)
or otherwise continue in full force and effect pursuant to the terms of the
Change in Control or (ii) such accelerated vesting is precluded by other
limitations imposed by the Plan Administrator at the time the repurchase right
is issued.

     

    C. Immediately
following the consummation of the Change in Control, all outstanding options
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise expressly continued in
full force and effect pursuant to the terms of the Change in
Control.

     

    D.           Each
option which is assumed in connection with a Change in Control shall be
appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities which would have been issuable to the
Optionee in consummation of such Change in Control had the option been exercised
immediately prior to such  Change in Control.  Appropriate
adjustments to reflect such Change in Control shall also be made to (i) the
exercise price payable per share under each outstanding option, provided the
aggregate exercise price payable for such securities shall remain the same, (ii)
the maximum number and/or class of securities available for issuance over the
remaining term of the Plan and (iii) the maximum number and/or class of
securities for which any one person may be granted options, separately
exercisable stock appreciation rights and direct stock issuances under the Plan
per calendar year.

     

    E.           The
Plan Administrator may at any time provide that one or more options will
automatically accelerate in connection with a Change in Control, whether or not
those options are assumed or otherwise continued in full force and effect
pursuant to the terms of the Change in Control.  Any such option shall
accordingly become exercisable, immediately prior to the effective date of such
Change in Control, for all of the shares of Common Stock at the time subject to
that option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock.  In addition, the Plan Administrator may at
any time provide that one or more of the Corporation’s repurchase rights shall
not be assignable in connection with such Change in Control and shall terminate
upon the consummation of such Change in Control.

     

    F.           The
Plan Administrator may at any time provide that one or more options will
automatically accelerate upon an Involuntary Termination of the Optionee’s
Service within a designated period (not to exceed eighteen (18) months)
following the effective date of any Change in Control in which those options do
not otherwise accelerate.  Any options so accelerated shall remain
exercisable for fully-vested shares until the earlier of (i) the expiration the
option term or (ii) the expiration of the one (1) year period measured from the
effective date of the Involuntary Termination.  In addition, the Plan
Administrator may at any time provide that one or more of the Corporation’s
repurchase rights shall immediately terminate upon such Involuntary
Termination.

     

    G.           The
Plan Administrator may at any time provide that one or more options will
automatically accelerate in connection with a Hostile Take-Over. Any such option
shall become exercisable, immediately prior to the effective date of such
Hostile Take-Over, for all of the shares of Common Stock at the time subject to
that option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. In addition, the Plan Administrator may at any time
provide that one or more of the Corporation’s repurchase rights shall terminate
automatically upon the consummation of such Hostile Take-Over. Alternatively,
the Plan Administrator may condition such automatic acceleration and termination
upon an Involuntary Termination of the Optionee’s Service within a designated
period (not to exceed eighteen (18) months) following the effective date of such
Hostile Take-Over.  Each option so accelerated shall remain
exercisable for fully-vested shares until the expiration or sooner termination
of the option term.

     

    H.           The
portion of any Incentive Option accelerated in connection with a Change in
Control or Hostile Take Over shall remain exercisable as an Incentive Option
only to the extent the applicable One Hundred Thousand Dollar ($100,000)
limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.

     

    IV.           STOCK
APPRECIATION RIGHTS

     

    The Plan
Administrator may, subject to such conditions as it may determine, grant to
selected Optionee's stock appreciation rights which will allow the holders of
those rights to elect between the exercise of the underlying option for shares
of Common Stock and the surrender of that option in exchange for a distribution
from the Corporation in an amount equal to the excess of (a) the Option
Surrender Value of the number of shares for which the option is surrendered over
(b) the aggregate exercise price payable for such shares.  The
distribution may be made in shares of Common Stock valued at Fair Market Value
on the option surrender date, in cash, or partly in shares and partly in cash,
as the Plan Administrator shall in its sole discretion deem
appropriate.

     

    

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
THREE

     

    
      SALARY
INVESTMENT OPTION GRANT PROGRAM

       

      

    

    I.           OPTION
GRANTS

     

    The
Primary Committee may implement the Salary Investment Option Grant Program for
one or more calendar years beginning after the Plan Effective Date and select
the Section 16 Insiders and other highly compensated Employees eligible to
participate in the Salary Investment Option Grant Program for each such calendar
year.  Each selected individual who elects to participate in the
Salary Investment Option Grant Program must, prior to the start of each calendar
year of participation, file with the Plan Administrator (or its designate) an
irrevocable authorization directing the Corporation to reduce his or her base
salary for that calendar year by an amount not less than Ten Thousand Dollars
($10,000.00) nor more than Fifty Thousand Dollars ($50,000.00).  The
Primary Committee shall have complete discretion to determine whether to approve
the filed authorization in whole or in part.  To the extent the
Primary Committee approves the authorization, the individual who filed that
authorization shall be granted an option under the Salary Investment Grant
Program on the first trading day in January for the calendar year for which the
salary reduction is to be in effect.

     

    II.           OPTION
TERMS

     

    Each
option shall be a Non-Statutory Option evidenced by one or more documents in the
form approved by the Plan Administrator; provided, however that each such
document shall comply with the terms specified below.

     

    A.           Exercise
Price.

     

    1.           The
exercise price per share shall be thirty-three and one-third percent (33-1/3%)
of the Fair Market Value per share of Common Stock on the option grant
date.

     

    2. The
exercise price shall become immediately due upon exercise of the option and
shall be payable in one or more of the alternative forms authorized under the
Discretionary Option Grant Program. Except to the extent the sale and remittance
procedure specified thereunder is utilized, payment of the exercise price for
the purchased shares must be made on the Exercise Date.

     

    B.           Number
of Option Shares.  The number of shares of Common subject to the
option shall be determined pursuant to the following formula (rounded down to
the nearest whole number):

     

    X = A /
(B x 66-2/3%), where

     

    X is the
number of option shares,

     

    A is the
dollar amount of the approved reduction in the Optionee’s base salary for the
calendar year, and

     

    B is the
Fair Market Value per share of Common Stock on the option grant
date.

     

    C.           Exercise
and Term of Options.  The option shall become exercisable in a series
of twelve (12) successive equal monthly installments upon the Optionee’s
completion of each calendar month of Service in the calendar year for which the
salary reduction is in effect.  Each option shall have a maximum term
of ten (10) years measured from the option grant date.

     

    D.           Cessation
of Service.  Each option outstanding at the time of the Optionee’s
cessation of Service shall remain exercisable, for any or all of the shares for
which the option is exercisable at the time of such cessation of Service, until
the earlier of (i) the expiration of the option term or (ii) the expiration of
the three (3)-year period following the Optionee’s cessation of
Service.  To the extent the option is held by the Optionee at the time
of his or her death, the option may be exercised by his or her
Beneficiary.  However, the option shall, immediately upon the
Optionee’s cessation of Service, terminate and cease to remain outstanding with
respect to any and all shares of Common Stock for which the option is not
otherwise at that time exercisable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    III.           CHANGE
IN CONTROL/HOSTILE TAKE-OVER

     

    A.           In
the event of any Change in Control or Hostile Take-Over while the Optionee
remains in Service, each outstanding option shall automatically accelerate so
that each such option shall, immediately prior to the effective date of the
Change in Control or Hostile Take-Over, become fully exercisable with respect to
the total number of shares of Common Stock at the time subject to such option
and may be exercised for any or all of those shares as fully-vested shares of
Common Stock.  Each such option accelerated in connection with a
Change in Control shall terminate upon the Change in Control, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the terms of the Change in
Control.  Each such option accelerated in connection with a Hostile
Take-Over shall remain exercisable until the expiration or sooner termination of
the option term.

     

    B.           Upon
the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each of his or her outstanding
options.  The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Option Surrender Value of the shares of Common Stock at the time subject to each
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such
shares.  Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation.

     

    IV.           REMAINING
TERMS

     

    The
remaining terms of each option granted under the Salary Investment Option Grant
Program shall be the same as the terms in effect for options made under the
Discretionary Option Grant Program.

     

    

     

    ARTICLE
FOUR

     

    
      STOCK
ISSUANCE PROGRAM

       

      

    

    I.           STOCK
ISSUANCE TERMS

     

    Shares of
Common Stock may be issued under the Stock Issuance Program through direct and
immediate issuances without any intervening options.  Shares of Common
Stock may also be issued under the Stock Issuance Program pursuant to share
right awards which entitle the recipients to receive those shares upon the
attainment of designated performance goals or Service
requirements.  Each such award shall be evidenced by one or more
documents which comply with the terms specified below.

     

    A.           Purchase
Price.

     

    1.           The
purchase price per share of Common Stock subject to direct issuance shall be
fixed by the Plan Administrator.

     

    2.           Subject
to the provisions of Section II of Article Seven, shares of Common Stock may be
issued under the Stock Issuance Program for any of the following items of
consideration which the Plan Administrator may deem appropriate in each
individual instance:

     

    (i)           cash
or check made payable to the Corporation, or

     

    (ii)           past
services rendered to the Corporation (or any Parent or Subsidiary).

     

    B.           Vesting/Issuance
Provisions.

     

    1.           The
Plan Administrator may issue shares of Common Stock which are fully and
immediately vested upon issuance or which are to vest in one or more
installments over the Participant’s period of Service or upon attainment of
specified performance objectives. Alternatively, the Plan Administrator may
issue share right awards which shall entitle the recipient to receive a
specified number of vested shares of Common Stock upon the attainment of one or
more performance goals or Service requirements established by the Plan
Administrator.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.           Any
new, substituted or additional securities or other property (including money
paid other than as a regular cash dividend) which the Participant may have the
right to receive with respect to his or her unvested shares of Common Stock by
reason of any stock dividend, stock split, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation’s receipt of consideration shall be
issued subject to (i) the same vesting requirements applicable to the
Participant’s unvested shares of Common Stock and (ii) such escrow arrangements
as the Plan Administrator shall deem appropriate.

     

    3. The
Participant shall have full stockholder rights with respect to the issued shares
of Common Stock, whether or not the Participant’s interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.

     

    4. Should
the Participant cease to remain in Service while holding one or more unvested
shares of Common Stock, or should the performance objectives not be attained
with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant’s purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to the surrendered shares.

     

    5. The Plan
Administrator may waive the surrender and cancellation of one or more unvested
shares of Common Stock (or other assets attributable thereto) which would
otherwise occur upon the cessation of the Participant’s Service or the
non-attainment of the performance objectives applicable to those shares. Such
waiver shall result in the immediate vesting of the Participant’s interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant’s cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.

     

    6. Outstanding
share right awards shall automatically terminate, and no shares of Common Stock
shall actually be issued in satisfaction of those awards, if the performance
goals or Service requirements established for such awards are not attained. The
Plan Administrator, however, shall have the authority to issue shares of Common
Stock in satisfaction of one or more outstanding share right awards as to which
the designated performance goals or Service requirements are not
attained.

     

    II.           CHANGE
IN CONTROL/HOSTILE TAKE-OVER

     

    A.           All
of the Corporation’s outstanding repurchase rights shall terminate
automatically, and all the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any Change in Control,
except to the extent (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) or otherwise continue in full force and effect
pursuant to the terms of the Change in Control or (ii) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.

     

    B.           The
Plan Administrator may at any time provide for the automatic termination of one
or more of those outstanding repurchase rights and the immediate vesting of the
shares of Common Stock subject to those terminated rights upon (i) a Change in
Control or Hostile Take-Over or (ii) an Involuntary Termination of the
Participant’s Service within a designated period (not to exceed eighteen (18)
months) following the effective date of any Change in Control or Hostile
Take-Over in which those repurchase rights are assigned to the successor
corporation (or parent thereof) or otherwise continue in full force and
effect.

     

    III.           SHARE
ESCROW/LEGENDS

     

    Unvested
shares may, in the Plan Administrator’s discretion, be held in escrow by the
Corporation until the Participant’s interest in such shares vests or may be
issued directly to the Participant with restrictive legends on the certificates
evidencing those unvested shares.

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
FIVE

     

    
      AUTOMATIC
OPTION GRANT PROGRAM

       

      

    

    I.           OPTION
TERMS

     

    A. Grant
Dates.  Options shall be made on the dates specified
below:

     

    1.           Each
individual who is first elected or appointed as a non- employee Board member at
any time after May 1, 2008 shall automatically be granted, on the date of such
initial election or appointment, a Non-Statutory Option to purchase 50,000
shares of Common Stock, provided that individual has not previously been in the
employ of the Corporation or any Parent or Subsidiary.

     

    2.           On
the date of each Annual Stockholders Meeting held after May 1, 2008, each
individual who is to continue to serve as a non-employee Board member, whether
or not that individual is standing for re-election to the Board, shall
automatically be granted a Non-Statutory Option to purchase 50,000 shares of
Common Stock, provided such individual has served as a non-employee Board member
for at least six (6) months.

     

    3.           Notwithstanding
the foregoing, there shall be deducted from each grant pursuant to Sections
I.A.1 or 2 of Article Five hereof, such number of shares as are the subject of
Automatic Option Grants pursuant to Sections I.A.1 or 2 of Article Five of the
Corporation’s 1998 Stock Incentive Plan, so long as the 1998 Stock Incentive
Plan shall remain in effect.

     

    B. Exercise
Price.

     

    1.           The
exercise price per share shall be equal to one hundred percent (100%) of the
Fair Market Value per share of Common Stock on the option grant
date.

     

    2.           The
exercise price shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise
Date.

     

    C.           Option
Term.  Each option shall have a term of ten (10) years measured from
the option grant date.

     

    D.           Exercise
and Vesting of Options.  Each option shall immediately exercisable for
any or all of the option shares.  However, any shares purchased under
the option shall be subject to repurchase by the Corporation, at the exercise
price paid per share, upon the Optionee’s cessation of Board service prior to
vesting in those shares.  Each initial 50,000 share option shall vest,
and the Corporation’s repurchase right shall lapse, in a series of three (3)
successive equal annual installments upon the Optionee’s completion of each year
of Board service over the three (3)-year period measured from the grant
date.  Each annual 50,000 share option shall vest, and the
Corporation’s repurchase right shall lapse, upon the Optionee’s completion of
one (1) year of Board service measured from the grant date.

     

    E.           Cessation
of Board Service.  The following provisions shall govern the exercise
of any options outstanding at the time of the Optionee’s cessation of Board
service:

     

    (i)           Any
option outstanding at the time of the Optionee’s cessation of Board service for
any reason shall remain exercisable for a twelve (12)-month period following the
date of such cessation of Board service, but in no event shall such option be
exercisable after the expiration of the option term.

     

    (ii)           Any
option exercisable in whole or in part by the Optionee at the time of death may
be subsequently exercised by his or her Beneficiary.

     

    (iii)           Following
the Optionee’s cessation of Board service, the option may not be exercised in
the aggregate for more than the number of shares in which the Optionee was
vested on the date of such cessation of Board service.  Upon the
expiration of the applicable exercise period or (if earlier) upon the expiration
of the option term, the option shall terminate and cease to be outstanding for
any vested shares for which the option has not been
exercised.  However, the option shall, immediately upon the Optionee’s
cessation of Board service, terminate and cease to be outstanding for any and
all shares in which the Optionee is not otherwise at that time
vested.

     

    (iv)           However,
should the Optionee cease to serve as a Board member by reason of death or
Permanent Disability, then all shares at the time subject to the option shall
immediately vest so that such option may, during the twelve (12)-month exercise
period following such cessation of Board service, be exercised for all or any
portion of those shares as fully-vested shares of Common Stock.

     

    II.           CHANGE
IN CONTROL/HOSTILE TAKE-OVER

     

    A.           In
the event of any Change in Control or Hostile Take-Over, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option may, immediately prior
to the effective date of such Change in Control the Hostile Take-Over, be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock.  Each such option accelerated in connection with a
Change in Control shall terminate upon the Change in Control, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the terms of the Change in
Control.  Each such option accelerated in connection with a Hostile
Take-Over shall remain exercisable until the expiration or sooner termination of
the option term.

     

    B.           All
outstanding repurchase rights shall also terminate automatically, and the shares
of Common Stock subject to those terminated rights shall immediately vest in
full, in the event of any Change in Control or Hostile Take-Over.

     

    C.           Upon
the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each of his or her outstanding
options.  The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Option Surrender Value of the shares of Common Stock at the time subject to each
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such
shares.  Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation.

     

    D.           Each
option which is assumed in connection with a Change in Control shall be
appropriately adjusted to apply to the number and class of securities which
would have been issuable to the Optionee in consummation of such Change in
Control had the option been exercised immediately prior to such Change in
Control.  Appropriate adjustments shall also be made to the exercise
rice payable per share under each outstanding option, provided the
aggregate  exercise price payable for such securities shall remain the
same.

     

    III.           REMAINING
TERMS

     

    The
remaining terms of each option granted under the Automatic Option Grant Program
shall be the same as the terms in effect for options made under the
Discretionary Option Grant Program.

     

    

     

    ARTICLE
SIX

     

    
      DIRECTOR
FEE OPTION GRANT PROGRAM

       

      

    

    I.           OPTION
GRANTS

     

    The Board
shall have the sole and exclusive authority to implement the Director Fee Option
Grant Program as of the first day of any calendar year beginning after the
Underwriting Date.  Upon such implementation of the Program, each
non-employee Board member may elect to apply all or any portion of the annual
retainer fee otherwise payable in cash for his or her service on the Board to
the acquisition of a special option grant under this Director Fee Option Grant
Program.  Such election must be filed with the Corporation’s Chief
Financial Officer prior to the first day of the calendar year for which the
election is to be in effect.  Each non-employee Board member who files
such a timely election shall automatically be granted an option under this
Director Fee Option Grant Program on the first trading day in January in the
calendar year for which the annual retainer fee which is the subject of that
election would otherwise be payable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    II.           OPTION
TERMS

     

    Each
option shall be a Non-Statutory Option governed by the terms and conditions
specified below.

     

    A.           Exercise
Price.

     

    1.           The
exercise price per share shall be thirty-three and one-third percent (33-1/3%)
of the Fair Market Value per share of Common Stock on the option grant
date.

     

    2.           The
exercise price shall become immediately due upon exercise of the option and
shall be payable in one or more of the alternative forms authorized under the
Discretionary Option Grant Program. Except to the extent the sale and remittance
procedure specified thereunder is utilized, payment of the exercise price for
the purchased shares must be made on the Exercise Date.

     

    B.           Number
of Option Shares.  The number of shares of Common Stock subject to the
option shall be determined pursuant to the following formula (rounded down to
the nearest whole number):

     

    X = A /
(B x 66-2/3%), where

     

    X is the
number of option shares,

     

    A is the
portion of the annual retainer fee subject to the non-employee Board member’s
election, and

     

    B is the
Fair Market Value per share of Common Stock on the option grant
date.

     

    C.           Exercise
and Term of Options.  The option shall become exercisable in a series
of twelve (12) successive equal monthly installments upon the Optionee’s
completion of each month of Board service during the calendar year in which the
option is granted.  Each option shall have a maximum term of ten (10)
years measured from the option grant date.

     

    D.           Termination
of Board Service.  Should the Optionee cease service for any reason
(other than death or Permanent Disability) while one or more of his or her
options are outstanding, then each such option shall remain exercisable, for any
or all of the shares for which the option is exercisable at the time of such
cessation of Board service, until the earlier of (i) expiration of the option
term or (ii) the expiration of the three (3)-year period measured from the date
of such cessation of Board service.  However, each such option
outstanding at the time of such cessation of Board service shall immediately
terminate and cease to remain outstanding with respect to any and all shares of
Common Stock for which the option is not otherwise at that time
exercisable.

     

    E.           Death
or Permanent Disability.  Should the Optionee’s service as a Board
member cease by reason of death or Permanent Disability, then each of the
Optionee’s outstanding options shall immediately become exercisable for all the
shares of Common Stock at the time subject to that option, and the option may be
exercised for any or all of those shares as fully-vested shares until the
earlier of (i) the expiration of the ten (10)-year option term or (ii) the
expiration of the three (3)-year period measured from the date of such cessation
of Board service.  To the extent the option is held by the Optionee at
the time of his or her death, the option may be exercised by his or her
Beneficiary.

     

    III.           CHANGE
IN CONTROL/HOSTILE TAKE-OVER

     

    A.           In
the event of any Change in Control or Hostile Take-Over while the Optionee
remains in Board service, each outstanding option shall automatically accelerate
so that each such option shall, immediately prior to the effective date of the
Change in Control or Hostile Take-Over, become fully exercisable with respect to
the total number of shares of Common Stock at the time subject to such option
and may be exercised for any or all of those shares as fully-vested shares of
Common Stock.  Each such option accelerated in connection with a
Change in Control shall terminate upon the Change in Control, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control.  Each such option accelerated in connection with a Hostile
Take-Over shall remain exercisable until the expiration or sooner termination of
the option term.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    B.           Upon
the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day
period in which to surrender to the Corporation each of his or her outstanding
options.  The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Option Surrender Value of the shares of Common Stock at the time subject to each
surrendered option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate exercise price payable for such
shares.  Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation.

     

    IV.           REMAINING
TERMS

     

    The
remaining terms of each option granted under this Director Fee Option Grant
Program shall be the same as the terms in effect for options made under the
Discretionary Option Grant Program.

     

    

     

    ARTICLE
SEVEN

     

    
      MISCELLANEOUS

       

      

    

    I.           NO
IMPAIRMENT OF AUTHORITY

     

    Outstanding
awards shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

     

    II.           FINANCING

     

    The Plan
Administrator may permit any Optionee or Participant to pay the option exercise
price under the Discretionary Option Grant Program or the purchase price of
shares issued under the Stock Issuance Program by delivering a full-recourse,
interest bearing promissory note payable in one or more
installments.  The terms of any such promissory note (including the
interest rate and the terms of repayment) shall be established by the Plan
Administrator in its sole discretion.  In no event may the maximum
credit available to the Optionee or Participant exceed the sum of (i) the
aggregate option exercise price or purchase price payable for the purchased
shares plus (ii) any Federal, state and local income and employment tax
liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.

     

    III.           TAX
WITHHOLDING

     

    A.           The
Corporation’s obligation to deliver shares of Common Stock upon the exercise of
options or the issuance or vesting of such shares under the Plan shall be
subject to the satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements.

     

    B.           The
Plan Administrator may, in its discretion, provide any or all holders of
Non-Statutory Options or unvested shares of Common Stock under the Plan with the
right to use shares of Common Stock in satisfaction of all or part of the Taxes
incurred by such holders in connection with the exercise of their options or the
vesting of their shares.  Such right may be provided to any such
holder in either or both of the following formats:

     

    Stock
Withholding:  The election to have the Corporation withhold, from the
shares of Common Stock otherwise issuable upon the exercise of such
Non-Statutory Option or the vesting of such shares, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.

     

    Stock
Delivery:  The election to deliver to the Corporation, at the time the
Non-Statutory Option is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such holder (other than in connection with
the option exercise or share vesting triggering the Taxes) with an aggregate
Fair Market Value equal to the percentage of the Taxes (not to exceed one
hundred percent (100%)) designated by the holder.

     

    IV.           EFFECTIVE
DATE AND TERM OF THE PLAN

     

    A.           The
Plan shall become effective immediately upon the Plan Effective
Date.  However, the Salary Investment Option Grant Program and
Director Fee Option Grant Program shall not be implemented until such time as
the Primary Committee or the Board may deem appropriate.  Options may
be granted under the Discretionary Option Grant or Automatic Option Grant
Program at any time on or after the Plan Effective Date.  However, no
options granted under the Plan may be exercised, and no shares shall be issued
under the Plan, until the Plan is approved by the Corporation’s
stockholders.  If such stockholder approval is not obtained within
twelve (12) months after the Plan Effective Date, then all options previously
granted under this Plan shall terminate and cease to be outstanding, and no
further options shall be granted and no shares shall be issued under the
Plan.

     

    B.           The
Plan shall terminate upon the earliest of (i) April 30, 2018 (ii) the date on
which all shares available for issuance under the Plan shall have been issued as
fully-vested shares or (iii) the termination of all outstanding options in
connection with a Change in Control.  Upon such plan termination, all
outstanding options and unvested stock issuances shall thereafter continue to
have force and effect in accordance with the provisions of the documents
evidencing such grants or issuances.

     

    V.           AMENDMENT
OF THE PLAN

     

    A.           The
Board shall have complete and exclusive power and authority to amend or modify
the Plan in any or all respects.  However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options or unvested stock issuances at the time outstanding under the Plan
unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws or regulations.

     

    B.           Options
to purchase shares of Common Stock may be granted under the Discretionary Option
Grant and Salary Investment Option Grant Programs and shares of Common Stock may
be issued under the Stock Issuance Program that are in each instance in excess
of the number of shares then available for issuance under the Plan, provided any
excess shares actually issued under those programs shall be held in escrow until
there is obtained stockholder approval of an amendment sufficiently increasing
the number of shares of Common Stock available for issuance under the
Plan.  If such stockholder approval is not obtained within twelve (12)
months after the date the first such excess issuances are made, then (i) any
unexercised options granted on the basis of such excess shares shall terminate
and cease to be outstanding and (ii) the Corporation shall promptly refund to
the Options and the Participants the exercise or purchase price paid for any
excess shares issued under the Plan and held in escrow, together with interest
(at the applicable Short Term Federal Rate) for the period the shares were held
in escrow, and such shares shall thereupon be automatically cancelled and cease
to be outstanding.

     

    VI.           USE
OF PROCEEDS

     

    Any cash
proceeds received by the Corporation from the sale of shares of Common Stock
under the Plan shall be used for general corporate purposes.

     

    VII.           REGULATORY
APPROVALS

     

    A.           The
implementation of the Plan, the granting of any stock option under the Plan and
the issuance of any shares of Common Stock (i) upon the exercise of any granted
option or (ii) under the Stock Issuance Program shall be subject to the
Corporation’s procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the stock options granted under
it and the shares of Common Stock issued pursuant to it.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    B.           No
shares of Common Stock or other assets shall be issued or delivered under the
Plan unless and until there shall have been compliance with all applicable
requirements of Federal and state securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the shares of Common
Stock issuable under the Plan, and all applicable listing requirements of any
stock exchange (or the Nasdaq SmallCap or other Market, if applicable) on which
Common Stock is then listed for trading. Each Optionee must agree that, unless
registered under the Securities Act of 1933, as amended (the "Act"), the shares
issuable on exercise of an option will bear an appropriate restrictive legend
under the Act and stop transfer instructions will be placed against the transfer
of the shares.

     

    VIII.                      NO
EMPLOYMENT/SERVICE RIGHTS

     

    Nothing
in the Plan shall confer upon the Optionee or the Participant any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee or the
Participant, which rights are hereby expressly reserved by each, to terminate
such person’s Service at any time for any reason, with or without
cause.

     

    

     

    
      APPENDIX

       

      

    

    The
following definitions shall be in effect under the Plan:

     

    A.           Automatic
Option Grant Program shall mean the automatic option program in effect under the
Plan.

     

    B.           Beneficiary
shall mean, in the event the Plan Administrator implements a beneficiary
designation procedure, the person designated by an Optionee or Participant,
pursuant to such procedure, to succeed to such person’s rights under any
outstanding awards held by him or her at the time of death.  In the
absence of such designation or procedure, the Beneficiary shall be the personal
representative of the estate of the Optionee or Participant or the person or
persons to whom the award is transferred by will or the laws of descent and
distribution.

     

    C.           Board
shall mean the Corporation’s Board of Directors.

     

    D.           Change
in Control shall mean a change in ownership or control of Corporation effected
through any of the following transactions:

     

    (i)           a
merger, consolidation or reorganization approved by the Corporation’s
stockholders, unless securities representing more than fifty percent (50%) of
the total combined voting power of the voting securities of the successor
corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Corporation’s outstanding voting securities immediately
prior to such transaction.

     

    (ii)           any
stockholder-approved transfer or other disposition of all or substantially all
of the Corporation’s assets, or

     

    (iii)           the
acquisition, directly or indirectly by any person or related group of persons
(other than the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation), of beneficial
ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders which the Board recommends such
stockholders accept.

     

    E.           Code
shall mean the Internal Revenue Code of 1986, as amended.

     

    F.           Common
Stock shall mean the Corporation’s common stock.

     

    G.           Corporation
shall mean GeoGlobal Resources, Inc., a Delaware corporation, and its
successors.

     

    H.           Director
Fee Option Grant Program shall mean the special stock grant in effect for
non-employee Board members under Article Six of the Plan.

     

    I.           Discretionary
Option Grant Program shall mean the discretionary option grant program in effect
under the Plan.

     

    J.           Employee
shall mean an individual who is in the employ of the Corporation (or any Parent
or Subsidiary), subject to the control and direction of the employer entity as
to both the work to be performed and the manner and method of
performance.

     

    K.           Exercise
Date shall mean the date on which the Corporation shall have received written
notice of the option exercise.

     

    L.           Fair
Market Value per share of Common Stock on any relevant date shall be determined
in accordance with the following provisions:

     

    
      	
              (i)  

            	
              If
      the Common Stock is at the time listed on any Stock Exchange or is traded
      on the Nasdaq National Market System, then the Fair Market Value shall be
      the closing selling price per share of Common Stock on the date in
      question on the Stock Exchange determined by the Plan Administrator to be
      the primary market for the Common Stock, as such price is officially
      quoted in the composite tape of transactions on such exchange, or on the
      Nasdaq National Market System.  If there is no closing selling
      price for the Common Stock on the date in question, then the Fair Market
      Value shall be the closing selling price on the last preceding date for
      which such quotation exists.

            

    

     

    
      	
              (ii)  

            	
              If
      the Common Stock is at the time traded on the Nasdaq SmallCap Market or
      the NASD Bulletin Board, then the Fair Market Value shall be the closing
      selling price per share of Common Stock on the date in question, as such
      price is reported on the Nasdaq SmallCap Market, or if not traded on the
      Nasdaq SmallCap Market, then on the NASD Bulletin Board, or any successor
      system of either.  If there is no closing selling price for the
      Common Stock on the date in question, then the Fair Market Value shall be
      the closing selling price on the last preceding date for which such
      quotation exists.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              If
      the Common Stock is not then listed or admitted to trading on any
      securities exchange or electronic quotation system, then the Fair Market
      Value shall be the average of the bid and asked prices as reported by any
      other reputable quotation service, or if there shall be no bid and asked
      prices on such day, the average of the high bid and low asked prices, as
      so reported, on the most recent day (not more than thirty (30) days prior
      to the date in question) for which prices have been so reported, and, if
      there are no bid and asked prices reported during the thirty (30) days
      prior to the date in question, the Fair Market Value shall be determined
      by the Plan Administrator as if the Company did not have a class of equity
      securities registered under the 1934
Act.

            

    

     

    M.           Hostile
Take-Over shall mean:

     

    (i)           the
acquisition, directly or indirectly, by any person or related group of persons
(other than the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders which the Board does not
recommend such stockholders to accept, or

     

    (ii)           a
change in the composition of the Board over a period of thirty-six (36)
consecutive months or less such that a majority of the Board members ceases, by
reason of one or more contested elections for Board membership, to be comprised
of individuals who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time the Board approved
such election or nomination.

     

    N.           Incentive
Option shall mean an option which satisfies the requirements of Code Section
422.

     

    O.           Involuntary
Termination shall mean the termination of the Service of any individual which
occurs by reason of:

     

    (i)           such
individual’s involuntary dismissal or discharge by the Corporation for reasons
other than Misconduct, or

     

    (ii)           such
individual’s voluntary resignation following (A) a change in his or her position
with the Corporation or Parent or Subsidiary employing the individual which
materially reduces his or her duties and responsibilities or the level of
management to which he or she reports, (B) a reduction in his or her level of
compensation (including base salary, fringe benefits and target bonus under any
performance based bonus or incentive programs) by more than fifteen percent
(15%) or  (C) a relocation of such individual’s place of employment by
more than fifty (50) miles, provided and only if such change, reduction or
relocation is effected by the Corporation without the individual’s
consent.

     

    P.           Misconduct
shall mean the commission of any act of fraud, or dishonesty by the Optionee or
Participant, any unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary),
or any intentional wrongdoing by such person, whether by omission or commission,
which adversely affects the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner.  This shall not limit the
grounds for the dismissal or discharge of any person in the Service of the
Corporation (or any Parent or Subsidiary).

     

    Q.           1934
Act shall mean the Securities Exchange Act of 1934, as amended.

     

    R.           Non-Statutory
Option shall mean an option not intended to satisfy requirements of Code Section
422.

     

    S.           Option
Surrender Value shall mean the Fair Market Value per share of Common Stock on
the date the option is surrendered to the Corporation or, in the event of a
Hostile Take-Over, effected through a tender offer, the highest reported price
per share of Common Stock paid by the tender offeror in effecting such Hostile
Take-Over, if greater.  However, if the surrendered option is an
Incentive Option, the Option Surrender Value shall not exceed the Fair Market
Value per share.

     

    T.           Optionee
shall mean any person to whom an option is granted under Discretionary Option
Grant, Salary Investment Option Grant, Automatic Option Grant or Director Fee
Option Grant Program.

     

    U.           Parent
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

     

    V.           Participant
shall mean any person who is issued shares of Common Stock under the Stock
Issuance Program.

     

    W.           Permanent
Disability or Permanently Disabled shall mean the inability of the Optionee or
the Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in death
or to be of continuous duration of twelve (12) months or
more.  However, solely for purposes of the Automatic Option Grant and
Director Fee Option Grant Programs, Permanent Disability or Permanently Disabled
shall mean the inability of the non-employee Board member to perform his or her
usual duties as a Board member by reason of any medically determinable physical
or mental impairment expected to result in death or to be of continuous duration
of twelve (12) months or more.

     

    X.           Plan
shall mean the Corporation’s 2008 Stock Incentive Plan, as set forth in this
document.

     

    Y.           Plan
Administrator shall mean the particular entity, whether the Primary Committee,
the Board or the Secondary Committee, which is authorized to administer the
Discretionary Option Grant, Salary Investment Option Grant and Stock Issuance
Programs with respect to one or more classes of eligible persons, to the extent
such entity is carrying out its administrative functions under those programs
with respect to the persons under its jurisdiction.  However, the
Primary Committee shall have the plenary authority to make all factual
determinations and to construe and interpret any and all ambiguities under the
Plan to the extent such authority is not otherwise expressly delegated to any
other Plan Administrator.

     

    Z.           Plan
Effective Date shall mean May 30, 2008, the date on which Plan was adopted by
the Board.

     

    AA.           Primary
Committee shall mean the committee of two (2) or more non-employee Board members
appointed by the Board to administer the Discretionary Option Grant and Stock
Issuance Programs with respect to Section 16 Insiders and to administer the
Salary Investment Option Grant Program with respect to all eligible
individuals.

     

    AB.           Salary
Investment Option Grant Program shall mean the salary investment grant program
in effect under the Plan.

     

    AC.           Secondary
Committee shall mean a committee of one (1) or more Board members appointed by
the Board to administer the Discretionary Option Grant and Stock Issuance
Programs with respect to eligible persons other than Section 16
Insiders.

     

    AD.           Section
16 Insider shall mean an officer or director of the Corporation subject to the
short-swing profit liabilities of Section 16 of the 1934 Act.

     

    AE.           Service
shall mean the performance of services for the Corporation (or any Parent or
Subsidiary) by a person in the capacity of an Employee, a non-employee member of
the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option
grant or stock issuance.

     

    AF.           Stock
Exchange shall mean either the American Stock Exchange or the New York Stock
Exchange.

     

    AG.           Stock
Issuance Program shall mean the stock issuance program in effect under the
Plan.

     

    AH.           Subsidiary
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

     

    AI.           Taxes
shall mean the Federal, state and local income and employment tax liabilities
incurred by the holder of Non-Statutory Options or unvested shares of Common
Stock in connection with the exercise of those options or the vesting of those
shares.

     

    AJ.           10%
Stockholder shall mean the owner of stock (as determined under Code Section
424(d)) possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Corporation (or any Parent or
Subsidiary).Exhibit 10.1 to Valspar Corporation Form 10-K for fiscal year ended October 31, 2008

Exhibit 10.1

 

THE VALSPAR CORPORATION 

KEY EMPLOYEES’ SUPPLEMENTARY RETIREMENT PLAN

(As Restated Effective October 15, 2008)

 

1.         General. The Plan enabled the Corporation to retain the services of designated key employees by providing for them and their families a supplemental source of income upon disability, retirement or death.   It is the purpose of this restatement to bring the Plan into compliance with the requirements of Code §409A and regulations promulgated thereunder from and after October 15, 2008, (the “Restatement Date”) and to provide for the transitional relief under the proposed regulations under Code §409A and prior Internal Revenue Service notices (“Applicable Guidance”) for the period between the Restatement Date and December 31, 2008. This Plan, as restated, shall be administered and operated so as to comply with Code §409A and Applicable Guidance, even if
contrary to the terms of this document, which shall be interpreted and/or modified in a manner consistent with the requirement of Code §409A, to the greatest extent permitted by law.

 

2.         Distribution Election. The payment of each participant’s Supplementary Retirement Account in effect on the Restatement Date in a form consistent with the provisions set forth in (a) through (d) below shall continue in effect, subject to the right of the participant to change the time and form of payment prior to December 31, 2008. Any such election shall comply with the requirements of Section XI.C of the Preamble to the Proposed Regulations under Code §409A, as modified by Notice 2007-86, shall be irrevocable as of December 31, 2008 and apply to any amount payable after December 31, 2008. The forms of payment available under the Plan shall be as follows:

 

(a)        single lump sum between January 2009 and October 2018;

 

(b)        annual or quarterly installments over either 5 or 10 years beginning January  2009, in an annual amount equal to the balance of the Supplementary Retirement Account as of the prior fiscal year-end  multiplied by the fraction of 1 divided by the number of years remaining in the installment period;

 

(c)        annual installments over the participant’s life expectancy computed by the Single Life Table in IRC Reg. §1.401(a)(9)-9 as set forth on Appendix A or using the Uniform Life Table in IRC Reg. §1.401(a)(9)-9 if election was made previously using that table,  in an annual amount equal to the balance of the Supplementary Retirement Account as of the Corporation’s prior fiscal year-end multiplied by the fraction of 1 divided by the number of years remaining in the participant’s life expectancy; or

 

(d)        annual installments over the joint life expectancies of the Participant and the Participant’s spouse computed by the Single Life Table in IRC Reg. §1.401(a)(9)-9 set forth on Appendix A or using the Uniform Life Table in IRC Reg. §1.401(a)(9)-9 if election was made previously using that table, in an annual amount equal to the balance of the Supplementary Retirement Account as of the Corporation’s prior fiscal year-end  multiplied by the fraction of 1 divided by the number of years remaining in the participant’s life expectancy, and upon the participant’s death, the life expectancy of the participant’s spouse using the spouse’s age as of the spouse’s birthday in the year of the participant’s death.

 

Nothing in this Section 2 shall modify any election that provided for scheduled payments of the participant’s Supplementary Retirement Account in effect for 2008.  Notwithstanding anything herein to the contrary, the Corporation shall delay any payment to any participant who is a “specified employee” (as defined in IRC Reg. §1.409A-1(i)) until the earliest date permitted under IRC Reg. §1.409A-3(i)(2). 

 

3.         Accumulation. The Corporation shall credit the participant’s Supplementary Retirement Account as of the Corporation’s fiscal year-end of the prior year with interest at the long term Applicable Federal Rate compounded annually in effect for November of the current year as published by the Department of Treasury. A participant’s Supplementary Retirement Account shall not in any manner be segregated by the Corporation, and the Corporation’s obligations with respect to such account shall be only an unsecured promise to pay, not evidenced by a promissory note.

 

4.         Distribution of Account. Distribution of the participant’s Supplementary Retirement Account shall be made in the form elected by the participant in the manner set forth in Section 2. 

 

(i)         In the event the form of payment of a participant’s Supplementary Retirement Account has not been designated by the participant as provided in Section 2 by December 31, 2008, the participant’s Supplementary Retirement Account shall be paid in 10 annual installments beginning October 2009 in an annual amount equal to the balance of the participant’s Supplementary Retirement Account as of the prior fiscal year-end  multiplied by the fraction of 1 divided by the number of years remaining in the installment period. 

 

(ii)        Except with respect to a participant who has elected a joint and survivor form of payment under Section 2(d), upon the participant’s death, any amount remaining in the participant’s Supplementary Retirement Account shall be paid to the participant’s beneficiary designated in writing by the participant in a single lump sum. If no designated beneficiary survives the participant, such payments shall be made to the participant’s spouse, if living, otherwise to the persons who would be the participant’s heirs-at-law in the proportions and determined as though the participant had then died intestate a resident of the State of Minnesota, but in accordance with the laws of said state governing the descent of personal property in effect as of the inception date of the Plan. In the event the
participant’s spouse dies while receiving payments under a joint and survivor form of payment, any amount remaining in the participant’s Supplementary Retirement Account shall be paid to the spouse’s estate.

 

(iii)       The Corporation shall withhold and remit any federal, state and local taxes required by law to be withheld out of each payment and the participant shall remain liable for any other income, employment or excise taxes due with respect to such payment.

 

5.         Small Account Distributions. Notwithstanding the foregoing, the Corporation will make a distribution in a single lump sum of the balance in the participant’s Supplementary Retirement Account if the balance represents the entirety of the participant’s interest under this Plan is not greater than $15,000 at the end of any fiscal year.

 

6.         Termination or Modification. The Corporation reserves the right to terminate this Plan or to modify the provisions hereof from time to time, except that the Corporation may not exercise such right in any manner which would adversely affect any rights of an employee theretofore accrued. Any termination of this Plan prior to the payment of all benefits due hereunder shall comply with the requirements of Treas. Reg. §1.409A-3(j)(4)(ix).

 

* * * * * * * *

 

As initially adopted by the Executive Committee October 29, 1974, amended through October 30, 1978 and restated effective October 15, 2008.  The restatement was approved by the Compensation Committee of the Board on October 14, 2008 and by the Board on October 15, 2008.

 

 

Appendix A

 

Single Life Table under IRC Reg §1.401(a)(9)-9

 

 

	
Age
 	
      
          Life Expectancy
 	
Age
 	
      
     Life Expectancy
 
	
 
 	
 
 	
 
 	
 
 
	
55
 	
29.6
 	
84
 	
8.1
 
	
56
 	
28.7
 	
85
 	
7.6
 
	
57
 	
27.9
 	
86
 	
7.1
 
	
58
 	
27.0
 	
87
 	
6.7
 
	
59
 	
26.1
 	
88
 	
6.3
 
	
60
 	
25.2
 	
89
 	
5.9
 
	
61
 	
24.4
 	
90
 	
5.5
 
	
62
 	
23.5
 	
91
 	
5.2
 
	
63
 	
22.7
 	
92
 	
4.9
 
	
64
 	
21.8
 	
93
 	
4.6
 
	
65
 	
21.0
 	
94
 	
4.3
 
	
66
 	
20.2
 	
95
 	
4.1
 
	
67
 	
19.4
 	
96
 	
3.8
 
	
68
 	
18.6
 	
97
 	
3.6
 
	
69
 	
17.8
 	
98
 	
3.4
 
	
70
 	
17.0
 	
99
 	
3.1
 
	
71
 	
16.3
 	
100
 	
2.9
 
	
72
 	
15.5
 	
101
 	
2.7
 
	
73
 	
14.8
 	
102
 	
2.5
 
	
74
 	
14.1
 	
103
 	
2.3
 
	
75
 	
13.4
 	
104
 	
2.1
 
	
76
 	
12.7
 	
105
 	
1.9
 
	
77
 	
12.1
 	
106
 	
1.7
 
	
78
 	
11.4
 	
107
 	
1.5
 
	
79
 	
10.8
 	
108
 	
1.4
 
	
80
 	
10.2
 	
109
 	
1.2
 
	
81
 	
9.7
 	
110
 	
1.1
 
	
82
 	
9.1
 	
111
 	
1.0
 
	
83
 	
8.6

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