Document:

EXHIBIT
4.2

    

    AS
THE CORPORATION IS NOT A REPORTING ISSUER IN ANY JURISDICTION OF CANADA, UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST NOT TRADE THE SECURITY IN CANADA AND MAY HAVE TO HOLD THE SECURITY FOR AN
INDEFINITE PERIOD.

    

    NEITHER
THESE WARRANTS NOR THE COMMON SHARES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.  THESE WARRANTS MAY NOT BE EXERCISED WITHIN THE UNITED STATES
OR BY OR ON BEHALF OF A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE U.S.
SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE U.S. SECURITIES ACT, AND EXEMPTIONS FROM APPLICABLE STATE
SECURITIES LAWS, IN EACH CASE AFTER PROVIDING AN OPINION OF COUNSEL OR OTHER
EVIDENCE SATISFACTORY TO THE CORPORATION TO SUCH EFFECT.

    

    NEITHER
THESE WARRANTS NOR THE COMMON SHARES ISSUABLE UPON EXERCISE THEREOF MAY BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF
EXCEPT: (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S.
SECURITIES ACT; (B) IN A TRANSACTION OUTSIDE THE UNITED STATES MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT OR (C) IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND, IN
EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS.  PRIOR TO THE COMPLETION OF ANY SUCH TRANSACTION PURSUANT TO THE
FOREGOING CLAUSES (B) OR (C), THE TRANSFEROR SHALL DELIVER TO THE CORPORATION A
WRITTEN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION TO
THE EFFECT THAT SUCH TRANSACTION IS IN COMPLIANCE WITH THE REGISTRATION
REQUIREMENTS OF ALL APPLICABLE UNITED STATES FEDERAL AND STATE SECURITIES
LAWS.  HEDGING TRANSACTIONS WITH RESPECT TO THESE WARRANTS AND THE
COMMON SHARES ISSUABLE UPON EXERCISE THEREOF ARE PROHIBITED UNLESS THEY ARE
CONDUCTED IN COMPLIANCE WITH THE U.S. SECURITIES ACT.

    

    This
warrant certificate is void if not exercised on or before 4:30 p.m. (Alberta
time) on November 9, 2013.

    

    WARRANT
CERTIFICATE

    DEEP
WELL OIL & GAS, INC.

    

    (Incorporated
under the laws of the State of Nevada and extra-
provincially registered in
the Province of Alberta, Canada)

    

    
      
        
          
            
              
                
                  
                    	
                            WARRANT
      CERTIFICATE

                            NO. l

                          	 
      	
                            l WARRANTS, each entitling the
      Holder to acquire one Common Share for each Warrant represented
      hereby

                          

                  

                

              

            

          

        

      

    

    

    THIS
IS TO CERTIFY THAT, FOR VALUE RECEIVED

    

    <Name>

    <Address>

    <City,
Province/State, Zip or Postal Code, County>

    <Telephone
Number>

    

    (hereinafter
referred to as the "Holder" or the "Warrantholder") is entitled to acquire for
each Warrant represented hereby, in the manner and subject to the restrictions
and adjustments set forth herein, at any time and from time to time until
4:30 p.m. (Edmonton time) (the "Time of Expiry") on the Expiry Date (as
hereinafter defined), one fully paid and non-assessable common share ("Common
Share") of DEEP WELL OIL & GAS, INC. (the "Corporation"), at the Exercise
Price (as hereinafter defined), subject to adjustment as herein
provided.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        2

      

    

     

    These
Warrants may only be exercised at the principal office of the Corporation at
Suite 700, 10150 – 100 Street, Edmonton, Alberta, T5J 0P6, or such other office
as the Corporation may advise the Holder in writing.  These Warrants
are issued subject to the terms and conditions appended hereto as Schedule "A".

     

    IN
WITNESS WHEREOF, the Corporation has caused this Warrant Certificate to be
executed by a duly authorized officer.

     

    DATED
this ________________________, 2010.

    

    
      
        	 
      	
                DEEP
      WELL OIL & GAS, INC.

              
	 
      	 
      	 
      
	 
      	
                Per: 

              	
                  

              

      

    

    

    (See
terms and conditions attached hereto)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
"A"

    

    TERMS
AND CONDITIONS FOR WARRANT

    

    ARTICLE 1

    INTERPRETATION

    

    
      	
              1.1

            	
              Definitions

            

    

     

    In these Terms and Conditions, unless
there is something in the subject matter or context inconsistent
therewith:

    

    
      	
              (a)

            	
              "Common
      Shares" means the common shares in the capital of the
      Corporation;

            

    

     

    
      	
              (b)

            	
              "Corporation"
      means Deep Well Oil & Gas,
Inc.;

            

    

     

    
      	
              (c)

            	
              "Current
      Market Price" of the Common Shares at any date means the simple average of
      the closing price per share for the Common Shares for any 10 consecutive
      trading days selected by the Corporation commencing not more than 45
      trading days before such date on the stock exchange on which the Common
      Shares are listed or, if such Common Shares are not listed on a stock
      exchange, such over-the-counter market on which the Common Shares are
      quoted or trade (provided that if on any day in such period no closing
      price per share for the Common Shares is reported on by such exchange or
      over-the-counter market for such day, the average of the reported closing
      bid and asked prices on such exchange or over-the-counter market on such
      day shall be deemed to be the closing price per share for the Common
      Shares for such day) of if the Common Shares are not listed or quoted on
      any stock exchange or over-the-counter market, a price determined by the
      board of directors of the Corporation acting
  reasonably;

            

    

     

    
      	
              (d)

            	
              "Dividend
      Paid in the Ordinary Course" means a dividend declared payable on the
      Common Shares in any four consecutive quarters of the Corporation, whether
      in (1) cash, (2) securities of the Corporation, including rights, options
      or warrants (other than rights, options or warrants referred to in
      subsection 4.2(b)) to purchase any securities of the Corporation or
      property or other assets of the Corporation, or (3) property or other
      assets of the Corporation, to the extent that the amount or value of such
      dividend together with the amount or value of all other dividends
      theretofore paid during such financial year (any such securities, property
      or other assets so distributed to be valued at the fair market value of
      such securities, property or other assets, as the case may be, as
      determined by the Corporation, which determination shall be conclusive,
      provided that, for the purposes of this definition, the fair market value
      of any Common Share distributed by way of dividend shall be conclusively
      determined by reference to the Current Market Price per Common Share on
      the date prior to the declaration of such dividend) does not exceed the
      greater of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              150%
      of the aggregate amount and/or value of dividends declared payable by the
      Corporation on the Common Shares in the period of four consecutive
      financial quarters ended immediately prior to the first day of such
      financial year; and

            

    

    
      
         

      

      
         

        
          

        

      

      
         

        2

      

    

    
      	
               
      

            	
              (ii)

            	
              100%
      of the consolidated net income of the Corporation before extraordinary
      items (but after dividends payable on all shares ranking prior to or on a
      parity with respect to the payment of dividends with the Common Shares) in
      respect of the period of four consecutive financial quarters ended
      immediately prior to the first day of the current financial quarter (such
      consolidated net income, extraordinary items and dividends to be shown in
      the audited consolidated financial statements of the Corporation for such
      period of four consecutive financial quarters or if there are no audited
      consolidated financial statements for such period, computed in accordance
      with generally accepted accounting principles, consistent with those
      applied in the preparation of the most recent audited consolidated
      financial statements of the
Corporation);

            

    

     

    
      	
              (e)

            	
              "Exercise
      Price" means the price of US$0.105 per Common Share (subject to adjustment
      in certain events);

            

    

     

    
      	
              (f)

            	
              "Expiry
      Date" means the November 9, 2013 unless modified in accordance with
      section 3.3 and 3.8;

            

    

     

    
      	
              (g)

            	
              "herein",
      "hereby" and similar expressions refer to these Terms and Conditions as
      the same may be amended or modified from time to time; and the expression
      "Article" and "Section" followed by a number refer to the specified
      Article or Section of these Terms and
  Conditions;

            

    

     

    
      	
              (h)

            	
              "person"
      means an individual, corporation, partnership, trustee or any
      unincorporated organization and words importing persons have a similar
      meaning;

            

    

     

    
      	
              (i)

            	
              “Prior Share Issuance
      Reservations”
      means all previously reserved share issuances including the ten
      percent (10%) of the issued and outstanding share capital which may be
      granted as options pursuant to the Corporation’s stock option
      plan;

            

    

     

    
      	
              (j)

            	
              "Time
      of Expiry" means 4:30 p.m. (Edmonton time) on the Expiry
    Date;

            

    

     

    
      	
              (k)

            	
              "Warrant"
      means the warrant to acquire Common Shares evidenced by the Warrant
      Certificate issued to the Holder;
and

            

    

     

    
      	
              (l)

            	
              "Warrant
      Certificate" means the certificate to which these Terms and Conditions are
      attached.

            

    

     

    
      	
              1.2

            	
              Gender

            

    

     

    Words importing the singular number
include the plural and vice versa and words importing the masculine gender
include the feminine and neuter genders.

    
      
         

      

      
         

        
          

        

      

      
         

        3

      

    

    

    
      	
              1.3

            	
              Interpretation
      Not Affected by Headings

            

    

     

    The division of these Terms and
Conditions into Articles, Sections and Subsections and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation thereof.

    

    
      	
              1.4

            	
              Applicable
      Law

            

    

     

    The terms hereof and of the Warrant
shall be construed in accordance with the laws of the Province of Alberta and
the laws of Canada applicable thereto.

    

    ARTICLE 2

    ISSUE
OF WARRANT

    

    
      	
              2.1

            	
              Issue
      of Warrants

            

    

     

    That number of Warrants set out on the
Warrant Certificate are hereby created and authorized to be issued.

    

    
      	
              2.2

            	
              Additional
      Warrants

            

    

     

    Subject to any other written agreement
between the Corporation and the Warrantholder, the Corporation may at any time
and from time to time undertake further equity or debt financing and may issue
additional securities of any kind including Common Shares, warrants or grant
options or similar rights to purchase Common Shares to any person.

    

    
      	
              2.3

            	
              Issue
      in Substitution for Lost Warrants

            

    

     

    If the Warrant Certificate becomes
mutilated, lost, destroyed or stolen:

    

    
      	
              (a)

            	
              the
      Corporation shall, subject to subsection 2.3(b) hereof, issue and
      deliver a new Warrant Certificate of like date and tenor as the one
      mutilated, lost, destroyed or stolen, in exchange for and in place of and
      upon cancellation of such mutilated, lost, destroyed or stolen Warrant
      Certificate; and

            

    

     

    
      	
              (b)

            	
              the
      Holder shall bear the cost of the issue of a new Warrant Certificate
      hereunder and in the case of the mutilation, loss, destruction or theft of
      the Warrant Certificate, shall, as a condition precedent to the issuance
      of a new Warrant Certificate, furnish to the Corporation such evidence of
      mutilation, loss, destruction, or theft as shall be satisfactory to the
      Corporation in its sole discretion and, if required by the Corporation, an
      indemnity in an amount and form satisfactory to the Corporation, in its
      discretion, and shall pay the reasonable charges of the Corporation in
      connection therewith.

            

    

     

    
      	
              2.4

            	
              Warrantholder
      Not a Shareholder

            

    

     

    The Warrant Certificate shall not
constitute the Holder a shareholder of the Corporation, nor entitle it to any
right or interest in respect thereof except as may be expressly provided in the
Warrant Certificate.  The Corporation may deem and treat the Holder of
the Warrant Certificate as the absolute owner thereof for all purposes and the
Corporation shall not be affected by any notice to the
contrary.

    
      
         

      

      
         

        
          

        

      

      
         

        4

      

    

    

    
      	
              2.5

            	
              Register
      of Warrants

            

    

     

    At all times while Warrants are
outstanding, the Corporation shall maintain a register of all holders of
Warrants on which shall be entered the names, latest known addresses of all
holders and if available, the telecopier numbers of such holders and particulars
of the Warrants held by them and a register of transfers in which shall be
entered the particulars of all transfers of Warrants, such registers to be kept
by and at the office of the Corporation.

     

    
      	
              2.6

            	
              Transfer

            

    

     

    Warrants may only be transferred on the
register of the Corporation by the Holder thereof or its legal representatives
or its attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Corporation in accordance with applicable
laws.  The Warrants and the Common Shares issuable thereunder are and
may continue to be subject to resale restrictions and hold periods, and holders
should consult their legal advisors in respect of the same.  Such
transfer will be effected upon surrender to the Corporation of this Warrant
Certificate for cancellation and the duly completed and executed Transfer Form
attached hereto as Appendix
1 and upon compliance, to the reasonable satisfaction of the Corporation,
with:

    

    
      	
              (a)

            	
              the
      conditions herein;

            

    

     

    
      	
              (b)

            	
              such
      reasonable requirements as the Corporation may require;
  and

            

    

     

    
      	
              (c)

            	
              all
      applicable securities legislation and requirements of regulatory
      authorities and all stock exchanges upon which the Common Shares are
      listed from time to time, as
applicable.

            

    

     

    
      	
              2.7

            	
              Default
      on Issuance of Common Shares

            

    

     

    Notwithstanding anything contained in
this Warrant Certificate, if for any reason, other than the failure or default
of the Holder of the Warrants, the Corporation is unable to issue and deliver
the Common Shares as contemplated within this Warrant Certificate to the Holder
upon the proper exercise by the Holder of the right to purchase any of the
Common Shares covered by this Warrant Certificate, the Corporation, at the
option of the Holder, must pay to the Holder, in cash, an amount equal to the
difference between the Exercise Price and the Current Market Price of the Common
Shares on the Exercise Date, for each Common Share that is not delivered, in
complete satisfaction of its obligations with respect to the particular Warrant
for which the Common Share was not issued.

    
      
         

      

      
         

        
          

        

      

      
         

        5

      

    

    

    ARTICLE 3

    EXERCISE
OF THE WARRANT

     

    
      	
              3.1

            	
              No
      Registration under U.S. Securities
Act

            

    

     

    The Warrants may not be exercised
within the United States, or by or on behalf of a “U.S. Person” (as defined in
Regulation S under the United States Securities Act of 1933, as amended (the
“U.S. Securities Act”)), nor will certificates representing Common Shares
issuable upon exercise of the Warrants be delivered in the United States, except
pursuant to an exemption from the registration requirements of the U.S.
Securities Act and exemptions from applicable state securities
laws.  Any person who proposes to exercise a Warrant shall provide to
the Corporation, as contemplated in Appendix 2, either (i) written
certification that, among other things, the Warrant is not being exercised
within the United States or by or on behalf of a U.S. Person, (ii) a written
opinion of counsel or other evidence satisfactory to the Corporation to the
effect that the issuance of Common Shares upon exercise of such Warrant is not
required to be registered under the U.S. Securities Act and applicable state
securities laws or (iii) written confirmation by the person exercising the
Warrant that it is the original purchaser thereof and reaffirming, as of the
date of such exercise, the representations, warranties made by it in the
subscription agreement pursuant to which it purchased the
Warrant.  Common Shares issuable upon exercise of Warrants by a person
in the United States or by or on behalf of a U.S. Person may, if so determined
by the Corporation in its sole discretion, bear a legend restricting
transfer.

     

    
      	
              3.2

            	
              Method
      of Exercise of The Warrant

            

    

     

    The Holder may exercise the right
hereby conferred on the Holder to acquire Common Shares (subject to the
provisions of this Article 3) by:

     

    
      	
              (a)

            	
              duly
      completing and executing the Warrant Exercise Form attached hereto as
      Appendix 2;
      and

            

    

     

    
      	
              (b)

            	
              certifying
      that the Holder or (if different) the recipient of the Common Shares to be
      issued upon exercise of the Warrant either: (i) is not (a) a "U.S.
      Person", (b) exercising the Warrant(s) on behalf of a "U.S. Person", and
      (c) in the United States at the time that the Warrant(s) are exercised and
      did not execute or deliver the Warrant Exercise Form in the United States;
      or (ii) at or prior to the time of such exercise, has delivered to the
      Corporation a written opinion of counsel or other evidence satisfactory to
      the Corporation to the effect that the issuance of Common Shares upon such
      exercise is not required to be registered under the U.S. Securities Act
      and applicable state securities laws; or (iii) is the original purchaser
      of the Warrants and confirms as of the date of such exercise, the
      representations, warranties and agreements made by it in the subscription
      agreement pursuant to which the Warrant was purchased by it;
      and

            

    

     

    
      	
              (c)

            	
              surrendering
      this certificate, together with the Holder’s certified cheque or a bank
      draft, money order or wire transfer  in the full amount of the
      total aggregate Exercise Price of the Common Shares being purchased,
      together with the duly completed and executed Warrant Exercise Form, to
      the Corporation at its offices,

            

    

     

    at any
time up until the Time of Expiry.  This Warrant Certificate shall be
deemed to be surrendered only upon personal delivery thereof to, or if sent by
mail or other means of transmission, upon actual receipt thereof by, the
Corporation at its offices.

    
      
         

      

      
         

        
          

        

      

      
         

        6

      

    

    

    
      	
              3.3

            	
              Accelerated
      Exercise Right

            

    

     

    
      	
              (a)

            	
              In
      the event that the Corporation’s closing price, on the OTCQB, of the
      Common Share’s is equal to or exceeds US$1.00 per Common Share for at
      least thirty (30) consecutive trading days, the Expiry Date of the Warrant
      will automatically accelerate to the date which is thirty (30) calendar
      days following the date that written notice has been given to the
      Warrantholder.

            

    

     

    
      	
              (b)

            	
              To
      exercise the accelerated exercise right described in Section 3.3(a), the
      Corporation must give notice by hand delivery, facsimile transmission,
      other means of electronic communication or (provided that the mailing
      party does not know and should not reasonably have known of any disruption
      or anticipated disruption of postal service which might affect delivery of
      the mail) by registered mail (postage prepaid), to the Warrantholder
      confirming that the conditions described in Section 3.3(a) are met. This
      notice must inform the Warrantholder of the Corporation’s intention to
      exercise its right to cause the accelerated exercise of the Warrant. The
      accelerated exercise date, which will be the date that the Warrantholder
      must pay the exercise price of the Warrants to the Corporation, will be a
      date selected by the Corporation (the “Accelerated Exercise
      Date”) and will be no earlier than thirty (30) calendar days after
      the date of the notice described in this Section 3.3(b) is emailed to the
      Warrantholder.

            

    

     

    
      	
              (c)

            	
              In
      addition to any information required by applicable law and regulation, the
      notice of a accelerated exercise described in Section 3.3(b) shall state,
      as appropriate: (i) the accelerated Exercise Date; (ii) the number of
      Common Shares to be issued upon exercise of the Warrant; (iii) the
      Aggregate Warrant Price to be paid by the Warrantholder; and (iv) the
      place where the Warrants are to be surrendered for
    exercise.

            

    

     

    
      	
              3.4

            	
              Effect
      of Exercise of the Warrant

            

    

     

    
      	
              (a)

            	
              Upon
      surrender and payment as aforesaid the Common Shares so subscribed for
      shall be issued as fully paid and non-assessable shares, free from all
      liens, charges and encumbrances and the Holder shall become the Holder of
      record of such Common Shares on the date of such surrender and
      payment;

            

    

     

    
      	
              (b)

            	
              Within
      ten (10) business days after surrender and payment as aforesaid, the
      Corporation shall forthwith cause the issuance of and mail to the Holder a
      certificate for the Common Shares purchased as
  aforesaid;

            

    

     

    
      	
              (c)

            	
              Notwithstanding
      anything herein contained including any adjustment provided for in
      Article 4, the Corporation shall not be required, upon the exercise
      of any Warrants, to issue fractions of Common Shares or to distribute
      certificates which evidence fractional Common Shares.  Any
      fractional Common Shares that would otherwise be issuable upon the
      exercise of Warrants shall be cancelled by the Corporation without
      compensation to the Holder thereof;
and

            

    

    
      
         

      

      
         

        
          

        

      

      
         

        7

      

    

    
      	
              (d)

            	
              Notwithstanding
      anything herein contained, no Common Shares will be issued pursuant to the
      exercise of any Warrant if the issuance of such Common Shares would
      constitute a violation of the securities laws of any applicable
      jurisdiction or the requirements of any applicable stock exchange, and without limiting the
      generality of the foregoing, in the event that any of the Warrants are
      exercised prior to expiry of any hold period or other resale restriction
      placed thereon by such laws or requirements, the certificates evidencing
      the Common Shares thereby issued will bear such legend as is required
      under applicable securities laws and that, in the opinion of legal counsel
      to the Corporation, is necessary in order to avoid a violation of any such
      laws or requirements.

            

    

     

    
      	
              3.5

            	
              Subscription
      for Less than Entitlement

            

    

     

    The Holder may subscribe for and
purchase a number of Common Shares less than the number which it is entitled to
purchase pursuant to the surrendered Warrant Certificate.  In the
event of any purchase of a number of Common Shares less than the number which
can be purchased pursuant to the Warrant Certificate, the Corporation shall
forthwith issue and deliver to the Holder a new Warrant Certificate containing
the same terms and conditions as disclosed herein to purchase that number of
Common Shares with respect to which such partial exercise did not
apply.

    

    
      	
              3.6

            	
              Resale
      Restrictions

            

    

     

    As the Corporation is not a reporting
issuer in any jurisdiction of Canada, unless permitted under Canadian securities
legislation, the Holder of this security must not trade the security in Canada
and may have to hold the security for an indefinite period.

     

    
      	
              3.7

            	
              Expiration
      of the Warrant

            

    

     

    After the
Time of Expiry, all rights hereunder shall wholly cease and terminate and the
Warrant Certificate and the Warrants shall be void and of no further force and
effect, subject to paragraph 3.8

     

    
      	
              3.8

            	
              Extension
      of the Warrant

            

    

     

    Notwithstanding
paragraph 3.7 above, in the event the issuance of the Common Shares received
upon exercise of the Warrant exceeds the Corporation’s then authorized share
capital, taking into consideration all of the Prior Share Issuance Reservations,
the Warrant shall not be exercisable until such time as the authorized share
capital of the Corporation has been sufficiently increased to accommodate for
the exercise of the Warrant.  The period of time during which the
Warrant cannot be exercised by the Warrantholder shall automatically be extended
to the Expiry Date.

    

    ARTICLE 4

    ADJUSTMENTS

    

    
      	
              4.1

            	
              Adjustment
      of Number of Common Shares

            

    

     

    The acquisition rights in effect at any
date attaching to the Warrants shall be subject to adjustment from time to time
as follows:

    
      
         

      

      
         

        
          

        

      

      
         

        8

      

    

    

    
      	
              (a)

            	
              If
      and whenever at any time after the date hereof and prior to the Time of
      Expiry, any adjustment in the Exercise Price or in the calculation thereof
      pursuant to Section 4.2 shall occur as a result
  of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              an
      event referred to in subsection
4.2(a);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      fixing by the Corporation of a record date for an event referred to in
      subsection 4.2(b); or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      fixing by the Corporation of a record date for an event referred to in
      subsection 4.2(c) if such event constitutes the issue or distribution to
      the holders of all or substantially all of its outstanding Common Shares
      of:

            

    

     

    
      	
               
      

            	
              (A)

            	
              Common
      Shares, or

            

    

     

    
      	
               
      

            	
              (B)

            	
              securities
      exchangeable for or convertible into Common Shares at less than the
      Current Market Price of the Common Shares on such record date,
      or

            

    

     

    
      	
               
      

            	
              (C)

            	
              rights,
      options or warrants to acquire Common Shares at an exercise, exchange or
      conversion price per Common Share less than the Current Market Price of
      the Common Shares on such record
date,

            

    

     

    
      	
               
      

            	
              the
      number of Common Shares obtainable upon the subsequent exercise of the
      Warrant shall be adjusted simultaneously with the adjustment in the
      Exercise Price pursuant to Section 4.2 by multiplying the number of Common
      Shares theretofore obtainable on the exercise thereof immediately prior to
      such adjustment by a fraction of which the numerator shall be the total
      number of Common Shares outstanding immediately after such date and the
      denominator shall be the total number of Common Shares outstanding
      immediately prior to such date.  To the extent that any
      adjustment in subscription rights occurs pursuant to this subsection
      4.1(a) as a result of the distribution of securities convertible into or
      exchangeable for Common Shares referred to in subsection 4.2(a) or as a
      result of the fixing by the Corporation of a record date for the
      distribution of rights, options or warrants referred to in subsection
      4.2(b), the number of Common Shares purchasable upon exercise of a Warrant
      shall be readjusted immediately after the expiration of any relevant
      exchange, conversion or exercise right to the number of Common Shares
      which would be purchasable based upon the number of
      Common Shares actually issued and remaining issuable immediately after
      such expiration, and shall be further readjusted in such manner upon
      expiration of any further such right.  To the extent that any
      such adjustment in subscription rights occurs pursuant to this subsection
      4.1(a) as a result of the fixing by the Corporation of a record date for
      the distribution referred to in subsection 4.2(c) of rights, options or
      warrants or exchangeable or convertible securities, the number of Common
      Shares purchasable upon exercise of a Warrant shall be readjusted
      immediately after the expiration of any relevant exchange, conversion or
      exercise right to the number which would be purchasable pursuant to this
      subsection 4.1(a) if the fair market value of such rights, options or
      warrants or other exchangeable or convertible securities had been
      determined for the purposes of the adjustment pursuant to this subsection
      4.1(a) on the basis of the number of Common Shares issued and remaining
      issuable immediately after such expiration, and shall be further
      readjusted in such manner upon expiration of any further
      right.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

        9

      

    

    

    
      	
              (b)

            	
              If
      and whenever at any time after the date hereof and prior to the Time of
      Expiry there is a reclassification of the Common Shares or a capital
      reorganization of the Corporation other than as described in subsection
      4.2(a) or a consolidation, amalgamation or merger of the Corporation
      (including, without limitation, by way of plan of arrangement) with or
      into any other body corporate, trust, partnership or other entity, or a
      sale or conveyance of the property and assets of the Corporation as an
      entirety or substantially as an entirety to any other body corporate,
      trust, partnership or other entity, any Warrantholder who has not
      exercised his right of acquisition prior to the effective date of such
      reclassification, reorganization, consolidation, amalgamation, merger,
      sale or conveyance, upon the exercise of such right thereafter, shall be
      entitled to receive and shall accept, in lieu of the number of Common
      Shares then sought to be acquired by it, the kind and number of shares or
      other securities or property of the Corporation or of the body corporate,
      trust, partnership or other entity resulting from such reclassification,
      reorganization, consolidation, amalgamation or merger, or to which such
      sale or conveyance may be made, as the case may be, that such Holder would
      have been entitled to receive as a result of such reclassification,
      reorganization, consolidation, amalgamation, merger, sale or conveyance,
      if, on the record date or the effective date thereof, as the case may be,
      the Warrantholder had been the registered Holder of the number of Common
      Shares to which the Holder was theretofore entitled upon
      exercise.  If determined appropriate by the board of directors
      of the Corporation to give effect to or to evidence the provisions of this
      subsection 4.1(b), the Corporation, its successor, or such purchasing
      body corporate, partnership, trust or other entity, as the case may be,
      shall prior to or contemporaneously with any such reclassification,
      reorganization, consolidation, amalgamation, merger, sale or conveyance,
      enter into an agreement or new Warrant Certificate which shall provide, to
      the extent possible, for the application of the provisions set forth in
      this Warrant Certificate with respect to the rights and interests
      thereafter of the Warrantholder to the end that the provisions set forth
      in this Warrant shall thereafter correspondingly be made applicable, as
      nearly as may reasonably be, with respect to any shares, other securities
      or property to which a Warrantholder is entitled on the exercise of its
      acquisition rights thereafter and upon entering into such new Warrant
      Certificate or agreement, the Corporation shall cease to have any
      obligations (including the obligation to issue any Common Shares)
      hereunder and the Holder shall cease to have any rights
      hereunder.  Any Warrant Certificate or agreement entered into
      pursuant to the provisions of this subsection 4.1(b) shall be an agreement
      entered into pursuant to the provisions of Article 6.  Any
      Warrant Certificate or agreement entered into between the Corporation, any
      successor to the Corporation or such purchasing body corporate,
      partnership, trust or other entity shall provide for adjustments which
      shall be as nearly equivalent as may be practicable to the adjustments
      provided in this Article 4 and which shall apply to successive
      reclassifications, reorganizations, consolidations, amalgamations,
      mergers, sales or conveyances.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

        10

      

    

    
      	
              4.2

            	
              Adjustment
      of Exercise Price

            

    

     

    The Exercise Price in effect at any
date attaching to the Warrants shall be subject to adjustment from time to time
as follows:

    

    
      	
              (a)

            	
              If
      and whenever after the date hereof and at any time prior to the Time of
      Expiry, the Corporation shall:

            

    

     

    
      	
               
      

            	
              (i)

            	
              subdivide,
      divide or change its outstanding Common Shares into a greater number of
      Common Shares;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              consolidate,
      reduce or combine its outstanding Common Shares into a lesser number of
      Common Shares;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              make
      any distribution, other than by way of Dividend Paid in the Ordinary
      Course, to the holders of all or substantially all of the outstanding
      Common Shares payable in Common
Shares;

            

    

     

    
      	
               
      

            	
              the
      Exercise Price in effect on the effective date of such events referred to
      in subsections 4.2(a)(i), 4.2(a)(ii), or 4.2(a)(iii) shall be adjusted to
      equal the price determined by multiplying the Exercise Price in effect
      immediately prior to such effective date by a fraction of which the
      numerator shall be the total number of Common Shares outstanding
      immediately prior to such date and the denominator shall be the total
      number of Common Shares immediately after such date. Such adjustment shall
      be made successively whenever any event referred to in this
      subsection 4.2(a) shall occur.

            

    

     

    
      	
              (b)

            	
              If
      and whenever at any time after the date hereof, the Corporation shall fix
      a record date which is prior to the Time of Expiry for the issue of
      rights, options or warrants to all or substantially all the holders of
      outstanding Common Shares under which such holders are entitled during a
      period expiring not more than sixty (60) days after the record date for
      such issue to subscribe for or purchase Common Shares, or securities
      convertible into or exchangeable for Common Shares, at a price per Common
      Share or having a conversion or exchange price per Common Share less than
      the Current Market Price per Common Share on such record date, the
      Exercise Price shall be adjusted immediately after such record date so
      that it shall equal the price determined by multiplying the Exercise Price
      in effect on such record date by a fraction of which the numerator shall
      be the total number of Common Shares outstanding on such record date plus
      a number of Common Shares equal to the number arrived at by dividing the
      aggregate price of the total number of additional Common Shares offered
      for subscription or purchase, or the aggregate conversion or exchange
      price of the convertible securities so offered, by such Current Market
      Price per Common Share, and of which the denominator shall be the total
      number of Common Shares outstanding on such record date plus the total
      number of additional Common Shares offered for subscription or purchase
      (or into which the convertible securities so offered are convertible or
      exchangeable).  If by the terms of the rights, options or
      warrants referred to in this subsection 4.2(b), there is more than one
      purchase, conversion or exchange price per Common Share, the aggregate
      price of the total number of additional Common Shares offered for
      subscription or purchase, or the aggregate conversion or exchange price of
      the convertible securities so offered, shall be calculated for purposes of
      the adjustment on the basis of the lowest purchase, conversion or exchange
      price per Common Share, as the case may be.  Any Common Shares
      owned by or held for the account of the Corporation or any subsidiary of
      the Corporation shall be deemed not to be outstanding for the purpose of
      any such computation.  To the extent that any adjustment in
      Exercise Price occurs pursuant to this subsection 4.2(b) as a result of
      the fixing by the Corporation of a record date for the distribution of
      rights, options or warrants referred to in this subsection 4.2(b), the
      Exercise Price shall be readjusted immediately after the expiration of any
      relevant exchange, conversion or exercise right to the Exercise Price
      which would then be in effect based upon the number of Common Shares
      actually issued and remaining issuable after such expiration, and shall be
      further readjusted in such manner upon expiration of any further such
      right.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

        11

      

    

    
      	
              (c)

            	
              If
      and whenever at any time prior to the Time of Expiry, the Corporation
      shall fix a record date which is prior to the Time of Expiry for the issue
      or distribution to all or substantially all the holders of its outstanding
      Common Shares of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              shares
      of any class other than Common Shares (excluding Dividends Paid in the
      Ordinary Course);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              rights,
      options or warrants (excluding those referred to in subsection
      4.2(b));

            

    

     

    
      	
               
      

            	
              (iii)

            	
              evidences
      of its indebtedness; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              any
      other property or assets (excluding Dividends Paid in the Ordinary
      Course);

            

    

     

    then, and
in each such case, the Exercise Price shall be adjusted immediately after such
record date so that it shall equal the price determined by multiplying the
Exercise Price in effect on such record date by a fraction, of which the
numerator shall be the total number of Common Shares outstanding on such record
date multiplied by the Current Market Price on such record date, less the
aggregate fair market value (as determined by the Corporation, which
determination shall be conclusive) of such shares, rights, options, warrants,
evidences of indebtedness or assets so issued or distributed, and of which the
denominator shall be the total number of Common Shares outstanding on such
record date multiplied by such Current Market Price, and any Common Shares owned
by or held for the account of the Corporation or any subsidiary of the
Corporation shall be deemed not to be outstanding for the purpose of any such
computation.  Such adjustment shall be made successively whenever such
a record date is fixed, and to the extent that such distribution is not so made,
the Exercise Price shall then be readjusted to the Exercise Price which would
then be in effect if such record date had not been fixed or to the Exercise
Price which would then be in effect based upon such shares, rights, options,
warrants, evidences of indebtedness or assets actually distributed, as the case
may be.

    
      
         

      

      
         

        
          

        

      

      
         

        12

      

    

    
      	
              4.3

            	
              General
      Adjustments

            

    

     

    
      	
              (a)

            	
              If
      necessary, appropriate adjustments shall be made in the application of the
      provisions set forth in this Article 4 with respect to the rights and
      interests thereafter of the holders of Warrants to the end that the
      provisions set forth in this Article 4 shall thereafter
      correspondingly be made applicable as nearly as may reasonably be possible
      in relation to any shares or other securities or property thereafter
      deliverable upon the exercise of any Warrant.  Any such
      adjustments shall be made by and set forth in an amendment to this Warrant
      Certificate hereto approved by the directors of the Corporation and shall
      for all purposes conclusively be deemed to be an appropriate
      adjustment.

            

    

     

    
      	
              (b)

            	
              If
      any case in which this Article 4 shall require that an adjustment
      shall become effective immediately after a record date for an event
      referred to herein, the Corporation may defer, until the occurrence of
      such event, issuing to the Holder of any Warrant exercised after such
      event the additional Common Shares issuable upon such conversion by reason
      of the adjustment required by such event before giving effect to such
      adjustment; provided, however, that the Corporation shall deliver to such
      Holder an appropriate instrument evidencing such Holder's right to receive
      such additional Common Shares upon the occurrence of the event requiring
      such adjustment and the right to receive any distributions made on such
      additional Common Shares declared in favour of holders of record of Common
      Shares on and after the relevant date of exercise or such later date as
      such Holder would, but for the provisions of this subsection 4.3(b),
      have become the Holder of record of such additional Common Shares as a
      result of the exercise of the
Warrants.

            

    

     

    
      	
              (c)

            	
              No
      adjustment in the Exercise Price or in the number of shares to be issued
      pursuant to the exercise of the Warrants shall be required unless such
      adjustment would result in a change of at least 1% in the Exercise Price
      then in effect or unless the number of shares to be issued would change by
      at least 1/100th of a share, provided, however, that any adjustments
      which, except for the provisions of this subsection 4.3(c) would
      otherwise have been required to be made, shall be carried forward and
      taken into account in any subsequent
adjustment.

            

    

     

    
      	
              (d)

            	
              The
      adjustments provided for in this Article 4 in the Exercise Price and
      in the number and classes of shares which are to be received on the
      exercise of Warrants are cumulative.  After any adjustment
      pursuant to this Section, the term "Common Shares" where used in this
      Warrant shall be interpreted to mean the shares or other securities or
      property of the Corporation which, as a result of all prior adjustments
      pursuant to this Section, the Warrantholder is entitled to receive upon
      the exercise of his Warrant, and the number of Common Shares indicated in
      any subscription made pursuant to a Warrant shall be interpreted to mean
      the number and kind of securities or property which, as a result of all
      prior adjustments pursuant to this Article 4, a Warrantholder is
      entitled to receive upon the full exercise of a Warrant entitling the
      Holder thereof to purchase the number of Common Shares so
      indicated.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

        13

      

    

    
      	
              (e)

            	
              All
      securities and property which a Warrantholder is at the time in question
      entitled to receive on the full exercise of his Warrant, whether or not as
      a result of adjustments made pursuant to this Section, shall, for the
      purposes of the interpretation of this Warrant be deemed to be securities
      and property which such Warrantholder is entitled to purchase pursuant to
      such Warrant.

            

    

     

    
      	
              4.4

            	
              Notice
      of Adjustment

            

    

     

    Whenever the number of Common Shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
Common Shares is adjusted, as herein provided, the Corporation shall promptly
send to the Warrantholder by first class mail, postage prepaid, notice of such
adjustment or adjustments.

     

    ARTICLE 5

    COVENANTS
BY THE CORPORATION

    

    
      	
              5.1

            	
              Covenants
      by the Corporation

            

    

     

    The Corporation hereby covenants and
agrees as follows:

    

    
      	
              (a)

            	
              it
      will at all times maintain its corporate existence and will carry on its
      business as currently carried on;

            

    

     

    
      	
              (b)

            	
              it
      will reserve and there will remain unissued out of its authorized capital
      a sufficient number of Common Shares to satisfy the rights of acquisition
      provided for in the Warrant Certificate;
and

            

    

     

    
      	
              (c)

            	
              all
      Common Shares issued upon exercise of the right to purchase provided for
      herein shall, upon payment of the Exercise Price therefor, be issued as
      fully paid and non-assessable
shares.

            

    

     

    ARTICLE 6

    MERGER
AND SUCCESSORS

    

    
      	
              6.1

            	
              Corporation
      May Consolidate, etc. on Certain
Terms

            

    

     

    Nothing herein contained shall prevent
any consolidation, reorganization, amalgamation, arrangement or merger of the
Corporation with or into any other body corporate, trust, partnership or other
entity, or a conveyance or transfer of all or substantially all the properties
and assets of the Corporation as an entirety or substantially as an entirety to
any other body corporate, trust, partnership or other entity lawfully entitled
to acquire and operate same, provided, however, that the other body corporate,
trust, partnership or other entity formed by such reorganization, consolidation,
amalgamation, arrangement or merger or which acquires by conveyance or transfer
all or substantially all the properties and assets of the Corporation shall,
simultaneously with such reorganization, consolidation, amalgamation,
arrangement, merger, conveyance or transfer, assume the due and punctual
performance and observance of all the covenants and conditions hereof to be
performed or observed by the Corporation.

    
      
         

      

      
         

        
          

        

      

      
         

        14

      

    

    

    
      	
              6.2

            	
              Successor
      Corporation Substituted

            

    

     

    In case the Corporation, pursuant to
Section 6.1, shall be reorganized, consolidated, amalgamated, arranged, or
merged with or into any other body corporate, trust, partnership or other
entity, or shall convey or transfer all or substantially all of its properties
and assets as an entirety or substantially as an entirety to any other body
corporate, trust, partnership or other entity, the successor formed by such
reorganization, consolidation, amalgamation, arrangement or merger or into which
the Corporation shall have been reorganized, consolidated, amalgamated, arranged
or merged or which shall have received a conveyance or transfer as aforesaid,
shall succeed to and be substituted for the Corporation hereunder and such
changes in phraseology and form (but not in substance) may be made in the
Warrant Certificate and herein as may be appropriate in view of such
reorganization, consolidation, amalgamation, arrangement, merger, conveyance or
transfer.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    APPENDIX
1
  

    
      
        

      

    

      
TRANSFER
FORM

    

    FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers to
_____________________________________, __________________ Warrants of Deep Well Oil & Gas, Inc.
registered in the name of the undersigned on the records of Deep Well Oil & Gas, Inc.
represented by the Warrant Certificate attached hereto and irrevocably
appoints Deep Well Oil &
Gas, Inc. the attorney of the undersigned to transfer the said securities
on the books or register with full power of substitution.

    

    DATED the
______ day of ________________, 201__.

    

    
      
        	
                  

              	 
      	
                  

              
	
                Signature
      Guaranteed

              	 
      	
                Signature
      of Holder

              

      

    

    

    Instructions:

    

    
      	
              1.

            	
              The
      signature of the Holder must be the signature of the person appearing on
      the face of this Certificate.

            

    

    

    
      	
              2.

            	
              If
      the Transfer Form is signed by a trustee, executor, administrator,
      curator, guardian, attorney, officer of a corporation or any person acting
      in a judiciary or representative capacity, the certificate must be
      accompanied by evidence of authority to sign satisfactory to the
      Corporation.

            

    

    

    
      	
              3.

            	
              The
      signature on the Transfer Form must be guaranteed by an authorized officer
      of a chartered bank, trust Corporation or an investment dealer who is a
      member of a recognized stock
exchange.

            

    

    

    
      	
              4.

            	
              Warrants shall only be
      transferable in accordance with applicable laws.  The Warrants
      and the Common Shares issuable thereunder are subject to resale
      restrictions and hold periods which will prevent the Holder, except in
      very limited circumstances from trading such
      securities.  Holders should consult their legal advisors in this
      regard.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    APPENDIX
2

     

    
      
        

      

    

      

    WARRANT
EXERCISE FORM

    

    TO:         Deep
Well Oil & Gas, Inc.

    

    The
undersigned Holder of the within Warrant(s) hereby subscribes for
_______________ Common Shares of Deep Well Oil & Gas, Inc. (the
"Corporation") (or such number of Common Shares or other securities or property
to which such exercise entitles the undersigned in lieu thereof or in addition
thereto under the provisions of the Warrant Certificate) pursuant to the within
Warrant(s) at US$0.105 per share (or the adjusted dollar amount per share at
which the undersigned is entitled to purchase such shares under the provisions
of the Warrant(s) subscribed for above) prior to 4:30 p.m. (Edmonton time) on
the Expiry Date on the terms specified in the said Warrant Certificate, which
certificate is surrendered to the Corporation and which will, upon the issuance
of the Common Shares referred to above and the issuance of a new Warrant for any
outstanding rights of the surrendered Warrant, be null and void.  The
undersigned also encloses herewith a certified cheque, bank draft or money order
or has transmitted good same day funds by wire or other similar transfer, in
lawful money of the United States, payable to or to the order of Deep Well Oil
& Gas, Inc. in payment of the exercise price.

    

    In order
to exercise any Warrants represented by this certificate, the person exercising
Warrant(s) must check one of the following:

      

    [PLEASE
CHECK ONE]

      

    
      
        	
                 ̈

              	
                The
      undersigned Holder (i) at the time of exercise of these Warrants is not in
      the United States; (ii) is not a "U.S. person" as defined in Regulation S
      under the United States Securities Act of 1933, as amended (the "U.S.
      Securities Act"), and is not exercising these Warrants on behalf of a
      "U.S. person"; (iii) did not acquire the Warrants in the United States;
      (iv) did not execute or deliver this Warrant Exercise Form in the United
      States; or

              
	 	 

      

    

    
      
        	
                 ̈

              	
                The
      undersigned certifies that an exemption from registration under the U.S.
      Securities Act and any applicable state securities laws is available, and
      attached hereto is an opinion of counsel to such effect, it being
      understood that any opinion of counsel tendered in connection with the
      exercise of these Warrants must be in form and substance satisfactory to
      the Corporation; or

              
	 	 

      

    

    
      	
               ̈

            	
              The
      undersigned certifies that the undersigned is the original purchaser of
      the Warrant(s) being exercised and confirms as of the date hereof, the
      representations, warranties and agreements made by the undersigned in the
      subscription agreement pursuant to which such Warrant(s) was acquired by
      it.

            

    

    

    The
undersigned directs that the said Common Shares hereby exercised, be issued and
delivered as follows:

    

    
      	
              Name
      in full

            	 
      	
              Address(es)
      (Include Postal Code)

            	 
      	
              #
      of Common Shares

            
	
                

            	 
      	
                

            	 
      	
                

            

    

    (Please
print full name in which certificates are to be issued.  If any of the
securities are to be issued to a person or persons other than the undersigned,
the undersigned Holder must pay to the Corporation all requisite taxes or other
governmental charges.)

    

    DATED this ________ day of
___________________, 201___.

    

    
      
        
          
            
              	
                        

                    	 
      	
                        

                    
	
                      Witness

                    	 
      	
                      Signature
      of Warrantholder (or its representative if not an
    individual).

                    
	
                      Print
      name and address of Warrantholder in full

                    	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                      Name: 

                    	
                        

                    	 
      	
                      Address: 

                    	 
      
	 
      	 
      	 
      	 
      
	
                      Title
      of person signing on behalf of Holder (if

                    	 
      	 
      	 
      
	
                      subscriber
      is not an individual):

                    	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                        

                    	 
      	
                        

                    
	 
      	 
      	
                      Signature
      Guaranteed

                    

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

        2

      

    

    
      	
              1.

            	
              If
      the Warrant Exercise Form indicates that Common Shares are to be issued to
      a person or persons other than the registered Holder of the certificate,
      the signature of such Holder of the Warrant Exercise Form must be
      guaranteed by an authorized officer of a chartered bank, trust corporation
      or an investment dealer who is a member of a recognized stock
      exchange.

            

    

     

    
      	
              2.

            	
              If
      the Warrant Exercise Form is signed by a trustee, executor, administrator,
      curator, guardian, attorney, officer of a corporation or any person acting
      in a judiciary or representative capacity, the certificate must be
      accompanied by evidence of authority to sign satisfactory to the
      Corporation.

            

    

     

    
      	
              3.

            	
              If the registered Holder
      exercises its right to receive Common Shares prior to expiry of any hold
      period or other resale restriction placed on the Warrants by the
      securities laws of any applicable jurisdiction or the requirements of any
      applicable stock exchange, the certificates evidencing the Common Shares
      thereby issued will bear such legend as is required under applicable
      securities laws and that, in the opinion of legal counsel to the
      Corporation, be necessary in order to avoid a violation of any such laws
      or requirements.EXHIBIT
10.5

     

    2010
STOCK INCENTIVE PLAN

    (as
amended through September 14, 2010)

    

    1.           Purpose.  The
purpose of the 2010 Stock Incentive Plan (the “Plan”) of Standard Gold, Inc.
(the “Company”) is to increase stockholder value and to advance the interests of
the Company by furnishing a variety of economic incentives (“Incentives”)
designed to attract, retain and motivate employees, certain key consultants and
directors of the Company.  Incentives may consist of opportunities to
purchase or receive shares of Common Stock, $.001 par value, of the Company
(“Common Stock”) or other incentive awards on terms determined under this
Plan.

     

    2.           Administration.

     

    2.1           Administration by
Committee.  The Plan shall be administered by the board of
directors of the Company (the “Board of Directors”) or by a stock option or
compensation committee (the “Committee”) of the Board of
Directors.  The Committee shall consist of not less than two directors
of the Company and shall be appointed from time to time by the Board of
Directors.  Each member of the Committee shall be (a) a “non-employee
director” within the meaning of Rule 16b-3 of the Securities Exchange Act of
1934 (including the regulations promulgated thereunder, the “1934 Act”) (a
“Non-Employee Director”), and (b) shall be an “outside director” within the
meaning of Section 162(m) under the Internal Revenue Code of 1986, as amended
(the “Code”) and the regulations promulgated thereunder.  The
Committee shall have complete authority to award Incentives under the Plan, to
interpret the Plan, and to make any other determination which it believes
necessary and advisable for the proper administration of the
Plan.  The Committee’s decisions and matters relating to the Plan
shall be final and conclusive on the Company and its participants. If at any
time there is no stock option or compensation committee, the term “Committee”,
as used in the Plan, shall refer to the Board of Directors.

     

    2.2           Delegation of
Authority.  The Company’s Chief Executive Officer may, on a
discretionary basis and without Committee review or approval, grant options to
purchase up to 50,000 shares each to new employees of the Company who are not
officers of the Company.  Such discretionary option grants shall not
exceed 150,000 shares in total in any fiscal year.  Subject to the
foregoing limitations, the Chief Executive Officer shall determine from time to
time (a) the new employees to whom grants will be made, (b) the number of shares
to be granted, and (c) the terms and provisions of each option (which need not
be identical).

     

    3.           Eligible
Participants.  Officers of the Company, employees of the
Company or its subsidiaries, members of the Board of Directors, and consultants
or other independent contractors who provide services to the Company or its
subsidiaries shall be eligible to receive Incentives under the Plan when
designated by the Committee.  Participants may be designated
individually or by groups or categories (for example, by pay grade) as the
Committee deems appropriate.  Participation by officers of the Company
or its subsidiaries and any performance objectives relating to such officers
must be approved by the Committee.  Participation by others and any
performance objectives relating to others may be approved by groups or
categories (for example, by pay grade) and authority to designate participants
who are not officers and to set or modify such targets may be
delegated.

     

    4.           Types of
Incentives.  Incentives under the Plan may be granted in any
one or a combination of the following forms:  (a) incentive stock
options and non-statutory stock options (Section 6); (b) stock appreciation
rights (“SARs”) (Section 7); (c) stock awards (Section 8); and (d) restricted
stock (Section 8).  Subject to the specific limitations provided in
this Plan, payment of Incentives may be in the form of cash, Common Stock or
combinations thereof as the Committee shall determine, and with such other
restrictions as it may impose.

    
      
         

      

      
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    5.           Shares Subject to the
Plan.

     

    5.1           Number of
Shares.  Subject to adjustment as provided in Section 9.6, the
number of shares of Common Stock which may be issued under the Plan shall not
exceed 3,000,000 shares of Common Stock.  Shares of Common Stock that
are issued under the Plan or are subject to outstanding Incentives will be
applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan.  Any shares of Common Stock
subject to SARs granted under this Plan shall be counted in full against the
3,000,000 share
limit, regardless of the number of shares of Common Stock actually issued upon
the exercise of such SARs.

     

    5.2           Cancellation.  If
a stock option or SAR granted hereunder expires or is terminated or canceled
unexercised as to any shares of Common Stock, such shares may again be issued
under the Plan either pursuant to stock options, SARs or
otherwise.  If shares of Common Stock are issued as restricted stock
or pursuant to a stock award and thereafter are forfeited or reacquired by the
Company pursuant to rights reserved upon issuance thereof, such forfeited and
reacquired shares may again be issued under the Plan, either as restricted
stock, pursuant to stock awards or otherwise.  The Committee may also
determine to cancel, and agree to the cancellation of, Incentives in order to
make a participant eligible for the grant of an Incentive at a lower exercise
price than the Incentive to be canceled; provided, however, that the substituted
Incentive must satisfy or be exempt from the requirements of Code Section 409A,
including the rules and regulations thereunder (together, “Code Section
409A”).

     

    5.3           Type of Common
Stock.  Common Stock issued under the Plan in connection with
Incentives shall be authorized and unissued shares.

     

    5.4           Limitation on Certain
Grants.  No person shall receive grants of stock options and
SARs under the Plan that exceed, in the aggregate, 1,000,000 shares during any
one fiscal year of the Company.

     

    6.           Stock
Options.  A stock option is a right to purchase shares of
Common Stock from the Company.  Each stock option granted by the
Committee under this Plan shall be subject to the following terms and
conditions:

     

    6.1           Price.  The
option price per share shall be determined by the Committee, subject to
adjustment under Section 9.6.  Notwithstanding the foregoing sentence,
except as permitted under Section 9.16, the option price per share shall not be
less than the Fair Market Value (as defined in Section 9.14) of the Common Stock
on the Grant Date (as defined in Section 9.15) unless the stock option satisfies
the provisions of Code Section 409A.

     

    6.2           Number.  The
number of shares of Common Stock subject to a stock option shall be determined
by the Committee, subject to adjustment as provided in Section
9.6.  The number of shares of Common Stock subject to a stock option
shall be reduced in the same proportion that the holder thereof exercises an SAR
if any SAR is granted in conjunction with or related to the stock
option.  Notwithstanding the foregoing, the limitation on grants under
Section 5.4 shall apply to grants of stock options under the
Plan.

    
      
         

      

      
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    6.3           Duration and Time for
Exercise.  Subject to earlier termination as provided in
Section 9.3, the term of each stock option shall be determined by the Committee
but shall not exceed ten years and one day from the Grant Date.  Each
stock option shall become exercisable at such time or times during its term as
shall be determined by the Committee at the time of grant.  The
Committee may accelerate the exercisability of any stock
option.  Subject to the first sentence of this paragraph, the
Committee may extend the term of any stock option to the extent provided in
Section 9.4.

     

    6.4           Manner of
Exercise.  A stock option may be exercised, in whole or in
part, by giving written notice to the Company, specifying the number of shares
of Common Stock to be purchased and accompanied by the full purchase price for
such shares.  The option price shall be payable (a) in United States
dollars upon exercise of the option and may be paid by cash, uncertified or
certified check or bank draft; (b) unless otherwise provided in the option
agreement, by delivery of shares of Common Stock in payment of all or any part
of the option price, which shares shall be valued for this purpose at the Fair
Market Value on the date such option is exercised; or (c) unless otherwise
provided in the option agreement, by instructing the Company to withhold from
the shares of Common Stock issuable upon exercise of the stock option shares of
Common Stock in payment of all or any part of the exercise price and/or any
related withholding tax obligations consistent with Section 9.8, which shares
shall be valued for this purpose at the Fair Market Value or in such other
manner as may be authorized from time to time by the
Committee.  Before the issuance of shares of Common Stock upon the
exercise of a stock option, a participant shall have no rights as a
stockholder.

     

    6.5           Incentive Stock
Options.  Notwithstanding anything in the Plan to the contrary,
the following additional provisions shall apply to the grant of stock options
which are intended to qualify as Incentive Stock Options (as such term is
defined in Code Section 422):

     

    (a)           The
aggregate Fair Market Value (determined as of the time the option is granted) of
the shares of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any participant during any calendar year
(under all of the Company’s plans) shall not exceed $100,000. The determination
will be made by taking Incentive Stock Options into account in the order in
which they were granted.  If such excess only applies to a portion of
an Incentive Stock Option, the Committee, in its discretion, will designate
which shares will be treated as shares to be acquired upon exercise of an
Incentive Stock Option.

     

    (b)           Any
option agreement for an Incentive Stock Option under the Plan shall contain such
other provisions as the Committee shall deem advisable, but shall in all events
be consistent with and contain all provisions required in order to qualify the
options as Incentive Stock Options.

     

    (c)           All
Incentive Stock Options must be granted within ten years from the earlier of the
date on which this Plan was adopted by Board of Directors or the date this Plan
was approved by the stockholders.

     

    (d)           Unless
sooner exercised, all Incentive Stock Options shall expire no later than ten
years after the Grant Date.

     

    (e)           The
option price for Incentive Stock Options shall be not less than the Fair Market
Value of the Common Stock subject to the option on the Grant
Date.

    
      
         

      

      
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    (f)           If
Incentive Stock Options are granted to any participant who, at the time such
option is granted, would own (within the meaning of Code Section 422) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the employer corporation or of its parent or subsidiary corporation,
(i) the option price for such Incentive Stock Options shall be not less than
110% of the Fair Market Value of the Common Stock subject to the option on the
Grant Date and (ii) such Incentive Stock Options shall expire no later than five
years after the Grant Date.

     

    7.           Stock Appreciation
Rights.  An SAR is a right to receive, without payment to the
Company, a number of shares of Common Stock, the amount of which is determined
pursuant to the formula set forth in Section 7.5.  An SAR may be
granted (a) with respect to any stock option granted under this Plan, either
concurrently with the grant of such stock option or at such later time as
determined by the Committee (as to all or any portion of the shares of Common
Stock subject to the stock option), or (b) alone, without reference to any
related stock option.  Each SAR granted by the Committee under this
Plan shall be subject to the following terms and conditions:

     

    7.1           Price.  The
exercise price per share of any SAR granted without reference to a stock option
shall be determined by the Committee, subject to adjustment under Section 9.6.
Notwithstanding the foregoing sentence, except as permitted under Section 9.16,
the exercise price per share shall not be less than the Fair Market Value of the
Common Stock on the Grant Date unless the SAR satisfies the provisions of Code
Section 409A.

     

    7.2           Number.  Each
SAR granted to any participant shall relate to such number of shares of Common
Stock as shall be determined by the Committee, subject to adjustment as provided
in Section 9.6.  In the case of an SAR granted with respect to a stock
option, the number of shares of Common Stock to which the SAR relates shall be
reduced in the same proportion that the holder of the option exercises the
related stock option. Notwithstanding the foregoing, the limitation on grants
under Section 5.4 shall apply to grants of SARs under the Plan.

     

    7.3           Duration.  Subject
to earlier termination as provided in Section 9.3, the term of each SAR shall be
determined by the Committee but shall not exceed ten years and one day from the
Grant Date.  Unless otherwise provided by the Committee, each SAR
shall become exercisable at such time or times, to such extent and upon such
conditions as the stock option, if any, to which it relates is
exercisable.  The Committee may in its discretion accelerate the
exercisability of any SAR.  Subject to the first sentence of this
paragraph, the Committee may extend the term of any SAR to the extent provided
in Section 9.4.

     

    7.4           Exercise.  An
SAR may be exercised, in whole or in part, by giving written notice to the
Company, specifying the number of SARs which the holder wishes to
exercise.  Upon receipt of such written notice, the Company shall,
within 90 days thereafter, deliver to the exercising holder certificates for the
shares of Common Stock or cash or both, as determined by the Committee, to which
the holder is entitled pursuant to Section 7.5.

     

    7.5           Issuance of Shares Upon
Exercise.  The number of shares of Common Stock which shall be
issuable upon the exercise of an SAR shall be determined by
dividing:

     

    (a)           the
number of shares of Common Stock as to which the SAR is exercised multiplied by
the amount of the appreciation in such shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the shares
of Common Stock subject to the SAR on the exercise date exceeds (1) in the case
of an SAR related to a stock option, the purchase price of the shares of Common
Stock under the stock option or (2) in the case of an SAR granted alone, without
reference to a related stock option, an amount which shall be determined by the
Committee at the time of grant, subject to adjustment under Section 9.6);
by

    
      
         

      

      
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    (b)           the
Fair Market Value of a share of Common Stock on the exercise date.

     

    No
fractional shares of Common Stock shall be issued upon the exercise of an SAR;
instead, the holder of the SAR shall be entitled to receive a cash adjustment
equal to the same fraction of the Fair Market Value of a share of Common Stock
on the exercise date or to purchase the portion necessary to make a whole share
at its Fair Market Value on the date of exercise.

     

    8.           Stock Awards and Restricted
Stock.  A stock award consists of the transfer by the Company
to a participant of shares of Common Stock, without other payment therefor, as
additional compensation for services to the Company.  A share of
restricted stock consists of shares of Common Stock which are sold or
transferred by the Company to a participant at a price, if any, determined by
the Committee and subject to restrictions on their sale or other transfer by the
participant.  The transfer of Common Stock pursuant to stock awards
and the transfer and sale of restricted stock shall be subject to the following
terms and conditions:

     

    8.1           Number of
Shares.  The number of shares to be transferred or sold by the
Company to a participant pursuant to a stock award or as restricted stock shall
be determined by the Committee.

     

    8.2           Sale
Price.  The Committee shall determine the price, if any, at
which shares of restricted stock shall be sold to a participant, which may vary
from time to time and among participants and which may be below the Fair Market
Value of such shares of Common Stock at the date of sale.

     

    8.3           Restrictions.  All
shares of restricted stock transferred or sold by the Company hereunder shall be
subject to such restrictions as the Committee may determine, including, without
limitation any or all of the following:

     

    (a)           a
prohibition against the sale, transfer, pledge or other encumbrance of the
shares of restricted stock, such prohibition to lapse at such time or times as
the Committee shall determine (whether in annual or more frequent installments,
at the time of the death, disability or retirement of the holder of such shares,
or otherwise);

     

    (b)           a
requirement that the holder of shares of restricted stock forfeit, or (in the
case of shares sold to a participant) re-sell back to the Company at his or her
cost, all or a part of such shares in the event of termination of his or her
employment or consulting engagement during any period in which such shares are
subject to restrictions;

     

    (c)           such
other conditions or restrictions as the Committee may deem
advisable.

     

    8.4           Restrictions.  In
order to enforce the restrictions imposed by the Committee pursuant to Section
8.3, the participant receiving restricted stock shall enter into an agreement
with the Company setting forth the conditions of the grant.  Shares of
restricted stock shall be registered in the name of the participant and
deposited, together with a stock power endorsed in blank, with the
Company.  Each such certificate shall bear a legend that refers to the
Plan and the restrictions imposed under the applicable agreement. The Committee
may provide that no certificates representing restricted stock be issued until
the restriction period is completed.

    
      
         

      

      
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    8.5           End of
Restrictions.  Subject to Section 9.5, at the end of any time
period during which the shares of restricted stock are subject to forfeiture and
restrictions on transfer, such shares will be delivered free of all restrictions
to the participant or to the participant’s legal representative, beneficiary or
heir.

     

    8.6           Rights of Holders of
Restricted Stock.  Subject to the terms and conditions of the
Plan, each participant receiving restricted stock shall have all the rights of a
stockholder with respect to shares of stock during any period in which such
shares are subject to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares.

     

    9.           General.

     

    9.1           Effective
Date.  The Plan will become effective upon the date of approval
by the Company’s Board of Directors (the “Effective Date”).

     

    9.2           Duration.  The
Plan shall remain in effect until all Incentives granted under the Plan have
either been satisfied by the issuance of shares of Common Stock or the payment
of cash or been terminated under the terms of the Plan and all restrictions
imposed on shares of Common Stock in connection with their issuance under the
Plan have lapsed.  No Incentives may be granted under the Plan after
the tenth anniversary of the Effective Date of the Plan.

     

    9.3           Non-transferability of
Incentives.  No stock option, SAR, restricted stock or stock
award may be transferred, pledged or assigned by the holder thereof (except, in
the event of the holder’s death, by will or the laws of descent and distribution
to the limited extent provided in the Plan or the Incentive, or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder), and the
Company shall not be required to recognize any attempted assignment of such
rights by any participant. Notwithstanding the preceding sentence, stock options
may be transferred by the holder thereof to the holder’s spouse, children,
grandchildren or parents (collectively, the “Family Members”), to trusts for the
benefit of Family Members, to partnerships or limited liability companies in
which Family Members are the only partners or shareholders, or to entities
exempt from federal income taxation pursuant to Code Section
501(c)(3).  During a participant’s lifetime, a stock option may be
exercised only by him or her, by his or her guardian or legal representative or
by the transferees permitted by this Section 9.3.

     

    9.4           Effect of Termination or
Death.  If a participant ceases to be an employee of or
consultant to the Company for any reason, including death or disability, any
Incentives may be exercised or shall expire at such times as may be set forth in
the agreement, if any, applicable to the Incentive, or otherwise as determined
by the Committee; provided, however, the term of an Incentive may not be
extended beyond the term originally prescribed when the Incentive was granted,
unless the Incentive satisfies (or is amended to satisfy) the requirements of
Code Section 409A; and provided further that the term of an Incentive may not be
extended beyond the maximum term permitted under this Plan.

    
      
         

      

      
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    9.5           Restrictions under
Securities Laws.  Notwithstanding anything in this Plan to the
contrary: (a) the Company may, if it shall determine it necessary or desirable
for any reason, at the time of award of any Incentive or the issuance of any
shares of Common Stock pursuant to any Incentive, require the recipient of the
Incentive, as a condition to the receipt thereof or to the receipt of shares of
Common Stock issued pursuant thereto, to deliver to the Company a written
representation of present intention to acquire the Incentive or the shares of
Common Stock issued pursuant thereto for his or her own account for investment
and not for distribution; and (b) if at any time the Company further determines,
in its sole discretion, that the listing, registration or qualification (or any
updating of any such document) of any Incentive or the shares of Common Stock
issuable pursuant thereto is necessary on any securities exchange or under any
federal or state securities or blue sky law, or that the consent or approval of
any governmental regulatory body is necessary or desirable as a condition of, or
in connection with the award of any Incentive, the issuance of shares of Common
Stock pursuant thereto, or the removal of any restrictions imposed on such
shares, such Incentive shall not be awarded or such shares of Common Stock shall
not be issued or such restrictions shall not be removed, as the case may be, in
whole or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company.

     

    9.6           Adjustment.  In
the event of any recapitalization, stock dividend, stock split, combination of
shares or other change in the Common Stock, the number of shares of Common Stock
then subject to the Plan, including shares subject to outstanding Incentives,
and the other numbers of shares of Common Stock provided in the Plan, shall be
adjusted in proportion to the change in outstanding shares of Common
Stock.  In the event of any such adjustments, the purchase price of
any option, the performance objectives of any Incentive, and the shares of
Common Stock issuable pursuant to any Incentive shall be adjusted as and to the
extent appropriate, in the discretion of the Committee, to provide participants
with the same relative rights before and after such adjustment.

     

    9.7           Incentive Plans and
Agreements.  Except in the case of stock awards, the terms of
each Incentive shall be stated in a plan or agreement approved by the
Committee.  The Committee may also determine to enter into agreements
with holders of options to reclassify or convert certain outstanding options,
within the terms of the Plan, as Incentive Stock Options or as non-statutory
stock options and in order to eliminate SARs with respect to all or part of such
options and any other previously issued options. The Committee shall communicate
the key terms of each award to the participant promptly after the Committee
approves the grant of such award.

     

    9.8           Withholding.

     

    (a)           The
Company shall have the right to withhold from any payments made under the Plan
or to collect as a condition of payment, any taxes required by law to be
withheld.  At any time when a participant is required to pay to the
Company an amount required to be withheld under applicable income tax laws in
connection with a distribution of Common Stock or upon exercise of an option or
SAR or upon vesting of restricted stock, the participant may satisfy this
obligation in whole or in part by electing (the “Election”) to have the Company
withhold, from the distribution or from such shares of restricted stock, shares
of Common Stock having a value up to the minimum amount of withholding taxes
required to be collected on the transaction.  The value of the shares
to be withheld shall be based on the Fair Market Value of the Common Stock on
the date that the amount of tax to be withheld shall be determined (“Tax
Date”).

     

    (b)           Each
Election must be made before the Tax Date.  The Committee may
disapprove of any Election, may suspend or terminate the right to make
Elections, or may provide with respect to any Incentive that the right to make
Elections shall not apply to such Incentive.  An Election is
irrevocable.

    
      
         

      

      
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    9.9           No Continued Employment,
Engagement or Right to Corporate Assets.  No participant under
the Plan shall have any right, because of his or her participation, to continue
in the employ of the Company for any period of time or to any right to continue
his or her present or any other rate of compensation.  Nothing
contained in the Plan shall be construed as giving an employee, a consultant,
such persons’ beneficiaries or any other person any equity or interests of any
kind in the assets of the Company or creating a trust of any kind or a fiduciary
relationship of any kind between the Company and any such person.

     

    9.10         Payments Under
Incentives.  Payment of cash or distribution of any shares of
Common Stock to which a participant is entitled under any Incentive shall be
made as provided in the Incentive. Except as permitted under Section 9.16,
payments and distributions may not be deferred under any Incentive unless the
deferral complies with the requirements of Code Section 409A.

     

    9.11         Amendment of the
Plan.  The Board of Directors may amend or discontinue the Plan
at any time.  However, no such amendment or discontinuance shall
adversely change or impair, without the consent of the recipient, an Incentive
previously granted. Further, no such amendment shall, without approval of the
stockholders of the Company if the Plan has been approved by the stockholders,
(a) increase the maximum number of shares of Common Stock which may be issued to
all participants under the Plan, (b) change or expand the types of Incentives
that may be granted under the Plan, (c) change the class of persons eligible to
receive Incentives under the Plan, or (d) materially increase the benefits
accruing to participants under the Plan.

     

    9.12         Amendment of Agreements for
Incentives. Except as otherwise provided in this Section 9.12, the terms
of an existing Incentive may be amended by agreement between the Committee and
the participant.  Notwithstanding the foregoing sentence, in the case
of a stock option or SAR, except as permitted under Section 9.16, no such
amendment shall (a) extend the term of the Incentive, except as provided in
Section 9.4; nor (b) reduce the exercise price per share below the Fair Market
Value of the Common Stock on the date the Incentive was granted, unless, in
either case, the amendment complies with the requirements of Code Section
409A.

     

    9.13         Sale, Merger, Exchange or
Liquidation.  Unless otherwise provided in the agreement for an
Incentive, in the event of an acquisition of the Company through the sale of
substantially all of the Company’s assets or through a merger, exchange,
reorganization or liquidation of the Company or a similar event as determined by
the Committee (collectively a “transaction”), the Committee shall be authorized,
in its sole discretion, to take any and all action it deems equitable under the
circumstances, including but not limited to any one or more of the
following:

     

    (a)           providing
that the Plan and all Incentives shall terminate and the holders of (i) all
outstanding vested options shall receive, in lieu of any shares of Common Stock
they would be entitled to receive under such options, such stock, securities or
assets, including cash, as would have been paid to such participants if their
options had been exercised and such participant had received Common Stock
immediately before such transaction (with appropriate adjustment for the
exercise price, if any), (ii) SARs that entitle the participant to receive
Common Stock shall receive, in lieu of any shares of Common Stock each
participant was entitled to receive as of the date of the transaction pursuant
to the terms of such Incentive, if any, such stock, securities or assets,
including cash, as would have been paid to such participant if such Common Stock
had been issued to and held by the participant immediately before such
transaction, and (iii) any Incentive under this Agreement which does not entitle
the participant to receive Common Stock shall be equitably treated as determined
by the Committee.

    
      
         

      

      
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    (b)           providing
that participants holding outstanding vested Common Stock based Incentives shall
receive, with respect to each share of Common Stock issuable pursuant to such
Incentives as of the effective date of any such transaction, at the
determination of the Committee, cash, securities or other property, or any
combination thereof, in an amount equal to the excess, if any, of the Fair
Market Value of such Common Stock on a date within ten days before the effective
date of such transaction over the option price or other amount owed by a
participant, if any, and that such Incentives shall be cancelled, including the
cancellation without consideration of all options that have an exercise price
below the per share value of the consideration received by the Company in the
transaction.

     

    (c)           providing
that the Plan (or replacement plan) shall continue with respect to Incentives
not cancelled or terminated as of the effective date of such transaction and
provide to participants holding such Incentives the right to earn their
respective Incentives on a substantially equivalent basis (taking into account
the transaction and the number of shares or other equity issued by such
successor entity) with respect to the equity of the entity succeeding the
Company by reason of such transaction.

     

    (d)           providing
that all unvested, unearned or restricted Incentives, including but not limited
to restricted stock for which restrictions have not lapsed as of the effective
date of such transaction, shall be void and deemed terminated, or, in the
alternative, for the acceleration or waiver of any vesting, earning or
restrictions on any Incentive.

     

    The Board
of Directors may restrict the rights of participants or the applicability of
this Section 9.13 to the extent necessary to comply with Section 16(b) of the
1934 Act, the Code or any other applicable law or regulation. The grant of an
Incentive award pursuant to the Plan shall not limit in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, exchange or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

     

    9.14         Definition of Fair Market
Value.  For purposes of this Plan, the “Fair Market Value” of a
share of Common Stock at a specified date shall, unless otherwise expressly
provided in this Plan, be the amount which the Committee determines in good
faith to be 100% of the fair market value of such a share as of the date in
question. Notwithstanding the foregoing:

     

    (a)           If
such shares are listed on a U.S. securities exchange, then Fair Market Value
shall be determined by reference to the last sale price of a share of Common
Stock on such U.S. securities exchange on the applicable date.  If
such U.S. securities exchange is closed for trading on such date, or if the
Common Stock does not trade on such date, then the last sale price used shall be
the one on the date the Common Stock last traded on such U.S. securities
exchange.

     

    (b)           If
such shares are publicly traded but are not listed on a U.S. securities
exchange, then Fair Market Value shall be determined by reference to the trading
price of a share of Common Stock on such date (or, if the applicable market is
closed on such date, the last date on which the Common Stock was publicly
traded), by a method consistently applied by the Committee.

    
      
         

      

      
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    (c)           Notwithstanding
subsections (a) and (b) above, if such shares are publicly traded, then Fair
Market Value may, at the discretion of the Committee, be equal to the average of
the closing sale prices of the Company’s Common Stock for the thirty (30)
calendar days prior to the Grant Date of the applicable Incentive.  In
the event the Committee elects to determine the Fair Market Value of Common
Stock pursuant to this section 9.14(c) in connection with the grant of an
Inventive to a participant, the Committee must irrevocably make such election
and determine the number of shares subject to the Incentive before the beginning
of the thirty (30) period.

     

    (d)           If
such shares are not publicly traded, then the Committee’s determination will be
based upon a good faith valuation of the Company’s Common Stock as of such date,
which shall be based upon such factors as the Committee deems
appropriate.  The valuation shall be accomplished in a manner that
complies with Code Section 409A and shall be consistently applied to Incentives
under the Plan.

     

    9.15         Definition of Grant
Date.  For purposes of this Plan, the “Grant Date” of an
Incentive shall be the date on which the Committee approved the award or, if
later, the date on which (a) the participant is no longer able to negotiate the
terms of the award and (b) it is expected that the key terms of the award will
be communicated within a relatively short period of time.

     

    9.16         Compliance with Code Section
409A.  The Plan and the agreement for each Incentive shall be
interpreted and administered so as to be exempt from the requirements of Code
Section 409A or to comply with such requirements.  Notwithstanding the
foregoing, Incentives may be awarded or amended in a manner that does not comply
with Code Section 409A, but only if and to the extent that the Committee
specifically provides in written resolutions that the Incentive or amendment is
not intended to comply with Code Section 409A.

     

    
      
         

      

      
        10

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