Document:

Unassociated Document

    
 

    

    

    China
Electric Motor, Inc.

    

    2010
OMNIBUS INCENTIVE PLAN

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    China
Electric Motor, Inc.

    2010
OMNIBUS INCENTIVE PLAN

    

    

    ARTICLE
I

    

    PURPOSE
AND ADOPTION OF THE PLAN

    

    1.01.                      Purpose.  The
purpose of the China Electric Motor, Inc. 2010 Omnibus Incentive Plan (as
amended from time to time, the "Plan") is to assist in attracting and retaining
highly competent employees, directors and consultants to act as an incentive in
motivating selected employees, directors and consultants of the Company and its Subsidiaries to
achieve long-term corporate objectives and to enable stock-based and cash-based
incentive awards to qualify as performance-based compensation for purposes of
the tax deduction limitations under Section 162(m) of the Code.

    

    1.02.                      Adoption and
Term.  The Plan has been approved by the Board to be effective
as of June 28, 2010, subject to the approval of the stockholders of the Company,
which occurred on August 2, 2010.  The Plan shall remain in effect
until the tenth anniversary of the Effective Date, or until terminated by action
of the Board, whichever occurs sooner.

    

    

    ARTICLE
II

    

    DEFINITIONS

    

    For the
purpose of this Plan, capitalized terms shall have the following
meanings:

    

    2.01.                      Affiliate means an
entity in which, directly or indirectly through one or more intermediaries, the
Company has at least a fifty percent (50%) ownership interest or, where
permissible under Section 409A of the Code, at least a twenty percent (20%)
ownership interest; provided, however, for purposes of any
grant of an Incentive Stock Option, “Affiliate” means a corporation which, for
purposes of Section 424 of the Code, is a parent or subsidiary of the Company,
directly or indirectly.

    

    2.02.                      Award means any one
or a combination of Non-Qualified Stock Options or Incentive Stock Options
described in Article VI, Stock Appreciation Rights described in Article VI,
Restricted Shares and Restricted Stock Units described in Article VII,
Performance Awards described in Article VIII, other stock-based Awards described
in Article IX, short-term cash incentive Awards described in Article X or any
other Award made under the terms of the Plan.

    

    2.03.                      Award Agreement means
a written agreement between the Company and a Participant or a written
acknowledgment from the Company to a Participant specifically setting forth the
terms and conditions of an Award granted under the Plan.

     

    
      
        
        

      

      
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    2.04.                      Award Period means,
with respect to an Award, the period of time, if any, set forth in the Award
Agreement during which specified target performance goals must be achieved or
other conditions set forth in the Award Agreement must be
satisfied.

    

    2.05.                      Beneficiary means an
individual, trust or estate who or which, by a written designation of the
Participant filed with the Company, or if no such written designation is filed,
by operation of law, succeeds to the rights and obligations of the Participant
under the Plan and the Award Agreement upon the Participant's
death.

    

    2.06.                      Board means the Board
of Directors of the Company.

    

    2.07.                      Change in Control
means, and shall be deemed to have occurred upon the occurrence of, any one of
the following events:

    

    (a)           The
acquisition in one or more transactions, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act), other than the Company, an Affiliate or any employee
benefit plan (or related trust) sponsored or maintained by the Company or an
Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of a number of Company Voting Securities in excess of
25% of the Company Voting Securities unless such acquisition has been approved
by the Board;

    

    (b)           Any
election has occurred of persons to the Board that causes two-thirds of the
Board to consist of persons other than (i) persons who were members of the Board
on the effective date of the Plan and (ii) persons who were nominated for
elections as members of the Board at a time when two-thirds of the Board
consisted of persons who were members of the Board on the effective date of the
Plan, provided, however, that any person nominated for election by a Board at
least two-thirds of whom constituted persons described in clauses (i) and/or
(ii) or by persons who were themselves nominated by such Board shall, for this
purpose, be deemed to have been nominated by a Board composed of persons
described in clause (i);

    

    (c)           The
consummation (i.e.
closing) of a reorganization, merger or consolidation involving the Company,
unless, following such reorganization, merger or consolidation, all or
substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Common Stock and Company Voting Securities
immediately prior to such reorganization, merger or consolidation, following
such reorganization, merger or consolidation beneficially own, directly or
indirectly, more than 75% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors or trustees,
as the case may be, of the entity resulting from such reorganization, merger or
consolidation in substantially the same proportion as their ownership of the
Outstanding Common Stock and Company Voting Securities immediately prior to such
reorganization, merger or consolidation, as the case may be;

     

    
      
        
        

      

      
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    (d)           The
consummation (i.e.
closing) of a sale or other disposition of all or substantially all the assets
of the Company, unless, following such sale or disposition, all or substantially
all of the individuals and entities who were the respective beneficial owners of
the Outstanding Common Stock and Company Voting Securities immediately prior to
such sale or disposition, following such sale or disposition beneficially own,
directly or indirectly, more than 75% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity purchasing such assets in
substantially the same proportion as their ownership of the Outstanding Common
Stock and Company Voting Securities immediately prior to such sale or
disposition, as the case may be; or

    

    (e)           a
complete liquidation or dissolution of the Company.

    

    2.08.                      Code means the
Internal Revenue Code of 1986, as amended. References to a section of the Code
shall include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said section.

    

    2.09.                      Committee means the
Compensation Committee of the Board.

    

    2.10.                      Common Stock means
the common stock of the Company, par value $0.0001 per share.

    

    2.11.                      Company means China
Electric Motor, Inc., a Delaware corporation, and its successors.

    

    2.12.                      Company Voting
Securities means the combined voting power of all outstanding voting
securities of the Company entitled to vote generally in the election of
directors to the Board.

    

    2.13.                      Date of Grant means
the date designated by the Committee as the date as of which it grants an Award,
which shall not be earlier than the date on which the Committee approves the
granting of such Award.

    

    2.14.                      Dividend Equivalent
Account means a bookkeeping account in accordance with under Section
11.17 and related to an Award that is credited with the amount of any cash
dividends or stock distributions that would be payable with respect to the
shares of Common Stock subject to such Awards had such shares been outstanding
shares of Common Stock.

    

    2.15           Exchange Act means
the Securities Exchange Act of 1934, as amended.

    

    2.16.                      Exercise Price means,
with respect to a Stock Appreciation Right, the amount established by the
Committee in the Award Agreement which is to be subtracted from the Fair Market
Value on the date of exercise in order to determine the amount of the payment to
be made to the Participant, as further described in Section
6.02(b).

    

    2.17.                      Fair Market Value
means, as of any applicable date:  (i) if the Common Stock is listed
on a national securities exchange or is authorized for quotation on the Nasdaq
National Market System (“NMS”), the closing sales price of the Common Stock on
the exchange or NMS, as the case may be, on that date, or, if no sale of the
Common Stock occurred on that date, on the next preceding date on which there
was a reported sale; or (ii) if none of the above apply, the closing bid price
as reported by the Nasdaq SmallCap Market on that date, or if no price was
reported for that date, on the next preceding date for which a price was
reported; or (iii) if none of the above apply, the last reported bid price
published in the “pink sheets” or displayed on the National Association of
Securities Dealers, Inc. (“NASD”), Electronic Bulletin Board, as the case may
be; or (iv) if none of the above apply, the fair market value of the Common
Stock as determined under procedures established by the Committee.

     

    
      
        
        

      

      
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    2.18.                      Incentive Stock
Option means a stock option within the meaning of Section 422 of the
Code.

    

    2.19.                      Merger means any
merger, reorganization, consolidation, exchange, transfer of assets or other
transaction having similar effect involving the Company.

    

    2.20.                      Non-Qualified Stock
Option means a stock option which is not an Incentive Stock
Option.

    

    2.21           Non-Vested Share
means shares of the Company Common Stock issued to a Participant in respect of
the non-vested portion of an Option in the event of the early exercise of such
Participant’s Options pursuant to such Participant’s Award Agreement, as
permitted in Section 6.06 below.

    

    2.22.                      Options means all
Non-Qualified Stock Options and Incentive Stock Options granted at any time
under the Plan.

    

    2.23.                      Outstanding Common
Stock means, at any time, the issued and outstanding shares of Common
Stock.

    

    2.24.                      Participant means a
person designated to receive an Award under the Plan in accordance with Section
5.01.

    

    2.25.                      Performance Awards
means Awards granted in accordance with Article VIII.

    

    2.26.                      Performance Goals
means targets established by the Committee with respect to one or more of the
following factors: net income (before or after taxes); earnings per share; share
price; net sales; units sold or growth in units sold; return on stockholders'
equity; customer satisfaction or retention; return on investment or working
capital; expense targets; working capital targets; operating efficiency;
productivity ratios; market share or change in market share; operating income;
economic value added (the amount, if any, by which net operating income after
tax exceeds a reference cost of capital); EBITDA (net income (loss) before net
interest expense, provision (benefit) for income taxes, and depreciation and
amortization); reductions in inventory; inventory turns and on-time delivery
performance.  Anyof these targets may be measured with respect to the
Company or any one or more of its Subsidiaries and divisions and either in
absolute terms or as compared to another company or companies, and quantifiable,
objective measures of individual performance relevant to the particular
individual's job responsibilities.

     

    
      
        
        

      

      
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    2.27.                      Plan has the meaning
given to such term in Section 1.01.

    

    2.28.                      Purchase Price, with
respect to Options, shall have the meaning set forth in Section
6.01(b).

    

    2.29.                      Restricted Shares
means Common Stock subject to restrictions imposed in connection with Awards
granted under Article VII.

    

    2.30.                      Restricted Stock
Unit means
a unit representing the right to receive Common Stock or the value thereof in
the future subject to restrictions imposed in connection with Awards granted
under Article VII.

    

    2.31.                      Rule 16b-3 means Rule
16b-3 promulgated by the Securities and Exchange Commission under Section 16 of
the Exchange Act, as the same may be amended from time to time, and any
successor rule.

    

    2.32.                      Stock Appreciation
Rights means awards granted in accordance with Article VI.

    

    2.33                      Termination of
Service means the voluntary or involuntary termination of a Participant’s
service as an employee, director or consultant with the Company or an Affiliate
for any reason, including death, disability, retirement or as the result of the
divestiture of the Participant's employer or any similar transaction in which
the Participant's employer ceases to be the Company or one of its
Subsidiaries.  Whether entering military or other government service
shall constitute Termination of Service, or whether and when a Termination of
Service shall occur as a result of disability, shall be determined in each case
by the Committee in its sole discretion.

    

    

    ARTICLE
III

    

    ADMINISTRATION

    

    3.01.                      Committee.

    

    (a)           Duties and
Authority.  The Plan shall be administered by the Committee and
the Committee shall have exclusive and final authority in each determination,
interpretation or other action affecting the Plan and its
Participants.  The Committee shall have the sole discretionary
authority to interpret the Plan, to establish and modify administrative rules
for the Plan, to impose such conditions and restrictions on Awards as it
determines appropriate, and to make all factual determinations with respect to
and take such steps in connection with the Plan and Awards granted hereunder as
it may deem necessary or advisable.  The Committee shall not, however,
have or exercise any discretion that would disqualify amounts payable under
Article X as performance-based compensation for purposes of Section 162(m) of
the Code.  The Committee may delegate such of its powers and authority
under the Plan as it deems appropriate to a subcommittee of the Committee or
designated officers or employees of the Company.  In addition, the
full Board may exercise any of the powers and authority of the Committee under
the Plan. In the event of such delegation of authority or exercise of authority
by the Board, references in the Plan to the Committee shall be deemed to refer,
as appropriate, to the delegate of the Committee or the
Board.  Actions taken by the Committee or any subcommittee thereof,
and any delegation by the Committee to designated officers or employees, under
this Section 3.01 shall comply with Section 16(b) of the Exchange Act, the
performance-based provisions of Section 162(m) of the Code, and the regulations
promulgated under each of such statutory provisions, or the respective
successors to such statutory provisions or regulations, as in effect from time
to time, to the extent applicable.

     

    
      
        
        

      

      
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    (b)           Indemnification.  Each
person who is or shall have been a member of the Board or the Committee, or an
officer or employee of the Company to whom authority was delegated in accordance
with the Plan shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such individual in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf; provided, however, that the foregoing
indemnification shall not apply to any loss, cost, liability, or expense that is
a result of his or her own willful misconduct.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, conferred in a separate agreement with the Company, as
a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

    

    

    ARTICLE
IV

    

    SHARES

    

    4.01.                      Number of Shares
Issuable.  The total number of shares initially authorized to
be issued under the Plan shall be One Million Two Hundred Thousand
(1,200,000) shares
of Common
Stock.  The foregoing share limit shall be subject to adjustment in
accordance with Section 11.07.  The shares to be offered under the
Plan shall be authorized and unissued Common Stock, or issued Common Stock that
shall have been reacquired by the Company.

    

    4.02.                      Shares Subject to Terminated
Awards.  Common Stock covered by any unexercised portions of
terminated or forfeited Options (including canceled Options) granted under
Article VI, Restricted Stock or Restricted Stock Units forfeited as provided in
Article VII, other stock-based Awards terminated or forfeited as provided under
the Plan, and Common Stock subject to any Awards that are otherwise surrendered
by the Participant may again be subject to new Awards under the
Plan.  Shares of Common Stock surrendered to or withheld by the
Company in payment or satisfaction of the Purchase Price of an Option or tax
withholding obligation with respect to an Award shall be available for the grant
of new Awards under the Plan.  In the event of the exercise of Stock
Appreciation Rights, whether or not granted in tandem with Options, only the
number of shares of Common Stock actually issued in payment of such Stock
Appreciation Rights shall be charged against the number of shares of Common
Stock available for the grant of Awards hereunder.

     

    
      
        
        

      

      
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    ARTICLE
V

    

    PARTICIPATION

    

    5.01.                      Eligible
Participants.  Participants in the Plan shall be such
employees, directors and consultants of the Company and its Subsidiaries as the
Committee, in its sole discretion, may designate from time to
time.  The Committee's designation of a Participant in any year shall
not require the Committee to designate such person to receive Awards or grants
in any other year.  The designation of a Participant to receive Awards
or grants under one portion of the Plan does not require the Committee to
include such Participant under other portions of the Plan.  The
Committee shall consider such factors as it deems pertinent in selecting
Participants and in determining the type and amount of their respective
Awards.  Subject to adjustment in accordance with Section 11.07, in
any calendar year, no Participant shall be granted Awards in respect of more
than 1.0 million shares of Common Stock (whether through grants of Options or
Stock Appreciation Rights or other Awards of Common Stock or rights with respect
thereto) or cash-based Awards for more than $1 million.

    

    ARTICLE
VI

    

    STOCK
OPTIONS AND STOCK APPRECIATION RIGHTS

    

    6.01.                      Option
Awards.

    

    (a)           Grant of
Options.  The Committee may grant, to such Participants as the
Committee may select, Options entitling the Participant to purchase shares of
Common Stock from the Company in such number, at such price, and on such terms
and subject to such conditions, not inconsistent with the terms of this Plan, as
may be established by the Committee.  The terms of any Option granted
under this Plan shall be set forth in an Award Agreement.

    

    (b)           Purchase Price of
Options.  Subject to the requirements applicable to Incentive
Stock Options under Section 6.01(d), the Purchase Price of each share of Common
Stock which may be purchased upon exercise of any Option granted under the Plan
shall be determined by the Committee; provided, however, that in no event shall
the Purchase Price be less than the Fair Market Value on the Date of
Grant.

    

    (c)           Designation of
Options.  The Committee shall designate, at the time of the
grant of each Option, the Option as an Incentive Stock Option or a Non-Qualified
Stock Option; provided,
however, that an Option may be designated as an Incentive Stock Option
only if the applicable Participant is an employee of the Company on the Date of
Grant.

     

    
      
        
        

      

      
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    (d)           Special Incentive Stock
Option Rules.  No Participant may be granted Incentive Stock
Options under the Incentive Plan (or any other plans of the Company) that would
result in Incentive Stock Options to purchase shares of Common Stock with an
aggregate Fair Market Value (measured on the Date of Grant) of more than
$100,000 first becoming exercisable by the Participant in any one calendar
year.  Notwithstanding any other provision of the Incentive Plan to
the contrary, the Exercise Price of each Incentive Stock Option shall be equal
to or greater than the Fair Market Value of the Common Stock subject to the
Incentive Stock Option as of the Date of Grant of the Incentive Stock Option;
provided, however, that no Incentive
Stock Option shall be granted to any person who, at the time the Option is
granted, owns stock (including stock owned by application of the constructive
ownership rules in Section 424(d) of the Code) possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
unless at the time the Incentive Stock Option is granted the price of the Option
is at least one hundred ten percent (110%) of the Fair Market Value of the
Common Stock subject to the Incentive Stock Option and the Incentive Stock
Option by its terms is not exercisable for more than five years from the Date of
Grant.

    

    (e)           Rights As a
Stockholder.  A Participant or a transferee of an Option
pursuant to Section 11.04 shall have no rights as a stockholder with respect to
Common Stock covered by an Option until the Participant or transferee shall have
become the holder of record of any such shares, and no adjustment shall be made
for dividends in cash or other property or distributions or other rights with
respect to any such Common Stock for which the record date is prior to the date
on which the Participant or a transferee of the Option shall have become the
holder of record of any such shares covered by the Option; provided, however,
that Participants are entitled to share adjustments to reflect capital changes
under Section 11.07.

    

    6.02.                      Stock Appreciation
Rights.

    

    (a)           Stock Appreciation Right
Awards.  The Committee is authorized to grant to any
Participant one or more Stock Appreciation Rights.  Such Stock
Appreciation Rights may be granted either independent of or in tandem with
Options granted to the same Participant. Stock Appreciation Rights granted in
tandem with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such Participant of the
related Option; provided however, that: (i) any Option covering any share of
Common Stock shall expire and not be exercisable upon the exercise of any Stock
Appreciation Right with respect to the same share, (ii) any Stock Appreciation
Right covering any share of Common Stock shall expire and not be exercisable
upon the exercise of any related Option with respect to the same share, and
(iii) an Option and Stock Appreciation Right covering the same share of Common
Stock may not be exercised simultaneously.  Upon exercise of a Stock
Appreciation Right with respect to a share of Common Stock, the Participant
shall be entitled to receive an amount equal to the excess, if any, of (A) the
Fair Market Value of a share of Common Stock on the date of exercise over (B)
the Exercise Price of such Stock Appreciation Right established in the Award
Agreement, which amount shall be payable as provided in Section
6.02(c).

     

    
      
        
        

      

      
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    (b)           Exercise Price. The
Exercise Price established under any Stock Appreciation Right granted under this
Plan shall be determined by the Committee, but in the case of Stock Appreciation
Rights granted in tandem with Options shall not be less than the Purchase Price
of the related Option; provided, however, that in no event shall the Exercise
Price be less than the Fair Market Value on the Date of Grant.  Upon
exercise of Stock Appreciation Rights granted in tandem with options, the number
of shares subject to exercise under any related Option shall automatically be
reduced by the number of shares of Common Stock represented by the Option or
portion thereof which are surrendered as a result of the exercise of such Stock
Appreciation Rights.

    

    (c)           Payment of Incremental
Value.  Any payment which may become due from the Company by
reason of a Participant's exercise of a Stock Appreciation Right may be paid to
the Participant as determined by the Committee (i) all in cash, (ii) all in
Common Stock, or (iii) in any combination of cash and Common
Stock.  In the event that all or a portion of the payment is made in
Common Stock, the number of shares of Common Stock delivered in satisfaction of
such payment shall be determined by dividing the amount of such payment or
portion thereof by the Fair Market Value on the Exercise Date.  No
fractional share of Common Stock shall be issued to make any payment in respect
of Stock Appreciation Rights; if any fractional share would be issuable, the
combination of cash and Common Stock payable to the Participant shall be
adjusted as directed by the Committee to avoid the issuance of any fractional
share.

    

    6.03.                      Terms of Stock Options and
Stock Appreciation Rights.

    

    (a)           Conditions on
Exercise.  An Award Agreement with respect to Options or Stock
Appreciation Rights may contain such waiting periods, exercise dates and
restrictions on exercise (including, but not limited to, periodic installments)
as may be determined by the Committee at the time of grant.  In the
event the Committee grants an Option or Stock Appreciation Right that would be
subject to Section 409A of the Code, the Committee may include such additional
terms, conditions and restrictions on the exercise of such Option or Stock
Appreciation Right as the Committee deems necessary or advisable in order to
comply with the requirements of Section 409A of the Code.

    

    (b)           Duration of Options and
Stock Appreciation Rights.  Options and Stock Appreciation
Rights shall terminate upon the first to occur of the following
events:

    

    (i)           Expiration
of the Option or Stock Appreciation Right as provided in the Award Agreement;
or

    

    (ii)           Termination
of the Award in the event of a Participant's disability, Retirement, death or
other Termination of Service as provided in the Award Agreement; or

    

    (iii)           In
the case of an Incentive Stock Option, ten years from the Date of Grant (five
years in certain cases, as described in Section 6.01(d)); or

     

    
      
        
        

      

      
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    (iv)           Solely
in the case of a Stock Appreciation Right granted in tandem with an Option, upon
the expiration of the related Option.

    

    (c)           Acceleration or Extension of
Exercise Time.  The Committee, in its sole discretion, shall
have the right (but shall not be obligated), exercisable on or at any time after
the Date of Grant, to permit the exercise of an Option or Stock Appreciation
Right (i) prior to the time such Option or Stock Appreciation Right would become
exercisable under the terms of the Award Agreement, (ii) after the termination
of the Option or Stock Appreciation Right under the terms of the Award
Agreement, or (iii) after the expiration of the Option or Stock Appreciation
Right.

    

    6.04.                      Exercise
Procedures.  Each Option and Stock Appreciation Right granted
under the Plan shall be exercised under such procedures and by such methods as
the Board may establish or approve from time to time.  The Purchase
Price of shares purchased upon exercise of an Option granted under the Plan
shall be paid in full in cash by the Participant pursuant to the Award
Agreement; provided, however, that the Committee may (but shall not be required
to) permit payment to be made (a) by delivery to the Company of shares of Common
Stock held by the Participant, (b) by a “net exercise” method under which the
Company reduces the number of shares of Common Stock issued upon exercise by the
largest whole number of shares with a Fair Market Value that does not exceed the
aggregate Exercise Price, or (c) such other consideration as the Committee deems
appropriate and in compliance with applicable law (including payment under an
arrangement constituting a brokerage transaction as permitted under the
provisions of Regulation T applicable to cashless exercises promulgated by the
Federal Reserve Board, unless prohibited by Section 402 of the Sarbanes-Oxley
Act of 2002).  In the event that any Common Stock shall be transferred
to the Company to satisfy all or any part of the Purchase Price, the part of the
Purchase Price deemed to have been satisfied by such transfer of Common Stock
shall be equal to the product derived by multiplying the Fair Market Value as of
the date of exercise times the number of shares of Common Stock transferred to
the Company.  The Participant may not transfer to the Company in
satisfaction of the Purchase Price any fractional share of Common
Stock.  Any part of the Purchase Price paid in cash upon the exercise
of any Option shall be added to the general funds of the Company and may be used
for any proper corporate purpose.  Unless the Committee shall
otherwise determine, any Common Stock transferred to the Company as payment of
all or part of the Purchase Price upon the exercise of any Option shall be held
as treasury shares.

    

    6.05.                      Change in
Control.  Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, no accelerated
vesting of any Options or Stock Appreciation Rights outstanding on the date of
such Change in Control shall occur.

    

    6.06.                      Early
Exercise.  An Option may, but need not, include a provision by
which the Participant may elect to exercise the Option in whole or in part prior
to the date the Option is fully vested.  The provision may be included
in the Award Agreement at the time of grant of the Option or may be added to the
Award Agreement by amendment at a later time.  In the event of an
early exercise of an Option, any shares of Common Stock received shall be
subject to a special repurchase right in favor of the Company with terms
established by the Board.  The Board shall determine the time and/or
the event that causes the repurchase right to terminate and fully vest the
Common Stock in the Participant.  Alternatively, in the sole
discretion of the Board, one or more Participants may be granted stock purchase
rights allowing them to purchase shares of Common Stock outright, subject to
conditions and restrictions as the Board may determine.

     

    
      
        
        

      

      
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    ARTICLE
VII

    

    RESTRICTED
SHARES AND RESTRICTED STOCK UNITS

    

    7.01.                      Award of Restricted Stock
and Restricted Stock Units. The
Committee may grant to any Participant an Award of Restricted Shares consisting
of a specified number of shares of Common Stock issued to the Participant
subject to such terms, conditions and forfeiture and transfer restrictions,
whether based on performance standards, periods of service, retention by the
Participant of ownership of specified shares of Common Stock or other criteria,
as the Committee shall establish.  The Committee may also grant
Restricted Stock Units representing the right to receive shares of Common Stock
in the future subject to such terms, conditions and restrictions, whether based
on performance standards, periods of service, retention by the Participant of
ownership of specified shares of Common Stock or other criteria, as the
Committee shall establish.  With respect to performance-based Awards
of Restricted Shares or Restricted Stock Units intended to qualify as
"performance-based" compensation for purposes of Section 162(m) of the Code,
performance targets will consist of specified levels of one or more of the
Performance Goals.  The terms of any Restricted Share and Restricted
Stock Unit Awards granted under this Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.

    

    7.02                      Restricted
Shares.

    

    (a)           Issuance of Restricted
Shares.  As soon as practicable after the Date of Grant of a
Restricted Share Award by the Committee, the Company shall cause to be
transferred on the books of the Company, or its agent, Common Stock, registered
on behalf of the Participant, evidencing the Restricted Shares covered by the
Award, but subject to forfeiture to the Company as of the Date of Grant if an
Award Agreement with respect to the Restricted Shares covered by the Award is
not duly executed by the Participant and timely returned to the
Company.  All Common Stock covered by Awards under this Article VII
shall be subject to the restrictions, terms and conditions contained in the Plan
and the Award Agreement entered into by the Participant.  Until the
lapse or release of all restrictions applicable to an Award of Restricted
Shares, the share certificates representing such Restricted Shares may be held
in custody by the Company, its designee, or, if the certificates bear a
restrictive legend, by the Participant.  Upon the lapse or release of
all restrictions with respect to an Award as described in Section 7.02(d), one
or more share certificates, registered in the name of the Participant, for an
appropriate number of shares as provided in Section 7.02(d), free of any
restrictions set forth in the Plan and the Award Agreement shall be delivered to
the Participant.

     

    
      
        
        

      

      
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    (b)           Stockholder
Rights.  Beginning on the Date of Grant of the Restricted Share
Award and subject to execution of the Award Agreement as provided in Section
7.02(a), 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, but not limited to, the right to vote such shares and
the right to receive dividends; provided, however, that any Common Stock
distributed as a dividend or otherwise with respect to any Restricted Shares as
to which the restrictions have not yet lapsed, shall be subject to the same
restrictions as such Restricted Shares and held or restricted as provided in
Section 7.02(a).

    

    (c)           Restriction on
Transferability.  None of the Restricted Shares may be assigned
or transferred (other than by will or the laws of descent and distribution, or
to an inter vivos trust with respect to which the Participant is treated as the
owner under Sections 671 through 677 of the Code, except to the extent that
Section 16 of the Exchange Act limits a Participant's right to make such
transfers), pledged or sold prior to lapse of the restrictions applicable
thereto.

    

    (d)           Delivery of Shares Upon
Vesting.  Upon expiration or earlier termination of the
forfeiture period without a forfeiture and the satisfaction of or release from
any other conditions prescribed by the Committee, or at such earlier time as
provided under the provisions of Section 7.04, the restrictions applicable to
the Restricted Shares shall lapse.  As promptly as administratively
feasible thereafter, subject to the requirements of Section 11.05, the Company
shall deliver to the Participant or, in case of the Participant's death, to the
Participant's Beneficiary, one or more share certificates for the appropriate
number of shares of Common Stock, free of all such restrictions, except for any
restrictions that may be imposed by law.

    

    (e)           Forfeiture of Restricted
Shares.  Subject to Sections 7.02(f) and 7.04, all Restricted
Shares shall be forfeited and returned to the Company and all rights of the
Participant with respect to such Restricted Shares shall terminate unless the
Participant continues in the service of the Company or an Affiliate as an
employee until the expiration of the forfeiture period for such Restricted
Shares and satisfies any and all other conditions set forth in the Award
Agreement.  The Committee shall determine the forfeiture period (which
may, but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Share Award.

    

    (f)           Waiver of Forfeiture
Period.  Notwithstanding anything contained in this Article VII
to the contrary, the Committee may, in its sole discretion, waive the forfeiture
period and any other conditions set forth in any Award Agreement under
appropriate circumstances (including the death, disability or Retirement of the
Participant or a material change in circumstances arising after the date of an
Award) and subject to such terms and conditions (including forfeiture of a
proportionate number of the Restricted Shares) as the Committee shall deem
appropriate.

     

    
      
        
        

      

      
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    7.03.                      Restricted Stock
Units. 

    

    (a)           Settlement of Restricted
Stock Units.  Payments shall be made to Participants with
respect to their Restricted Stock Units as soon as practicable after the
Committee has determined that the terms and conditions applicable to such Award
have been satisfied or at a later date if distribution has been
deferred.  Payments to Participants with respect to Restricted Stock
Units shall be made in the form of Common Stock, or cash or a combination of
both, as the Committee may determine.  The amount of any cash to be
paid in lieu of Common Stock shall be determined on the basis of the Fair Market
Value of the Common Stock on the date any such payment is
processed.  As to shares of Common Stock which constitute all or any
part of such payment, the Committee may impose such restrictions concerning
their transferability and/or their forfeiture as may be provided in the
applicable Award Agreement or as the Committee may otherwise determine, provided
such determination is made on or before the date certificates for such shares
are first delivered to the applicable Participant.

    

    (b)           Shareholder
Rights.  Until the lapse or release of all restrictions
applicable to an Award of Restricted Stock Units, no shares of Common Stock
shall be issued in respect of such Awards and no Participant shall have any
rights as a shareholder of the Company with respect to the shares of Common
Stock covered by such Award of Restricted Stock Units.

    

    (c)           Waiver of Forfeiture
Period.  Notwithstanding anything contained in this Section
7.03 to the contrary, the Committee may, in its sole discretion, waive the
forfeiture period and any other conditions set forth in any Award Agreement
under appropriate circumstances (including the death, disability or retirement
of the Participant or a material change in circumstances arising after the date
of an Award) and subject to such terms and conditions (including forfeiture of a
proportionate number of shares issuable upon settlement of the Restricted Stock
Units constituting an Award) as the Committee shall deem
appropriate.

    

    (d)           Deferral of
Payment.  If approved by the Committee and set forth in the
applicable Award Agreement, a Participant may elect to defer the amount payable
with respect to the Participant’s Restricted Stock Units in accordance with such
terms as may be established by the Committee, subject to the requirements of
Section 409A of the Code.

    

    7.04.                      Change in
Control.  Unless otherwise provided by the Committee in the
applicable Award Agreement, no acceleration of the termination of any of the
restrictions applicable to Restricted Shares and Restricted Stock Unit Awards
shall occur in the event of a Change in Control.

    

    

    ARTICLE
VIII

    

    PERFORMANCE
AWARDS

    

    8.01.                      Performance
Awards.

    

    (a)           Award Periods and
Calculations of Potential Incentive Amounts.  The Committee may
grant Performance Awards to Participants.  A Performance Award shall
consist of the right to receive a payment (measured by the Fair Market Value of
a specified number of shares of Common Stock, increases in such Fair Market
Value during the Award Period and/or a fixed cash amount) contingent upon the
extent to which certain predetermined performance targets have been met during
an Award Period.  The Award Period shall be two or more fiscal or
calendar years as determined by the Committee.  The Committee, in its
discretion and under such terms as it deems appropriate, may permit newly
eligible Participants, such as those who are promoted or newly hired, to receive
Performance Awards after an Award Period has commenced.

     

    
      
        
        

      

      
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    (b)           Performance
Targets.  Subject to Section 11.18, the performance targets
applicable to a Performance Award may include such goals related to the
performance of the Company or, where relevant, any one or more of its
Subsidiaries or divisions and/or the performance of a Participant as may be
established by the Committee in its discretion.  In the case of
Performance Awards to "covered employees" (as defined in Section 162(m) of the
Code), the targets will be limited to specified levels of one or more of the
Performance Goals.  The performance targets established by the
Committee may vary for different Award Periods and need not be the same for each
Participant receiving a Performance Award in an Award Period.

    

    (c)           Earning Performance
Awards.  The Committee, at or as soon as practicable after the
Date of Grant, shall prescribe a formula to determine the percentage of the
Performance Award to be earned based upon the degree of attainment of the
applicable performance targets.

    

    (d)           Payment of Earned
Performance Awards.  Subject to the requirements of Section
11.05, payments of earned Performance Awards shall be made in cash or Common
Stock, or a combination of cash and Common Stock, in the discretion of the
Committee.  The Committee, in its sole discretion, may define, and set
forth in the applicable Award Agreement, such terms and conditions with respect
to the payment of earned Performance Awards as it may deem
desirable.

    

    8.02.                      Termination of
Service.  In the event of a Participant’s Termination of
Service during an Award Period, the Participant’s Performance Awards shall be
forfeited except as may otherwise be provided in the applicable Award
Agreement.

    

    8.03.                      Change in
Control.  Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, no accelerated
vesting of any Performance Awards outstanding on the date of such Change in
Control shall occur.

    

    ARTICLE
IX

    

    OTHER
STOCK-BASED AWARDS

     

    9.01.                      Grant of Other Stock-Based
Awards.  Other stock-based awards, consisting of stock purchase
rights (with or without loans to Participants by the Company containing such
terms as the Committee shall determine), Awards of Common Stock, or Awards
valued in whole or in part by reference to, or otherwise based on, Common Stock,
may be granted either alone or in addition to or in conjunction with other
Awards under the Plan. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the persons to whom and the
time or times at which such Awards shall be made, the number of shares of Common
Stock to be granted pursuant to such Awards, and all other conditions of the
Awards.  Any such Award shall be confirmed by an Award Agreement
executed by the Committee and the Participant, which Award Agreement shall
contain such provisions as the Committee determines to be necessary or
appropriate to carry out the intent of this Plan with respect to such
Award.

     

    
      
        
        

      

      
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    9.02.                      Terms of Other Stock-Based
Awards.  In addition to the terms and conditions specified in
the Award Agreement, Awards made pursuant to this Article IX shall be subject to
the following:

    

    (a)           Any
Common Stock subject to Awards made under this Article IX may not be sold,
assigned, transferred, pledged or otherwise encumbered prior to the date on
which the shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses; and

    

    (b)           If
specified by the Committee in the Award Agreement, the recipient of an Award
under this Article IX shall be entitled to receive, currently or on a deferred
basis, interest or dividends or dividend equivalents with respect to the Common
Stock or other securities covered by the Award; and

    

    (c)           The
Award Agreement with respect to any Award shall contain provisions dealing with
the disposition of such Award in the event of a Termination of Service prior to
the exercise, payment or other settlement of such Award, whether such
termination occurs because of Retirement, disability, death or other reason,
with such provisions to take account of the specific nature and purpose of the
Award.

    

    

    ARTICLE
X

    

    SHORT-TERM
CASH INCENTIVE AWARDS

    

    10.01.                      Eligibility.  Executive
officers of the Company who are from time to time determined by the Committee to
be "covered employees" for purposes of Section 162(m) of the Code will be
eligible to receive short-term cash incentive awards under this Article
X.

    

    10.02.                      Awards.

    

    (a)           Performance
Targets.  The Committee shall establish objective performance
targets based on specified levels of one or more of the Performance
Goals.  Such performance targets shall be established by the Committee
on a timely basis to ensure that the targets are considered "preestablished" for
purposes of Section 162(m) of the Code.

    

    (b)           Amounts of
Awards.  In conjunction with the establishment of performance
targets for a fiscal year or such other short-term performance period
established by the Committee, the Committee shall adopt an objective formula (on
the basis of percentages of Participants' salaries, shares in a bonus pool or
otherwise) for computing the respective amounts payable under the Plan to
Participants if and to the extent that the performance targets are
attained.  Such formula shall comply with the requirements applicable
to performance-based compensation plans under Section 162(m) of the Code and, to
the extent based on percentages of a bonus pool, such percentages shall not
exceed 100% in the aggregate.

     

    
      
        
        

      

      
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    (c)           Payment of
Awards.  Awards will be payable to Participants in cash each
year upon prior written certification by the Committee of attainment of the
specified performance targets for the preceding fiscal year or other applicable
performance period.

    

    (d)           Negative
Discretion.  Notwithstanding the attainment by the Company of
the specified performance targets, the Committee shall have the discretion,
which need not be exercised uniformly among the Participants, to reduce or
eliminate the award that would be otherwise paid.

    

    (e)           Guidelines.  The
Committee may adopt from time to time written policies for its implementation of
this Article X.  Such guidelines shall reflect the intention of the
Company that all payments hereunder qualify as performance-based compensation
under Section 162(m) of the Code.

    

    (f)           Non-Exclusive
Arrangement.  The adoption and operation of this Article X
shall not preclude the Board or the Committee from approving other short-term
incentive compensation arrangements for the benefit of individuals who are
Participants hereunder as the Board or Committee, as the case may be, deems
appropriate and in the best of the Company.

    

    

    ARTICLE
XI

    

    TERMS
APPLICABLE GENERALLY TO AWARDS

    GRANTED
UNDER THE PLAN

    

    11.01.                      Plan Provisions Control
Award Terms.  Except as provided in Section 11.16, the terms of
the Plan shall govern all Awards granted under the Plan, and in no event shall
the Committee have the power to grant any Award under the Plan which is contrary
to any of the provisions of the Plan.  In the event any provision of
any Award granted under the Plan shall conflict with any term in the Plan as
constituted on the Date of Grant of such Award, the term in the Plan as
constituted on the Date of Grant of such Award shall control.  Except
as provided in Section 11.03 and Section 11.07, the terms of any Award granted
under the Plan may not be changed after the Date of Grant of such Award so as to
materially decrease the value of the Award without the express written approval
of the holder.

    

    11.02.                      Award
Agreement.  No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.

     

    
      
        
        

      

      
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    11.03.                      Modification of Award After
Grant.  No Award granted under the Plan to a Participant may be
modified (unless such modification does not materially decrease the value of the
Award) after the Date of Grant except by express written agreement between the
Company and the Participant, provided that any such change (a) shall not be
inconsistent with the terms of the Plan, and (b) shall be approved by the
Committee.

    

    11.04.                      Limitation on
Transfer.  Except as provided in Section 7.01(c) in the case of
Restricted Shares, a Participant's rights and interest under the Plan may not be
assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan.  The Participant's Beneficiary may exercise the
Participant's rights to the extent they are exercisable under the Plan following
the death of the Participant. Notwithstanding the foregoing, to the extent
permitted under Section 16(b) of the Exchange Act with respect to Participants
subject to such Section, the Committee may grant Non-Qualified Stock Options
that are transferable, without payment of consideration, to immediate family
members of the Participant or to trusts or partnerships for such family members,
and the Committee may also amend outstanding Non-Qualified Stock Options to
provide for such transferability.

    

    11.05.                      Taxes.  The
Company shall be entitled, if the Committee deems it necessary or desirable, to
withhold (or secure payment from the Participant in lieu of withholding) the
amount of any withholding or other tax required by law to be withheld or paid by
the Company with respect to any amount payable and/or shares issuable under such
Participant's Award, or with respect to any income recognized upon a
disqualifying disposition of shares received pursuant to the exercise of an
Incentive Stock Option, and the Company may defer payment or issuance of the
cash or shares upon exercise or vesting of an Award unless indemnified to its
satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Committee and shall be
payable by the Participant at such time as the Committee determines in
accordance with the following rules:

    

    (a)           The
Participant shall have the right to elect to meet his or her withholding
requirement (i) by having withheld from such Award at the appropriate time that
number of shares of Common Stock, rounded down to the nearest whole share, whose
Fair Market Value is equal to the amount of withholding taxes due, (ii) by
direct payment to the Company in cash of the amount of any taxes required to be
withheld with respect to such Award or (iii) by a combination of shares and
cash.

    

    (b)           In
the case of Participants who are subject to Section 16 of the Exchange Act, the
Committee may impose such limitations and restrictions as it deems necessary or
appropriate with respect to the delivery or withholding of shares of Common
Stock to meet tax withholding obligations.

    

    11.06.                      Surrender of Awards;
Authorization of Repricing.  Any Award granted under the Plan
may be surrendered to the Company for cancellation on such terms as the
Committee and the holder approve.  Without requiring shareholder
approval, the Committee may substitute a new Award under this Plan in connection
with the surrender by the Participant of an equity compensation award previously
granted under this Plan or any other plan sponsored by the Company, including
the substitution or grant of (i) an Option or Stock Appreciation Right with a
lower exercise price than the Option or Stock Appreciation Right being
surrendered, (ii) a different type of Award upon the surrender or cancellation
of an Option or Stock Appreciation Right with an exercise price above the Fair
Market Value of the underlying Common Stock on the date of such substitution or
grant, or (iii) any other Award constituting a repricing of an Option or Stock
Appreciation Right.

     

    
      
        
        

      

      
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    11.07.                      Adjustments to Reflect
Capital Changes.

    

    (a)           Recapitalization.  In
the event of any corporate event or transaction (including, but not limited to,
a change in the Common Stock or the capitalization of the Company) such as a
merger, consolidation, reorganization, recapitalization, separation, partial or
complete liquidation, stock dividend, stock split, reverse stock split, split
up, spin-off, or other distribution of stock or property of the Company, a
combination or exchange of Common Stock, dividend in kind, or other like change
in capital structure, number of outstanding shares of Common Stock, distribution
(other than normal cash dividends) to shareholders of the Company, or any
similar corporate event or transaction, the Committee, in order to prevent
dilution or enlargement of Participants’ rights under this Plan, shall make
equitable and appropriate adjustments and substitutions, as applicable, to or of
the number and kind of shares subject to outstanding Awards, the Purchase Price
or Exercise Price for such shares, the number and kind of shares available for
future issuance under the Plan and the maximum number of shares in respect of
which Awards can be made to any Participant in any calendar year, and other
determinations applicable to outstanding Awards.  The Committee shall
have the power and sole discretion to determine the amount of the adjustment to
be made in each case.

    

    (b)           Merger.  In
the event that the Company is a party to a Merger, outstanding Awards shall be
subject to the agreement of merger or reorganization.  Such agreement
may provide, without limitation, for the continuation of outstanding Awards by
the Company (if the Company is a surviving corporation), for their assumption by
the surviving corporation or its parent or subsidiary, for the substitution by
the surviving corporation or its parent or subsidiary of its own awards for such
Awards, for accelerated vesting and accelerated expiration, or for settlement in
cash or cash equivalents.

    

    (c)           Options to Purchase Shares
or Stock of Acquired Companies.  After any Merger in which the
Company or an Affiliate shall be a surviving corporation, the Committee may
grant substituted options under the provisions of the Plan, pursuant to Section
424 of the Code, replacing old options granted under a plan of another party to
the Merger whose shares or stock subject to the old options may no longer be
issued following the Merger.  The foregoing adjustments and manner of
application of the foregoing provisions shall be determined by the Committee in
its sole discretion.  Any such adjustments may provide for the
elimination of any fractional shares which might otherwise become subject to any
Options.

    

    11.08.                      No Right to Continued
Service.  No person shall have any claim of right to be granted
an Award under this Plan. Neither the Plan nor any action taken hereunder shall
be construed as giving any Participant any right to be retained in the service
of the Company or any of its Subsidiaries.

     

    
      
        
        

      

      
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    11.09.                      Awards Not Includable for
Benefit Purposes.  Payments received by a Participant pursuant
to the provisions of the Plan shall not be included in the determination of
benefits under any pension, group insurance or other benefit plan applicable to
the Participant which is maintained by the Company or any of its Subsidiaries,
except as may be provided under the terms of such plans or determined by the
Board.

    

    11.10.                      Governing
Law.  All determinations made and actions taken pursuant to the
Plan shall be governed by the laws of Delaware and construed in
accordance therewith.

    

    11.11.                      No Strict
Construction.  No rule of strict construction shall be implied
against the Company, the Committee, or any other person in the interpretation of
any of the terms of the Plan, any Award granted under the Plan or any rule or
procedure established by the Committee.

    

    11.12.                      Compliance with Rule
16b-3.  It is intended that, unless the Committee determines
otherwise, Awards under the Plan be eligible for exemption under Rule
16b-3.  The Board is authorized to amend the Plan and to make any such
modifications to Award Agreements to comply with Rule 16b-3, as it may be
amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments made to Rule 16b-3.

    

    11.13.                      Captions.  The
captions (i.e., all Section headings) used in the Plan are for convenience only,
do not constitute a part of the Plan, and shall not be deemed to limit,
characterize or affect in any way any provisions of the Plan, and all provisions
of the Plan shall be construed as if no captions have been used in the
Plan.

    

    11.14.                      Severability.  Whenever
possible, each provision in the Plan and every Award at any time granted under
the Plan shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Plan or any Award at any time
granted under the Plan shall be held to be prohibited by or invalid under
applicable law, then (a) such provision shall be deemed amended to accomplish
the objectives of the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of the Plan and every other Award
at any time granted under the Plan shall remain in full force and
effect.

    

    11.15.                      Amendment and
Termination.

    

    (a)           Amendment.  The
Board shall have complete power and authority to amend the Plan at any time;
provided, however, that the Board shall not, without the requisite affirmative
approval of stockholders of the Company, make any amendment which requires
stockholder approval under the Code or under any other applicable law or rule of
any stock exchange which lists Common Stock or Company Voting
Securities.  No termination or amendment of the Plan may, without the
consent of the Participant to whom any Award shall theretofore have been granted
under the Plan, adversely affect the right of such individual under such
Award.

     

    
      
        
        

      

      
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    (b)           Termination.  The
Board shall have the right and the power to terminate the Plan at any time. No
Award shall be granted under the Plan after the termination of the Plan, but the
termination of the Plan shall not have any other effect and any Award
outstanding at the time of the termination of the Plan may be exercised after
termination of the Plan at any time prior to the expiration date of such Award
to the same extent such Award would have been exercisable had the Plan not
terminated.

    

    11.16.                      Foreign Qualified
Awards.  Awards under the Plan may be granted to such employees
of the Company and its Subsidiaries who are residing in foreign jurisdictions as
the Committee in its sole discretion may determine from time to time. The
Committee may adopt such supplements to the Plan as may be necessary or
appropriate to comply with the applicable laws of such foreign jurisdictions and
to afford Participants favorable treatment under such laws; provided, however,
that no Award shall be granted under any such supplement with terms or
conditions inconsistent with the provision set forth in the Plan.

    

    11.17.                      Dividend
Equivalents.  For any Award granted under the Plan, the
Committee shall have the discretion, upon the Date of Grant or thereafter, to
establish a Dividend Equivalent Account with respect to the Award, and the
applicable Award Agreement or an amendment thereto shall confirm such
establishment.  If a Dividend Equivalent Account is established, the
following terms shall apply:

    

    (a)           Terms and
Conditions.  Dividend Equivalent Accounts shall be subject to
such terms and conditions as the Committee shall determine and as shall be set
forth in the applicable Award Agreement.  Such terms and conditions
may include, without limitation, for the Participant’s Account to be credited as
of the record date of each cash dividend on the Common Stock with an amount
equal to the cash dividends which would be paid with respect to the number of
shares of Common Stock then covered by the related Award if such shares of
Common Stock had been owned of record by the Participant on such record
date.

    

    (b)           Unfunded
Obligation.  Dividend Equivalent Accounts shall be established
and maintained only on the books and records of the Company and no assets or
funds of the Company shall be set aside, placed in trust, removed from the
claims of the Company's general creditors, or otherwise made available until
such amounts are actually payable as provided hereunder.

    

    11.18                      Adjustment of Performance
Goals and Targets.  Notwithstanding any provision of the Plan
to the contrary, the Committee shall have the authority to adjust any
Performance Goal, performance target or other performance-based criteria
established with respect to any Award under the Plan if circumstances occur
(including, but not limited to, unusual or nonrecurring events, changes in tax
laws or accounting principles or practices or changed business or economic
conditions) that cause any such Performance Goal, performance target or
performance-based criteria to be inappropriate in the judgment of the Committee;
provided, that with respect to any Award that is intended to qualify for the
"performance-based compensation" exception under Section 162(m) of the Code and
the regulations thereunder, any adjustment by the Committee shall be consistent
with the requirements of Section 162(m) and the regulations
thereunder.

     

    
      
        
        

      

      
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    11.19                      Legality of
Issuance.  Notwithstanding any provision of this Plan or any
applicable Award Agreement to the contrary, the Committee shall have the sole
discretion to impose such conditions, restrictions and limitations (including
suspending exercises of Options or Stock Appreciation Rights and the tolling of
any applicable exercise period during such suspension) on the issuance of Common
Stock with respect to any Award unless and until the Committee determines that
such issuance complies with (i) any applicable registration requirements under
the Securities Act of 1933 or the Committee has determined that an exemption
therefrom is available, (ii) any applicable listing requirement of any stock
exchange on which the Common Stock is listed, (iii) any applicable Company
policy or administrative rules, and (iv) any other applicable provision of
state, federal or foreign law, including foreign securities laws where
applicable.

    

    11.20                      Restrictions on
Transfer.  Regardless of whether the offering and sale of
Common Stock under the Plan have been registered under the Securities Act of
1933 or have been registered or qualified under the securities laws of any
state, the Company may impose restrictions upon the sale, pledge, or other
transfer of such Common Stock (including the placement of appropriate legends on
stock certificates) if, in the judgment of the Company and its counsel, such
restrictions are necessary or desirable to achieve compliance with the
provisions of the Securities Act of 1933, the securities laws of any state, the
United States or any other applicable foreign law.

    

    11.21                      Further
Assurances.  As a condition to receipt of any Award under the
Plan, a Participant shall agree, upon demand of the Company, to do all acts and
execute, deliver and perform all additional documents, instruments and
agreements which may be reasonably required by the Company, to implement the
provisions and purposes of the Plan.

    

    
      
        
        

      

      
        22Unassociated Document

    Exhibit
10.1

    Gran
Tierra Energy Inc.

     

    2007
Equity Incentive Plan

     

    Adopted:
August 9, 2007

    Approved
By Stockholders:  October 10, 2007

    Amended
by the Board: December 20, 2007

    Amended
by the Board: January 14, 2008

    Amended
by the Board: October 9, 2008

    Approved
by the Stockholders: November 14, 2008

    Amended
by the Board: April 26, 2010

    Approved
by the Stockholders: June 16, 2010

     

    

    
      	
              1. 

            	
              General
      Purposes.

            

    

     

    (a)           Amendment and
Restatement.  The Plan is intended as a complete amendment and
restatement of the Company’s 2005 Equity Incentive Plan (the “Prior
Plan”).  All outstanding stock awards granted under the Prior
Plan shall remain subject to the terms of the Prior Plan.  All Stock
Awards granted subsequent to the effective date of this Plan shall be subject to
the terms of this Plan.

     

    (b)           Eligible Stock Award
Recipients.  The persons eligible to receive Stock Awards are
Employees, Directors and Consultants.

     

    (c)           Available Stock
Awards.  The purpose of the Plan is to provide a means by which
eligible recipients of Stock Awards may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of the following
Stock Awards: (i) Options, (ii) Restricted Stock Awards, (iii) Stock
Appreciation Rights, (iv) Restricted Stock Units and (v) Other Stock
Awards.

     

    (d)           General
Purpose.  The Company, by means of the Plan, seeks to retain
the services of the group of persons eligible to receive Stock Awards, to secure
and retain the services of new members of this group and to provide incentives
for such persons to exert maximum efforts for the success of the Company and its
Affiliates.

     

    
      	
              2. 

            	
              Definitions.

            

    

     

    (a)           “Affiliate”
means any “parent corporation” or “subsidiary corporation” of the Company,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f), respectively, of the Code.  The Board shall have the
authority to determine the time or times at which “parent corporation” or
“subsidiary corporation” status is determined within the foregoing
definition.

     

    (b)           “Board”
means the Board of Directors of the Company.

     

    
      
        
        

      

      
        1.

        
          

        

      

      
        
        

      

       

    

    (c)           “Capitalization
Adjustment” has the meaning ascribed to that term in Section
11(a).

     

    (d)            “Change in
Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

     

    (i)           any
Exchange Act Person becomes the Owner, directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the combined voting
power of the Company’s then outstanding securities other than by virtue of a
merger, consolidation or similar transaction.  Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an institutional investor, any
affiliate thereof or any other Exchange Act Person that acquires the Company’s
securities in a transaction or series of related transactions that are primarily
a private financing transaction for the Company or (B) solely because the level
of Ownership held by any Exchange Act Person (the “Subject
Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a
Change in Control shall be deemed to occur;

     

    (ii)           there
is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company if, immediately after the consummation of
such merger, consolidation or similar transaction, the stockholders of the
Company immediately prior thereto do not Own, directly or indirectly, either (A)
outstanding voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving Entity in such
merger, consolidation or similar transaction;

     

    (iii)           there
is consummated a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries
to an Entity, more than fifty percent (50%) of the combined voting power of the
voting securities of which are Owned by stockholders of the Company in
substantially the same proportion as their Ownership of the Company immediately
prior to such sale, lease, license or other disposition; or

     

    (iv)           individuals
who, on the date this Plan is adopted by the Board, are members of the Board
(the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
members of the Board; provided, however, that if
the appointment or election (or nomination for election) of any new Board member
was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be
considered as a member of the Incumbent Board).

     

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        

      

       

    

    The term
Change in Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company.

     

    Notwithstanding
the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the
Company or any Affiliate and the Participant shall supersede the foregoing
definition with respect to Stock Awards subject to such agreement (it being
understood, however, that if no definition of Change in Control or any analogous
term is set forth in such an individual written agreement, the foregoing
definition shall apply).

     

    (e)           “Code”
means the United States Internal Revenue Code of 1986, as amended.

     

    (f)           “Committee”
means a committee of one or more members of the Board appointed by the Board in
accordance with Section 3(d).

     

    (g)           “Common
Stock” means the common stock of the Company.

     

    (h)           “Company”
means Gran Tierra Energy Inc., a Nevada corporation.

     

    (i)           “Consultant”
means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for
such services or (ii) serving as a member of the Board of Directors of an
Affiliate and who is compensated for such services.  However, the term
“Consultant” shall not include Directors who are not compensated by the Company
for their services as Directors, and the payment of a director’s fee by the
Company for services as a Director shall not cause a Director to be considered a
“Consultant” for purposes of the Plan.

     

    (j)           “Continuous
Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or
terminated.  A change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee, Consultant or Director or
a change in the entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s service with
the Company or an Affiliate, shall not terminate a Participant’s Continuous
Service; provided, however,
if the Entity for which a Participant is rendering services ceases to
qualify as an Affiliate, as determined by the Board in its sole discretion, such
Participant’s Continuous Service shall be considered to have terminated on the
date such Entity ceases to qualify as an Affiliate.  For example, a
change in status from an employee of the Company to a consultant to an Affiliate
or to a Director shall not constitute an interruption of Continuous
Service.  To the extent permitted by law, the Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.  Notwithstanding the foregoing, a leave of
absence shall be treated as Continuous Service for purposes of vesting in a
Stock Award only to such extent as may be provided in the Company’s leave of
absence policy or in the written terms of the Participant’s leave of
absence.

     

    (k)           “Corporate
Transaction” means the occurrence, in a single transaction or in a series
of related transactions, of any one or more of the following
events:

     

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

       

    

    (i)           the
consummation of a sale or other disposition of
all or substantially all, as determined by the Board in its discretion, of the
consolidated assets of the Company and its Subsidiaries;

     

    (ii)           the
consummation of a sale or other disposition of at least fifty percent (50%) of
the outstanding securities of the Company;

     

    (iii)           the
consummation of a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or

     

    (iv)           the
consummation of a merger, consolidation or similar transaction following which
the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash
or otherwise.

     

    (l)           “Covered
Employee” shall have the meaning provided in Section 162(m)(3) of the
Code.

     

    (m)           “Director”
means a member of the Board.

     

    (n)           “Disability”
means the permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code.

     

    (o)           “Disinterested
Stockholders” means all of the stockholders of the Company except
Insiders of the Company who are eligible to receive Stock Awards, and such
Insiders’ associates.

     

    (p)           “Employee”
means any person employed by the Company or an Affiliate.  Service as
a Director or payment of a director’s fee by the Company for such service or for
service as a member of the Board of Directors of an Affiliate shall not be
sufficient to constitute “employment” by the Company or an
Affiliate.

     

    (q)           “Entity”
means a corporation, partnership, limited liability company or other
entity.

     

    (r)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

     

    (s)           “Exchange Act
Person” means any natural person, Entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act
Person” shall not include (A) the Company or any Subsidiary of the Company, (B)
any employee benefit plan of the Company or any Subsidiary of the Company or any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any Subsidiary of the Company, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) an Entity
Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the
Company.

     

    
      
        
        

      

      
        4.

        
          

        

      

      
        
        

      

       

    

    (t)           “Fair Market
Value” means, as of any date, the value of the Common Stock determined as
follows:

     

    (i)           If
the Common Stock is listed on any established stock exchange or traded on the
Nasdaq Global Select Market, Nasdaq Global Market or the Nasdaq Capital Market,
the Fair Market Value of a share of Common Stock, unless otherwise determined by
the Board, shall be the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on such exchange or market (or the exchange
or market with the greatest volume of trading in the Common Stock) on the day of
determination (or if such day of determination does not fall on a market trading
day, then the last market trading day prior to the day of determination), as
reported in a source the Board deems reliable.

     

    (ii)           In
the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board and in a manner that complies with
Sections 409A and 422 of the Code.

     

    (u)           “Insider”
means an “insider” as defined under the policies of the Toronto Stock Exchange,
as amended from time to time, which includes, among others, Directors and TSX
Officers of the Company.

     

    (v)           “Non-Employee
Director” means a Director who
either (i) is not currently an employee or officer of the Company or its parent
or a subsidiary, does not receive compensation, either directly or indirectly,
from the Company or its parent or a subsidiary, for services rendered as a
consultant or in any capacity other than as a Director (except for an amount as
to which disclosure would not be required under Item 404(a) of Regulation S-K
promulgated pursuant to the Securities Act (“Regulation
S-K”)), does not possess an interest in any other transaction for which
disclosure would be required under Item 404(a) of Regulation S-K, and is not
engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered
a “non-employee director” for purposes of Rule 16b-3.

     

    (w)           “Officer”
means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

     

    (x)           “Option”
means a stock option granted pursuant to the Plan that is not intended to
qualify as an “incentive stock option” within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

     

    (y)           “Option
Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option
grant.  Each Option Agreement shall be subject to the terms and
conditions of the Plan.

     

    (z)           “Optionholder”
means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.

     

    (aa)           “Other Stock
Award” means an award based in whole or in part by reference to the
Common Stock which is granted pursuant to the terms and conditions of Section
7(d).

     

    
      
        
        

      

      
        5.

        
          

        

      

      
        
        

      

       

    

    (bb)           “Outside
Director” means a Director who either (i) is not a current employee of
the Company or an “affiliated corporation” (within the meaning of Treasury
Regulations promulgated under Section 162(m) of the Code), is not a former
employee of the Company or an “affiliated corporation” who receives compensation
for prior services (other than benefits under a tax qualified retirement plan)
during the taxable year, has not been an officer of the Company or an
“affiliated corporation,” and does not receive remuneration from the Company or
an “affiliated corporation,” either directly or indirectly, in any capacity
other than as a Director or (ii) is otherwise considered an “outside director”
for purposes of Section 162(m) of the Code.

     

    (cc)           “Own,” “Owned,”
“Owner,” “Ownership” A person or Entity shall
be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

     

    (dd)           “Participant”
means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.

     

    (ee)           “Plan”
means this Gran Tierra Energy Inc. 2007 Equity Incentive Plan.

     

    (ff)           “Restricted Stock
Award” means an award of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 7(a).

     

    (gg)           “Restricted Stock
Unit” means a right to receive shares of Common Stock which is granted
pursuant to the terms and conditions of Section 7(b).

     

    (hh)           “Rule
16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

     

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

     

    (jj)           “Stock
Appreciation Right” means a right to receive the appreciation on Common
Stock that is granted pursuant to the terms and conditions of Section
7(c).

     

    (kk)           “Stock
Award” means any right granted under the Plan, including an Option,
Restricted Stock Award, Restricted Stock Unit, Stock Appreciation Right and
Other Stock Award.

     

    (ll)           “Stock Award
Agreement” means a written agreement between the Company and a holder of
a Stock Award evidencing the terms and conditions of an individual Stock Award
grant.  Each Stock Award Agreement shall be subject to the terms and
conditions of the Plan.

     

    (mm)           Subsidiary”
means, with respect to the Company, (i) any corporation of which more than fifty
percent (50%) of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the Company, and
(ii) any partnership in which the Company has a direct or indirect interest
(whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).

     

    
      
        
        

      

      
        6.

        
          

        

      

      
        
        

      

       

    

    (nn)           “TSX Officer”
means a senior officer of the Company or any subsidiary and includes an issuer,
all of the voting securities of which are owned by a TSX Officer.

     

    
      	
              3. 

            	
              Administration.

            

    

     

    (a)           Administration by
Board.  The Board shall administer the Plan unless and until
the Board delegates administration to a Committee, as provided in Section
3(d).

     

    (b)           Powers of
Board.  The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:

     

    (i)           To
determine from time to time which of the persons eligible under the Plan shall
be granted Stock Awards; when and how each Stock Award shall be granted; what
type or combination of types of Stock Award shall be granted; the provisions of
each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive Common Stock pursuant to a
Stock Award; and the number of shares of Common Stock with respect to which a
Stock Award shall be granted to each such person.

     

    (ii)           To
construe and interpret the Plan and Stock Awards granted under it, and to
establish, amend and revoke rules and regulations for its
administration.  The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan or Stock Award fully effective.

     

    (iii)           To
settle all controversies regarding the Plan and Stock Awards granted under
it.

     

    (iv)           To
amend the Plan or a Stock Award as provided in Section 12.

     

    (v)           To
terminate or suspend the Plan as provided in Section 13.

     

    (vi)           Generally,
to exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company and that are not in
conflict with the provisions of the Plan or Stock Awards.

     

    (vii)           To
adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are located
in various local jurisdictions.

     

    (c)           Cancellation and Re-Grant of Stock
Awards.  Notwithstanding the foregoing or any other provision
of this Plan, neither the Board nor any Committee shall have the authority to:
(i) reduce the exercise price of any outstanding Options or Stock Appreciation
Rights under the Plan, or (ii) cancel any outstanding Options or Stock
Appreciation Rights that have an exercise price or strike price greater than the
current Fair Market Value of the Common Stock in exchange for cash or other
Stock Awards under the Plan, unless the stockholders of the Company have
approved such an action within twelve (12) months prior to such an
event.

     

    
      
        
        

      

      
        7.

        
          

        

      

      
        
        

      

       

    

    (d)           Delegation
to Committee.

     

    (i)           General.  The Board
may delegate administration of the Plan to a Committee or Committees of one or
more members of the Board, and the term “Committee” shall apply to any person or
persons to whom such authority has been delegated.  If administration
is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board.  The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan.

     

    (ii)           Section 162(m) and Rule 16b-3
Compliance.  In the discretion of the Board, the Committee may
consist solely of two or more Outside Directors, in accordance with Section
162(m) of the Code, and/or solely of two or more Non-Employee Directors, in
accordance with Rule 16b-3.  In addition, the Board or the Committee
may delegate to a committee of one or more members of the Board the authority to
grant Stock Awards to eligible persons who are either (a) not then Covered
Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award, (b) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code, or
(c) not then subject to Section 16 of the Exchange Act.

     

    (e)           Effect of Board’s Decision.
All determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

     

    
      	
              4. 

            	
              Shares
      Subject to the Plan.

            

    

     

    (a)           Share Reserve. Subject to the
provisions of Section 11(a) relating to Capitalization Adjustments, the Common
Stock that may be issued pursuant to Stock Awards shall not exceed, in the
aggregate, 23,306,100 shares of Common Stock.

     

    (b)           Reversion of Shares to the Share
Reserve.  If any Stock Award shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in full,
the shares of Common Stock not acquired under such Stock Award shall revert to
and again become available for issuance under the Plan.

     

    (c)           Source of
Shares.  The shares of Common Stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or
otherwise.

     

    
      	
              5. 

            	
              Eligibility.

            

    

     

    (a)           Eligibility for Specific Stock
Awards.  Stock Awards may be granted to Employees, Directors
and Consultants.

     

    
      
        
        

      

      
        8.

        
          

        

      

      
        
        

      

       

    

    (b)           Section 162(m) Limitation on Annual
Grants. Subject to the provisions of Section 11(a) relating to
Capitalization Adjustments, no Employee shall be eligible to be granted Options
covering more than one million (1,000,000) shares of Common Stock during any
calendar year.

     

    (c)           Consultants.  A
Consultant shall not be eligible for the grant of a Stock Award if, at the time
of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”)
is not available to register either the offer or the sale of the Company’s
securities to such Consultant because of the nature of the services that the
Consultant is providing to the Company, because the Consultant is not a natural
person, or because of any other rule governing the use of Form S-8.

     

    
      	
              6. 

            	
              Option
      Provisions.

            

    

     

    Each
Option shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. The provisions of each Option shall include
(through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions:

     

    (a)           Term.  No Option shall be
exercisable after the expiration of ten (10) years from the date on which it was
granted.

     

    (b)           Exercise Price of a Stock
Option.  The exercise price of each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the Option on the date the Option is
granted.  Notwithstanding the foregoing, an Option may be granted with
an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Sections 409A and 424(a) of the Code;
provided, however,
that if the Common Stock is listed on the Toronto Stock Exchange, the
granting of the Option is approved by the Toronto Stock Exchange to the extent
necessary to satisfy the rules of the Toronto Stock Exchange.

     

    (c)           Consideration.  The
purchase price of Common Stock acquired pursuant to an Option shall be paid, to
the extent permitted by applicable statutes and regulations, either (i) in cash
at the time the Option is exercised or (ii) at the discretion of the Board at
the time of or subsequently to the grant of the Option (1) by delivery to the
Company of other Common Stock (whether by actual delivery or attestation), (2)
by a “net exercise” of the Option (as further described below), (3) pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instruction to
pay the aggregate exercise price to the Company from the sales proceeds or (4)
in any other form of legal consideration that may be acceptable to the
Board.

     

    In the case of a “net exercise” of an
Option, the Company will not require a payment of the exercise price of the
Option from the Optionholder but will reduce the number of shares of Common
Stock issued upon the exercise by the largest number of whole shares that has a
Fair Market Value that does not exceed the aggregate exercise
price.  With respect to any remaining balance of the aggregate
exercise price, the Company shall accept a cash payment from the
Optionholder.  The shares of Common Stock so used to pay the exercise
price of an Option under a “net exercise,” the shares actually delivered to the
Optionholder, and any shares withheld to satisfy tax withholding obligations
will be considered to have resulted from the exercise of the Option, and
accordingly, the Option will not again be exercisable with respect to such
shares.

     

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

       

    

    (d)           Transferability of an
Option.  An Option shall be transferable to the extent provided
in the Option Agreement.  If the Option does not provide for
transferability, then the Option shall not be transferable except by will or by
the laws of descent and distribution or pursuant a domestic relations order and
shall be exercisable during the lifetime of the Optionholder only by the
Optionholder.  Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionholder,
shall thereafter be entitled to exercise the Option.

     

    (e)           Vesting
Generally.  The total number of shares of Common Stock subject
to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal.  The Option
may be subject to such other terms and conditions on the time or times when it
may be exercised (which may be based on performance or other criteria) as the
Board may deem appropriate.  The vesting provisions of individual
Options may vary.  The provisions of this Section 6(e) are subject to
any Option provisions governing the minimum number of shares of Common Stock as
to which an Option may be exercised.

     

    (f)           Termination of Continuous
Service.  In the event that an Optionholder’s Continuous
Service terminates (other than upon the Optionholder’s death or Disability), the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Optionholder’s Continuous Service (or
such longer or shorter period specified in the Option Agreement) or (ii) the
expiration of the term of the Option as set forth in the Option
Agreement.  If, after termination, the Optionholder does not exercise
his or her Option within the time specified in the Option Agreement, the Option
shall terminate.

     

    (g)           Extension of Termination
Date.  An Optionholder’s Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholder’s
Continuous Service (other than upon the Optionholder’s death or Disability)
would be prohibited at any time solely because the issuance of shares of Common
Stock would violate the registration requirements under the Securities Act, then
the Option shall terminate on the earlier of (i) the expiration of the term of
the Option set forth in Section 6(a) or (ii) the expiration of a period of three
(3) months after the termination of the Optionholder’s Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements.

     

    (h)           Disability of
Optionholder.  In the event that an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement or (ii) the expiration of the term of the Option as set
forth in the Option Agreement.  If, after termination, the
Optionholder does not exercise his or her Option within the time specified
herein, the Option shall terminate.

     

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

       

    

    (i)           Death of
Optionholder.  In the event that (i) an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder’s Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder’s estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder’s death pursuant to Section 6(d), but only within
the period ending on the earlier of (1) the date eighteen (18) months following
the date of death (or such longer or shorter period specified in the Option
Agreement or (2) the expiration of the term of such Option as set forth in the
Option Agreement.  If, after death, the Option is not exercised within
the time specified herein, the Option shall terminate.

     

    (j)           Early Exercise.  The
Option may, but need not, include a provision whereby the Optionholder may elect
at any time before the Optionholder’s Continuous Service terminates to exercise
the Option as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of the Option.  Any unvested shares
of Common Stock so purchased may be subject to a repurchase option in favor of
the Company or to any other restriction the Board determines to be
appropriate.  The Company will not exercise its repurchase option
until at least six (6) months (or such longer or shorter period of time required
to avoid classification of the Option as a liability for financial accounting
purposes) have elapsed following exercise of the Option unless the Board
otherwise specifically provides in the Option.

     

    
      	
              7. 

            	
              Provisions
      of Stock Awards other than
Options.

            

    

     

    (a)           Restricted Stock
Awards.  Each Restricted Stock Award agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate.  To the extent consistent with the Company’s Bylaws, at
the Board’s election, shares of Common Stock may be (x) held in book entry form
subject to the Company’s instructions until any restrictions relating to the
Restricted Stock Award lapse; or (y) evidenced by a certificate, which
certificate shall be held in such form and manner as determined by the Board.
The terms and conditions of Restricted Stock Award agreements may change from
time to time, and the terms and conditions of separate Restricted Stock Award
agreements need not be identical; provided, however, that each
Restricted Stock Award agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     

    (i)           Purchase Price.  At
the time of the grant of a Restricted Stock Award, the Board will determine the
price to be paid by the Participant for each share subject to the Restricted
Stock Award. To the extent required by applicable law, the price to be paid by
the Participant for each share of the Restricted Stock Award will not be less
than the par value of a share of Common Stock.  A Restricted Stock
Award may be awarded as a stock bonus (i.e., with no cash purchase
price to be paid) to the extent permissible under applicable law.

     

    
      
        
        

      

      
        11.

        
          

        

      

      
        
        

      

       

    

    (ii)           Consideration.  At
the time of the grant of a Restricted Stock Award, the Board will determine the
consideration permissible for the payment of the purchase price of the
Restricted Stock Award. The purchase price of Common Stock acquired pursuant to
the Restricted Stock Award shall be paid in one of the following ways: (i) in
cash at the time of purchase; (ii) by services rendered or to be rendered to the
Company; or (iii) in any other form of legal consideration that may be
acceptable to the Board.

     

    (iii)           Vesting. Shares of Common
Stock acquired under a Restricted Stock Award may, but need not, be subject to a
share repurchase option in favor of the Company in accordance with a vesting
schedule to be determined by the Board.

     

    (iv)           Termination of Participant’s
Continuous Service. In the event that a Participant’s Continuous Service
terminates, the Company may repurchase or otherwise reacquire any or all of the
shares of Common Stock held by the Participant that have not vested as of the
date of termination under the terms of the Restricted Stock Award
agreement.  The Company will not exercise its repurchase option until
at least six (6) months (or such longer or shorter period of time required to
avoid classification of the Restricted Stock Award as a liability for financial
accounting purposes) have elapsed following the purchase of the restricted stock
unless otherwise determined by the Board or provided in the Restricted Stock
Award agreement.

     

    (v)           Transferability. Rights to
purchase or receive shares of Common Stock granted under a Restricted Stock
Award shall be transferable by the Participant only upon such terms and
conditions as are set forth in the Restricted Stock Award agreement, as the
Board shall determine in its discretion, and so long as Common Stock awarded
under the Restricted Stock Award remains subject to the terms of the Restricted
Stock Award agreement.

     

    (b)           Restricted Stock
Units.  Each Restricted Stock Unit agreement shall be in such
form and shall contain such terms and conditions as the Board shall
determine.  The terms and conditions of Restricted Stock Unit
agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Unit agreements need not be identical; provided, however, that each
Restricted Stock Unit agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     

    (i)           Consideration.  At
the time of grant of a Restricted Stock Unit award, the Board will determine the
consideration, if any, to be paid by the Participant upon delivery of each share
of Common Stock subject to the Restricted Stock Unit award. To the extent
required by applicable law, the consideration to be paid by the Participant for
each share of Common Stock subject to a Restricted Stock Unit award will not be
less than the par value of a share of Common Stock.  Such
consideration may be paid in any form permitted under applicable
law.

     

    (ii)           Vesting.  At the
time of the grant of a Restricted Stock Unit award, the Board may impose such
restrictions or conditions to the vesting of the shares Restricted Stock Unit as
it deems appropriate.

     

    
      
        
        

      

      
        12.

        
          

        

      

      
        
        

      

       

    

    (iii)           Payment.  A
Restricted Stock Unit award may be settled by the delivery of shares of Common
Stock, their cash equivalent, or any combination of the two, as the Board deems
appropriate.

     

    (iv)           Additional
Restrictions.  At the time of the grant of a Restricted Stock
Unit award, the Board, as it deems appropriate, may impose such restrictions or
conditions that delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Restricted Stock Unit award after the vesting of such
Stock Award.

     

    (v)           Dividend
Equivalents.  Dividend equivalents may be credited in respect
of Restricted Stock Units, as the Board deems appropriate.  Such
dividend equivalents may be converted into additional Restricted Stock Units by
dividing (1) the aggregate amount or value of the dividends paid with respect to
that number of shares of Common Stock equal to the number of Restricted Stock
Units then credited by (2) the Fair Market Value per share of Common Stock on
the payment date for such dividend. The additional Restricted Stock Units
credited by reason of such dividend equivalents will be subject to all the terms
and conditions of the underlying Restricted Stock Unit award to which they
relate.

     

    (vi)           Termination of Participant’s
Continuous Service.  Except as otherwise provided in the
applicable Stock Award Agreement, Restricted Stock Units that have not vested
will be forfeited upon the Participant’s termination of Continuous Service for
any reason.

     

    (c)           Stock Appreciation
Rights.  Each Stock Appreciation Right agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate.  The terms and conditions of Stock Appreciation Right
agreements may change from time to time, and the terms and conditions of
separate Stock Appreciation Rights agreements need not be identical, but each
Stock Appreciation Right agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     

    (i)           Calculation of
Appreciation.  Each Stock Appreciation Right will be
denominated in share of Common Stock equivalents.  The appreciation
distribution payable on the exercise of a Stock Appreciation Right will be not
greater than an amount equal to the excess of (A) the aggregate Fair Market
Value (on the date of the exercise of the Stock Appreciation Right) of a number
of shares of Common Stock equal to the number of share of Common Stock
equivalents in which the Participant is vested under such Stock Appreciation
Right and with respect to which the Participant is exercising the Stock
Appreciation Right on such date, over (B) an amount that will be determined by
the Committee at the time of grant of the Stock Appreciation Right.

     

    (ii)           Vesting.  At the
time of the grant of a Stock Appreciation Right, the Board may impose such
restrictions or conditions to the vesting of such Right as it deems
appropriate.

     

    (iii)           Exercise.  To
exercise any outstanding Stock Appreciation Right, the Participant must provide
written notice of exercise to the Company in compliance with the provisions of
the Stock Appreciation Rights agreement evidencing such Right.

     

    
      
        
        

      

      
        13.

        
          

        

      

      
        
        

      

       

    

    (iv)           Payment. The appreciation
distribution in respect of a Stock Appreciation Right may be paid in Common
Stock, in cash, or any combination of the two, as the Board deems
appropriate.

     

    (v)           Termination of Continuous
Service.  If a Participant’s Continuous Service terminates for
any reason, any unvested Stock Appreciation Rights shall be forfeited and any
vested Stock Appreciation Rights shall be automatically redeemed.

     

    (d)           Other Stock
Awards.  Other forms of Stock Awards valued in whole or in part
by reference to, or otherwise based on, Common Stock may be granted either alone
or in addition to Stock Awards provided for under Section 6 and the preceding
provisions of this Section 7.  Subject to the provisions of the Plan,
the Board shall have sole and complete authority to determine the persons to
whom and the time or times at which such Other Stock Awards will be granted, the
number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Stock Awards and all other terms and conditions of such Stock
Awards.

     

    
      	
              8. 

            	
              Covenants
      of the Company.

            

    

     

    (a)           Availability of
Shares.  During the terms of the Stock Awards, the Company
shall keep available at all times the number of shares of Common Stock required
to satisfy such Stock Awards.

     

    (b)           Securities Law
Compliance.  The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award.  If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the authority which
counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock upon exercise of such Stock Awards
unless and until such authority is obtained. A Participant shall not be eligible
for the grant of a Stock Award or the subsequent issuance of Common Stock
pursuant to the Stock Award if such grant or issuance would be in violation of
any applicable securities law.

     

    (c)           No Obligation to
Notify.  The Company shall have no duty or obligation to any
Participant to advise such holder as to the time or manner of exercising such
Stock Award.  Furthermore, the Company shall have no duty or
obligation to warn or otherwise advise such holder of a pending termination or
expiration of a Stock Award or a possible period in which the Stock Award may
not be exercised.  The Company has no duty or obligation to minimize
the tax consequences of a Stock Award to the holder of such Stock
Award.

     

    
      	
              9. 

            	
              Use
      of Proceeds from Stock.

            

    

     

    Proceeds
from the sale of Common Stock pursuant to Stock Awards shall constitute general
funds of the Company.

     

    
      
        
        

      

      
        14.

        
          

        

      

      
        
        

      

       

    

    
      	
              10. 

            	
              Miscellaneous.

            

    

     

    (a)           Acceleration of Exercisability and
Vesting.  The Board shall have the power to accelerate the time
at which a Stock Award may first be exercised or the time during which a Stock
Award or any part thereof will vest in accordance with the Plan, notwithstanding
the provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.

     

    (b)           Corporate Action Constituting Grant
of Stock Awards.  Corporate action constituting a grant by the
Company of a Stock Award to any Participant shall be deemed completed as of the
date of such corporate action, unless otherwise determined by the Board,
regardless of when the instrument, certificate, or letter evidencing the Stock
Award is communicated to, or actually received or accepted by, the
Participant.

     

    (c)           Stockholder
Rights.  Subject to the further limitations of Section 7(b)(iv)
hereof, no Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to
such Stock Award unless and until (i) such Participant has satisfied all
requirements for exercise of the Stock Award pursuant to its terms, if
applicable, and (ii) the issuance of the Common Stock subject to such Stock
Award has been entered into the books and records of the Company.

     

    (d)           No Employment or other Service
Rights.  Nothing in the Plan, and Stock Award Agreement or any
other instrument executed thereunder or in connection with any Stock Award
granted pursuant thereto shall confer upon any Participant any right to continue
to serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an Affiliate
to terminate (i) the employment of an Employee with or without notice and with
or without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant’s agreement with the Company or an Affiliate or (iii) the service of
a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.

     

    (e)           Investment
Assurances.  The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing
the Common Stock.  The foregoing requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (1) the issuance of
the shares of Common Stock upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act, or (2) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the Common Stock.

     

    
      
        
        

      

      
        15.

        
          

        

      

      
        
        

      

       

    

    (f)           Withholding
Obligations.  Unless prohibited by the terms of a Stock Award
Agreement, the Company may, in its sole discretion, satisfy any country,
federal, state, provincial or local tax withholding obligation relating to any
Stock Award by any of the following means (in addition to the Company’s right to
withhold from any compensation paid to the Participant by the Company) or by a
combination of such means: (i) causing the Participant to tender a cash payment;
(ii) withholding shares of Common Stock from the shares of Common Stock issued
or otherwise issuable to the Participant in connection with the Stock Award;
provided, however, that no shares of Common Stock are withheld with a value
exceeding the minimum amount of tax required to be withheld by law (or such
lower amount as may be necessary to avoid classification of the Stock Award as a
liability for financial accounting purposes); (iii) withholding payment from any
amounts otherwise payable to the Participant; (iv) withholding cash from a Stock
Award settled in cash; or (v) by such other method as may be set forth in the
Stock Award Agreement.

     

    (g)           Electronic
Delivery.  Any reference herein to a “written” agreement or
document shall include any agreement or document delivered electronically or
posted on the Company’s intranet.

     

    (h)           Compliance with Section
409A.  To the extent that the Board determines that any Stock
Award granted hereunder is subject to Section 409A of the Code, the Stock Award
Agreement evidencing such Stock Award shall incorporate the terms and conditions
necessary to avoid the consequences specified in Section 409A(a)(1) of the
Code.  To the extent applicable, the Plan and Stock Award Agreements
shall be interpreted in accordance with Section 409A of the Code, including
without limitation any applicable guidance that may be issued or amended after
the Effective Date.

     

    
      	
              11. 

            	
              Adjustments
      upon Changes in Stock.

            

    

     

    (a)           Capitalization
Adjustments.  If any change is made in, or other event occurs
with respect to, the Common Stock subject to the Plan or subject to any Stock
Award without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or similar transaction (each a “Capitalization
Adjustment”), the Board shall appropriately and proportionately adjust:
(i) the class(es) and maximum number of securities subject to the Plan pursuant
to Section 4(a), (ii) the class(es) and maximum number of securities that
may be awarded to any person pursuant to Section 5(b), and (iii) the class(es)
and number of securities and price per share of stock subject to outstanding
Stock Awards.  The Board shall make such adjustments, and its
determination shall be final, binding and conclusive.  The conversion
of any convertible securities of the Company shall not be treated as a
Capitalization Adjustment.

     

    
      
        
        

      

      
        16.

        
          

        

      

      
        
        

      

       

    

    (b)           Dissolution or
Liquidation.  In the event of a dissolution or liquidation of
the Company, then all outstanding Options shall terminate immediately prior to
the completion of such dissolution or liquidation, and shares of Common Stock
subject to the Company’s repurchase option may be repurchased by the Company
notwithstanding the fact that the holder of such stock is still in Continuous
Service.

     

    (c)           Corporate
Transaction.  In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may assume or continue any or all
Stock Awards outstanding under the Plan or may substitute similar stock awards
for Stock Awards outstanding under the Plan (it being understood that similar
stock awards include, but are not limited to, awards to acquire the same
consideration paid to the stockholders or the Company, as the case may be,
pursuant to the Corporate Transaction), and any reacquisition or repurchase
rights held by the Company in respect of Common Stock issued pursuant to Stock
Awards may be assigned by the Company to the successor of the Company (or the
successor’s parent company), if any, in connection with such Corporate
Transaction.  In the event that any surviving corporation or acquiring
corporation does not assume or continue any or all such outstanding Stock Awards
or substitute similar stock awards for such outstanding Stock Awards, then with
respect to Stock Awards that have been not assumed, continued or substituted and
that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction, the vesting of such Stock
Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five (5) days prior to the
effective time of the Corporate Transaction), the Stock Awards shall terminate
if not exercised (if applicable) at or prior to such effective time, and any
reacquisition or repurchase rights held by the Company with respect to such
Stock Awards held by Participants whose Continuous Service has not terminated
shall (contingent upon the effectiveness of the Corporate Transaction)
lapse.  With respect to any other Stock Awards outstanding under the
Plan that have not been assumed, continued or substituted, the vesting of such
Stock Awards (and, if applicable, the time at which such Stock Award may be
exercised) shall not be accelerated, unless otherwise provided in a written
agreement between the Company or any Affiliate and the holder of such Stock
Award, and such Stock Awards shall terminate if not exercised (if applicable)
prior to the effective time of the Corporate Transaction.

     

    (d)           Change in
Control.  A Stock Award held by any Participant whose
Continuous Service has not terminated prior to the effective time of a Change in
Control may be subject to additional acceleration of vesting and exercisability
upon or after such event as may be provided in the Stock Award Agreement for
such Stock Award or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant, but in the absence of such
provision, no such acceleration shall occur.

     

    
      	
              12. 

            	
              Amendment
      of the Plan and Stock
Awards.

            

    

     

    (a)           Amendment of
Plan.  The Board at any time, and from time to time, may amend
the Plan.  However, except as provided in Section 11(a) relating to
Capitalization Adjustments and Section 12(f) relating to amendments without
Stockholder Approval, no amendment shall be effective unless approved by the
stockholders of the Company.

     

    
      
        
        

      

      
        17.

        
          

        

      

      
        
        

      

       

    

    (b)           Stockholder
Approval.  The Board, in its sole discretion, may submit any
other amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to Covered Employees.

     

    (c)           No Impairment of
Rights.  Rights under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the Participant and (ii) the Participant
consents in writing.

     

    (d)           Amendment of Stock
Awards.  The Board at any time, and from time to time, may
amend the terms of any one or more Stock Awards; provided, however, that (i)
if the Common Stock is listed on the Toronto Stock Exchange any amendment is
approved by the stockholders to the extent necessary to satisfy the rules of the
Toronto Stock Exchange, and (ii) that the rights under any Stock Award shall not
be impaired by any such amendment unless (A) the Company requests the consent of
the Participant and (B) the Participant consents in writing.

     

    (e)           Insiders. If an amendment
reducing the Option exercise price or extending the term of the Option is made
to an Option held by an Insider, the amendment shall only be made effective
after the approval is received of Disinterested Stockholders at a meeting of the
stockholders of the Company.

     

    (f)           Amendments without Stockholder
Approval. Without limiting the generality of the foregoing, or the other
provisions hereof, the Board shall have the authority: (a) to make amendments to
the Plan or a Stock Award of a housekeeping or administrative nature; (b) if the
Common Stock is listed on the Toronto Stock Exchange subject to any required
approval of the Toronto Stock Exchange, to change the vesting or termination
provisions of a Stock Award or the Plan; (c) amendments necessary to comply
with provisions of applicable law or stock exchange requirements or for grants
to qualify for favourable treatment under applicable laws; and (d)  any
other amendment, fundamental or otherwise, not requiring stockholder approval
under the Code; provided,
however, that no amendment shall be made without stockholder approval to
the extent stockholder approval is necessary to satisfy the requirements of
Section 422 of the Code

     

    
      	
              13. 

            	
              Termination
      or Suspension of the Plan.

            

    

     

    (a)           Plan Term.  The
Board may suspend or terminate the Plan at any time.  No Stock Awards
may be granted under the Plan while the Plan is suspended or after it is
terminated.

     

    (b)           No Impairment of
Rights.  Suspension or termination of the Plan shall not impair
rights and obligations under any Stock Award granted while the Plan is in effect
except with the written consent of the Participant.

     

    
      	
              14. 

            	
              Effective
      Date of Plan.

            

    

     

    The Plan
shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until
the Plan has been approved by the stockholders of the Company, which approval
shall be within twelve (12) months before or after the date the Plan is adopted
by the Board.

     

    
      
        
        

      

      
        18.

        
          

        

      

      
        
        

      

       

    

    
      	
              15. 

            	
              Choice
      of Law.

            

    

     

    The law
of the State of Nevada shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s
conflict of laws rules.

     

    
      
        	
                16. 

              	
                Limits
      with respect to
Insiders.

              

      

    

     

    (a)           The
maximum number of shares of Common Stock which may be reserved for issuance to
Insiders, at any time, under the Plan and any other share compensation
arrangement of the Company shall be 10% of the Common Stock issued and
outstanding.

     

    (b)           The
maximum number of shares of Common Stock which may be issued to Insiders under
the Plan, at any time, and any other share compensation arrangement within any
12-month period shall be 10% of the Common Stock outstanding.

     

    (c)           The
maximum number of shares of Common Stock which may be issued to any one Insider
and such Insider’s associates under the Plan, at any time, within a 12-month
period shall be 5% of the Common Stock outstanding.

     

    
      
        	
                17. 

              	
                Limits
      with respect to
Consultants.

              

      

    

     

    (a)           The
number of Options granted to any one Consultant in any 12-month period under the
Plan shall not exceed 2% of the issued and outstanding shares of Common Stock at
the time of grant.

     

    
      
        
        

      

      
        19.

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