Document:

Exhibit 10.5

 

 

Investor
Relations Consulting Agreement

 

 

THIS CONSULTING AGREEMENT (“Agreement”)
is made this 31st day of August 2018 by and between OZOP Surgical Corp. (OZSC) (hereinafter referred to as the “Company”
or “OZSC”), and Kingdom Building, Inc. (hereinafter referred collectively as the “Consultant” or “KBI”).

 

EXPLANATORY
STATEMENT 

 

The Consultant affirms that it has successfully
demonstrated financial and public relations consulting expertise, and possesses valuable knowledge, and experience in the areas
of business finance and corporate investor/public relations. The Company believes that the Consultant’s knowledge, expertise
and experience would benefit the Company, and the Company desires to retain the Consultant to perform consulting services for the
Company under this Agreement.

 

NOW, THEREFORE, in consideration of their
mutual agreements and covenants contained herein, and for other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and in further consideration of the affixation by the parties of their respective signatures below, the parties
agree as follows:

 

Consulting
Services

 

1.1       KBI
agrees that commencing on the 31st day of August 2018, the Consultant will reasonably be available during regular business hours
to advise, counsel and inform designated officers and employees of the Company as it relates to financial markets and exchanges,
competitors, business acquisitions and other aspects of or concerning the Company’s business about which KBI has knowledge
or expertise.

 

1.2       KBI
shall render services to the Company as an independent contractor, and not as an employee. All services rendered by KBI on behalf
of the Company shall be performed to the best of KBI’s ability in concert with the overall business plan of the Company and
the goals and objectives of the Company’s management and Board of Directors, including articulating OZSC’s investment
story and highlights; building and maintaining relationships with supporters of the stock, including institutional investors and
sell-side analysts; increasing the Company participation in investment conferences focused on medical device and small-cap companies;
achieving a fair market value for the Company’s stock; and significantly increasing the Company’ s exposure in the
financial market.

 

 

		I.	Scope
of Services, Programs and Deliverables

 

KBI will develop, implement, and maintain
an ongoing stock market support system for OZSC with the general objective of expanding awareness in OZSC among stockbrokers, analysts,
small-cap portfolio/fund managers, market makers, and the appropriate financial & trade publications.

1. INVESTOR RELATONS 

		A.	Complete IR Audit (including
full review of the investor and shareholder database, IR website and all public documentation) 

		B.	Understand the financials and all operating metrics
of OZSC in detail, facilitating interactions with new and current investors.

		C.	Senior Account Manager and single point of contact
for all investors.  Streamlines all communication and IR functionality. 

		D.	Develop and Update FAQ

		E.	Create 2-Page Corporate
Profile

		F.	PowerPoint Presentation
Updates

		G.	Review and provide suggestions
for IR website

		H.	MZ Group Investor Welcome
Letter

		I.	Quarterly Conference
Call Script and Preparation (starting in August)

		J.	Press Release Input
and Dissemination 

		K.	Facilitate incoming
and outgoing investor/shareholder calls.  Screen all parties before allowing communication with management.

		L.	Shareholder Database
Management 

		M.	Roadshow Management
Coaching

		N.	Roadshows with Detailed Follow-Up 

		O.	Targeted Sell-Side Research
and Financial Media Introductions

		P.	Investor Conference
Invites

2. INVESTMENT AWARENESS AND OUTREACH

 

		A.	Consultant will make
introductions to targeted investors worldwide utilizing a proprietary, robust database:

		i.	Equity Brokers

		ii.	Analysts (both generalists
and industry specialists) 

		iii.	Portfolio Managers/Institutions

		iv.	High Net Worth Investors

		v.	Market Makers

		vi.	Financial Publications

 

3. FINANCIAL MEDIA RELATIONS

Targeted media relations offer an
important segment to the corporate story. KBI will target media opportunities that highlight OZSC’s strategy, growth objectives,
board of directors, developments and milestones related to its business. Services include:

 

A.       Targeted
media programs

B.       Strategic
counsel

C.       Release
drafts and media targets

D.       Q&A
to support significant corporate developments

F.       Feedback
after interviews

 

Trade Magazines & Journals
- Investors, business partners, customers, and business reporters utilize the industry press as a valued source of information.
KBI will raise awareness for OZSC’s business and technologies, and news events related to growth performance, partnership
deals, and significant product advances in qualified trade magazines and journals.

 

Business & Financial Media
– KBI will identify the optimal news, corporate, and industry trends that will provide angles in the business/financial media
and then actively pursue those opportunities with the appropriate reporter(s).

 

KBI Branded Distribution –
Company will be featured in KBI Newsletter which is distributed eight times per year to over 25,000 investors worldwide.

 

PUBLIC MARKET INSIGHT 

 

KBI will counsel and educate the
Company’s senior management on the life cycle of the financial markets and most importantly how the Company is impacted directly
and indirectly by different variables. The Team at KBI leverages its collective expertise on all aspects of strategic financial,
corporate and crisis communications gain through representing over 200 public companies. KBI will help the Company set and manage
expectations while relaying valuation metrics, perceptions, and methodologies utilized by investment professionals. This consulting
aspect of KBI’s business is extremely valuable for management to optimize key opportunities and to avoid pitfalls.

 

As part of its ongoing commitment
and partnership with the Company, KBI will educate the Company’s senior management on the importance of establishing conservative
expectations and how various corporate actions may be perceived and impact the public market.

 

II.       Agenda

 

Timeline 

 

FIRST 30 DAYS 

 

	Spend adequate time with management to understand
the business/growth plan, financial forecasts, capital expenditure, and cash flow projections.
	Create a two-page Corporate Profile, which
clearly articulates OZSC’s current business and financial position, as well as its strategy for future growth. This is an
important marketing piece for investors to quickly learn about the company.
	Review and update PowerPoint presentation.
KBI will utilize proprietary research, feedback from conversations and meetings to incorporate and improve the Investor PowerPoint
and message delivery. UPDATED AT LEAST ONE TIME PER QUARTER.
	Assist and provide input for all corporate
press releases including both creation and ongoing revisions. We will assist by providing additional fact finding and other market
research which will help the context and delivery of the message.
	Counsel senior management on all aspects
of the capital markets and most importantly how OZSC is impacted directly and indirectly by different economic variables. The goal
is to enable management to optimize key opportunities and to avoid pitfalls, both of which have long-term positive implications.

		F.	Host Virtual Road Shows for management
with goal of having at least 20-25 new investment professionals joining during each event. Alternate schedules between these events
and traditional Road Shows to continue growing a pipeline of new and interested investors.

		G.	Develop initial target list and begin
making introductions to investment professionals and investors while seeding and confirming meetings for upcoming Road Shows. Practice
and refine presentation with management team. 

		-	Target brokers, fund
managers, Buy and Sell Side Analysts, and high net worth investors which follow companies with a similar profile to OZSC

	Provide a detailed description of each contact
prior to each meeting. During the meetings and/or conference calls a member of KBI will be available to facilitate the correspondence
and assist with due diligence. Management will be provided with a summary of feedback including KBI’s suggestions for improvements
on both the context and delivery of the Company’s story.

 

 

DAYS 30-60 

 

		A.	Target brokerage firms who hold conferences
which would be applicable for OZSC. Establish a goal of having management present in at least 3 new conferences. These would be
non-paid for and have high institutional attendance, in addition to high net worth investors. Additionally, KBI will seek opportunities
to present to brokers directly at firms for both teach-ins and small events. 

	Formalize a Press Release calendar (queue)
for coming three months. Create and release accordingly to the market and simultaneously to current and prospective investors inboxes.
	Include OZSC where applicable in interviews
with all financial online sites. Review and create media target list. Being to make introductions and follow-up.
	Include OZSC in all presentations where KBI
representatives will speak on OZSC’s industry topics.
	Continue outreach and road shows.

 

 

DAYS 60-90 

 

		A.	Formalize and continually update the
database to ensure that all press releases are e-mailed to all interested professionals. 

		B.	Target newsletter editors and publishers
for favorable recommendations. Focus on Business Publications for appropriate stories on OZSC product roll-out, unique carrier
centric model, and key competitive advantages to investors and industry players. Follow-up accordingly with all interested parties
with a goal of receiving a new piece of media coverage at least 1x per quarter. 

		C.	Schedule and book out Road Shows. 

		D.	Conduct and host quarterly and annual
earnings call. This will include full script creation, Q&A/FAQ compilation and practice. Incorporate feedback and key concepts
into prepared remarks. Schedule the call, including webcast and generate a press release to notify shareholders of conference call
(it should be released at least 7 days prior to call date). Call outs to maximize attendance and gather feedback to improve ongoing
public correspondence.

 

 

 

 

ONGOING – These services will be provided ongoing with
a summary included in each quarterly update

 

		A.	Respond to all investor requests and calls in a
timely manner to facilitate the distribution of corporate information. Focus on educating shareholders, with the premise that an
informed investor will become a longer-term investor.

		B.	Formalize and continually
update the database to ensure that all press releases are e-mailed to all interested professionals. This includes the input of
notes to keep track of all investor correspondence and reminder calls to all investor prior to earnings conference calls.

		C.	Provide consulting services
to OZSC management on the public markets

		D.	Provide progress reports
to senior management and evaluate achievements with a monthly summary of activities and a detailed report every quarter.

 

Many of the above items will occur simultaneously
but certain items will have chronological priority over others. As OZSC grows, KBI will recommend changes to the Agenda that complement
its growth. As the Company continues to execute its strategic plan by winning new customers and expanding its base of business
we will target an expanded universe of institutional investors. At each stage of growth, the appropriate approach to the market
will be incorporated into the agenda for optimal results.

 

Assuming that management’s efforts
are leading ultimately to success and greater profitability, the end results of this financial communication and awareness campaign
should be:

 

		A.	An increase in the number
of financial professionals (including brokers, institutions and analysts) and individual investors well educated and knowledgeable
about OZSC: including senior management, the company’s products, and its current financial condition & growth opportunities.

		B.	An increase in the number
of articles printed in both trade and financial publications.

		C.	An increase in the liquidity
of the common stock.

		D.	An increase in OZSC
market capitalization coupled with a broader, more diverse shareholder base.

		E.	Suitable and better
access to the capital markets, which will facilitate future acquisitions and working capital needs. 

 

III.       Term

 

This Agreement becomes effective upon execution
and shall remain effective for a period of twelve (12) months from that date. After the initial six (6) month period, this Agreement
may be terminated upon sixty (60) days written notice. If not terminated, this agreement shall continue and will automatically
renew every twelve (12) months unless either party to the other delivers written notice of termination at least sixty (60) days
prior to the end of the then current term.

 

 

 

 

 

 

 

 

IV.       Compensation

 

	
        Cash

         
	
         

        $8,500
        per month payable on the 1st day of each month, said
        amount shall be deferred until consummation of a debt or equity “Financing”, with a minimum raise of $1.5 million in
        gross proceeds. Upon closing of the financing, all accrued amounts shall be paid in full and the monthly fee will continue through
        the life of the contract.

         

	Equity 	
         

        The Company will issue 650,000 of shares of
        restricted common stock of OZSC. All shares shall be deemed, fully paid for, and non-forfeitable when issued.

         

	
         

        Expense Reimbursement

        

        

         
	
         

        Only expenses that would ordinarily be incurred
        by the Company will be billed back on a monthly basis. Applicable reimbursements would include: creation, printing and postage
        for investor packages, fees for news wire services. Any packages requiring additional photocopying/ printing will be billed back
        to the Company at cost (with no mark-up). Any extraordinary items, such as broker lunch presentations, air travel, hotel, ground
        transportation or media campaigns, etc. shall be paid by the Company, only with Company authorization prior to incurring any expenses.

         

 

V.       Prior
Restriction

 

KBI represents to the Company that it is not
subject to, or bound by, any agreement which sets forth or contains any provision, the existence or enforcement of which would
in any way restrict or hinder KBI from performing the services on behalf of the Company that KBI is herein agreeing to perform.

 

Neither KBI nor any consultant it utilizes
in connection with the services hereunder shall provide any service to, or contract with any direct competitor of the Company during
the Term of this Agreement (including any extensions thereof) or for a period of ninety (90) days thereafter.

 

 

VI.       Assignment

 

This Agreement is personal to KBI and may
not be assigned in any way by KBI without the prior written consent of the Company. Subject to the foregoing, the rights and obligations
under this Agreement shall inure to the benefit of, and shall be binding upon, the heirs, legatees, successors and permitted assigns
of KBI and upon the successors and assigns of the Company.

 

 

VII.       Confidentiality

 

Except as required by law or court order,
KBI will keep confidential any trade secrets or confidential or proprietary information of the Company which are now known to KBI
or which hereinafter may become known to KBI and KBI shall not at any time directly or indirectly disclose or permit to be disclosed
any such information to any person, firm, or corporation or other entity, or use the same in any way other than in connection with
the business of the Company and in any case only with prior written permission of OZSC. For purposes of this Agreement, “trade
secrets or confidential or proprietary information” includes information unique to or about the Company including but not
limited to its business and is not known or generally available to the public.

 

 

VIII.        Default

 

	Except for a claim or controversy arising
under Section VIII of this Agreement, any claim or controversy arising under any of the provisions of this Agreement shall, at
the election of either party hereto, be determined by arbitration in California in accordance with the rules of the American Arbitration
Association. The decision of the Arbitrator shall be binding and conclusive upon the parties. Each party shall pay its own costs
and expenses in any such arbitration. The prevailing party shall be entitled to reimbursement of all fees incurred, including attorney,
filing, travel and anything associated with the arbitration.

 

	In the event that KBI commits any material
breach of any provision of this Agreement, as determined by the Company in good faith, the Company may, by injunctive action, compel
KBI to comply with, or restrain KBI from violating, such provision, and, in addition, and not in the alternative, the Company shall
be entitled to declare KBI in default hereunder and to terminate this Agreement and any further payments hereunder.

 

	Since KBI must at all times rely upon the
accuracy and completeness of information supplied to it by the Company’s officers, directors, agents, and employees, the
Company agrees to indemnify, hold harmless, and defend KBI, its officers, agents, and employees at the Company’s expense,
against any proceeding or suit which may arise out of and/or be due to any material misrepresentation in such information supplied
by the Company to KBI (or any material omission by the Company that caused such supplied information to be materially misleading).

 

	KBI agrees to indemnify, hold harmless and
defend the Company, its officers, directors, employees and agents from and against any and all claims, actions, proceedings, losses,
liabilities, costs and expenses (including without limitation reasonable attorney’s fees) incurred by any of them in connection
with, as a result of, and or due to any actions or inactions or misstatements by KBI, its officers, agents, or employees regarding
or on behalf of the Company whether as a result of rendering services under this agreement or otherwise.

 

 

IX.       Severability
and Reformation

 

If any provision
of this Agreement is held to be illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable,
and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision were never a part hereof,
and the remaining provisions shall remain in full force and shall not be affected by the illegal, invalid, or unenforceable provision,
or by its severance; but in any such event this Agreement shall be construed to give effect to the severed provision to the extent
legally permissible.

 

 

 

 

 

 

X.       Notices

 

Any notices required by this Agreement shall
(i) be made in writing and delivered to the party to whom it is addressed by hand delivery, by certified mail, return receipt requested,
with adequate postage prepaid, or by courier delivery service (including major overnight delivery companies such as Federal Express
and UPS), (ii) be deemed given when received, and (iii) in the case of the Company, be mailed to its principal office at OZOP Surgical
Corp., 319 Clematis Street, Suite 714, West Palm Beach, FL, USA, 33401; and in the case of KBI, be mailed to KBI, 572 Hidden Ridge
Ct., Encinitas, CA 92024.

 

 

XI.       Miscellaneous

 

	This Agreement may not be amended, except
by a written instrument signed and delivered by each of the parties hereto.
	This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof, and all other agreements relating to the subject matter hereof
are hereby superseded.
	This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.

 

 

 

 

In Witness Whereof, the parties have executed
this Consulting Agreement as of the day and year first above written.

 

AGREED: 

 

Kingdom
Building, Inc. Ozop Surgical Corp.

 

 

By: ____________________________  By:
_______________________________

Ted Haberfield, President
 _______________________________

 

Date: ___________________________  Date:
______________________________Exactus PRE 14C

 

Exhibit 10.1

 

EXACTUS,
INC.

2018 EQUITY INCENTIVE PLAN

 

1. Scope of Plan;
Definitions.

 

(a)
This 2018 Equity Incentive Plan (the “Plan”) is
intended to advance the interests of Exactus, Inc. (the
“Company”) and its Related Corporations by enhancing
the ability of the Company to attract and retain qualified
employees, consultants, Officers and directors, by creating
incentives and rewards for their contributions to the success of
the Company and its Related Corporations. This Plan will provide to
(a) Officers and other employees of the Company and its Related
Corporations opportunities to purchase common stock (“Common
Stock”) of the Company pursuant to Options granted hereunder
which qualify as incentive stock options (“ISOs”) under
Section 422(b) of the Internal Revenue Code of 1986 (the
“Code”), (b) directors, Officers, employees and
consultants of the Company and Related Corporations opportunities
to purchase Common Stock in the Company pursuant to options granted
hereunder which do not qualify as ISOs (“Non-Qualified
Options”); (c) directors, Officers, employees and consultants
of the Company and Related Corporations opportunities to receive
shares of Common Stock of the Company which normally are subject to
restrictions on sale (“Restricted Stock”); (d)
directors, Officers, employees and consultants of the Company and
Related Corporations opportunities to receive grants of stock
appreciation rights (“SARs”); and (e) directors,
Officers, employees and consultants of the Company and Related
Corporations opportunities to receive grants of restricted stock
units (“RSUs”). ISOs, Non-Discretionary Options and
Non-Qualified Options are referred to hereafter as
“Options.” Options, Restricted Stock, RSUs and SARs are
sometimes referred to hereafter collectively as “Stock
Rights.” Any of the Options and/or Stock Rights may in the
Board of Directors or Compensation Committee’s discretion be
issued in tandem to one or more other Options and/or Stock Rights
to the extent permitted by law.

 

(b)
For purposes of the Plan, capitalized words and terms shall have
the following meaning:

 

“Board”
means the board of directors of the Company.

 

 “Chairman”
means the chairman of the Board.

 

“Change
of Control” means the occurrence of any of the following
events: (i) the consummation of the sale or disposition by the
Company of all or substantially all of the Company’s assets
in a transaction which requires shareholder approval under
applicable state law; or (ii) the consummation of a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (eitherby remaining outstanding or by being
converted into voting securities of the surviving entity or its
parent) at least 50% of the total voting power represented by the
voting securities of the Company or such surviving entity or its
parent outstanding immediately after such merger or
consolidation.

 

“Code”
shall have the meaning given to it in Section 1(a).

 

“Common
Stock” shall have the meaning given to it in Section
1(a).

 

“Company”
shall have the meaning given to it in Section 1(a).

 

 

-1-

 

 

“Compensation
Committee” means the compensation committee of the Board, if
any, which shall consist of two or more members of the Board, each
of whom shall be both an “outside director” within the
meaning of Section 162(m) of the Code and a “non-employee
director” within the meaning of Rule 16b-3.  All
references in this Plan to the Compensation Committee shall mean
the Board when (i) there is no Compensation Committee or (ii) the
Board has retained the power to administer this Plan.

 

“Disability”
means “permanent and total disability” as defined in
Section 22(e)(3) of the Code or successor statute.

 

“Disqualifying
Disposition” means any disposition (including any sale) of
Common Stock underlying an ISO before the later of (i) two years
after the date of employee was granted the ISO or (ii) one year
after the date the employee acquired Common Stock by exercising the
ISO.

 

“Exchange
Act” shall mean the Securities Exchange Act of
1934.

 

“Fair
Market Value” shall be determined as of the last Trading Day
before the date a Stock Right is granted and shall
mean:

 

(1)       
the closing price on the principal market if the Common Stock is
listed on a national securities exchange or any market operated by
the OTC Markets Group, Inc. (or any successor) (any the
“Principal Market”).

 

(2)       
if no closing prices are available from the Principle Market, then
the average bid and asked price for the Company’s shares on
the Principal Market;

 

(3)      
if there are no prices available under clauses (1) or (2), then
Fair Market Value shall be based upon the average closing bid and
asked price as determined following a polling of all dealers making
a market in the Company’s Common Stock; or

 

(4)       if
there is no regularly established trading market for the
Company’s Common Stock or if the Company’s Common Stock
is listed, quoted or reported under clauses (1) or (2) but it
trades sporadically rather than every day, the Fair Market Value
shall be established by the Board or the Compensation Committee
taking into consideration all relevant factors including the most
recent price at which the Company’s Common Stock was
sold.

 

“ISO”
shall have the meaning given to it in Section 1(a).

 

“Non-Discretionary
Options” shall have the meaning given to it in Section
1(a).

 

“Non-Qualified
Options” shall have the meaning given to it in Section
1(a).

 

“Officers”
means a person who is an executive officer of the Company and is
required to file ownership reports under Section 16(a) of the
Exchange Act.

 

“Options”
shall have the meaning given to it in Section 1(a).

 

“Plan”
shall have the meaning given to it in Section 1(a).

 

 

-2-

 

 

“Related
Corporations” shall mean a corporation which is a subsidiary
corporation with respect to the Company within the meaning of
Section 424(f) of the Code.

 

“Restricted
Stock” shall have the meaning contained in Section
1(a).

 

“RSU”
shall have the meaning given to it in Section 1(a).

 

“SAR”
shall have the meaning given to it in Section 1(a).

 

“Securities
Act” means the Securities Act of 1933.

 

“Stock
Rights” shall have the meaning given to it in Section
1(a).

 

“Trading
Day” shall mean a day on which the New York Stock Exchange is
open for business.

 

This Plan is intended to comply in all respects
with Rule 16b-3 (“Rule 16b-3”) and its successor rules
as promulgated under Section 16(b) of the Exchange Act for
participants who are subject to Section 16 of the Exchange Act. To
the extent any provision of the Plan or action by the Plan
administrators fails to so comply, it shall be deemed null and void
to the extent permitted by law and deemed advisable by the Plan
administrators. Provided, however,
such exercise of discretion by the Plan administrators shall not
interfere with the contract rights of any grantee. In the event
that any interpretation or construction of the Plan is required, it
shall be interpreted and construed in order to ensure, to the
maximum extent permissible by law, that such grantee does not
violate the short-swing profit provisions of Section 16(b) of the
Exchange Act and that any exemption available under Rule 16b-3 or
other rule is available.

 

2. Administration of the
Plan.

 

(a)
The Plan may be administered by the entire Board or by the
Compensation Committee. Once appointed, the Compensation Committee
shall continue to serve until otherwise directed by the Board. A
majority of the members of the Compensation Committee shall
constitute a quorum, and all determinations of the Compensation
Committee shall be made by the majority of its members present at a
meeting. Any determination of the Compensation Committee under the
Plan may be made without notice or meeting of the Compensation
Committee by a writing signed by all of the Compensation Committee
members. Subject to ratification of the grant of each Stock Right
by the Board (but only if so required by applicable state law), and
subject to the terms of the Plan, the Compensation Committee shall
have the authority to (i) determine the employees of the Company
and Related Corporations (from among the class of employees
eligible under Section 3 to receive ISOs) to whom ISOs may be
granted, and to determine (from among the class ofindividuals and
entities eligible under Section 3 to receive Non-Qualified Options,
Restricted Stock, RSUs and SARs) to whom Non-Qualified Options,
Restricted Stock, RSUs and SARs may be granted; (ii) determine when
Stock Rights may be granted; (iii) determine the exercise prices of
Stock Rights other than Restricted Stock and RSUs, which shall not
be less than the Fair Market Value; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v)
determine when Stock Rights shall become exercisable, the duration
of the exercise period and when each Stock Right shall vest; (vi)
determine whether restrictions such as repurchase options are to be
imposed on shares subject to or issued in connection with Stock
Rights, and the nature ofsuch restrictions, if any, and (vii)
interpret the Plan and promulgate and rescind rules and regulations
relating to it. The interpretation and construction by the
Compensation Committee of any provisions of the Plan or of any
Stock Right granted under it shall be final, binding and conclusive
unless otherwise determined by the Board. The Compensation
Committee may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem best.

 

 

-3-

 

 

No
members of the Compensation Committee or the Board shall be liable
for any action or determination made in good faith with respect to
the Plan or any Stock Right granted under it. No member of the
Compensation Committee or the Board shall be liable for any act or
omission of any other member of the Compensation Committee or the
Board or for any act or omission on his own part, including but not
limited to the exercise of any power and discretion given to him
under the Plan, except those resulting from his own gross
negligence or willful misconduct.

 

(b)
The Compensation Committee may select one of its members as its
chairman and shall hold meetings at such time and places as it may
determine. All references in this Plan to the Compensation
Committee shall mean the Board if no Compensation Committee has
been appointed. From time to time the Board may increase the size
of the Compensation Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies however caused or
remove all members of the Compensation Committee and thereafter
directly administer the Plan.

 

(c)
Stock Rights may be granted to members of the Board, whether such
grants are in their capacity as directors, Officers or consultants.
All grants of Stock Rights to members of the Board shall in all
other respects be made in accordance with the provisions of this
Plan applicable to other eligible persons. Members of the Board who
are either (i) eligible for Stock Rights pursuant to the Plan or
(ii) have been granted Stock Rights may vote on any matters
affecting the administration of the Plan or the grant of any Stock
Rights pursuant to the Plan.

 

(d) In addition to such other rights of
indemnification as he may have as a member of the Board, and with
respect to administration of the Plan and the granting of Stock
Rights under it, each member of the Board and of the Compensation
Committee shall be entitled without further act on his part to
indemnification from the Company for all expenses (including
advances of litigation expenses, the amount of judgment and the
amount of approved settlements made with a view to the curtailment
of costs of litigation) reasonably incurred by him in connection
with or arising out of any action, suit or proceeding, including
any appeal thereof, with respect to the administration of the Plan
or the granting of Stock Rights under it in which he may be
involved by reason of his being or having been a member of the
Board or the Compensation Committee, whether or not he continues to
be such member of the Board or the Compensation Committee at the
time of the incurring of such expenses; provided, however,
that such indemnity shall be subject to the limitations contained
in any Indemnification Agreement between the Company and the Board
member or Officer. The foregoing right of indemnification shall
inure to the benefit of the heirs, executors or administrators of
each such member of the Board or the Compensation Committee and
shall be in addition to all other rights to which such member of
the Board or the Compensation Committee would be entitled to as a
matter of law, contract or otherwise.

 

(e)
The Board may delegate the powers to grant Stock Rights to Officers
to the extent permitted by the laws of the Company’s state of
incorporation.

 

3. Eligible Employees and
Others.  ISOs may be
granted to any employee of the Company or any Related Corporation.
Those Officers and directors of the Company who are not employees
may not be granted ISOs under the Plan. Subject to compliance with
Rule 16b-3 and other applicable securities laws, Non-Qualified
Options, Restricted Stock, RSUs and SARs may be granted to any
director (whether or not an employee), Officers, employees or
consultants of the Company or any Related Corporation. The
Compensation Committee may take into consideration a
recipient’s individual circumstances in determining whether
to grant an ISO, a Non-Qualified Option, Restricted Stock, RSUs or
a SAR. Granting of any Stock Right to any individual or entity
shall neither entitle that individual or entity to, nor disqualify
him from participation in, any other grant of Stock
Rights.

 

 

-4-

 

 

4. Common
Stock. The Common Stock subject
to Stock Rights shall be authorized but unissued shares of Common
Stock, par value $0.0001, or shares of Common Stock reacquired by
the Company in any manner, including purchase, forfeiture or
otherwise. The aggregate number of shares of Common Stock which may
be issued pursuant to the Plan is 9,500,000, less any Stock Rights
previously granted or exercised subject to adjustment as provided
in Section 14. Any such shares may be issued under ISOs,
Non-Qualified Options, Restricted Stock, RSUs or SARs, so long as
the number of shares so issued does not exceed the limitations in
this Section. If any Stock Rights granted under the Plan shall
expire, terminate, forfeit or are cancelled for any reason or shall
cease for any reason to be exercisable in whole or in part without
the delivery of shares of Common Stock, or if the Company shall
reacquire any unvested shares, or if any Stock Rights or shares of
Common Stock are tendered to pay the exercise price of any Stock
Rights then the shares covered by such expiration, termination,
forfeiture, cancelation, reacquisition, or tender to pay the
exercise price will again become available for grants under the
Plan.

 

5. Granting of Stock
Rights.

 

(a) The date of grant of a Stock Right under the
Plan will be the date specified by the Board or Compensation
Committee at the time it grants the Stock
Right; provided, however,
that such date shall not be prior to the date on which the Board or
Compensation Committee acts to approve the grant. The Board or
Compensation Committee shall have the right, with the consent of
the optionee, to convert an ISO granted under the Plan to a
Non-Qualified Option pursuant to Section 17.

 

(b)
The Board or Compensation Committee shall grant Stock Rights to
participants that it, in its sole discretion, selects. Stock Rights
shall be granted on such terms as the Board or Compensation
Committee shall determine except that ISOs shall be granted on
terms that comply with the Code and regulations
thereunder.

 

(c)
A SAR entitles the holder to receive, as designated by the Board or
Compensation Committee, cash or shares of Common Stock, value equal
to (or otherwise based on) the excess of: (a) the Fair Market Value
of a specified number of shares of Common Stock at the time of
exercise over (b) an exercise price established by the Board or
Compensation Committee. The exercise price of each SAR granted
under this Plan shall be established by the Compensation Committee
or shall be determined by a method established by the Board or
Compensation Committee at the time the SAR is granted, provided the
exercise price shall not be less than 100% of the Fair Market Value
of a share of Common Stock on the date of the grant of the SAR, or
such higher price as is established by the Board or Compensation
Committee. A SAR shall be exercisable in accordance with such terms
and conditions and during such periods as may be established by the
Board or Compensation Committee. Shares of Common Stock delivered
pursuant to the exercise of a SAR shall be subject to such
conditions, restrictions and contingencies as the Board or
Compensation Committee may establish in the applicable SAR
agreement or document, if any. The Board or Compensation Committee,
in its discretion, may impose such conditions, restrictions and
contingencies with respect to shares of Common Stock acquired
pursuant to the exercise of each SARas the Board or Compensation
Committee determines to be desirable. A SAR under the Plan shall be
subject to such terms and conditions, not inconsistent with the
Plan, as the Board or Compensation Committee shall, in its
discretion, prescribe. The terms and conditions of any SAR to any
grantee shall be reflected in such form of agreement as is
determined by the Board or Compensation Committee. A copy of such
document, if any, shall be provided to the grantee, and the Board
or Compensation Committee may condition the granting of the SAR on
the grantee executing such agreement.

 

 

-5-

 

 

(d) An RSU gives the grantee the right to receive
a number of shares of the Company’s Common Stock on
applicable vesting or other dates. Delivery of the RSUs may be
deferred beyond vesting as determined by the Board or Compensation
Committee. RSUs shall be evidenced by an RSU agreement in the form
determined by the Board or Compensation
Committee. With respect to
an RSU, which becomes non-forfeitable due to the lapse of time, the
Compensation Committee shall prescribe in the RSU agreement the
vesting period. With respect to the granting of the RSU, which
becomes non-forfeitable due to the satisfaction of certain
pre-established performance-based objectives imposed by the Board
or Compensation Committee, the measurement date of whether such
performance-based objectives have been satisfied shall be a date no
earlier than the first anniversary of the date of the RSU. A
recipient who is granted an RSU shall possess no incidents of
ownership with respect to such underlying Common Stock, although
the RSU agreement may provide for payments in lieu of dividends to
such grantee.

 

(e)
Notwithstanding any provision of this Plan, the Board or
Compensation Committee may impose conditions and restrictions on
any grant of Stock Rights including forfeiture of vested Options,
cancellation of Common Stock acquired in connection with any Stock
Right and forfeiture of profits.

 

(f)
The Options and SARs shall not be exercisable for a period of more
than 10 years from the date of grant.  

 

6. Sale of
Shares. The shares underlying
Stock Rights granted to any Officers, director or a beneficial
owner of 10% or more of the Company’s securities registered
under Section 12 of the Exchange Act shall not be sold, assigned or
transferred by the grantee until at least six months elapse from
the date of the grant thereof.

 

7. ISO Minimum Option
Price and Other Limitations.

 

(a)
The exercise price per share relating to all Options granted under
the Plan shall not be less than the Fair Market Value per share of
Common Stock on the last trading day prior to the date of such
grant. For purposes of determining the exercise price, the date of
the grant shall be the later of (i) the date of approval by the
Board or Compensation Committee or the Board, or (ii) for ISOs, the
date the recipient becomes an employee of the Company. In the case
of an ISO to be granted to an employee owning Common Stock which
represents more than 10% of the total combined voting power of all
classes of stock of the Company or any Related Corporation, the
price per share shall not be less than 110% of the Fair Market
Value per share of Common Stock on the date of grant and such ISO
shall not be exercisable after the expiration of five years from
the date of grant.

 

(b)
In no event shall the aggregate Fair Market Value (determined at
the time an ISO is granted) of Common Stock for which ISOs granted
to any employee are exercisable for the first time by such employee
during any calendar year (under all stock option plans of the
Company and any Related Corporation) exceed $100,000.
 

 

8. Duration of Stock
Rights. Subject to earlier
termination as provided in Sections 3, 5, 9, 10 and 11, each Option
and SAR shall expire on the date specified in the original
instrument granting such Stock Right (except with respect to any
part of an ISO that is converted into a Non-Qualified Option
pursuant to Section 17), provided, however,
that such instrument must comply with Section 422 of the Code with
regard to ISOs and Rule 16b-3 with regard to all Stock Rights
granted pursuant to the Plan to Officers, directors and 10%
shareholders of the Company.

 

 

-6-

 

 

9. Exercise of Options
and SARs; Vesting of Stock Rights. Subject to the provisions of Sections 3 and 9
through 13, each Option and SAR granted under the Plan shall be
exercisable as follows:

 

(a)
The Options and SARs shall either be fully vested and exercisable
from the date of grant or shall vest and become exercisable in such
installments as the Board or Compensation Committee may
specify.

 

(b)
Once an installment becomes exercisable it shall remain exercisable
until expiration or termination of the Option and SAR, unless
otherwise specified by the Board or Compensation
Committee.

 

(c)
Each Option and SAR or installment, once it becomes exercisable,
may be exercised at any time or from time to time, in whole or in
part, for up to the total number of shares with respect to which it
is then exercisable.

 

(d) The Board or Compensation Committee shall have
the right to accelerate the vesting date of any installment of any
Stock Right; provided that
the Board or Compensation Committee shall not accelerate the
exercise date of any installment of any Option granted to any
employee as an ISO (and not previously converted into a
Non-Qualified Option pursuant to Section 17) if such acceleration
would violate the annual exercisability limitation contained in
Section 422(d) of the Code as described in Section
7(b).

 

10. Termination of
Employment. Subject to any
greater restrictions or limitations as may be imposed by the Board
or Compensation Committee or by a written agreement, if an optionee
ceases to be employed by the Company and all Related Corporations
other than by reason of death or Disability, no further
installments of his Options shall vest or become exercisable, and
his Options shall terminate as provided for in the grant or on the
day one year after the day of the termination of his employment
(except three months for ISOs), whichever is earlier, but in no
event later than on their specified expiration dates. Employment
shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any
period during which such optionee’s right to re-employment is
guaranteed by statute. A leave of absence with the written approval
of the Board shall not be considered an interruption of employment
under the Plan, provided that such written approval contractually
obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of
employment within or among the Company and Related Corporations so
long as the optionee continues to be an employee of the Company or
any Related Corporation.

 

11. Death;
Disability. Unless otherwise
determined by the Board or Compensation Committee or by a written
agreement:

 

(a)
If the holder of an Option or SAR ceases to be employed by the
Company and all Related Corporations by reason of his death, any
Options or SARs held by the optionee may be exercised to the extent
he could have exercised it on the date of his death, by his estate,
personal representative or beneficiary who has acquired the Options
or SARs by will or by the laws of descent and distribution, at any
time prior to the earlier of: (i) the Options’ or SARs’
specified expiration date or (ii) one year (except three months for
an ISO) from the date of death.

 

 

-7-

 

 

(b)
If the holder of an Option or SAR ceases to be employed by the
Company and all Related Corporations, or a director or Director
Advisor can no longer perform his duties, by reason of his
Disability, any Options or SARs held by the optionee may be
exercised to the extent he could have exercised it on the date of
termination due to Disability until the earlier of (i) the
Options’ or SARs’ specified expiration date or (ii) one
year from the date of the termination.

 

12. Assignment, Transfer
or Sale.

 

(a)
No ISO granted under this Plan shall be assignable or transferable
by the grantee except by will or by the laws of descent and
distribution, and during the lifetime of the grantee, each ISO
shall be exercisable only by him, his guardian or legal
representative.

 

(b)
Except for ISOs, all Stock Rights are transferable subject to
compliance with applicable securities laws and Section 6 of this
Plan.

 

13. Terms and Conditions
of Stock Rights. Stock Rights
shall be evidenced by instruments (which need not be identical) in
such forms as the Board or Compensation Committee may from time to
time approve. Such instruments shall conform to the terms and
conditions set forth in Sections 5 through 12 hereofand may contain
such other provisions as the Board or Compensation Committee deems
advisable which are not inconsistent with the Plan. In granting any
Stock Rights, the Board or Compensation Committee may specify that
Stock Rights shall be subject to the restrictions set forth herein
with respect to ISOs, or to such other termination and cancellation
provisions as the Board or Compensation Committee may determine.
The Board or Compensation Committee may from time to time confer
authority and responsibilityon one or more of its own members
and/or one or more Officers of the Company to execute and deliver
such instruments. The proper Officers of the Company are authorized
and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such
instruments.

 

14. Adjustments Upon
Certain Events.

 

(a) Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Stock Right, and the number of shares
of Common Stock which have been authorized for issuance under the
Plan but as to which no Stock Rights have yet been granted or which
have been returned to the Plan upon cancellation or expiration of a
Stock Right, as well as the price per share of Common Stock(or
cash, as applicable) covered by each such outstanding Option or
SAR, shall be proportionately adjusted for any increases or
decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend,
combination or reclassification of Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the
Company; provided, however,
that conversion of any convertible securities of the Company or the
voluntary cancellation whether by virtue of a cashless exercise of
a derivative security of the Company or otherwise shall not be
deemed to have been “effected without receipt of
consideration.”  Such adjustment shall be made by the
Board or Compensation Committee, whose determination in that
respect shall be final, binding and conclusive.  Except as
expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of
Common Stock subject to a Stock Right. No adjustments shall be made
for dividends or other distributions paid in cash or in property
other than securities of the Company.

 

 

-8-

 

 

(b)
In the event of the proposed dissolution or liquidation of the
Company, the Board or Compensation Committee shall notify each
participant as soon as practicable prior to the effective date of
such proposed transaction.  To the extent it has not been
previously exercised, a Stock Right will terminate immediately
prior to the consummation of such proposed action.

 

(c)
In the event of a merger of the Company with or into another
corporation, or a Change of Control, each outstanding Stock Right
shall be assumed (as defined below) or an equivalent option or
right substituted by the successor corporation or a parent or
subsidiary of the successor corporation.  In the event that
the successor corporation refuses to assume or substitute for the
Stock Rights, the participants shall fully vest in and have the
right to exercise their Stock Rights as to which it would not
otherwise be vested or exercisable.  If a Stock Right becomes
fully vested and exercisable in lieu of assumption or substitution
in the event of a merger or sale of assets, the Board or
Compensation Committee shall notify the participant in writing or
electronically that the Stock Right shall be fully vested and
exercisable for a period of at least 15 days from the date of such
notice, and any Options or SARs shall terminate one minute prior to
the closing of the merger or sale of assets.
  

 

For the purposes of this Section 14(c), the Stock
Right shall be considered “assumed” if, following the
merger or Change of Control, the option or right confers the right
to purchase or receive, for each share of Common Stock subject to
the Stock Right immediately prior to the merger or Change of
Control, the consideration (whether stock, cash, or other
securities or property) received in the merger or Change of Control
by holders of Common Stock for each share held on the effective
date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however,
that if such consideration received in the merger or Change of
Control is not solely common stock of the successor corporation or
its parent, the Board or Compensation Committee may, with the
consent of the successor corporation, provide for the consideration
to be received upon the exercise of the Stock Right, for each share
of Common Stock subject to the Stock Right, to be solely common
stock of the successor corporation or its parent equal in Fair
Market Value to the per share consideration received by holders of
Common Stock in the merger or Change of
Control.

 

(d)
Notwithstanding the foregoing, any adjustments made pursuant to
Section 14(a), (b) or (c) with respect to ISOs shall be made only
after the Board or Compensation Committee, after consulting with
counsel for the Company, determines whether such adjustments would
constitute a “modification” of such ISOs (as that term
is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs.  If the
Board or Compensation Committee determines that such adjustments
made with respect to ISOs would constitute a modification of such
ISOs it may refrain from making such adjustments.

 

(e)
No fractional shares shall be issued under the Plan and the
optionee shall receive from the Company cash in lieu of such
fractional shares.

 

 

-9-

 

 

15. Means of Exercising
Stock Rights.

 

(a)
An Option or SAR (or any part or installment thereof) shall be
exercised by giving written notice to the Company at its principal
office address. Such notice shall identify the Stock Right being
exercised and specify the number of shares as to which such Stock
Right is being exercised, accompanied by full payment of the
exercise price therefor (to the extent it is exercisable in cash)
either (i) in United States dollars by check or wire transfer; or
(ii) at the discretion of the Board or Compensation Committee,
through delivery of shares of Common Stock having a Fair Market
Value equal as of the date of the exercise to the cash exercise
price of the Stock Right; or (iii) at the discretion of the Board
or Compensation Committee, by any combination of (i) and (ii)
 above. If the Board or Compensation Committee exercises its
discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (ii) or  (iii)
 of the preceding sentence, such discretion need not  be
exercised in writing at the time of the grant of the Stock Right in
question. The holder of a Stock Right shall not have the rights of
a shareholder with respect to the shares covered by his Stock Right
until the date of issuance of a stock certificate to him for such
shares. Except as expressly provided above in Section 14 with
respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which
the record date is before the date such stock certificate is
issued.

 

(b)
Each notice of exercise shall, unless the shares of Common Stock
are covered by a then current registration statement under the
Securities Act, contain the holder’s acknowledgment in form
and substance satisfactory to the Company that (i) such shares are
being purchased for investment and not for distribution or resale
(other than a distribution or resale which, in the opinion of
counsel satisfactory to the Company, may be made without violating
the registration provisions of the Securities Act), (ii) the holder
has been advised and understands that (1) the shares have not been
registered under the Securities Act and are “restricted
securities” within the meaning of Rule 144 under the
Securities Act and are subject to restrictions on transfer and (2)
the Company is under no obligation to register the shares under the
Securities Act or to take any action which would make available to
the holder any exemption from such registration, and (iii) such
shares may not be transferred without compliance with all
applicable federal and state securities laws. Notwithstanding the
above, should the Company be advised by counsel that issuance of
shares should be delayed pending registration under federal or
state securities laws or the receipt of an opinion that an
appropriate exemption therefrom is available, the Company may defer
exercise of any Stock Right granted hereunder until either such
event has occurred.

 

16. Term, Termination and
Amendment.
 

 

(a)
This Plan was adopted by the Board.  This Plan may be approved
by the Company’s shareholders, which approval is required for
ISOs.

 

(b)
The Board may terminate the Plan at any time.  Unless sooner
terminated, the Plan shall terminate 10 years from the date the
Board adopts the Plan.  No Stock Rights may be granted under
the Plan once the Plan is terminated.  Termination of the Plan
shall not impair rights and obligations under any Stock Right
granted while the Plan is in effect, except with the written
consent of the grantee.

 

 

-10-

 

 

(c) The Board at any time, and from time to time,
may amend the Plan.  Provided, however,
except as provided in Section 14 relating to adjustments in Common
Stock, no amendment shall be effective unless approved by the
shareholders of the Company to the extent (i) shareholder approval
is necessary to satisfy the requirements of Section 422 of the Code
or (ii) required by the rules of the principal national securities
exchange or trading market upon which the Company’s Common
Stock trades. Rights under any Stock Rights granted before
amendment of the Plan shall not be impaired by any amendment of the
Plan, except with the written consent of the
grantee.

 

(d) The Board at any time, and from time to time,
may amend the terms of any one or more Stock
Rights; provided, however,
that the rights under the Stock Right shall not be impaired by any
such amendment, except with the written consent of the
grantee.

 

17. Conversion of ISOs
into Non-Qualified Options; Termination of ISOs. The Board or Compensation Committee, at the
written request of any optionee, may in its discretion take such
actions as may be necessary to convert such optionee’s ISOs
(or any installments or portions of installments thereof) that have
not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs,
regardless of whether the optionee is an employee of the Company or
a Related Corporation at the time of such conversion.
 Provided, however,
the Board or Compensation Committee shall not reprice the Options
or extend the exercise period or reduce the exercise price of the
appropriate installments of such Options without the approval of
the Company’s shareholders. At the time of such conversion,
the Board or Compensation Committee (with the consent of the
optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Board or Compensation
Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such
optionee’s ISOs converted into Non-Qualified Options, and no
such conversion shall occur until and unless the Board or
Compensation Committee takes appropriate action. The Compensation
Committee, with the consent of the optionee, may also terminate any
portion of any ISO that has not been exercised at the time of such
termination.

 

18. Application of
Funds. The proceeds received by
the Company from the sale of shares pursuant to Options or SARS (if
cash settled) granted under the Plan shall be used for general
corporate purposes.

 

19. Governmental
Regulations. The
Company’s obligation to sell and deliver shares of the Common
Stock under this Plan is subject to the approval of any
governmental authority required in connection with the
authorization, issuance or sale of such shares.

 

20. Withholding of
Additional Income Taxes. In
connection with the granting, exercise or vesting of a Stock Right
or the making of a Disqualifying Disposition the Company, in
accordance with Section 3402(a) of the Code, may require the
optionee to pay additional withholding taxes in respect of the
amount that is considered compensation includable in such
person’s gross income.

 

To
the extent that the Company is required to withhold taxes for
federal income tax purposes as provided above, if any optionee may
elect to satisfy such withholding requirement by (i) paying the
amount of the required withholding tax to the Company; (ii)
delivering to the Company shares of its Common Stock (including
shares of Restricted Stock) previously owned by the optionee; or
(iii) having the Company retain a portion of the shares covered by
an Option exercise. The number of shares to be delivered to or
withheld by the Company times the Fair Market Value of such shares
shall equal the cash required to be withheld.

 

 

-11-

 

 

21. Notice to Company of
Disqualifying Disposition. Each
employee who receives an ISO must agree to notify the Company in
writing immediately after the employee makes a Disqualifying
Disposition of any Common Stock acquired pursuant to the exercise
of an ISO. If the employee has died before such stock is sold, the
holding periods requirements of the Disqualifying Disposition do
not apply and no Disqualifying Disposition can occur
thereafter.

 

22. Continued
Employment. The grant of a
Stock Right pursuant to the Plan shall not be construed to imply or
to constitute evidence of any agreement, express or implied, on the
part of the Company or any Related Corporation to retain the
grantee in the employ of the Company or a Related Corporation, as a
member of the Company’s Board or in any other capacity,
whichever the case may be.

 

23. Governing Law;
Construction. The validity and
construction of the Plan and the instruments evidencing Stock
Rights shall be governed by the laws of the Company’s state
of incorporation. In construing this Plan, the singular shall
include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise
requires.

 

24. (a) Forfeiture of Stock
Rights Granted to Employees or Consultants. Notwithstanding any other provision of this
Plan, and unless otherwise provided for in a Stock Rights
Agreement, all vested or unvested Stock Rights granted to employees
or consultants shall be immediately forfeited at the discretion of
the Board if any of the following events occur:

 

(1)
Termination of the relationship with the grantee for cause
including, but not limited to, fraud, theft, dishonesty and
violation of Company policy;

 

(2)
Purchasing or selling securities of the Company in violation of the
Company’s insider trading guidelines then in
effect;

 

(3)
Breaching any duty of confidentiality including that required by
the Company’s insider trading guidelines then in
effect;

 

(4)
Competing with the Company;

 

(5)
Being unavailable for consultation after leaving the
Company’s employment if such availability is a condition of
any agreement between the Company and the grantee;

 

(6)
Recruitment of Company personnel after termination of employment,
whether such termination is voluntary or for cause;

 

(7)
Failure to assign any invention or technology to the Company if
such assignment is a condition of employment or any other
agreements between the Company and the grantee; or

 

(8)
A finding by the Board that the grantee has acted disloyally and/or
against the interests of the Company.

 

(b) Forfeiture of Stock
Rights Granted to Directors.
 Notwithstanding any other provision of this Plan, and unless
otherwise provided for in a Stock Rights Agreement, all vested or
unvested Stock Rights granted to directors shall be immediately
forfeited at the discretion of the Board if any of the following
events occur:

 

(1)
Purchasing or selling securities of the Company in violation of the
Company’s insider trading guidelines then in
effect;

 

 

-12-

 

 

(2)
Breaching any duty of confidentiality including that required by
the Company’s insider trading guidelines then in
effect;

 

(3)
Competing with the Company;

 

(4)
Recruitment of Company personnel after ceasing to be a
director;

or

(5)
A finding by the Board that the grantee has acted disloyally and/or
against the interests of the Company.

 

The
Company may impose other forfeiture restrictions which are more or
less restrictive and require a return of profits from the sale of
Common Stock as part of said forfeiture provisions if such
forfeiture provisions and/or return of provisions are contained in
a Stock Rights Agreement.

 

(c) Profits on the Sale of
Certain Shares; Redemption.
 If any of the events specified in Section 24(a) or (b) of the
Plan occur within one year from the date the grantee last performed
services for the Company in the capacity for which the Stock Rights
were granted (the “Termination Date”) (or such
longer period required by any written agreement), all profits
earned from the sale of the Company’s securities, including
the sale of shares of common stock underlying the Stock Rights,
during the two-year period commencing one year prior to the
Termination Date shall be forfeited and immediately paid by the
grantee to the Company.  Further, in such event, the Company
may at its option redeem shares of common stock acquired upon
exercise of the Stock Right by payment of the exercise price to the
grantee.  To the extent that another written agreement with
the Company extends the events in Section 24(a) or (b) beyond one
year following the Termination Date, the two-year period shall be
extended by an equal number of days.  The Company’s
rights under this Section 24(c) do not lapse one year form the
Termination Date but are contract rights subject to any appropriate
statutory limitation period.

 

 

 

 

-13-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00287-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00287-of-00352.parquet"}]]