Document:

EXHIBIT 4.6

 

THIS WARRANT HAS NOT BEEN REGISTERED

UNDER THE SECURITIES ACT OF 1933

AND IS NOT TRANSFERABLE

EXCEPT AS PROVIDED HEREIN

 

S&W Seed Company

 

PURCHASE WARRANT

 

Issued to:

 

PAULSON INVESTMENT COMPANY, INC.

 

Exercisable to Purchase

 

136,000 Units

 

 

of

 

 

S&W SEED COMPANY

 

 

Void after                           ,
2015

 

 

This is to certify that, for value received and subject to the terms
and conditions set forth below, the Warrantholder (hereinafter defined) is
entitled to purchase, and the Company promises and agrees to sell and issue to
the Warrantholder, at any time on or after                       ,
2011 and on or before                     ,
2015, up to 136,000 Units (hereinafter defined) at the Exercise Price
(hereinafter defined).

 

This Warrant Certificate is issued subject to the following terms and
conditions:

 

1.                                       Definitions of Certain Terms. 
Except as may be otherwise clearly required by the context, the
following terms have the following meanings:

 

(a)                                  “Act” means the Securities Act of 1933,
as amended.

 

(b)                                 “Class A Warrant” means
a redeemable Class A warrant to purchase one share of Common Stock at an
exercise price of $      , as defined in the
Warrant Agreement.

 

(c)                                  “Class B Warrant” means
a redeemable Class B warrant to purchase one share of Common Stock at an
exercise price of $      , as defined in the
Warrant Agreement.

 

(d)                                 “Closing Date” means the date on which
the Offering is closed.

 

(e)                                  “Commission” means the Securities and
Exchange Commission.

 

(f)                                    “Common Stock” means the common stock,
par value $0.001, of the Company.

 

(g)                                 “Company” means S&W Seed Company, a
Delaware corporation.

 

(h)                                 “Company’s Expenses” means any and all
expenses payable by the Company or the Warrantholder in connection with an
offering described in Section 6 hereof, except Warrantholder’s Expenses.

 

(i)                                     “Corporate Financing Rule” means Rule 5110
of the rules of the Financial Industry Regulatory Authority.

 

(j)                                     “Effective Date” means the date of the
Company’s final prospectus as filed with the Securities and Commission pursuant
to Rule 424(b) of the Act.

 

(k)                                  “Exercise Price” means the price at which
the Warrantholder may purchase one Unit upon exercise of Warrants as determined
from time to time pursuant to the provisions hereof.  The initial Exercise Price is $        
per Unit.

 

(l)                                     “Offering” means the public offering of
Units made pursuant to the Registration Statement.

 

(m)                               “Participating Underwriter” means any
underwriter participating in the sale of the Securities pursuant to a
registration under Section 6 of this Warrant Certificate.

 

1

 

(n)                                 “Registration Statement” means the
Company’s registration statement (File No. 333 -                   )
as amended on the Closing Date.

 

(o)                                 “Rules and Regulations” means the rules and
regulations of the Commission adopted under the Act.

 

(p)                                 “Securities” means the securities
obtained or obtainable upon exercise of the Warrant or securities obtained or
obtainable upon exercise, exchange, or conversion of such securities.

 

(q)                                 “Unit” means two shares of Common Stock,
one Class A Warrant, and one Class B Warrant.

 

(r)                                    “Unit Warrants” means the Class A
Warrants and the Class B Warrants.

 

(s)                                  “Warrant Agreement” means that certain
Warrant Agreement, dated as of                     ,
2010, by and between the Company and BNY Mellon Shareholder Services relating
to the issuance of Unit Warrants.

 

(t)                                    “Warrant Certificate” means a certificate
evidencing the Warrant.

 

(u)                                 “Warrantholder” means a record holder of
the Warrant or Securities.  The initial
Warrantholder is Paulson Investment Company, Inc.

 

(v)                                 “Warrantholder’s Expenses” means the sum
of (i) the aggregate amount of cash payments made to an underwriter,
underwriting syndicate, or agent in connection with an offering described in Section 6
hereof multiplied by a fraction the numerator of which is the aggregate sales
price of the Securities sold by such underwriter, underwriting syndicate, or
agent in such offering and the denominator of which is the aggregate sales
price of all of the securities sold by such underwriter, underwriting
syndicate, or agent in such offering and (ii) all out-of-pocket expenses
of the Warrantholder, except for the fees and disbursements of one firm
retained as legal counsel for the Warrantholder that will be paid by the
Company.

 

(w)                               “Warrant” means the warrant evidenced by
this certificate, any similar certificate issued in connection with the
Offering, or any certificate obtained upon transfer or partial exercise of the
Warrant evidenced by any such certificate.

 

2.                                       Exercise of Warrant. 
All or any part of the Warrant represented by this Warrant Certificate
may be exercised commencing on the first anniversary of the Effective Date and
ending at 5 p.m. Pacific Time on the fifth anniversary of the Effective
Date (the “Expiration Date”) by surrendering this Warrant Certificate, together
with appropriate instructions, duly executed by the Warrantholder or by its
duly authorized attorney, at the office of the Company, 25552 South Butte
Avenue, Five Points, CA 93624; or at such other office or agency as the Company
may designate.  The date on which such
instructions are received by the Company shall be the date of exercise.  Subject to the provisions below, upon receipt
of notice of exercise, the Company shall immediately instruct its transfer
agent to prepare certificates for the Securities to be received by the
Warrantholder upon completion of the Warrant exercise.  When such certificates are prepared, the
Company shall notify the Warrantholder and deliver such 

 

2

 

certificates to the Warrantholder or as per the
Warrantholder’s instructions immediately upon payment in full by the
Warrantholder, in lawful money of the United States, of the Exercise Price payable
with respect to the Securities being purchased, if any.  If the Warrantholder shall represent and
warrant that all applicable registration and prospectus delivery requirements
for their sale have been complied with upon sale of the Securities received
upon exercise of the Warrant, such certificates shall not bear a legend with
respect to the Act.

 

If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Warrantholder a new Warrant Certificate (dated the date hereof), in form
and tenor similar to this Warrant Certificate, evidencing that portion of the
Warrant not exercised.  The Securities to
be obtained on exercise of the Warrant will be deemed to have been issued, and
any person exercising the Warrant will be deemed to have become a holder of
record of those Securities, as of the date of the payment of the Exercise
Price.

 

Notwithstanding the foregoing, in no event shall such Securities be
issued, and the Company is authorized to refuse to honor the exercise of the
Warrant, if such exercise would result in the opinion of the Company’s Board of
Directors, upon advice of counsel, in the violation of any law; and provided
further that, if the Warrant is exercisable solely for Securities listed on a
securities exchange or for which there are at least three independent market
makers, the Company may elect to redeem the Warrant submitted for exercise for
a price equal to the difference between the aggregate low asked price, or
closing price, as the case may be, of the Securities for which the Warrant is
exercisable on the date of exercise and the Exercise Price; in the event of
such redemption, the Company will pay to the holder of the Warrant the
above-described redemption price in cash within 10 business days after receipt
of notice of exercise.

 

3.                                       Adjustments in Certain Events. 
The number, class, and price of Securities for which this Warrant
Certificate may be exercised are subject to adjustment from time to time upon
the happening of certain events as follows:

 

(a)                                  If the outstanding shares of the Company’s
Common Stock are divided into a greater number of shares or a dividend in stock
is paid on the Common Stock, the number of shares of Common Stock and the number
of Unit Warrants for which the Warrant is then exercisable will be
proportionately increased and the Exercise Price will be proportionately
reduced; and, conversely, if the outstanding shares of Common Stock are
combined into a smaller number of shares of Common Stock, the number of shares
of Common Stock and the number of Unit Warrants for which the Warrant is then
exercisable will be proportionately reduced and the Exercise Price and the
number of Unit Warrants will be proportionately increased. The increases and
reductions provided for in this Section 3(a) will be made with the
intent and, as nearly as practicable, the effect that neither the percentage of
the total equity of the Company obtainable on exercise of the Warrants nor the
price payable for such percentage upon such exercise will be affected by any
event described in this Section 3(a).

 

(b)                                 In case of any change in the Common Stock
through merger, consolidation, reclassification, reorganization, partial or
complete liquidation, purchase of substantially all the assets of the Company,
or other change in the capital structure of the Company, then, as a condition
of such change, lawful and adequate provision will be made so that the holder
of this Warrant Certificate will have the right thereafter to receive upon the 

 

3

 

exercise of the Warrant the kind and amount of shares
of stock or other securities or property to which he would have been entitled
if, immediately prior to such event, he had held the number of shares of Common
Stock and the number of Unit Warrants obtainable upon the exercise of the
Warrant.  In any such case, appropriate
adjustment will be made in the application of the provisions set forth herein
with respect to the rights and interest thereafter of the Warrantholder, to the
end that the provisions set forth herein will thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other securities
or property thereafter deliverable upon the exercise of the Warrant.  The Company will not permit any change in its
capital structure to occur unless the issuer of the shares of stock or other
securities to be received by the holder of this Warrant Certificate, if not the
Company, agrees to be bound by and comply with the provisions of this Warrant
Certificate.

 

(c)                                  When any adjustment is required to be
made in the number of shares of Common Stock, Unit Warrants, other securities,
or the property purchasable upon exercise of the Warrant, the Company will promptly
determine the new number of such shares or other securities or property
purchasable upon exercise of the Warrant and (i) prepare and retain on
file a statement describing in reasonable detail the method used in arriving at
the new number of such shares or other securities or property purchasable upon
exercise of the Warrant and (ii) cause a copy of such statement to be
mailed to the Warrantholder within thirty (30) days after the date of the event
giving rise to the adjustment.

 

(d)                                 No fractional shares of Common Stock or
other Securities will be issued in connection with the exercise of the Warrant,
but the Company will pay, in lieu of fractional shares, a cash payment therefor
on the basis of the mean between the bid and asked prices of the Common Stock
in the over-the-counter market or the last sale price of the Common Stock on
the principal exchange or other trading facility on which the Common Stock is
traded on the day immediately prior to exercise.

 

(e)                                  If securities of the Company or securities
of any subsidiary of the Company are distributed pro rata to holders of Common
Stock, such number of securities will be distributed to the Warrantholder or
its assignee upon exercise of its rights hereunder as such Warrantholder or
assignee would have been entitled to if this Warrant Certificate had been
exercised prior to the record date for such distribution.  The provisions with respect to adjustment of
the Common Stock provided in this Section 3 will also apply to the
securities to which the Warrantholder or its assignee is entitled under this Section 3(e).

 

(f)                                    Notwithstanding anything herein to the
contrary, there will be no adjustment made hereunder on account of the sale by
the Company of the Common Stock or other Securities purchasable upon exercise
of the Warrant.

 

(g)                                 If, immediately prior to any exercise of
Warrants, there shall be outstanding no securities of a class or series that,
but for the provisions of this Section 3, would be issuable upon such
exercise (the “Formerly Issuable Securities”), then, upon such exercise,
and in lieu of the Formerly Issuable Securities, the Company shall issue that
number and kind of other securities or property for which the Formerly Issuable
Securities were most recently exercisable or into which the Formerly Issuable
Securities were most recently convertible, as the case may be.

 

4

 

4.                                       Reservation of Securities. 
The Company agrees that the number of shares of Common Stock or other
Securities sufficient to provide for the exercise of the Warrant upon the basis
set forth above will at all times during the term of the Warrant be reserved
for exercise.

 

5.                                       Validity of Securities. 
All Securities delivered upon the exercise of the Warrant will be duly
and validly issued in accordance with their terms, and the Company will pay all
documentary and transfer taxes, if any, in respect of the original issuance
thereof upon exercise of the Warrant.

 

6.                                       Registration of Securities Issuable on
Exercise of Warrant Certificate.

 

(a)                                  The Company will register the Securities
with the Commission pursuant to the Act so as to allow the unrestricted sale of
the Securities to the public from time to time commencing on the first
anniversary of the Effective Date and ending at 5:00 p.m. Pacific Time on
the fifth anniversary of the Effective Date (the “Registration Period”).  The Company will also file such applications
and other documents necessary to permit the sale of the Securities to the
public during the Registration Period in those states in which the Units were
qualified for sale in the Offering or such other states as the Company and the
Warrantholder agree to.  In order to
comply with the provisions of this Section 6(a), the Company is not
required to file more than one registration statement.  No registration right of any kind, “piggyback”
or otherwise, will last longer than five years from the Effective Date.

 

(b)                                 The Company will pay all of the Company’s
Expenses and each Warrantholder will pay its pro rata share of the Warrantholder’s
Expenses relating to the registration, offer, and sale of the Securities.

 

(c)                                  Except as specifically provided herein,
the manner and conduct of the registration, including the contents of the
registration statement, will be entirely in the control and at the discretion
of the Company.  The Company will file
such post-effective amendments and supplements as may be necessary to maintain
the currency of the registration statement during the period of its use.  In addition, if the Warrantholder participating
in the registration is advised by counsel that the registration statement, in
their opinion, is deficient in any material respect, the Company will use its
best efforts to cause the registration statement to be amended to eliminate the
concerns raised.

 

(d)                                 The Company will furnish to the
Warrantholder the number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such other
documents as it may reasonably request in order to facilitate the disposition
of Securities owned by it.

 

(e)                                  The Company will, at the request of
Warrantholders holding at least 50 percent of the then outstanding Warrants, (i) furnish
an opinion of the counsel representing the Company for the purposes of the
registration pursuant to this Section 6, addressed to the Warrantholders
and any Participating Underwriter, (ii) furnish an appropriate letter from
the independent public accountants of the Company, addressed to the
Warrantholders and any Participating Underwriter, and (iii) make
representations and warranties to the Warrantholders and any Participating
Underwriter.  A request pursuant to this
subsection (e) may be made on three occasions.  The documents required to be delivered
pursuant to this subsection (e) will be 

 

5

 

dated within ten days of the request and will be, in
form and substance, equivalent to similar documents furnished to the
underwriters in connection with the Offering, with such changes as may be
appropriate in light of changed circumstances.

 

7.                                       Indemnification in Connection with
Registration.

 

(a)                                  If any of the Securities are registered,
the Company will indemnify and hold harmless each selling Warrantholder, any
person who controls any selling Warrantholder within the meaning of the Act,
and any Participating Underwriter against any losses, claims, damages, or
liabilities, joint or several, to which any Warrantholder, controlling person,
or Participating Underwriter may be subject under the Act or otherwise; and it
will reimburse each Warrantholder, each controlling person, and each
Participating Underwriter for any legal or other expenses reasonably incurred
by the Warrantholder, controlling person, or Participating Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability, or action, insofar as such losses, claims, damages, or liabilities,
joint or several (or actions in respect thereof), arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any such registration statement or
any preliminary prospectus or final prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the Company
will not be liable in any case to the extent that any loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any registration statement,
preliminary prospectus, final prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
by a Warrantholder for use in the preparation thereof.  The indemnity agreement contained in this
subparagraph (a) will not apply to amounts paid to any claimant in
settlement of any suit or claim unless such payment is first approved by the
Company, such approval not to be unreasonably withheld.

 

(b)                                 Each selling Warrantholder, as a
condition of the Company’s registration obligation, will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed any registration statement or other filing or any amendment or
supplement thereto, and any person who controls the Company within the meaning
of the Act, against any losses, claims, damages, or liabilities to which the
Company or any such director, officer, or controlling person may become subject
under the Act or otherwise, and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, or action, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained in said
registration statement, any preliminary or final prospectus, or other filing,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission was made in said registration statement,
preliminary or final prospectus, or other filing, or amendment or supplement,
in reliance upon and in conformity with written information furnished by such
Warrantholder for use in the preparation thereof; provided, however, that the
indemnity agreement contained in this 

 

6

 

subparagraph (b) will not apply to amounts paid
to any claimant in settlement of any suit or claim unless such payment is first
approved by the Warrantholder, such approval not to be unreasonably withheld.

 

(c)                                  Promptly after receipt by an indemnified
party under subparagraphs (a) or (b) above of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, notify the indemnifying
party of the commencement thereof; but the omission to notify the indemnifying
party will not relieve it from any liability that it may have to any
indemnified party otherwise than under subparagraphs (a) and (b).

 

(d)                                 If any such action is brought against any
indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party; and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.

 

8.                                       Restrictions on Transfer. 
This Warrant Certificate and the Warrant may not be sold, transferred,
assigned, pledged, or hypothecated, or be the subject of any hedging, short
sale, derivative, put, or call transaction that would result in the effective
economic disposition of the securities by any person for a period of one year
immediately following the Effective Date, except as permitted in subparagraph
(g)(2) of the Corporate Financing Rule. 
The Warrant may be divided or combined, upon request to the Company by
the Warrantholder, into a certificate or certificates evidencing the same
aggregate number of Warrants.

 

9.                                       No Rights as a Shareholder. 
Except as otherwise provided herein, the Warrantholder will not, by
virtue of ownership of the Warrant, be entitled to any rights of a shareholder
of the Company but will, upon written request to the Company, be entitled to
receive such quarterly or annual reports as the Company distributes to its
shareholders.

 

10.                                 Notice.  Any notices
required or permitted to be given hereunder will be in writing and may be
served personally or by mail; and if served will be addressed as follows:

 

If
to the Company:

 

S&W Seed Company

25552 South Butte Avenue

Five Points, CA 93624

Attention: 
President

 

If
to the Warrantholder:

 

at
the address furnished

by
the Warrantholder to the

Company
for the purpose of

notice.

 

7

 

Any
notice so given by mail will be deemed effectively given 48 hours after mailing
when deposited in the United States mail, registered or certified mail, return
receipt requested, postage prepaid and addressed as specified above.  Any party may by written notice to the other
specify a different address for notice purposes.

 

11.                                 Applicable Law. 
This Warrant Certificate will be governed by and construed in accordance
with the laws of the State of Oregon, without reference to conflict of laws
principles thereunder.  All disputes
relating to this Warrant Certificate shall be tried before the courts of Oregon
located in Multnomah County, Oregon to the exclusion of all other courts that
might have jurisdiction.

 

	
  Dated
  as of
                            ,
  2010

  	
   

  
	
   

  	
   

  
	
   

  	
  S&W
  SEED COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark
  S. Grewal

  
	
   

  	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed
  and Accepted as of
                            ,
  2010

  	
   

  
	
   

  	
   

  
	
   

  	
  PAULSON
  INVESTMENT COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

8EXHIBIT 10.1

 

S&W SEED
COMPANY

2009 EQUITY INCENTIVE PLAN

 

S&W
Seed Company (the “Company”), a Delaware corporation, hereby establishes and
adopts the following 2009 Equity Incentive Plan (the “Plan”).

 

1.             PURPOSE OF THE PLAN

 

The
purpose of the Plan is to assist the Company and its Subsidiaries in attracting
and retaining selected individuals to serve as employees, directors,
consultants and/or advisors who are expected to contribute to the Company’s
success and to achieve long-term objectives that will benefit stockholders of
the Company through the additional incentives inherent in the Awards hereunder.

 

2.             DEFINITIONS

 

2.1.         “Award” shall
mean any Option, Stock Appreciation Right, Restricted Stock Award, Restricted
Stock Unit Award, Other Share-Based Award, Performance Award or any other
right, interest or option relating to Shares or other property (including cash)
granted pursuant to the provisions of the Plan.

 

2.2.         “Award Agreement”
shall mean any agreement, contract or other instrument or document evidencing
any Award hereunder, whether in writing or through an electronic medium.

 

2.3.         “Board” shall
mean the board of directors of the Company.

 

2.4.         “Code” shall
mean the Internal Revenue Code of 1986, as amended from time to time.

 

2.5.         “Committee”
shall mean the Compensation Committee of the Board or a subcommittee thereof
formed by the Compensation Committee to act as the Committee hereunder. The
Committee shall consist of no fewer than two Directors, each of whom is (i) a
“Non-Employee Director” within the meaning of Rule 16b-3 under the
Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of
the Code, and (iii) an “independent director” for purpose of the rules of
the applicable stock market or exchange on which the Shares are quoted or
traded, to the extent required by such rules. The Board may designate one or
more Directors as alternate members of the Committee who may replace any absent
or disqualified member at any meeting of the Committee.

 

2.6.         “Consultant”
shall mean any consultant or advisor who is a natural person and who provides
services to the Company or any Subsidiary, so long as such person (i) renders
bona fide services that are not in connection with the offer and sale of the
Company’s securities in a capital-raising transaction and (ii) does not
directly or indirectly promote or maintain a market for the Company’s
securities.

 

1

 

2.7.         “Covered Employee”
shall mean an employee of the Company or its Subsidiaries who is a “covered
employee” within the meaning of Section 162(m) of the Code.

 

2.8.         “Director”
shall mean a non-employee member of the Board.

 

2.9.         “Dividend Equivalents”
shall have the meaning set forth in Section 11.4.

 

2.10.       “Employee”
shall mean any employee of the Company or any Subsidiary and any prospective
employee conditioned upon, and effective not earlier than, such person becoming
an employee of the Company or any Subsidiary.

 

2.11.       “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

 

2.12.       “Fair Market Value”
shall mean, with respect to Shares as of any date, (i) the closing sale
price of the Shares reported as having occurred on the principal U.S. national
securities exchange on which the Shares are listed and traded on such date, or,
if there is no such sale on that date, then on the last preceding date on which
such a sale was reported; (ii) if the Shares are not listed on any U.S.
national securities exchange but are quoted in an inter-dealer quotation system
on a last sale basis, the final ask price of the Shares reported on such date,
or, if there is no such sale on such date, then on the last preceding date on
which a sale was reported; or (iii) if the Shares are not listed on a U.S.
national securities exchange nor quoted on an inter-dealer quotation system on
a last sale basis, the amount determined by the Committee to be the fair market
value of the Shares as determined by the Committee in its sole discretion. The
Fair Market Value of any property other than Shares shall mean the market value
of such property determined by such methods or procedures as shall be
established from time to time by the Committee.

 

2.13.       “Incentive Stock Option” shall mean an Option which when granted is intended to
qualify as an incentive stock option for purposes of Section 422 of the
Code.

 

2.14.       “Limitations”
shall have the meaning set forth in Section 3.1(g). \

 

2.15.       “Option” shall
mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period
or periods as the Committee shall determine.

 

2.16.       “Other Share-Based Award”
shall have the meaning set forth in Section 8.1.

 

2.17.       “Participant”
shall mean an Employee, Director or Consultant who is selected by the Committee
to receive an Award under the Plan.

 

2.18.       “Payee” shall
have the meaning set forth in Section 12.2.

 

2.19.       “Performance Award”
shall mean any Award of Performance Cash, Performance Shares or Performance
Units granted pursuant to Article 9.

 

2

 

2.20.       “Performance Cash” shall mean any cash incentives granted pursuant to Article 9
payable to the Participant upon the achievement of such performance goals as
the Committee shall establish.

 

2.21.       “Performance Period”
shall mean the period established by the Committee during which any performance
goals specified by the Committee with respect to a Performance Award are to be
measured.

 

2.22.       “Performance Share”
shall mean any grant pursuant to Article 9 of a unit valued by reference
to a designated number of Shares, which value will be paid to the Participant
upon achievement of such performance goals as the Committee shall establish.

 

2.23. “Performance Unit” shall mean any grant
pursuant to Article 9 of a unit valued by reference to a designated amount
of cash or property other than Shares, which value will be paid to the
Participant upon achievement of such performance goals during the Performance
Period as the Committee shall establish.

 

2.24.       “Permitted Assignee”
shall have the meaning set forth in Section 11.2.

 

2.25.       “Restricted Stock”
shall mean any Share issued with the restriction that the holder may not sell,
transfer, pledge or assign such Share and with such other restrictions as the
Committee, in its sole discretion, may impose, which restrictions may lapse
separately or in combination at such time or times, in installments or
otherwise, as the Committee may deem appropriate.

 

2.26.       “Restricted Stock Award”
shall have the meaning set forth in Section 7.1.

 

2.27        “Restricted Stock Unit” means an Award that is valued by reference to a Share, which
value may be paid to the Participant by delivery of such property as the
Committee shall determine, which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.

 

2.28        “Restricted Stock Unit Award” shall have the meaning set forth in Section 7.1

 

2.29.       “Shares” shall
mean the shares of common stock of the Company, par value $0.001 per share.

 

2.30.       “Stock Appreciation Right”
shall mean the right granted to a Participant pursuant to Article 6.

 

2.31. “Subsidiary” shall mean any corporation
(other than the Company) in an unbroken chain of corporations beginning with
the Company if, at the relevant time 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 the chain.

 

2.32.       Substitute Awards” shall mean Awards granted or Shares issued by the Company
in assumption of, or in substitution or exchange for, awards previously
granted, or the right or

 

3

 

obligation to make future awards,
in each case by a company acquired by the Company or any Subsidiary or with
which the Company or any Subsidiary combines.

 

2.34.       “Vesting Period”
shall mean the period of time specified by the Committee during which vesting
restrictions for an Award are applicable.

 

3.             SHARES SUBJECT TO THE PLAN

 

3.1          Number of Shares.

 

(a)       Subject to adjustment as provided in Section 3.1(e), a
total of 750,000 Shares shall be authorized for issuance under the Plan.

 

(b)       If any Shares subject to an Award are forfeited, an Award
expires or otherwise terminates without issuance of Shares, or an Award is
settled for cash (in whole or in part) or otherwise does not result in the
issuance of all or a portion of the Shares subject to such Award (including on
payment in Shares on exercise of a Stock Appreciation Right), such Shares
shall, to the extent of such forfeiture, expiration, termination, cash
settlement or non-issuance, again be available for issuance under the Plan.

 

(c)       In the event that (i) any Option or other Award granted
hereunder is exercised through the tendering of Shares (either actually or by
attestation) or by the withholding of Shares by the Company, or (ii) withholding
tax liabilities arising from such Option or other Award are satisfied by the
tendering of Shares (either actually or by attestation) or by the withholding
of Shares by the Company, then the Shares so tendered or withheld shall be
available for issuance under the Plan.

 

(d)       Substitute Awards shall not reduce the Shares authorized for
grant under the Plan or the applicable Limitations for grant to a Participant
under Section 10.5, nor shall Shares subject to a Substitute Award again
be available for Awards under the Plan to the extent of any forfeiture,
expiration or cash settlement as provided in paragraph (b) or (c) above.
Additionally, in the event that a company acquired by the Company or any
Subsidiary or with which the Company or any Subsidiary combines has shares
available under a pre-existing plan approved by stockholders and not adopted in
contemplation of such acquisition or combination, the shares available for
grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation
ratio or formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the entities party to
such acquisition or combination) may be used for Awards under the Plan and
shall not reduce the Shares authorized for grant under the Plan; provided that
Awards using such available shares shall not be made after the date awards or
grants could have been made under the terms of the pre-existing plan, absent
the acquisition or combination, and shall only be made to individuals who were
not Employees or Directors prior to such acquisition or combination.

 

(e)       In the event of any merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other
property, other than a regular cash dividend), stock split (including a stock
split in the form of a stock dividend), reverse stock split, spin-off or
similar transaction or other change in corporate structure affecting the Shares
or the

 

4

 

value
thereof, such adjustments and other substitutions shall be made to the Plan and
to Awards as the Committee deems equitable or appropriate taking into
consideration the accounting and tax consequences, including such adjustments
in the aggregate number, class and kind of securities that may be delivered
under the Plan, the Limitations, the maximum number of Shares that may be
issued pursuant to Incentive Stock Options and, in the aggregate or to any one
Participant, in the number, class, kind and option or exercise price of
securities subject to outstanding Awards granted under the Plan (including, if
the Committee deems appropriate, the substitution of similar options to
purchase the shares of, or other awards denominated in the  shares of, another company) as the Committee may determine
to be appropriate; provided, however, that the number of Shares subject to any
Award shall always be a whole number.

 

(f)        The Committee may grant Incentive Stock Options to any
employee of the Company or any present or future Parent or Subsidiary as
defined in Sections 424(e) or (f) of the Code, and any other entities
the employees of which are eligible to receive Incentive Stock Options under
the Code, and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code. The Company
shall have no liability to a Participant, or any other party, if an Option (or
any part thereof) that is intended to be an Incentive Stock Option is not an
Incentive Stock Option or for any action taken by the Board, including without
limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock
Option.

 

3.2.         Source of Shares. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued shares, treasury shares or shares purchased in
the open market or otherwise.

 

4.             ELIGIBILITY AND ADMINISTRATION

 

4.1.         Eligibility.
Any Employee, Director or Consultant shall be eligible to be selected as a
Participant. The Committee may grant Substitute Awards to holders of equity
awards issued by a company acquired by the Company or with which the Company
combines.

 

4.2.         Administration.

 

(a)       The Plan shall be administered by the Committee. The
Committee shall have full power and authority, subject to the provisions of the
Plan and subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to: (i) select
the Employees, Directors or Consultants to whom Awards may from time to time be
granted hereunder; (ii) determine the type or types of Awards to be
granted to each Participant hereunder; (iii) determine the number of
Shares to be covered by each Award granted hereunder; (iv) determine the
terms and conditions, not inconsistent with the provisions of the Plan, of any
Award granted hereunder; (v) determine whether, to what extent and under
what circumstances Awards may be settled in cash, Shares or other property; (vi) determine
whether, to what extent, and under what circumstances cash, Shares, other
property and other amounts payable with respect to an Award made under the Plan
shall be deferred either automatically or at the election of the Participant; (vii) determine
whether, to what extent and under what circumstances any Award shall be
canceled or suspended; (viii) interpret and administer the Plan and any
instrument or agreement entered into under or in connection with the Plan,
including any Award Agreement; (ix) correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent that the Committee

 

5

 

shall
deem desirable to carry it into effect; (x) establish, amend, suspend or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; (xi) determine
whether any Award will have Dividend Equivalents; and (xii) make any other
determination and take any other action that the Committee deems necessary or
desirable for administration of the Plan.

 

(b)       Decisions of the Committee shall be final, conclusive and
binding on all persons or entities, including the Company, any Participant, and
any Subsidiary. A majority of the members of the Committee may determine its
actions, including fixing the time and place of its meetings. Notwithstanding
the foregoing, any action or determination by the Committee specifically
affecting or relating to an Award or to a Director shall require the prior
approval of the Board.

 

(c)       To the extent not inconsistent with applicable law,
including Section 162(m) of the Code, or the rules and
regulations of the principal U.S. national securities exchange on which the
Shares are traded, if any, the Committee may delegate to (i) a committee
of one or more directors of the Company any of the authority of the Committee
under the Plan, including the right to grant, cancel or suspend Awards and (ii) to
the extent permitted by law, to one or more executive officers or a committee
of executive officers the right to grant Awards to Employees who are not
Directors or executive officers of the Company and the authority to take action
on behalf of the Committee pursuant to the Plan to cancel or suspend Awards to
Employees who are not Directors or executive officers of the Company.

 

5.             OPTIONS

 

5.1.         Grant of Options. Options may be granted hereunder to Participants either
alone or in addition to other Awards granted under the Plan. Any Option shall
be subject to the terms and conditions of this Article and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable. Options may be designated as
Incentive Stock Options, as determined by the Committee.

 

5.2.         Award Agreements. All Options shall be evidenced by a written Award
Agreement in such form and containing such terms and conditions as the
Committee shall determine which are not inconsistent with the provisions of the
Plan. The terms of Options need not be the same with respect to each
Participant. Granting an Option pursuant to the Plan shall impose no obligation
on the recipient to exercise such Option. Any individual who is granted an
Option pursuant to this Article may hold more than one Option granted
pursuant to the Plan at the same time.

 

5.3.         Option Price. Other than in connection with Substitute Awards, the
option price per each Share purchasable under any Option granted pursuant to
this Article shall not be less than 100% of the Fair Market Value of one
Share on the date of grant of such Option; provided, however,
that in the case of an Incentive Stock Option granted to a Participant who, at
the time of the grant, owns stock representing more than 10% of the voting
power of all classes of stock of the Company or any Subsidiary, the option
price per share Shall be no less than 110% of the Fair Market Value of one
Share on the date of grant. Other than pursuant to Section 3.1(e) and
other than in connection with the grant of a Substitute Award, the Committee
shall not without the approval of the Company’s stockholders (a) lower the
option price per Share of an Option after it

 

6

 

is granted, (b) cancel
an Option when the option price per Share exceeds the Fair Market Value of the
underlying Shares in exchange for cash or another Award, and (c) take any
other action with respect to an Option that would be treated as a repricing
under the rules and regulations of the principal securities exchange on
which the Shares are traded, if any.

 

5.4.         Option Term.
The term of each Option shall be fixed by the Committee in its sole discretion;
provided that no Option shall be exercisable after the expiration of 10 years
from the date the Option is granted, except in the event of death or disability
(other than with respect to an Incentive Stock Option); provided, however, that
the term of the Option shall not exceed five years from the date the Option is
granted in the case of an Incentive Stock Option granted to a Participant who,
at the time of the grant, owns stock representing more than 10% of the voting
power of all classes of stock of the Company or any Subsidiary.

 

5.5.         Exercise of Options.

 

(a)       Vested Options granted under the Plan shall be exercised by
the Participant or by a Permitted Assignee (as defined in Section 11.2)
thereof (or by the Participant’s executors, administrators, guardian or legal
representative, as may be provided in an Award Agreement) as to all or part of
the Shares covered thereby, by giving notice of exercise to the Company or its
designated agent, specifying the number of Shares to be purchased. The notice
of exercise shall be in such form, made in such manner, and in compliance with
such other requirements consistent with the provisions of the Plan as the
Committee may prescribe from time to time

 

(b)       Full payment of the exercise price of an Option shall be
made at the time of exercise and shall be made (i) in cash or cash
equivalents (including certified check or bank check or wire transfer of
immediately available funds), (ii) by tendering previously acquired Shares
(either actually or by attestation, valued at their then Fair Market Value), (iii) by
delivery of other consideration having a Fair Market Value on the exercise date
equal to the total purchase price, (iv) by withholding Shares otherwise
issuable in connection with the exercise of the Option, (v) through any
other method specified in an Award Agreement (including same-day sales through
a broker), or (vi) any combination of any of the foregoing, as may be
provided in the Award Agreement. The notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Committee may from time to time direct, and shall be
in such form, containing such further provisions consistent with the provisions
of the Plan, as the Committee may from time to time prescribe. In no event may
any Option granted hereunder be exercised for a fraction of a Share.

 

5.6.         Form of Settlement. In its sole discretion, the Committee may provide that the
Shares to be issued upon an Option’s exercise shall be in the form of
Restricted Stock or other similar securities.

 

6.             STOCK APPRECIATION RIGHTS

 

6.1.         Grant and Exercise. The Committee may provide Stock Appreciation Rights (a) in
tandem with all or part of any Option granted under the Plan or at any
subsequent time during the term of such Option, (b) in tandem with all or
part of any Award (other than an Option) granted under the Plan or at any
subsequent time during the term of such Award, or

 

7

 

(c) without regard to
any Option or other Award in each case upon such terms and conditions as the
Committee may establish in its sole discretion.

 

6.2.         Terms and Conditions. Stock Appreciation Rights shall be subject to such terms
and conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee, including the following:

 

(a)       Upon the exercise of a Stock Appreciation Right, the holder
shall have the right to receive the excess of (i) the Fair Market Value of
one Share on the date of exercise (or such amount less than such Fair Market
Value as the Committee shall so determine at any time during a specified period
before the date of exercise) over (ii) the grant price of the Stock
Appreciation Right on the date of grant, which, except in the case of
Substitute Awards or in connection with an adjustment provided in Section 3.1(e),
shall not be less than the Fair Market Value of one Share on such date of grant
of the Stock Appreciation Right.

 

(b)       The Committee shall determine in its sole discretion whether
payment of a Stock Appreciation Right shall be made in cash, in whole Shares or
other property, or any combination thereof.

 

(c)       The provisions of Stock Appreciation Rights need not be the
same with respect to each recipient.

 

(d)       The Committee may impose such other conditions or
restrictions on the terms of exercise and the grant price of any Stock
Appreciation Right, as it shall deem appropriate. A Stock Appreciation Right
shall have (i) a grant price not less than 100% of the Fair Market Value
of one Share on the date of grant (subject to the requirements of Section 409A
of the Code with respect to a Stock Appreciation Right granted in tandem with,
but subsequent to, an Option), and (ii) a term not greater than 10 years
except in the event of death or disability (other than with respect to a Stock
Appreciation Right granted in tandem with an Incentive Stock Option).

 

(e)       An Award Agreement may provide that if on the last day of
the term of a Stock Appreciation Right the Fair Market Value of one Share
exceeds the grant price per Share of the Stock Appreciation Right, the
Participant has not exercised the Stock Appreciation Right or the tandem Option
(if applicable) and neither the Stock Appreciation Right nor the Option has
expired, the Stock Appreciation Right shall be deemed to have been exercised by
the Participant on such day. In such event the Company shall make payment to
the Participant in accordance with this Section, reduced by the number of
Shares (or cash) required for withholding taxes; any fractional Share shall be
settled in cash.

 

(f)        Without the approval of the Company’s stockholders, other
than pursuant to Section 3.1(e) and other than in connection with the
grant of a Substitute Award, the Committee shall not (i) reduce the grant
price of any Stock Appreciation Right after the date of grant (ii) cancel
any Stock Appreciation Right when the grant price per Share exceeds the Fair
Market Value of the underlying Shares in exchange for cash or another Award,
and (iii) take any other action with respect to a Stock Appreciation Right
that would be treated as a repricing under the rules and regulations of
the principal securities exchange on which the Shares are traded.

 

8

 

7.             RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

7.1.         Grants.
Awards of Restricted Stock and of Restricted Stock Units may be issued
hereunder to Participants either alone or in addition to other Awards granted
under the Plan (a “Restricted Stock Award” or “Restricted Stock Unit Award”
respectively), and such Restricted Stock Awards and Restricted Stock Unit
Awards shall also be available as a form of payment of Performance Awards and
other earned cash-based incentive compensation. The Committee has  absolute discretion to determine whether any consideration
(other than services) is to be received by the Company or any Subsidiary as a
condition precedent to the issuance of Restricted Stock or Restricted Stock
Units.

 

7.2.         Award Agreements. The terms of any Restricted Stock Award or Restricted
Stock Unit Award granted under the Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with the Plan. The terms of Restricted Stock Awards and Restricted
Stock Unit Awards need not be the same with respect to each Participant

 

7.3.         Rights of Holders of Restricted Stock and
Restricted Stock Units. Unless
otherwise provided in the Award Agreement, beginning on the date of grant of
the Restricted Stock Award and subject to execution of the Award Agreement, the
Participant shall become a stockholder of the Company with respect to all
Shares subject to the Award Agreement and shall have all of the rights of a
stockholder, including the right to vote such Shares and the right to receive
distributions made with respect to such Shares. A Participant receiving a
Restricted Stock Unit Award shall not possess voting rights with respect to
such Award. Except as otherwise provided in an Award Agreement any Shares or
any other property (other than cash) distributed as a dividend or otherwise
with respect to any Restricted Stock Award or Restricted Stock Unit Award as to
which the restrictions have not yet lapsed shall be subject to the same
restrictions as such Restricted Stock Award or Restricted Stock Unit Award. The
Committee may provide in an Award Agreement that an Award of Restricted Stock
is conditioned upon the Participant making or refraining from making an
election with respect to the Award under Section 83(b) of the Code.
If a Participant makes an election pursuant to 83(b) of the Code with
respect to an Award of Restricted Stock, the Participant shall be required to
file promptly a copy of such election with the Company.

 

7.4          Issuance of Shares. Any Restricted Stock granted under the Plan may be evidenced
in such manner as the Board may deem appropriate, including book-entry
registration or issuance of a stock certificate or certificates, which certificate
or certificates shall be held by the Company. Such certificate or certificates
shall be registered in the name of the Participant and shall bear an
appropriate legend referring to the restrictions applicable to such Restricted
Stock.

 

8.             OTHER SHARE-BASED AWARDS

 

8.1.         Grants.
Other Awards of Shares and other Awards that are valued in whole or in part by
reference to, or are otherwise based on, Shares or other property (“Other
Share-Based

 

9

 

 

Awards”), including deferred
stock units, may be granted hereunder to Participants either alone or in
addition to other Awards granted under the Plan. Other Share-Based Awards shall
also be available as a form of payment of other Awards granted under the Plan
and other earned cash-based compensation.

 

8.2.         Award Agreements. The terms of Other Share-Based Award granted under the
Plan shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan. The terms of
such Awards need not be the same with respect to each Participant.

 

8.3.         Payment. Except
as may be provided in an Award Agreement, Other Share-Based Awards may be paid
in cash, Shares, other property, or any combination thereof, in the sole
discretion of the Committee. Other Share-Based Awards may be paid in a lump sum
or in installments or, in accordance with procedures established by the
Committee, on a deferred basis subject to the requirements of Section 409A
of the Code.

 

9.             PERFORMANCE AWARDS

 

9.1.         Grants.
Performance Awards in the form of Performance Cash, Performance Shares or
Performance Units, as determined by the Committee in its sole discretion, may
be granted hereunder to Participants, for no consideration or for such minimum
consideration as may be required by applicable law, either alone or in addition
to other Awards granted under the Plan. The performance goals to be achieved
for each Performance Period shall be conclusively determined by the Committee
and may be based upon the criteria set forth in Section 10.2.

 

9.2.         Award Agreements. The terms of any Performance Award granted under the Plan
shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan, including
whether such Awards shall have Dividend Equivalents. The terms of Performance
Awards need not be the same with respect to each Participant.

 

9.3.         Terms and Conditions. The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award. The amount of the
Award to be distributed shall be conclusively determined by the Committee.

 

9.4.         Payment. Except
as provided in Section 3.1(e) or as may be provided in an Award
Agreement, Performance Awards will be distributed only after the end of the
relevant Performance Period. Performance Awards may be paid in cash, Shares,
other property, or any combination thereof, in the sole discretion of the
Committee. Performance Awards may be paid in a lump sum or in installments
following the close of the Performance Period or, in accordance with procedures
established by the Committee, on a deferred basis subject to the requirements
of Section 409A of the Code.

 

10.          CODE SECTION 162(m) PROVISIONS

 

10.1. Covered Employees.
Notwithstanding any other provision of the Plan, if the Committee determines at
the time a Restricted Stock Award, a Restricted Stock Unit Award, a

 

10

 

Performance Award or an Other
Share-Based Award is granted to a Participant who is, or is likely to be, as of
the end of the tax year in which the Company would claim a tax deduction in
connection with such Award, a Covered Employee, then the Committee may provide
that this Article 10 is applicable to such Award.

 

10.2.       Performance Criteria.

 

(a)       If the Committee determines that a Restricted Stock Award, a
Restricted Stock Unit, a Performance Award or an Other Share-Based Award is
intended to be subject to this Article 10, the lapsing of restrictions
thereon and the distribution of cash, Shares or other property pursuant
thereto, as applicable, shall be subject to the achievement of one or more
objective performance goals established by the Committee, which shall be based
on the attainment of specified levels of one or any combination of the
following, or such other performance criteria as may be later determined by the
Committee:

 

(i)                                     net sales;

(ii)                                  revenue;

(iii)                               revenue growth or product revenue growth;

(iv)                              operating income (before or after taxes);

(v)                                 pre- or after-tax income (before or after allocation of
corporate overhead and bonus); earnings per share; net income (before or after
taxes);

(vi)                              return on equity;

(vii)                           total shareholder return;

(viii)                        return on assets or net assets;

(ix)                                appreciation in and/or maintenance of the price of the
Shares or any other publicly-traded securities of the Company;

(x)                                   market share; gross profits;

(xi)                                earnings (including earnings before taxes, earnings before
interest and taxes or earnings before interest, taxes, depreciation and
amortization);

(xii)                             economic value-added models or equivalent metrics;

(xiii)                         comparisons with various stock market indices;

(xiv)                         reductions in costs;

(xv)                            cash flow or cash flow per share (before or after
dividends);

(xvi)                         return on capital (including return on total capital or
return on invested capital);

(xvii)                      cash flow return on investment;

(xviii)                   improvement in or attainment of expense levels or working
capital levels;

(xiv)                         operating margins, gross margins or cash margin;

(xx)                              year-end cash;

(xxi)                          debt reduction;

(xxii)                       stockholder equity;

(xxiii)                    financing and other capital raising transactions (including
sales of the Company’s equity or debt securities);

(xxiv)                   factoring transactions; sales or licenses of the Company’s
assets, including its intellectual property, whether in a particular
jurisdiction or territory or globally; or through partnering transactions; and

 

11

 

(xxv)                      implementation, completion or attainment of measurable
objectives with respect to research, development, manufacturing,
commercialization, products or projects, production volume levels, acquisitions
and divestitures and recruiting and maintaining personnel.

 

(b)           Such performance goals also may be based solely by reference
to the Company’s performance or the performance of a Subsidiary, division,
business segment or business unit of the Company, or based upon the relative
performance of other companies or upon comparisons of any of the indicators of
performance relative to other companies.

 

(c)       The Committee may also exclude charges related to an event
or occurrence which the Committee determines should appropriately be excluded,
including (i) restructurings, discontinued operations, extraordinary
items, and other unusual or non-recurring charges, (ii) an event either
not directly related to the operations of the Company or not within the
reasonable control of the Company’s management, or (iii) the cumulative
effects of tax or accounting changes in accordance with U.S. generally accepted
accounting principles. Such performance goals shall be set by the Committee
within the time period prescribed by, and shall otherwise comply with the requirements
of, Section 162(m) of the Code, and the regulations thereunder.

 

10.3.       Adjustments.
Notwithstanding any provision of the Plan, with respect to any Restricted Stock
Award, Restricted Stock Unit Award, Performance Award or Other Share-Based
Award that is subject to this Section 10, the Committee may adjust
downwards, but not upwards, the amount payable pursuant to such Award, and the
Committee may not waive the achievement of the applicable performance goals,
except in the case of the death or disability of the Participant or as
otherwise determined by the Committee in special circumstances.

 

10.4.       Restrictions. The Committee shall have the power to impose such other
restrictions on Awards subject to this Article as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for “performance-based
compensation” within the meaning of Section 162(m) of the Code.

 

10.5.       Limitations on Grants to Individual
Participants. The
maximum dollar value that may be earned by any Participant for each
12 months in a Performance Period with respect to Performance Awards that
are intended to comply with the performance-based exception under Code Section 162(m).
If an Award is cancelled, the cancelled Award shall continue to be counted
toward the applicable Limitations.

 

11.          GENERALLY APPLICABLE PROVISIONS

 

11.1.       Amendment and Termination of the Plan. The Board may, from time to time, alter, amend, suspend or
terminate the Plan as it shall deem advisable, subject to any requirement for
stockholder approval imposed by applicable law, including the rules and
regulations of the principal securities market on which the Shares are traded;
provided that the Board may not, without the approval of the Company’s
stockholders, amend the Plan to (a) increase the number of Shares that may
be the subject of Awards under the Plan (except for adjustments pursuant to Section 3.1(e)),
(b) expand the types of awards available under the Plan, (c) materially
expand the class of persons eligible to participate in the Plan, (d) amend
any provision of Section 5.3 or Section 6.2(e), (e) increase the
maximum permissible term of any Option specified by Section 5.4 or the
maximum permissible term of a Stock Appreciation Right specified by

 

12

 

Section 6.2(d), or (f) increase
the Limitations. No amendments to, or termination of, the Plan shall impair the
rights of a Participant under any Award previously granted without such
Participant’s consent.

 

11.2.       Transferability of Awards. Except as provided below, no Award and no Shares that have
not been issued or as to which any applicable restriction, performance or
deferral period has not lapsed, may be sold, assigned, transferred, pledged or
otherwise encumbered, other than by will or the laws of descent and
distribution, and such Award may be exercised during the life of the
Participant only by the Participant or the Participant’s guardian or legal
representative. To the extent and under such terms and conditions as determined
by the Committee, a Participant may assign or transfer an Award (each
transferee thereof, a “Permitted Assignee”) to (i) the Participant’s
spouse, children or grandchildren (including any adopted and step children or
grandchildren), parents, grandparents or siblings, (ii) to a trust for the
benefit of one or more of the Participant or the persons referred to in clause
(i), or (iii) to a partnership, limited liability company or corporation
in which the Participant or the persons referred to in clause (i) are the
only partners, members or stockholders; provided that such Permitted Assignee
shall be bound by and subject to all of the terms and conditions of the Plan
and the Award Agreement relating to the transferred Award and shall execute an
agreement satisfactory to the Company evidencing such obligations; and provided
further that such Participant shall remain bound by the terms and conditions of
the Plan. The Company shall cooperate with any Permitted Assignee and the
Company’s transfer agent in effectuating any transfer permitted under this
Section.

 

11.3.       Termination of Employment. The Committee shall determine and set forth in each Award
Agreement whether any Awards granted in such Award Agreement will continue to
be exercisable, continue to vest or be earned and the terms of such exercise,
vesting or earning, on and after the date that a Participant ceases to be
employed by or to provide services to the Company or any Subsidiary (including
as a Director), whether by reason of death, disability, voluntary or
involuntary termination of employment or services, or otherwise. The Committee
shall also determine and set forth in each Award Agreement the effect, if any,
on an Award of the occurrence of a change in control of the Company. The date
of termination of a Participant’s employment or services will be determined by
the Committee, which determination will be final.

 

11.4.       Deferral;
Dividend Equivalents. The
Committee shall be authorized to establish procedures pursuant to which the
payment of any Award may be deferred. Subject to the provisions of the Plan and
any Award Agreement, the recipient of an Award may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, cash,
stock or other property dividends in amounts equivalent to cash, stock or other
property dividends on Shares (“Dividend Equivalents”) with respect to the
number of Shares covered by the Award, as determined by the Committee, in its
sole discretion. The Committee may provide that such amounts and Dividend Equivalents
(if any) shall be deemed to have been reinvested in additional Shares or
otherwise reinvested and may provide that such amounts and Dividend Equivalents
are subject to the same vesting or performance conditions as the underlying
Award.

 

12.          MISCELLANEOUS

 

12.1.       Award Agreements. Each Award Agreement shall either be (a) in writing
in a form approved by the Committee and executed by the Company by an officer
duly authorized to

 

13

 

act on its behalf, or (b) an
electronic notice in a form approved by the Committee and recorded by the
Company (or its designee) in an electronic recordkeeping system used for the
purpose of tracking one or more types of Awards as the Committee may provide;
in each case and if required by the Committee, the Award Agreement shall be
executed or otherwise electronically accepted by the recipient of the Award in
such form and manner as the Committee may require. The Committee may authorize
any officer of the Company to execute any or all Award Agreements on behalf of
the Company. The Award Agreement shall set forth the material terms and
conditions of the Award as established by the Committee consistent with the
provisions of the Plan.

 

12.2.       Tax Withholding. The Company shall have the right to make all payments or
distributions pursuant to the Plan to a Participant (or a Permitted Assignee
thereof) (any such person, a “Payee”) net of any applicable federal, state and
local taxes required to be paid or withheld as a result of (a) the grant
of any Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the
delivery of Shares or cash, (d) the lapse of any restrictions in
connection with any Award or (e) any other event occurring pursuant to the
Plan. The Company or any Subsidiary shall have the right to withhold from wages
or other amounts otherwise payable to such Payee such withholding taxes as may
be required by law, or to otherwise require the Payee to pay such withholding
taxes. If the Payee shall fail to make such tax payments as are required, the
Company or its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
such Payee or to take such other action as may be necessary to satisfy such
withholding obligations. The Committee shall be authorized to establish
procedures for election by Participants to satisfy such obligation for the
payment of such taxes by tendering previously acquired Shares (either actually
or by attestation, valued at their then Fair Market Value), or by directing the
Company to retain Shares (up to the Participant’s minimum required tax
withholding rate or such other rate that will not cause an adverse accounting
consequence or cost) otherwise deliverable in connection with the Award.

 

12.3.       Right of Discharge Reserved; Claims to
Awards. Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any Employee, Director or
Consultant the right to continue in the employment or service of the Company or
any Subsidiary or affect any right that the Company or any Subsidiary may have
to terminate the employment or service of (or to demote or to exclude from
future Awards under the Plan) any such Employee , Director or Consultant at any
time for any reason. Except as specifically provided by the Committee, the
Company shall not be liable for the loss of existing or potential profit from
an Award granted in the event of termination of an employment or other
relationship. No Employee, Director or Consultant shall have any claim to be
granted any Award under the Plan, and there is no obligation for uniformity of
treatment of Employees, Directors Consultants or Participants under the Plan.

 

12.4.       Substitute Awards. Notwithstanding any other provision of the Plan, the terms
of Substitute Awards may vary from the terms set forth in the Plan to the
extent the Committee deems appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.

 

12.5.       Cancellation of Award; Forfeiture of Gain. Notwithstanding anything to the contrary contained herein,
an Award Agreement may provide that the Award shall be canceled if the
Participant, without the consent of the Company, while employed by the Company
or any

 

14

 

Subsidiary or after
termination of such employment or service, violates a non-competition,
non-solicitation or non-disclosure covenant or agreement or otherwise engages
in activity that is in conflict with or adverse to the interest of the Company
or any Subsidiary (including conduct contributing to any financial restatements
or financial irregularities), as determined by the Committee in its sole
discretion. The Committee may provide in an Award Agreement that if within the
time period specified in the Agreement the Participant establishes a
relationship with a competitor or engages in an activity referred to in the
preceding sentence, the Participant will forfeit any gain realized on the
vesting or exercise of the Award and must repay such gain to the Company.

 

12.6.       Stop Transfer Orders. All certificates for Shares delivered under the Plan
pursuant to any Award shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.

 

12.7.       Nature of Payments. All Awards made pursuant to the Plan are in consideration
of services performed or to be performed for the Company or any Subsidiary,
division or business unit of the Company. Any income or gain realized pursuant
to Awards under the Plan constitutes a special incentive payment to the
Participant and shall not be taken into account, to the extent permissible
under applicable law, as compensation for purposes of any of the employee
benefit plans of the Company or any Subsidiary except as may be determined by
the Committee or by the Board or board of directors of the applicable
Subsidiary.

 

12.8.       Other Plans.
Nothing contained in the Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases.

 

12.9.       Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent
that such court of competent jurisdiction deems it lawful, valid and/or
enforceable and as so limited shall remain in full force and effect, and (b) not
affect any other provision of the Plan or part thereof, each of which shall
remain in full force and effect. If the making of any payment or the provision
of any other benefit required under the Plan shall be held unlawful or
otherwise invalid or unenforceable by a court of competent jurisdiction, such
unlawfulness, invalidity or unenforceability shall not prevent any other
payment or benefit from being made or provided under the Plan, and if the
making of any payment in full or the provision of any other benefit required
under the Plan in full would be unlawful or otherwise invalid or unenforceable,
then such unlawfulness, invalidity or unenforceability shall not prevent such
payment or benefit from being made or provided in part, to the extent that it
would not be unlawful, invalid or unenforceable, and the maximum payment or
benefit that would not be unlawful, invalid or unenforceable shall be made or
provided under the Plan.

 

12.10.     Construction. As used in the Plan, the words “include” and “including,”
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words “without limitation.”

 

15

 

12.11.     Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to deliver
the Shares or payments in lieu of or with respect to Awards hereunder;
provided, however, that the existence of such trusts or other arrangements is
consistent with the unfunded status of the Plan.

 

12.12.     Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of California,
without reference to principles of conflict of laws, and construed accordingly.

 

12.13.     Effective Date of Plan; Termination of
Plan. The Plan shall be effective
on the date of the adoption of the Plan by the Board. Awards may be granted
under the Plan at any time and from time to time on or prior to the tenth
anniversary of the effective date of the Plan, on which date the Plan will
expire except as to Awards then outstanding under the Plan. Such outstanding
Awards shall remain in effect until they have been exercised or terminated, or
have expired.

 

12.14.     Foreign Employees. Awards may be granted to Participants who are foreign
nationals or employed outside the United States, or both, on such terms and
conditions different from those applicable to Awards to Employees, Directors or
Consultants providing services in the United States as may, in the judgment of
the Committee, be necessary or desirable in order to recognize differences in
local law or tax policy. The Committee also may impose conditions on the
exercise or vesting of Awards in order to minimize the Company’s obligation with
respect to tax equalization for Employees or Consultants on assignments outside
their home country.

 

12.15.     Compliance with Section 409A of the
Code. This Plan is intended to
comply and shall be administered in a manner that is intended to comply with Section 409A
of the Code and shall be construed and interpreted in accordance with such
intent. To the extent that an Award or the payment, settlement or deferral
thereof is subject to Section 409A of the Code, the Award shall be
granted, paid, settled or deferred in a manner that will comply with Section 409A
of the Code, including regulations or other guidance issued with respect
thereto, except as otherwise determined by the Committee. Any provision of this
Plan that would cause the grant of an Award or the payment, settlement or
deferral thereof to fail to satisfy Section 409A of the Code shall be
amended to comply with Section 409A of the Code on a timely basis, which
may be made on a retroactive basis, in accordance with regulations and other
guidance issued under Section 409A of the Code.

 

12.16.     Limitations
on Liability. Notwithstanding any other provisions of the Plan,
no individual acting as a director, officer, other employee, or agent of the
Company will be liable to any Participant, former Participant, spouse,
beneficiary, or any other person for any claim, loss, liability, or expense
incurred in connection with the Plan, nor will such individual be personally
liable with respect to the Plan because of any contract or other instrument he
or she executes in his or her capacity as a director, officer, other employee,
or agent of the Company. The Company

 

16

 

will indemnify and hold harmless each director, officer, other employee,
or agent of the Company to whom any duty or power relating to the
administration or interpretation of the Plan has been or will be delegated,
against any cost or expense (including attorneys’ fees) or liability (including
any sum paid in settlement of a claim with the Board’s approval) arising out of
any act or omission to act concerning this Plan unless arising out of such
person’s own fraud or bad faith.

 

12.16      Captions.
The captions in the Plan are for convenience of reference only, and are not
intended to narrow, limit or affect the substance or interpretation of the
provisions contained herein.

 

17

 

 

S&W SEED
COMPANY

GRANT NOTICE FOR 2009 INCENTIVE PLAN

INCENTIVE STOCK OPTIONS

 

FOR
GOOD AND VALUABLE CONSIDERATION, S&W Seed Company, a Delaware corporation
(the “Company”), hereby grants to Participant named below the incentive stock
option (the “Option”) to purchase any part or all of the number of shares of
its common stock, par value $0.001 (the “Common Stock”), that are covered by
this Option, as specified below, at the Exercise Price per share specified
below and upon the terms and subject to the conditions set forth in this Grant
Notice, the S&W Seed Company 2009 Incentive Plan (the “Plan”) and the
Standard Terms and Conditions (the “Standard Terms and Conditions”) promulgated
under such Plan, each as amended from time to time. This Option is granted
pursuant to the Plan and is subject to and qualified in its entirety by the
Standard Terms and Conditions.

 

	
  Name of Participant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares of Common Stock covered by Option:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price Per Share:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
   

  	
   

  
					

 

1

 

This
Option is intended to qualify as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended. By accepting this Grant
Notice, Participant acknowledges that he or she has received and read, and
agrees that this Option shall be subject to, the terms of this Grant Notice,
the Plan and the Standard Terms and Conditions.

 

	
  S&W SEED COMPANY.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Participant Signature

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Address (please print):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2

 

S&W SEED
COMPANY

STANDARD TERMS AND CONDITIONS FOR

EMPLOYEE INCENTIVE STOCK OPTIONS

 

These
Standard Terms and Conditions apply to the Options granted pursuant to the
S&W Seed Company 2009 Incentive Plan (the “Plan”), which are identified as
incentive stock options and are evidenced by a Grant Notice or an action of the
Administrator that specifically refers to these Standard Terms and Conditions.
In addition to these Terms and Conditions, the Option shall be subject to the
terms of the Plan, which are incorporated into these Standard Terms and
Conditions by this reference. Capitalized terms not otherwise defined herein
shall have the meaning set forth in the Plan.

 

1.     TERMS
OF OPTION

 

S&W
Seed Company, a Delaware corporation (the “Company”), has granted to the
Participant named in the Grant Notice provided to said Participant herewith
(the “Grant Notice”) an incentive stock option (the “Option”) to purchase up to
the number of shares of the Company’s common stock (the “Common Stock”), set
forth in the Grant Notice. The exercise price per share and the other terms and
subject to the conditions of the Option are set forth in the Grant Notice, these
Standard Terms and Conditions (as amended from time to time), and the Plan. For
purposes of these Standard Terms and Conditions and the Grant Notice, any
reference to the Company shall include a reference to any Subsidiary.

 

2.     INCENTIVE STOCK OPTION

 

The Option is intended to qualify as
an incentive stock option under Section 422 of the Internal Revenue Code
of 1986, as amended (the “Code”), and will be interpreted accordingly.
Section 422 of the Code provides, among other things, that the Participant
shall not be taxed upon the exercise of a stock option that qualifies as an
incentive stock option provided the Participant does not dispose of the shares
of Common Stock acquired upon exercise of such option until the later of two
years after such option is granted to the Participant and one year after such
option is exercised. Notwithstanding anything to the contrary herein,
Section 422 of the Code provides that incentive stock options (including,
possibly, the Option) shall not be treated as incentive stock options if and to
the extent that the aggregate fair market value of shares of Common Stock
(determined as of the time of grant) with respect to which such incentive stock
options are exercisable for the first time by the Participant during any calendar
year (under all plans of the Company and its Subsidiaries) exceeds $100,000,
taking options into account in the order in which they were granted. Thus, if
and to the extent that any shares of Common Stock issued under a portion of the
Option exceeds the foregoing $100,000 limitation, such shares shall not be
treated as issued under an incentive stock option pursuant to Section 422
of the Code and shall instead be treated as issued pursuant to nonqualified
stock options.

 

3.     EXERCISE OF OPTION

 

The Option shall not be exercisable
as of the Grant Date set forth in the Grant Notice. After the Grant Date, to
the extent not previously exercised, and subject to termination or acceleration
as provided in these Standard Terms and Conditions and the Plan, the Option
shall be exercisable only to the extent it becomes vested, as described in the
Grant Notice or

 

1

 

the terms of the Plan, to purchase
up to that number of shares of Common Stock as set forth in the Grant Notice,
provided that (except as set forth in Section 4.A below) the Participant
remains employed with the Company and does not experience a Termination of
Employment. The vesting period and/or exercisability of an Option may be
adjusted by the Administrator to reflect the decreased level of employment
during any period in which the Participant is on an approved leave of absence
or is employed on a less than full time basis.

 

To exercise the Option (or any part
thereof), the Participant shall deliver to the Company a “Notice of Exercise”
in a form specified by the Administrator, specifying the number of whole shares
of Common Stock the Participant wishes to purchase and how the Participant’s
shares of Common Stock should be registered (in the Participant’s name only or
in the Participant’s and the Participant’s spouse’s names as community property
or as joint tenants with right of survivorship).

 

The exercise price (the “Exercise
Price”) of the Option is set forth in the Grant Notice. The Company shall not be
obligated to issue any shares of Common Stock until the Participant shall have
paid the total Exercise Price for that number of shares of Common Stock. The
Exercise Price may be paid in Common Stock, cash or a combination thereof,
including an irrevocable commitment by a broker to pay over such amount from a
sale of the Common Stock issuable under the Option, the delivery of previously
owned Common Stock, withholding of shares of Common Stock deliverable upon
exercise of the Option, or in such other manners as may be permitted by the
Administrator.

 

Fractional shares may not be
exercised. Shares of Common Stock will be issued as soon as practical after
exercise. Notwithstanding the above, the Company shall not be obligated to
deliver any shares of Common Stock during any period when the Company
determines that the exercisability of the Option or the delivery of shares of
Common Stock hereunder would violate any federal, state or other applicable
laws.

 

4.     EXPIRATION OF OPTION

 

The Option shall expire and cease to
be exercisable as of the earlier of (a) the Expiration Date set forth in
the Grant Notice or (b) the date specified below in connection with the
Participant’s Termination of Employment:

 

A.           If
the Participant’s Termination of Employment is by reason of death, Disability
or Retirement, the Participant (or the Participant’s estate, beneficiary or
legal representative) may exercise the Option (regardless of whether then
vested or exercisable) until the date that is twelve months following the date
of such Termination of Employment.

 

B.             If
the Participant’s Termination of Employment is for any reason other than death,
Disability, Retirement or Cause, the Participant may exercise any portion of
the Option that is vested and exercisable at the time of such Termination of
Employment until the date that is three months following the date of such
Termination of Employment. Any portion of the Option that is not vested and
exercisable at the time of such Termination of Employment (after taking into
account any accelerated vesting under Section 12 of the Plan, if
applicable) shall be forfeited and canceled as of the date of such Termination
of Employment.

 

2

 

C.             If
the Participant’s Termination of Employment is by the Company for Cause, the
entire Option, whether or not then vested and exercisable, shall be immediately
forfeited and canceled as of the date of such Termination of Employment.

 

5.     RESTRICTIONS ON RESALES OF SHARES ACQUIRED PURSUANT TO OPTION
EXERCISE

 

The
Company may impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resales by the
Participant or other subsequent transfers by the Participant of any shares of
Common Stock issued as a result of the exercise of the Option, including
without limitation (a) restrictions under an insider trading policy, (b) restrictions
designed to delay and/or coordinate the timing and manner of sales by
Participant and other optionholders and (c) restrictions as to the use of
a specified brokerage firm for such resales or other transfers.

 

6.     INCOME TAXES

 

The
Company shall not deliver shares of Common Stock in respect of the exercise of
any Option unless and until the Participant has made arrangements satisfactory
to the Administrator to satisfy applicable withholding tax obligations. Unless
the Participant pays the withholding tax obligations to the Company by cash or
check in connection with the exercise of the Option, withholding may be
effected, at the Company’s option, by withholding Common Stock issuable in
connection with the exercise of the Option (provided that shares of Common
Stock may be withheld only to the extent that such withholding will not result
in adverse accounting treatment for the Company). The Participant acknowledges
that the Company shall have the right to deduct any taxes required to be
withheld by law in connection with the exercise of the Option from any amounts
payable by it to the Participant (including, without limitation, future cash
wages).

 

7.     NON-TRANSFERABILITY OF OPTION

 

Except
as permitted by the Administrator or as permitted under the Plan, the
Participant may not assign or transfer the Option to anyone other than by will
or the laws of descent and distribution and the Option shall be exercisable
only by the Participant during his or her lifetime. The Company may cancel the
Participant’s Option if the Participant attempts to assign or transfer it in a
manner inconsistent with this Section 7.

 

8.     OTHER AGREEMENTS SUPERSEDED

 

The
Grant Notice, these Standard Terms and Conditions and the Plan constitute the
entire understanding between the Participant and the Company regarding the
Option. Any prior agreements, commitments or negotiations concerning the Option
are superseded.

 

9.     LIMITATION OF INTEREST IN SHARES SUBJECT TO OPTION

 

Neither
the Participant (individually or as a member of a group) nor any beneficiary or
other person claiming under or through the Participant shall have any right,
title, interest, or privilege in or to any shares of Common Stock allocated or
reserved for the purpose of the Plan or subject to the Grant Notice or these
Standard Terms and Conditions except as to such shares of Common Stock, if any,
as shall have been issued to such person upon exercise of

 

3

 

the
Option or any part of it. Nothing in the Plan, in the Grant Notice, these
Standard Terms and Conditions or any other instrument executed pursuant to the
Plan shall confer upon the Participant any right to continue in the Company’s
employ or service nor limit in any way the Company’s right to terminate the
Participant’s employment at any time for any reason.

 

10.  GENERAL

 

In
the event that any provision of these Standard Terms and Conditions is declared
to be illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent
necessary to render it legal, valid and enforceable, or otherwise deleted, and
the remainder of these Standard Terms and Conditions shall not be affected
except to the extent necessary to reform or delete such illegal, invalid or
unenforceable provision.

 

The
headings preceding the text of the sections hereof are inserted solely for
convenience of reference, and shall not constitute a part of these Standard
Terms and Conditions, nor shall they affect its meaning, construction or
effect.

 

These
Standard Terms and Conditions shall inure to the benefit of and be binding upon
the parties hereto and their respective permitted heirs, beneficiaries,
successors and assigns.

 

These
Standard Terms and Conditions shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to principles of
conflicts of law.

 

All
questions arising under the Plan or under these Standard Terms and Conditions
shall be decided by the Administrator in its total and absolute discretion.

 

12.  ELECTRONIC DELIVERY

 

By
executing the Grant Notice, the Participant hereby consents to the delivery of
information (including, without limitation, information required to be
delivered to the Participant pursuant to applicable securities laws) regarding
the Company and its Subsidiaries, the Plan the Option and the Common Stock via
the Company’s website or other electronic delivery.

 

4

 

S&W SEED
COMPANY

GRANT NOTICE FOR 2009 INCENTIVE PLAN

NON-QUALIFIED STOCK OPTIONS

 

FOR
GOOD AND VALUABLE CONSIDERATION, S&W Seed Company, a Delaware corporation
(the “Company”), hereby grants to Participant named below the nonqualified
stock option (the “Option”) to purchase any part or all of the number of shares
of its common stock, par value $0.001 (the “Common Stock”), that are covered by
this Option, as specified below, at the Exercise Price per share specified
below and upon the terms and subject to the conditions set forth in this Grant
Notice, the S&W Seed Company 2009 Incentive Plan (the “Plan”) and the
Standard Terms and Conditions (the “Standard Terms and Conditions”) promulgated
under such Plan, each as amended from time to time. This Option is granted
pursuant to the Plan and is subject to and qualified in its entirety by the
Standard Terms and Conditions.

 

	
  Name of Participant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares of Common Stock covered by Option:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price Per Share:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
   

  	
   

  
					

 

1

 

This
Option is not intended to qualify as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended. By accepting this Grant
Notice, Participant acknowledges that he or she has received and read, and
agrees that this Option shall be subject to, the terms of this Grant Notice,
the Plan and the Standard Terms and Conditions.

 

	
  S&W SEED COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Participant Signature

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Address (please print):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2

 

 

S&W SEED
COMPANY

STANDARD TERMS AND CONDITIONS FOR

NON-QUALIFIED STOCK OPTIONS

 

These
Standard Terms and Conditions apply to the Options granted pursuant to the
S&W Seed Company 2009 Incentive Plan (the “Plan”), which are identified as
nonqualified stock options and are evidenced by a Grant Notice or an action of
the Administrator that specifically refers to these Standard Terms and
Conditions. In addition to these Terms and Conditions, the Option shall be
subject to the terms of the Plan, which are incorporated into these Standard
Terms and Conditions by this reference. Capitalized terms not otherwise defined
herein shall have the meaning set forth in the Plan.

 

1.              TERMS OF OPTION

 

S&W
Seed Company, a Delaware corporation (the “Company”), has granted to the
Participant named in the Grant Notice provided to said Participant herewith
(the “Grant Notice”) a nonqualified stock option (the “Option”) to purchase up
to the number of shares of the Company’s common stock (the “Common Stock”), set
forth in the Grant Notice. The exercise price per share and the other terms and
subject to the conditions of the Option are set forth in the Grant Notice,
these Standard Terms and Conditions (as amended from time to time), and the
Plan. For purposes of these Standard Terms and Conditions and the Grant Notice,
any reference to the Company shall include a reference to any Subsidiary.

 

2.              NONQUALIFIED STOCK OPTION

 

The
Option is not intended to be an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”) and will be
interpreted accordingly.

 

3.              EXERCISE OF OPTION

 

The
Option shall not be exercisable as of the Grant Date set forth in the Grant
Notice. After the Grant Date, to the extent not previously exercised, and
subject to termination or acceleration as provided in these Standard Terms and
Conditions and the Plan, the Option shall be exercisable only to the extent it
becomes vested, as described in the Grant Notice or the terms of the Plan, to
purchase up to that number of shares of Common Stock as set forth in the Grant
Notice, provided that (except as set forth in Section 4.A below) the
Participant remains employed with the Company and does not experience a
Termination of Employment. The vesting period and/or exercisability of an
Option may be adjusted by the Administrator to reflect the decreased level of
employment during any period in which the Participant is on an approved leave
of absence or is employed on a less than full time basis.

 

To
exercise the Option (or any part thereof), the Participant shall deliver to the
Company a “Notice of Exercise” in a form specified by the Administrator,
specifying the number of whole shares of Common Stock the Participant wishes to
purchase and how the Participant’s shares of Common Stock should be registered
(in the Participant’s name only or in the

 

1

 

Participant’s
and the Participant’s spouse’s names as community property or as joint tenants
with right of survivorship).

 

The
exercise price (the “Exercise Price”) of the Option is set forth in the Grant
Notice. The Company shall not be obligated to issue any shares of Common Stock
until the Participant shall have paid the total Exercise Price for that number
of shares of Common Stock. The Exercise Price may be paid in Common Stock, cash
or a combination thereof, including an irrevocable commitment by a broker to
pay over such amount from a sale of the Common Stock issuable under the Option,
the delivery of previously owned Common Stock, withholding of shares of Common
Stock deliverable upon exercise of the Option, or in such other manners as may
be permitted by the Administrator.

 

Fractional
shares may not be exercised. Shares of Common Stock will be issued as soon as
practical after exercise. Notwithstanding the above, the Company shall not be
obligated to deliver any shares of Common Stock during any period when the
Company determines that the exercisability of the Option or the delivery of
shares of Common Stock hereunder would violate any federal, state or other
applicable laws.

 

4.              EXPIRATION OF OPTION

 

The
Option shall expire and cease to be exercisable as of the earlier of (a) the
Expiration Date set forth in the Grant Notice or (b) the date specified
below in connection with the Participant’s Termination of Employment:

 

A.           If the Participant’s Termination of Employment is by reason
of death, Disability or Retirement, the Participant (or the Participant’s
estate, beneficiary or legal representative) may exercise the Option
(regardless of whether then vested or exercisable) until the date that is
twelve months following the date of such Termination of Employment.

 

B.             If the Participant’s Termination of Employment is for any
reason other than death, Disability, Retirement or Cause, the Participant may
exercise any portion of the Option that is vested and exercisable at the time
of such Termination of Employment until the date that is three months following
the date of such Termination of Employment. Any portion of the Option that is
not vested and exercisable at the time of such Termination of Employment (after
taking into account any accelerated vesting under Section 12 of the Plan,
if applicable) shall be forfeited and canceled as of the date of such
Termination of Employment.

 

C.             If the Participant’s Termination of Employment is by the
Company for Cause, the entire Option, whether or not then vested and
exercisable, shall be immediately forfeited and canceled as of the date of such
Termination of Employment.

 

5.              RESTRICTIONS ON RESALES OF SHARES ACQUIRED
PURSUANT TO OPTION EXERCISE

 

The
Company may impose such restrictions, conditions or limitations as it
determines

 

2

 

appropriate
as to the timing and manner of any resales by the Participant or other
subsequent transfers by the Participant of any shares of Common Stock issued as
a result of the exercise of the Option, including without limitation (a) restrictions
under an insider trading policy, (b) restrictions designed to delay and/or
coordinate the timing and manner of sales by Participant and other
optionholders and (c) restrictions as to the use of a specified brokerage
firm for such resales or other transfers.

 

6.              INCOME TAXES

 

The
Company shall not deliver shares of Common Stock in respect of the exercise of
any Option unless and until the Participant has made arrangements satisfactory
to the Administrator to satisfy applicable withholding tax obligations. Unless
the Participant pays the withholding tax obligations to the Company by cash or check
in connection with the exercise of the Option, withholding may be effected, at
the Company’s option, by withholding Common Stock issuable in connection with
the exercise of the Option (provided that shares of Common Stock may be
withheld only to the extent that such withholding will not result in adverse
accounting treatment for the Company). The Participant acknowledges that the
Company shall have the right to deduct any taxes required to be withheld by law
in connection with the exercise of the Option from any amounts payable by it to
the Participant (including, without limitation, future cash wages).

 

7.              NON-TRANSFERABILITY OF OPTION

 

Except
as permitted by the Administrator or as permitted under the Plan, the
Participant may not assign or transfer the Option to anyone other than by will
or the laws of descent and distribution and the Option shall be exercisable
only by the Participant during his or her lifetime. The Company may cancel the
Participant’s Option if the Participant attempts to assign or transfer it in a
manner inconsistent with this Section 7.

 

8.              OTHER AGREEMENTS SUPERSEDED

 

The
Grant Notice, these Standard Terms and Conditions and the Plan constitute the
entire understanding between the Participant and the Company regarding the
Option. Any prior agreements, commitments or negotiations concerning the Option
are superseded.

 

9.              LIMITATION OF INTEREST IN SHARES SUBJECT TO
OPTION

 

Neither
the Participant (individually or as a member of a group) nor any beneficiary or
other person claiming under or through the Participant shall have any right,
title, interest, or privilege in or to any shares of Common Stock allocated or
reserved for the purpose of the Plan or subject to the Grant Notice or these
Standard Terms and Conditions except as to such shares of Common Stock, if any,
as shall have been issued to such person upon exercise of the Option or any
part of it. Nothing in the Plan, in the Grant Notice, these Standard Terms and
Conditions or any other instrument executed pursuant to the Plan shall confer
upon the Participant any right to continue in the Company’s employ or service
nor limit in any way

 

3

 

the
Company’s right to terminate the Participant’s employment at any time for any
reason.

 

10.       GENERAL

 

In
the event that any provision of these Standard Terms and Conditions is declared
to be illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent
necessary to render it legal, valid and enforceable, or otherwise deleted, and
the remainder of these Standard Terms and Conditions shall not be affected
except to the extent necessary to reform or delete such illegal, invalid or
unenforceable provision.

 

The
headings preceding the text of the sections hereof are inserted solely for
convenience of reference, and shall not constitute a part of these Standard
Terms and Conditions, nor shall they affect its meaning, construction or
effect.

 

These
Standard Terms and Conditions shall inure to the benefit of and be binding upon
the parties hereto and their respective permitted heirs, beneficiaries,
successors and assigns.

 

These
Standard Terms and Conditions shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to principles of
conflicts of law.

 

All
questions arising under the Plan or under these Standard Terms and Conditions
shall be decided by the Administrator in its total and absolute discretion.

 

12.       ELECTRONIC DELIVERY

 

By
executing the Grant Notice, the Participant hereby consents to the delivery of
information (including, without limitation, information required to be
delivered to the Participant pursuant to applicable securities laws) regarding
the Company and the Subsidiaries, the Plan, the Option and the Common Stock via
Company website or other electronic delivery.

 

4

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