Document:

ex-10_1.htm

    Exhibit
10.1

     

    

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       

      CERTIFICATE
OF DESIGNATION

      OF

      SERIES
I PREFERRED STOCK

      OF

      TRILLIANT
EXPLORATION CORPORATION

      

      (Pursuant
to NRS 78.1955)

       

      The
following is a statement of the powers, designations, preferences, limitations,
restrictions and relative rights of a series of preferred stock of Trilliant
Exploration Corporation, a Nevada corporation (the “Corporation”), as authorized
and ratified by the board of directors of the Corporation, for the purposes of
confirming a series of the Corporation’s authorized preferred stock, $.001 par
value per share (“Preferred Stock”):

       

      10,200,000
shares of the authorized and unissued Preferred Stock of the Corporation are
hereby designated “Series I
Preferred Stock” with the following rights, preferences, powers,
privileges and restrictions, qualifications and limitations.

       

      1.    Dividends.

       

      From and
after the date of the issuance of any shares of Series I Preferred Stock, the
holders of record of each share of Series I Preferred Stock will be entitled to
receive, and the Board of Directors of the Corporation must declare dividends in
an amount equal to the amount of dividends such holders would have received if
each share of Series I Preferred Stock had been one share of the Corporation’s
common stock.

       

      2.    Liquidation, Dissolution or
Winding Up; Certain Mergers, Consolidations and Asset Sales.

       

      2.1    Preferential Payments to
Holders of Series I Preferred Stock.  In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series I Preferred Stock then outstanding
will be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders before any payment will be made to the holders
of Common Stock or any other Junior Securities by reason of their ownership
thereof, an amount per share equal to One Dollar ($1.00) per share (the “Base
Amount”) plus any accrued but unpaid dividends.   If upon any
such liquidation, dissolution or winding up of the Corporation, the assets of
the Corporation available for distribution to its stockholders are insufficient
to pay the holders of shares of Series I Preferred Stock the full amount to
which they are entitled under this Section 2.1, the
holders of shares of Series I Preferred Stock will share ratably in any
distribution of the assets available for distribution in proportion to the
respective amounts that would otherwise be payable in respect of the shares held
by them upon such distribution if all amounts payable on or with respect to such
shares were paid in full.  The aggregate amount which a holder of a
share of Series I Preferred Stock is entitled to receive under this Section 2.1 is
referred to as the “Series I
Liquidation Amount.”

       

      2.2    Distribution of Remaining
Assets.  In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after the payment of
all preferential amounts required to be paid to the holders of shares of Series
I Preferred Stock as provided in Section 2.1, the
remaining assets of the Corporation available for distribution to its
stockholders will be distributed among the holders of Junior Securities, in
accordance with their respective terms.  After the payment of all
preferential amounts required to be paid to the holders of shares of Series I
Preferred Stock as provided in

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Section 2.1, the holders of shares of Series I
Preferred Stock shall not participate in the distribution of the remaining
assets pursuant to this Section
2.2.

       

      2.3    Deemed Liquidation
Events.

       

      2.3.1    Definition.  Each
of the following events will be considered a “Deemed Liquidation Event”
unless the holders of at least a majority of the outstanding shares of Series I
Preferred Stock elects otherwise by written notice sent to the Corporation at
least ten days prior to the effective date of any such event:

       

      (a)    a merger or
consolidation in which

       

      (i)    the
Corporation is a constituent party or

       

      (ii)    a subsidiary
of the Corporation is a constituent party and the Corporation issues shares of
its capital stock pursuant to such merger or consolidation,

       

      except
any such merger or consolidation involving the Corporation or a subsidiary in
which the shares of capital stock of the Corporation outstanding immediately
prior to such merger or consolidation continue to represent, or are converted
into or exchanged for shares of capital stock that represent, immediately
following such merger or consolidation, at least a majority, by voting power, of
the capital stock or other equity interests of (1) the surviving or resulting
corporation or entity or (2) if the surviving or resulting corporation or entity
is a wholly owned subsidiary of another corporation or entity immediately
following such merger or consolidation, the parent corporation or entity of such
surviving or resulting corporation or entity (provided that, for
the purpose of this Section 2.3.1, all
shares of Common Stock issuable upon exercise of Options (as defined in Section 4.4.1)
outstanding immediately prior to such merger or consolidation or upon conversion
of Convertible Securities (as defined in Section 4.4.1)
outstanding immediately prior to such merger or consolidation will be deemed to
be outstanding immediately prior to such merger or consolidation and, if
applicable, converted or exchanged in such merger or consolidation on the same
terms as the actual outstanding shares of Common Stock are converted or
exchanged);

       

      (b)    the sale,
lease, transfer, exclusive license or other disposition, in a single transaction
or series of related transactions, by the Corporation or any subsidiary of the
Corporation of all or a majority of the assets or revenue or earnings generating
capacity of the Corporation and its subsidiaries taken as a whole (including,
without limitation, any of its patents), or the sale or disposition (whether by
merger or otherwise) of one or more subsidiaries of the Corporation if a
majority of the assets or revenue or earnings generating capacity of the
Corporation and its subsidiaries taken as a whole are held by such subsidiary or
subsidiaries, except where such sale, lease, transfer, exclusive license or
other disposition is to a wholly owned subsidiary of the Corporation;
or

       

       

      2.3.2    Effecting a Deemed
Liquidation Event.

       

      (a)    The
Corporation will not have the power to effect a Deemed Liquidation Event
referred to in Section
2.3.1(a)(i) unless the agreement or plan of merger or consolidation for
such transaction (the “Merger
Agreement”) provides that the consideration payable to the stockholders
of the Corporation will be allocated among the holders of capital stock of the
Corporation in accordance with Sections 2.1 and
2.2.  In
the event of a Deemed Liquidation Event referred to in Section 2.3.1(a)(ii),
2.3.1(b) or
2.3.1(c), if
the Corporation does not effect a dissolution of the Corporation under the
Nevada Revised Statutes within 90 days after such Deemed Liquidation Event, then
(i) the Corporation will send a written notice to each holder
of

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Series I
Preferred Stock no later than the 90th day after the Deemed Liquidation Event
advising such holders of their right (and the requirements to be met to secure
such right) pursuant to the terms of the following clause (ii) to
require the redemption of such shares of Series I Preferred Stock, and (ii) if
the holders of at least a majority of the then outstanding shares of Series I
Preferred Stock so request in a written instrument delivered to the Corporation
not later than 120 days after such Deemed Liquidation Event, the Corporation
will use the consideration received by the Corporation, if any, for such Deemed
Liquidation Event (net of any retained liabilities associated with the assets
sold or technology licensed, as determined in good faith by the Board of
Directors of the Corporation), together with any other assets of the Corporation
available for distribution to its stockholders (the “Available Proceeds”), to the
extent legally available therefor, on the 150th day after such Deemed
Liquidation Event, to redeem all outstanding shares of Series I Preferred Stock
at a price per share equal to the Series I Liquidation Amount (referred to in
this Section
2.4 as the “Redemption
Price”).  Notwithstanding the foregoing, in the event of a
redemption pursuant to the preceding sentence, if the Available Proceeds are not
sufficient to redeem all outstanding shares of Series I Preferred Stock, the
Corporation will redeem a pro rata portion of each holder’s shares of Series I
Preferred Stock to the fullest extent of such Available Proceeds, based on the
respective amounts that would otherwise be payable in respect of the shares to
be redeemed if the Available Proceeds were sufficient to redeem all such shares,
and will redeem the remaining shares to have been redeemed as soon as
practicable after the Corporation has funds legally available
therefor.  The Corporation will send written notice of the mandatory
redemption (the “Redemption
Notice”) to each holder of record of Series I Preferred Stock not less
than 40 days prior to each Deemed Liquidation Event.  Each Redemption
Notice will state:

       

      (i)    the number of
shares of Series I Preferred Stock held by the holder that the Corporation will
redeem on the date of the Deemed Liquidation Event specified in the Redemption
Notice;

       

      (ii)    the date of
the Deemed Liquidation Event and the Redemption Price;

       

      (iii)    the date upon
which the holder’s right to convert such shares terminates (as determined in
accordance with Section 4.1);
and

       

      (iv)    that the
holder is to surrender to the Corporation, in the manner and at the place
designated, his, her or its certificate or certificates representing the shares
of Series I Preferred Stock to be redeemed.

       

      2.3.3    Opt Out; Tender of
Certificates.  If the Corporation receives, on or prior to the
20th day after the date of delivery of the Redemption Notice to a holder of
Series I Preferred Stock, written notice from such holder that such holder
elects to be excluded from the redemption provided in this Section 2.3, then the
shares of Series I Preferred Stock registered on the books of the Corporation in
the name of such holder at the time of the Corporation’s receipt of such notice
will thereafter be “Excluded
Shares.”  Excluded Shares will not be redeemed or redeemable
pursuant to this Section 2.3, whether
in such Deemed Liquidation Event or thereafter.  On or before the date
of the Deemed Liquidation Event, each holder of shares of Series I Preferred
Stock to be redeemed on such date, unless such holder has exercised his, her or
its right to convert such shares as provided in Section 4, must
surrender the certificate or certificates representing such shares (or, if such
registered holder alleges that such certificate has been lost, stolen or
destroyed, a lost certificate affidavit and agreement reasonably acceptable to
the Corporation to indemnify the Corporation against any claim that may be made
against the Corporation on account of the alleged loss, theft or destruction of
such certificate) to the Corporation, in the manner and at the place designated
in the Redemption Notice, and thereupon

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      the
Redemption Price for such shares will be payable to the order of the person
whose name appears on such certificate or certificates as the owner
thereof.  In the event less than all of the shares of Series I
Preferred Stock represented by a certificate are redeemed, a new certificate
representing the unredeemed shares of Series I Preferred Stock will promptly be
issued to such holder.  If the Redemption Notice has been duly given,
and if on the date of the Deemed Liquidation Event the Redemption Price payable
upon redemption of the shares of Series I Preferred Stock to be redeemed in such
Deemed Liquidation Event is paid or tendered for payment or deposited with an
independent payment agent so as to be available therefor in a timely manner,
then notwithstanding that the certificates evidencing any of the shares of
Series I Preferred Stock so called for redemption have not been surrendered,
dividends with respect to such shares of Series I Preferred Stock will cease to
accrue after date of the Deemed Liquidation Event and all rights with respect to
such shares will forthwith after the date of the Deemed Liquidation Event
terminate, except only the right of the holders to receive the Redemption Price
without interest upon surrender of their certificate or certificates
therefor.

       

      Prior to
the distribution or redemption provided for in this Section 2.3, the
Corporation will not expend or dissipate the consideration received for such
Deemed Liquidation Event, except to discharge expenses incurred in connection
with such Deemed Liquidation Event.

       

       

      2.3.4   Amount Deemed Paid or
Distributed.  If the amount deemed paid or distributed under
this Section
2.3 is made in property other than in cash, the value of such
distribution will be the fair market value of such property determined
as follows:

       

      (a)    For
securities not subject to investment letters or other similar restrictions on
free marketability,

       

      (i)    if traded on
a securities exchange or the NASDAQ Stock Market, the value will be deemed to be
the average of the closing prices of the securities on such exchange or market
over the 30-period ending three days prior to the closing of such
transaction;

       

      (ii)    if actively
traded on the over-the-counter-bulletin-board (OTCBB), the value will be deemed
to be the average of the closing bid prices over the 30-day period ending three
days prior to the closing of such transaction; or

       

      (iii)    if there is
no active public market, the value will be the fair market value thereof, as
determined in good faith by the Board of Directors of the
Corporation.

       

      (b)    The method of
valuation of securities subject to investment letters or other similar
restrictions on free marketability (other than restrictions arising solely by
virtue of a stockholder’s status as an affiliate or former affiliate) will take
into account an appropriate discount (as determined in good faith by the Board
of Directors of the Corporation) from the market value as determined pursuant to
clause (a) above so as to reflect the approximate fair market value
thereof.

       

      2.3.5   Allocation of
Escrow.  In the event of a
Deemed Liquidation Event pursuant to Section 2.3.1(a)(i),
if any portion of the consideration payable to the stockholders of the
Corporation is placed into escrow or is payable to the stockholders of the
Corporation subject to contingencies, the Merger Agreement will provide that (a)
the portion of such consideration that is not placed in escrow and not subject
to any contingencies (the “Initial Consideration”) will
be allocated among the holders of capital stock of the Corporation in accordance
with Sections
2.1 and 2.2 as if the Initial
Consideration were the only consideration payable in connection with such Deemed
Liquidation Event and (b) any additional consideration

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      that
becomes payable to the stockholders of the Corporation upon release from escrow
or satisfaction of contingencies will be allocated among the holders of capital
stock of the Corporation in accordance with Sections 2.1 and
2.2 after
taking into account the previous payment of the Initial Consideration as part of
the same transaction.

       

      3.     Voting.

       

      3.1    General.  On
any matter presented to the stockholders of the Corporation for their action or
consideration at any meeting of stockholders of the Corporation (or by written
consent of stockholders in lieu of meeting), each holder of outstanding shares
of Series I Preferred Stock will be entitled to cast the number of votes equal
to the number of whole shares of Common Stock into which the shares of Series I
Preferred Stock held by such holder are convertible as of the record date for
determining stockholders entitled to vote on such matter.  Except as
provided by law or by the other provisions of the Articles of Incorporation or
Certificate or Designation, holders of Series I Preferred Stock will vote
together with the holders of Common Stock as a single class.

       

       

      4.    Optional
Conversion.

       

      The
holders of the Series I Preferred Stock will have conversion rights as follows
(the “Conversion
Rights”):

       

      4.1    Right to
Convert.

       

      4.1.1    Conversion
Ratio.  Each share of Series I Preferred Stock will be
convertible, at the option of the holder thereof, at any time and from time to
time, and without the payment of additional consideration by the holder thereof,
into such number of fully paid and nonassessable shares of the
Corporation’s  Common Stock as is determined by dividing (i) the Base
Amount by (ii) the average of the closing prices of the securities on the OTCBB,
NASDAQ or other exchange or market on which such Common Stock trades over the
5-day period ending three days prior to the closing of such transaction
(the“Series I Conversion
Price”).  In the event that on the date of optional conversion
pursuant to this Section 4.1.1 the Corporation’s Common Stock is not trading on
the OTCBB, NASDAQ or other public exchange or market, the denominator in the
formula for the Series I Conversion Price shall be the fair market value of the
Corporation’s Common Stock, as determined in good faith by the Board of
Directors of the Corporation

       

      4.1.2    Termination of Conversion
Rights.  In the event of a liquidation, dissolution or winding
up of the Corporation or a Deemed Liquidation Event, the Conversion Rights will
terminate at the close of business on the last full day preceding the date fixed
for the payment of any such amounts distributable on such event to the holders
of Series I Preferred Stock.

       

      4.2    Fractional
Shares.  No fractional shares of Common Stock will be issued
upon conversion of the Series I Preferred Stock.  Any fractional
shares to which the holder would otherwise be entitled will be

      cancelled
with no compensation to such holder.

       

      4.3    Mechanics of
Conversion.

       

      4.3.1    Notice of
Conversion.  In order for a holder of Series I Preferred Stock
to voluntarily convert shares of Series I Preferred Stock into shares of Common
Stock, such holder will surrender the certificate or certificates for such
shares of Series I Preferred Stock (or, if such registered holder alleges that
such certificate has been lost, stolen or destroyed, a lost certificate
affidavit and agreement reasonably acceptable to the Corporation to indemnify
the Corporation against any claim that may be made against the Corporation on
account of the alleged loss, theft or destruction of such certificate), at the
office of the transfer agent for the Series I Preferred Stock, together with
written notice that such holder elects to convert all or any number of the
shares of the Series I Preferred Stock represented by such certificate or
certificates and, if applicable, any event on which such conversion is
contingent.  Such notice will state such holder’s name or the names of
the nominees in which such holder wishes the certificate or certificates for
shares of Common Stock to be issued.  If required by the Corporation,
certificates surrendered for conversion will be endorsed or accompanied by a
written instrument or instruments of transfer, in form reasonably satisfactory
to the Corporation, duly executed by the registered holder or his, her or its
attorney duly authorized in writing.  The close of business on the
date of receipt by the transfer agent (or by the Corporation if the Corporation
serves as its own transfer agent) of such certificates (or lost certificate
affidavit and agreement) and notice will be the time of conversion (the “Conversion Time”), and the
shares of Common Stock issuable upon conversion of the shares represented by
such certificate will be deemed to be outstanding of record as of such
date.  The Corporation will, as soon as practicable after the
Conversion Time, (i) issue and deliver to such holder of Series I Preferred
Stock, or to his, her or its nominees, a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion in
accordance with the provisions hereof and a certificate for the number (if any)
of the shares of Series I Preferred Stock represented by the surrendered
certificate that were not converted into Common Stock, (ii) pay in cash such
amount as provided in Section 4.2 in lieu
of any fraction of a share of Common Stock otherwise issuable upon such
conversion.

       

      4.3.2    Reservation of
Shares.  The Corporation will at all times when the Series I
Preferred Stock will be outstanding, reserve and keep available out of its
authorized but unissued capital stock, for the purpose of effecting the
conversion of the Series I Preferred Stock, such number of its duly authorized
shares of Common Stock as will from time to time be sufficient to effect the
conversion of all outstanding Series I Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock will not be sufficient
to effect the conversion of all then outstanding shares of the Series I
Preferred Stock, the Corporation will take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as will be sufficient for such purposes, including, without
limitation, engaging in best efforts to obtain the requisite stockholder
approval of any necessary amendment to the Articles of
Incorporation.  Before taking any action which would cause an
adjustment reducing the Series I Conversion Price below the then par value of
the shares of Common Stock issuable upon conversion of the Series I Preferred
Stock, the Corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of Common Stock at such
adjusted Series I Conversion Price.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.4           Effect of
Conversion.  All shares of Series I Preferred Stock that have
been surrendered for conversion as herein provided will no longer be deemed to
be outstanding and all rights with respect to such shares will immediately cease
and terminate at the Conversion Time, except only the right of the holders
thereof to receive shares of Common Stock in exchange therefor, and to receive
payment of any dividends declared but unpaid thereon.  Any shares of
Series I Preferred Stock so converted will be retired and cancelled and may not
be reissued as shares of such series, and the Corporation may thereafter take
such appropriate action (without the need for stockholder action) as may be
necessary to reduce the authorized number of shares of Series I Preferred Stock
accordingly.

       

                           4.5    Taxes.  The
Corporation will pay any and all issue and other similar taxes that may be
payable in respect of any issuance or delivery of shares of Common Stock upon
conversion of shares of Series I Preferred Stock pursuant to this Section
4.  The Corporation will not, however, be required to pay any
tax that may be payable in respect of any transfer involved in the issuance and
delivery of shares of Common Stock in a name other than that in which the shares
of Series I Preferred Stock so converted were registered, and no such issuance
or delivery will be made unless and until the person or entity requesting such
issuance has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.

       

      4.6    Adjustment for Merger or
Reorganization, etc.  Subject to the provisions of Section 2.3, if there
occurs any reorganization, recapitalization, reclassification, consolidation or
merger involving the Corporation in which the Common Stock (but not the Series I
Preferred Stock) is converted into or exchanged for securities, cash or other
property (other than a transaction covered by Sections 4.4, 4.6 or 4.7), then, following
any such reorganization, recapitalization, reclassification, consolidation or
merger, each share of Series I Preferred Stock will thereafter be convertible in
lieu of the Common Stock into which it was convertible prior to such event into
the kind and amount of securities, cash or other property which a holder of the
number of shares of Common Stock of the Corporation issuable upon conversion of
one share of Series I Preferred Stock immediately prior to such reorganization,
recapitalization, reclassification, consolidation or merger would have been
entitled to receive pursuant to such transaction; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors of the
Corporation) will be made in the application of the provisions in this Section 4 with
respect to the rights and interests thereafter of the holders of the Series I
Preferred Stock, to the end that the provisions set forth in this Section 4 (including
provisions with respect to changes in and other adjustments of the Series I
Conversion Price) will thereafter be applicable, as nearly as reasonably may be,
in relation to any securities or other property thereafter deliverable upon the
conversion of the Series I Preferred Stock.

       

      4.10    Notice of Record
Date.  In the event:

       

      (a)    the
Corporation takes a record of the holders of its Common Stock (or other capital
stock or securities at the time issuable upon conversion of the Series I
Preferred Stock) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of capital stock of any class or any other securities, or to
receive any other security; or

       

      (b)    of any
capital reorganization of the Corporation, any reclassification of the Common
Stock of the Corporation, or any Deemed Liquidation Event; or

       

      (c)    of the
voluntary or involuntary dissolution, liquidation or winding-up of the
Corporation,

       

      then, and
in each such case, the Corporation will send or cause to be sent to the holders
of the Series I Preferred Stock a notice specifying, as the case may be, (i) the
record date for such dividend, distribution or right, and the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up is proposed to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such other capital stock or securities at the time issuable upon the conversion
of the Series I Preferred Stock) will be entitled to exchange their shares of
Common Stock (or such other capital stock or securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up, and the amount per
share and character of such exchange applicable to the Series I Preferred Stock
and the Common Stock.  Such notice will be sent at least ten days
prior to the record date or effective date for the event specified in such
notice.

       

      5.    Redemption
of  Shares :

      

      5.1    Each share of
Series I Preferred Stock will be redeemable, at the option of the Corporation,
at any time and from time to time, and without the payment of additional
consideration by the holder thereof, at the redemption price of One Dollar
($1.00) per share.

      

      5.2    Each Share of
Series I Preferred Stock redeemed or otherwise acquired by the Corporation will
be automatically and immediately cancelled and retired and will not be reissued,
sold or transferred.  Neither the Corporation nor any of its
subsidiaries may exercise any voting or other rights granted to the holders of
Series I Preferred Stock following redemption.

       

      6.    Waiver.  Any
of the rights, powers, preferences and other terms of the Series I Preferred
Stock set forth herein may be waived on behalf of all holders of Series I
Preferred Stock by the affirmative written consent or vote of the holders of at
least a majority of the shares of Series I Preferred Stock then
outstanding.

       

      7.    Notices.  Any
notice required or permitted by the provisions of this Article Fourth to be
given to a holder of shares of Series I Preferred Stock will be mailed, postage
prepaid, to the post office address last shown on the records of the
Corporation, or given by electronic communication in compliance with the
provisions of the General Corporation Law, and will be deemed sent upon such
mailing or electronic transmission.ex_4-1.htm

    EXHIBIT
4.1

     

     

    
      GENERAL
ENVIRONMENTAL MANAGEMENT, INC.

      2009
FLEXIBLE STOCK PLAN

      

      

      ARTICLE
I - NAME AND PURPOSE

      

      1.1 Name.  The
name of the Plan is the “General Environmental Management, Inc. 2009 Flexible
Stock Plan" (the "Plan").

      

      1.2 Purpose.  General
Environmental Management, Inc. (the "Company") has established the Plan to
attract, retain, motivate and reward employees, directors, officers, consultants
and advisors , to encourage ownership of the Company's Common Stock by employees
and other individuals, and to promote and further the best interests of the
Company.

      

      ARTICLE
II - DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION

      

      2.1 General
Definitions.  The following words and phrases, when used in the
Plan, unless otherwise specifically defined or unless the context clearly
otherwise requires, shall have the following respective meanings:

      

      (a)
"Agreement" means the document which evidences the grant of any Benefit (as
defined below) under the Plan and which sets forth the Benefit and the terms,
conditions and provisions of, and restrictions relating to, such
Benefit.

      

      (b)
"Benefit" means any benefit granted to a participant under the
Plan.

      

      (c)
"Board" means the Board of Directors of the Company.

      

      (d)
"Committee" means the Committee described in Section 5.1, or in the event that
the Board of Directors does not appoint a Committee, then the Board of
Directors.

      

      (e)
"Common Stock" means the Company's common stock, $0.001 par value.

      

      (f)
"Effective Date" means the date that the Plan is adopted by the Board of
Directors.

      

      (g)
"Employee" means any person employed by the Employer and any director, officer,
consultant and advisor.

      

      (h)
"Employer" means the Company and all Subsidiaries.

      

      (i)
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      

      (j) "Fair
Market Value" means the last reported sale price, regular way, of the Shares on
any day or, in case no such reported sale takes place on such day, the average
of the reported closing  bid and asked prices, regular way, in either
case on the principal national securities exchange on which the Shares are
listed or if the Shares are not listed on a national securities exchange and are
listed on the Nasdaq Stock Market, the sale price determined in the same fashion
or, if the  Shares are not so listed on any of the foregoing, the
average of the bid and asked prices on such day as furnished by dealers in the
Shares in the over-the-counter market.  All calculations of the
current market price shall be made to the nearest cent.

       

      (k)
"Option" means an option to purchase Shares granted under the Plan.

      

      (l)  "Other
Stock Based Award" means an award under the Plan that is valued in whole or in
part by reference to, or is otherwise based on, Common Stock.

      

      (m)
"Participant" means a person who is granted a Benefit under the
Plan.

      

      (n)
"Performance Share" means a Share awarded to a Participant under ARTICLE XIV of
this Plan.

      

      (o)
"Plan" means the General Environmental Management, Inc. 2009 Flexible Stock
Plan, and all amendments and supplements to it.

      

      (p)
"Restricted Stock" means Shares issued under ARTICLE XIII of the
Plan.

      

      (q)
"Share" means a share of Common Stock.

      

      (r)
"Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Company if, at the time of grant of an Option or other
Benefit, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.

      

      2.2 Other
Definitions.  In addition to the above definitions, certain
words and phrases used in the Plan and any Agreement may be defined in other
portions of the Plan or in such Agreement.

      

      2.3 Conflicts in Plan. In
the case of any conflict in the terms of the Plan relating to a Benefit, the
provisions in the ARTICLE of the Plan which specifically permits the grant of
such Benefit shall control those in a different ARTICLE.

      

      ARTICLE
III - COMMON STOCK

      

      3.1 Number of
Shares.  The number of Shares which may be issued or sold or
for which Options or Performance Shares may be granted under the Plan is fixed
at 3,000,000 Shares.  At this date there are no shares issued and
outstanding under this Plan. Such Shares may be authorized but unissued Shares,
or Shares held in the treasury, or both.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      3.2 Re-usage.  If
an Option expires or is terminated, surrendered, or canceled without having been
fully exercised, if Restricted Stock or Performance Shares are forfeited, or if
any other grant results in any Shares not being issued, the Shares covered by
such Option, grant of Restricted Shares, Performance Shares or other grant, as
the case may be, shall again be available for use under the Plan, to the fullest
extent permitted under applicable law.

      

      3.3  Adjustments.  If
there is any change in the Common Stock of the Company by reason of any stock
dividend, spin-off, split-up, spin-out, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, the number and class of
shares available for Options and grants of Restricted Stock, Performance Shares
and Other Stock Based Awards and the number of Shares subject to outstanding
Options, grants of Restricted Stock and Performance Shares which are not vested,
and Other Stock Based Awards, and the price thereof, as applicable, shall be
appropriately adjusted by the Committee.

      

      ARTICLE
IV - ELIGIBILITY

      

      4.1 Determined By
Committee.  The Participants and the Benefits they receive
under the Plan shall be determined solely by the Committee, or in the event the
Board of Directors does not appoint a Committee, then by the Board of Directors
(hereinafter the Committee or the Board, if there is no Committee appointed, is
referred to as the “Committee).  In making its determinations, the
Committee shall consider past, present and expected future contributions of
Participants and potential Participants to the Company, including, without
limitation, the performance of, or the refraining from the performance of,
services.

      

      ARTICLE
V - ADMINISTRATION

      

      5.1 Committee.

      

      (a) The
Plan shall be administered by the Board of Directors of the Company, the Stock
Option Committee of the Board or another committee of the Board, all as shall be
determined by the Board.

       

      (b) If
the Board appoints a Committee, the Committee shall be comprised of not less
than one person, and each member of the Committee shall be a member of the
Board. Subject to the foregoing, the Board may from time to time appoint members
of the Committee in substitution for or in addition to members previously
appointed, may fill vacancies in the Committee and may remove members of the
Committee, at the sole discretion of the Board of Directors.

      

      (c) The
Committee shall select one of its members as its chairman and shall hold its
meetings at such times and places as it shall deem advisable. A majority of its
members shall constitute a quorum and all determinations shall be made by a
majority of such quorum. Any determination reduced to writing and signed by all
of the members of the Committee shall be fully as effective as if it had been
made by a majority vote at a meeting duly called and held.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

      5.2 Powers.

      

      (a) The
Board or the Committee, if so determined by the Board, shall have full power and
authority, subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be issued or adopted by the
Board, to grant eligible persons Benefits under the Plan, to determine the
restrictions, terms and conditions (which need not be identical) of all Benefits
so granted, to interpret the provisions of the Plan and any Agreements relating
to Benefits granted under the Plan, and to supervise the administration of the
Plan.

      

      (b) The
Board or the Committee, if the Board shall so determine, shall have sole
authority in the selection of directors, officers and employees of the Company
or a Subsidiary, and any consultant, advisor or independent contractor to the
Company or a Subsidiary, to whom Awards may be granted under the Plan and in the
determination of the timing, pricing, terms, conditions, restrictions and amount
of any such Award, subject only to the express provisions of the
Plan.

      

      (c)
Without limiting the generality of the above Sections, the Board or the
Committee shall have the authority to condition any Award, in whole or in part,
on performance or other criteria established by the Board or the Committee at
the time of grant. In making determinations hereunder, the Board or the
Committee may take into account the nature of the services rendered by the
respective directors, officers, employees, consultants, advisors or independent
contractors, their present and potential contributions to the success of the
Company and its Subsidiaries and such other factors as the Board or the
Committee in its discretion deems relevant, and may consult with, and give such
consideration to the recommendations of, management of the Company as the Board
or Committee deems desirable.

      

      5.3 Interpretation.  The
Board or the Committee is authorized, subject to the provisions of the Plan, to
establish, amend and rescind such rules and regulations as it deems necessary or
advisable for the proper administration of the Plan and to take such other
action in connection with or in relation to the Plan as it deems necessary or
advisable. Each action and determination made or taken pursuant to the Plan by
the Board or the Committee, including any interpretation or construction of the
Plan, shall be final and conclusive for all purposes and upon all persons. No
member of the Board or the Committee shall be liable for any action or
determination made or taken by him or the Board or the Committee in good faith
with respect to the Plan.

       

      ARTICLE
VI - AMENDMENT

      

      6.1 Power of
Board.  Except as hereinafter provided, the Board shall have
the sole right and power to amend the Plan at any time and from time to
time.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      ARTICLE
VII - TERM AND TERMINATION

      

      7.1 Term.  The
Plan shall commence as of the Effective Date, and, subject to the terms of the
Plan, including those limiting the period over which Benefits may be granted,
shall continue in full force and effect until terminated.

      

      7.2 Termination.  The
Plan may be terminated at any time by the Board.

      

      ARTICLE
VIII - MODIFICATION OR TERMINATION OF BENEFITS

      

      8.1 General.  Subject
to the provisions of Section 8.2, the amendment or termination of the Plan shall
not adversely affect a Participant's right to any Benefit granted prior to such
amendment or termination.

      

      8.2 Committee's
Right.  Any Benefit granted may be converted, modified,
forfeited or canceled, in whole or in part, by the board or the Committee if and
to the extent permitted in the Plan or applicable Agreement, or in the grant of
the Benefit, or with the consent of the Participant to whom such Benefit was
granted.

      

      ARTICLE
IX - AGREEMENTS AND CERTAIN BENEFITS

      

      9.1 Grant Evidenced by
Agreement.  The grant of any Benefit under the Plan may be
evidenced by an Agreement which shall describe the specific Benefit granted and
the terms and conditions of the Benefit or may be evidenced by adoption of a
Board Resolution.  The granting of any Benefit shall be subject to,
and conditioned upon, the recipient's execution of any Agreement required by the
Committee, or the Board if no Committee is appointed.  Except as
otherwise provided in an Agreement, all capitalized terms used in the Agreement
shall have the same meaning as in the Plan, and the Agreement shall be subject
to all of the terms of the Plan.

      

      9.2 Provisions of
Agreement.  Any Agreement shall contain such
provisions  that the Committee, or the Board if no Committee is
appointed, shall determine to be necessary, desirable and appropriate for the
Benefit granted which may include, but not be limited to, the following with
respect to any Benefit:  description of the type of Benefit; the
Benefit's duration; its transferability; if an Option, the exercise price, the
exercise period and the person or persons who may exercise the Option; the
effect upon such Benefit of the Participant's death or termination of
employment; the Benefit's conditions; when, if, and how any Benefit may be
forfeited, converted into another Benefit, modified, exchanged for another
Benefit or replaced; and the restrictions on any Shares purchased or granted
under the Plan.

      

      9.3 Certain
Benefits.  Any Benefit granted to an individual who is subject
to Section 16 of the Exchange Act shall be not transferable other than by will
or the laws of descent and distribution and shall be exercisable during her/his
lifetime only by him, her/his guardian or her/his legal
representative.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

      ARTICLE
X - REPLACEMENT AND TANDEM AWARDS

      

      10.1
Replacement.  The
Committee, or the Board if no Committee is appointed, may permit a Participant
to elect to surrender a Benefit in exchange for a new Benefit.

      

      10.2
Tandem
Awards.  Awards may be granted by the Committee, or the Board
if no Committee is appointed,  in tandem.

      

      ARTICLE XI - PAYMENT,
DIVIDENDS, DEFERRAL AND WITHHOLDING

      

      11.1
Payment.  Upon
the exercise of an Option or in the case of any other Benefit that requires a
payment to the Company, the amount due the Company is to be paid:

      

      (a) in
cash;

      

      (b) by
the tender to the Company of Shares owned by the optionee and registered in his
name having a Fair Market Value equal to the amount due to the
Company;

      

      (c) by
credit applied towards any amount due and payable under a contract executed by
the Company;

      

      (d) in
other property, rights and credits, including the Participant's promissory note;
or

      

      (e) by
any combination of the payment methods specified in (a), (b) and (c)
above.

      

      Notwithstanding
the foregoing, any method of payment other than (a) may be used only with the
consent of the Committee, or the Board if no Committee is appointed, (or if and
to the extent so provided in an Agreement).  The proceeds of the Sale
of Common Stock purchased pursuant to an Option and any payment to the Company
for other Benefits shall be added to the general funds of the Company or to the
Shares held in treasury, as the case may be, and used for the corporate purposes
of the Company as the Board shall determine.

      

      11.2
Dividend
Equivalents.  Grants of Benefits in Shares or Share equivalents
may include dividend equivalent payments or dividend credit rights.

      

      11.3
Deferral.  The
right to receive any Benefit under the Plan may, at the request of the
Participant, be deferred for such period and upon such terms as the Committee,
or the Board if no Committee is appointed, shall determine, which may include
crediting of interest on deferrals of cash and crediting of dividends on
deferrals denominated in Shares.

      

      11.4
Withholding.  The
Company, at the time any distribution is made under the Plan, whether in cash or
in Shares, may at its discretion withhold from such distribution any amount
necessary to satisfy federal, state and local  income tax withholding
requirements with respect to such distribution. Such withholding shall be in
cash or, in the Committee's sole discretion, Shares.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

      ARTICLE
XII - OPTIONS

      

      12.1
Determination by
Committee.  The terms of all Options shall be determined by the
Committee, or the Board if no Committee is appointed.

       

      ARTICLE
XIII - RESTRICTED STOCK

      

      13.1
Description.  The
Committee, or the Board if no Committee is appointed,  may grant
Benefits in Shares available under ARTICLE III of the Plan as Restricted
Stock.   Shares of Restricted Stock shall be issued and delivered
at the time of the grant.  Each certificate representing Shares of
Restricted Stock shall bear a restrictive legend stating that such Shares are
nontransferable until all restrictions have been satisfied (and such other
legend as may be required in connection with any Agreement relating to the
issuance under the Plan).  The grantee shall be entitled to full
voting and dividend rights with respect to all shares of Restricted Stock from
the date of grant.

      

      13.2
Non-Transferability.  Shares
of Restricted Stock shall not be transferable until after the removal of the
legend with respect to such Shares.

      

      ARTICLE
XIV - PERFORMANCE SHARES

      

      14.1
Description.  Performance
Shares are the right of an individual to whom a grant of such Shares is made to
receive Shares or cash equal to the Fair Market Value of such Shares at a future
date in accordance with the terms of such grant.  Generally, such
right shall be based upon the attainment of targeted profit and/or performance
objectives.

      

      14.2
Grant.  The
Committee, or the Board if no Committee is appointed, may grant an award of
Performance Shares.  The number of Performance Shares and the terms
and conditions of the grant shall be set forth in an applicable
Agreement.

      

      ARTICLE
XV – FORM S-8 REGISTERED STOCK

      

      15.1 The
Committee, or the Board if no Committee is appointed,  may grant
Benefits in the form of the issuance of Shares available under ARTICLE III of
the Plan, after filing and effectiveness of an S-8 Registration Statement filed
under the Securities Act of 1933 registering such shares, either specifically or
as part of a Plan wide registration of shares.  The issuance of all
such shares shall be in accord with the rules and regulations associated with
the use of an S-8 Registration Statement adopted by the Securities and Exchange
Commission as amended, and the terms set forth in the S-8 Registration Statement
as filed.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      ARTICLE
XVI - OTHER STOCK BASED AWARDS AND OTHER BENEFITS

      

      16.1
Other Stock Based
Awards.  The Committee shall have the right to grant Other
Stock Based Awards which may include, without limitation, the grant of Shares
based on certain conditions, the payment of cash based on the performance of the
Common Stock, and the grant of securities convertible into Shares.

      

      16.2
Other
Benefits.  The Committee shall have the right to provide types
of Benefits under the Plan in addition to those specifically listed, if the
Committee believes that such Benefits would further the  purposes for
which the Plan was established.

      

      ARTICLE
XVII - MISCELLANEOUS PROVISIONS

      

      17.1 -
Underscored References.  The underscored references contained in the
Plan are included only for convenience, and they shall not be construed as a
part of the Plan or in any respect affecting or modifying its
provisions.

      

      17.2
Number and
Gender.  The masculine and neuter, wherever used in the Plan,
shall refer to either the masculine, neuter or feminine; and, unless the context
otherwise requires, the singular shall include the plural and the plural the
singular.

      

      17.3
Governing
Law.  This Plan shall be construed and administered in
accordance with the laws of the State of Nevada.

      

      17.4
Purchase for
Investment.  The Committee may require each person purchasing
Shares pursuant to an Option, or receiving shares under an award under the Plan
to represent to and agree with the Company in writing that such person is
acquiring the Shares for investment and without a view to distribution or
resale.  The certificates for such Shares may include any legend which
the Committee deems appropriate to reflect any restrictions on
transfer.  All certificates for Shares delivered under the Plan shall
be subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under all applicable laws, rules and regulations, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate references to such restrictions.

      

      17.5
No Employment
Contract.  The adoption of the Plan shall not confer upon any
Employee any right to continued employment nor shall it interfere in any way
with the right of the Employer to terminate the employment of any of its
Employees at any time.

      

      17.6
No Effect on Other
Benefits.  The receipt of Benefits under the Plan shall have no
effect on any benefits to which a Participant may be entitled from the Employer,
under another plan or otherwise, or preclude a Participant from receiving any
such benefits.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      Undersigned,
the Secretary of General Environmental Management, Inc., hereby certifies that
this General Environmental Management, Inc., 2009 Flexible Stock Plan was duly
adopted by the Board of Directors of the Corporation, effective as of June 30,
2009

       

      
        
          
            	 	 	 	 	 
	
                    /s/
      Clyde E. Rhodes, Jr. 

                  	 	 	
                    Date:
      June 30, 2009

                  	 
	
                     

                  	 	 	
                     

                  	 
	
                     

                  	 	 	
                     

                  	 

          

        

      

       

       

      9

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