Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.1

NEUTRON ENTERPRISES, INC.

2007 STOCK INCENTIVE PLAN

1. Purpose.

The purpose of this 2007 Stock Incentive Plan (the “Plan”) of Neutron Enterprises, Inc., a
Nevada corporation (the “Company”), is to promote and closely align the interests of employees of
the Company and its shareholders by providing employees with stock-based compensation and other
performance-based compensation. The Plan is intended to strengthen the Company’s ability to reward
employee performance that enhances long-term shareholder value, increase employee stock ownership
through performance-based compensation plans, and strengthen the Company’s ability to attract and
retain outstanding employees.

Except where the context otherwise requires or as specifically provided herein, the term
“Company” shall include any of the Company’s present or future parent or subsidiary corporations as
defined in Section 424 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”), and any other business venture or affiliate in which the
Company has a controlling interest.

2. Administration.

(a) Administration by Board. The Plan will be administered by the board of directors
of the Company (the “Board”). The Board will have full and final authority to operate, manage and
administer the Plan on behalf of the Company. To the extent required for transactions under the
Plan to qualify for the exemptions available under Rule 16b-3 promulgated under the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), all actions relating to Awards (as defined
in Section 4) to persons subject to Section 16 of the Exchange Act may be taken by the Board or a
Committee composed of two or more members, each of whom is a “non-employee director” within the
meaning of Rule 16b-3 under the Exchange Act. To the extent required for compensation realized
from Awards under the Plan to be deductible by the Company pursuant to Section 162(m) of the Code
(“Section 162(m)”), such Awards may be granted by the Board or a Committee composed of two or more
members, each of whom is an “outside director” within the meaning of Section 162(m).

(b) Authority of Board. Except as provided in the Plan, the Board shall be authorized
and empowered to take all actions necessary or desirable, in its sole discretion, in connection
with the administration of the Plan, including, without limitation, the following:

(1) to prescribe, amend and rescind rules and regulations relating to the Plan and any Awards
and to define terms not otherwise defined herein;

(2) to determine which persons are Participants, to which of such Participants, if any, Awards
shall be granted hereunder, and the timing of any such Awards;

(3) to grant Awards to Participants and determine the terms and conditions thereof, including
the number of shares of Common Stock subject to Awards and the circumstances under which Awards
become exercisable or vested or are forfeited or expire;

 

 

 

(4) to establish, verify the extent of satisfaction of, adjust, reduce or waive any
performance goals or other conditions applicable to the grant, issuance, exercisability, vesting
and/or ability to retain any Award;

(5) to prescribe and amend the terms and conditions of the agreements or other documents
evidencing Awards made under this Plan, which terms and conditions may differ among individual
Awards and participants;

(6) to interpret and construe this Plan, any rules and regulations under this Plan, and the
terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions
in good faith and for the benefit of the Company; and

(7) to make all other determinations deemed necessary or advisable for the administration of
the Plan.

All decisions and interpretations by the Board shall be made in the Board’s sole discretion
and shall be final, binding and conclusive on all persons having or claiming any interest in the
Plan or in any Award. No member or former member of the Board acting pursuant to the authority
delegated by the Board shall be liable for any action or determination made in good faith with
respect to the Plan.

(c) Appointment of Committees. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a “Committee”). Action of a Committee may be taken by the vote of a majority of its
members or by the written consent of a majority of its members. All decisions by a Committee shall
be made in the Committee’s sole discretion and shall be final, binding and conclusive on all
persons having or claiming any interest in the Plan or in any Award. A Committee may allocate
among its members and delegate to any director of the Company who is not a member of the Committee
any of its administrative responsibilities. All references in the Plan to the “Board” shall mean
the Board or one or more Committees to the extent the Board has delegated any of its powers or
authority under the Plan to such Committee.

3. Individuals Eligible for Awards.

Awards under the Plan may be made to the following individuals: (i) employees, officers or
directors of the Company, (ii) consultants or advisors to the Company, and (iii) individuals who
have entered into an agreement with the Company under which they will be employed by the Company in
the future. Each individual who is eligible to participate in the Plan or has been granted an
Award under the Plan shall be deemed a “Participant.”

4. Awards Available Under the Plan.

Awards may be made under the Plan in the form of: (i) options, (ii) stock appreciation rights,
(iii) restricted stock, (iv) restricted stock units, (v) unrestricted stock, and (vi) other
equity-based or equity-related awards that the Board determines to be consistent with the purpose
of the Plan and the interests of the Company (each award together with the written agreement
containing the terms and conditions of the award, an “Award”).

 

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5. Stock Available for Awards.

(a) Number of Shares. Awards may be made under the Plan for up to 6,000,000 shares of
common stock, $.001 par value per share, of the Company (the “Common Stock”). If: (i) any Award
expires or is terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part (including as the result of shares of Common Stock subject to such
Award being repurchased by the Company at the original issuance price pursuant to a contractual
repurchase right), (ii) any Award results in any Common Stock not being issued (including, without
limitation, when an Award is settled for cash), (iii) shares of Common Stock are surrendered or
withheld from any Award to satisfy a Participant’s income tax or other withholding obligation, or
(iv) shares of Common Stock owned by a Participant are tendered to pay the exercise price of any
Award granted under the Plan, then in each such case the shares of Common Stock covered by such
forfeited, terminated or canceled Award or that are equal to the number of shares surrendered,
withheld or tendered shall again become available for transfer pursuant to Awards granted or to be
granted under the Plan, subject, however, in the case of Incentive Stock Options (as hereinafter
defined), to any limitations under the Code. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares.

(b) Substitute Awards. The Board may grant Awards in tandem with or in substitution
for any other Award granted under this Plan or any award granted under any other plan of the
Company. The Board may grant Awards under the Plan in substitution for stock and stock-based
awards held by employees of another corporation who concurrently become employees of the Company as
the result of a merger or consolidation of the employing corporation with the Company or the
acquisition by the Company of property or stock of the employing corporation. The Board may direct
that the substitute Awards be granted on such terms and conditions as the Board considers
appropriate in the circumstances.

6. Stock Options.

(a) General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option, and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option that is not intended to be an Incentive Stock Option (as defined
below) or that is intended to be an Incentive Stock Option but fails to so qualify, whether at the
time of grant or thereafter, shall be designated a “Nonstatutory Stock Option”.

(b) Incentive Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be
granted to employees of the Company, any of the Company’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Code and any other entities the employees
of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to
and shall be construed consistently with the requirements of Section 422 of the Code. To the
extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate
fair market value as determined by, or in a manner approved by, the Board in good faith (“Fair
Market Value”), determined as of the time of grant, of the shares of Common Stock

 

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with respect to which Incentive Stock Options granted under the Plan and any other plan of the
Company become exercisable for the first time by a Participant during any calendar year shall not
exceed $100,000. The Company shall have no liability to a Participant, or any other party, if an
Option, or any part thereof, that is intended to be an Incentive Stock Option is not an Incentive
Stock Option.

(c) Exercise Price. The Board shall establish the exercise price of an Option at the
time each Option is granted and specify it in the applicable Award; provided, however, that the
exercise price shall not be less than 100% of the fair market value of the Common Stock, as
determined by the Board, at the time the Option is granted; and provided further, that if the
Option granted is an Incentive Stock Option, the exercise price shall be not less than 100% of the
fair market value of the Common Stock, as determined by the Board, at the time the Incentive Stock
Option is granted. If an employee owns or is deemed to own, by reason of the attribution rules
applicable under Section 424(d) of the Code, more than ten percent (10%) of the combined voting
power of all classes of stock of the Company and an Incentive Stock Option is granted to such
employee, the exercise price shall be not less than 110% of the fair market value of the Common
Stock, as determined by the Board, at the time the Option is granted.

(d) Duration. Each Option shall be exercisable at such times and subject to such
terms and conditions as the Board may specify in the applicable Award; provided, however, that no
Option will be granted for a term in excess of 10 years. If an employee owns or is deemed to own,
by reason of the attribution rules applicable under Section 424(d) of the Code, more than ten
percent (10%) of the combined voting power of all classes of stock of the Company and an Incentive
Stock Option is granted to such employee, the term of such option shall be no more than five (5)
years from the date of grant.

(e) Exercisability; Rights of Stockholder. Options shall become vested and
exercisable at such time or times, whether or not in installments, as shall be determined by the
Board. In the alternative, the Board may specify that an Option shall become vested and
exercisable upon the achievement of such performance goals, objectives and other conditions as it
may establish at the time of grant. A Participant shall have the rights of a stockholder only as
to shares of Common Stock acquired upon the exercise of a Option and not as to shares of Common
Stock underlying unexercised Options.

(f) Restrictions. The Board shall determine, with respect to each Option to be
granted, the nature and extent of the restrictions, if any, to be imposed on the shares of Common
Stock that may be purchased thereunder. Without limiting the generality of the foregoing, the
Board may impose conditions restricting absolutely or conditionally the transferability of shares
of Common Stock acquired through the exercise of Options for such periods, and subject to such
conditions, including continued employment of the Participant by the Company, as the Board may
determine.

(g) Method of Exercise. Options may be exercised in whole or in part by delivering
written notice of exercise to the Company specifying the number of shares to be purchased and
signed by the proper person, or by any other form of notice, including electronic notice, approved
by the Board, together with payment in full of the aggregate exercise price for the number of
shares for which the Option is exercised.

 

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(h) Methods of Payment. Common Stock purchased upon the exercise of an Option granted
under the Plan may be paid for as follows:

(1) in cash or by check, payable to the order of the Company;

(2) if the shares of Common Stock underlying the Option are registered under the Securities
Act, except as the Board may, in its sole discretion, otherwise provide in an Award, by: (i)
delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the exercise price and any required tax
withholding, or (ii) delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the Company the exercise
price and any required tax withholding;

(3) by delivery of such shares of Common Stock owned by the Participant valued at their Fair
Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such
shares of Common Stock were owned by the Participant at least six months prior to such delivery,
and (iii) such shares of Common Stock are not subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements or restrictions (any such shares satisfying all of the
requirements set forth in subsections (i), (ii) and (iii), “Mature Shares”);

(4) by reducing the number of shares of Common Stock otherwise issuable under the Option to
the Participant upon the exercise of the Option by a number of shares of Common Stock having a Fair
Market Value equal to such aggregated exercise price; provided, however, that such method of
payment is then permitted under applicable law;

(5) to the extent permitted by applicable law and by the Board, in its sole discretion, by:
(i) delivery of a promissory note of the Participant to the Company on terms determined by the
Board, or (ii) payment of such other lawful consideration as the Board may determine; or

(6) by any combination of the above permitted forms of payment.

The delivery of certificates representing the shares of Common Stock to be purchased pursuant
to the exercise of an Option will be contingent upon receipt from the Participant (or a purchaser
acting in his stead in accordance with the provisions of the Option) by the Company of the full
purchase price for the shares and the fulfillment of any other requirements contained in the Option
or imposed by applicable law.

7. Stock Appreciation Rights.

(a) General. The Board may grant Awards entitling the holder on exercise thereof to
acquire: (i) a number of shares of Common Stock, (ii) an equivalent amount of cash, or (iii) a
combination of Common Stock and cash, as determined by the Board in its sole discretion, determined
in whole or in part by reference to the appreciation, from and after the date of grant, in the Fair
Market Value of a share of Common Stock (each, a “SAR”), with such rights and subject to such
restrictions and conditions as the Board may determine at the time of grant.

 

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(b) Exercise Price. The Board shall establish the exercise price at the time each SAR
is granted and specify it in the applicable Award; provided, however, that the exercise price shall
be not less than 100% of the fair market value of the Common Stock, as determined by the Board, at
the time the SAR is granted.

(c) Calculation of Appreciation. Upon exercise, the Participant shall receive a
number of shares of Common Stock, an amount of cash, or a combination of Common Stock and cash,
having an aggregate Fair Market Value equal to the product of: (i) the sum of: (x) the Fair Market
Value of a share of Common Stock on the date of the Participant’s request, less (y) the exercise
price per share of Common Stock specified in such SAR, multiplied by (ii) the number of shares of
Common Stock for which such SAR shall be exercised.

(d) Exercisability; Rights of Stockholder. SARs shall become vested and exercisable
at such time or times, whether or not in installments, as shall be determined by the Board. In the
alternative, the Board may specify that a SAR shall become vested and exercisable upon the
achievement of such performance goals, objectives and other conditions as it may establish at the
time of grant. A Participant shall have the rights of a stockholder only as to shares of Common
Stock acquired upon the exercise of a SAR and not as to shares of Common Stock underlying
unexercised SARs.

(e) Restrictions. The Board shall determine, with respect to each SAR to be granted,
the nature and extent of the restrictions, if any, to be imposed on any shares of Common Stock that
may be purchased thereunder. Without limiting the generality of the foregoing, the Board may
impose conditions restricting absolutely or conditionally the transferability of shares of Common
Stock acquired through the exercise of SARs for such periods, and subject to such conditions,
including continued employment of the Participant by the Company, as the Board may determine.

(f) Method of Exercise. SARs may be exercised in whole or in part by delivering
written notice of exercise to the Company specifying the number of shares to be purchased and
signed by the proper person, or by any other form of notice, including electronic notice, approved
by the Board.

8. Restricted Stock.

(a) General. The Board may grant Awards entitling recipients to acquire, for such
purchase price, if any, as may be determined by the Board, shares of Common Stock (“Restricted
Stock”) with such rights and subject to such restrictions and conditions as the Board may determine
at the time of grant.

(b) Acceptance of Award. A Participant who is granted Restricted Stock shall have no
rights with respect to such Award unless the Participant shall have accepted the Award within 60
days (or such shorter date as the Board may specify) following the date of the Award by making
payment to the Company of the specified purchase price, if any, of the shares covered by the Award
and by executing and delivering to the Company a written instrument that sets forth the terms and
conditions applicable to the Restricted Stock in such form as the Board shall determine.

 

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(c) Vesting of Restricted Stock. Shares of Restricted Stock shall become vested and
exercisable at such time or times, whether or not in installments, as shall be determined by the
Board. In the alternative, the Board may specify that the shares of Restricted Stock shall become
vested and exercisable upon the achievement of such performance goals, objectives and other
conditions as it may establish at the time of grant. Subsequent to such date or dates and/or the
attainment of such pre-established performance goals, objectives and other conditions, the shares
on which all restrictions have lapsed shall no longer be Restricted Stock and shall be deemed
“vested.”

(d) Rights as a Stockholder. Upon complying with the provisions of this Section 8, a
Participant shall have all the rights of a stockholder with respect to the Restricted Stock,
including voting and dividend rights, subject to non-transferability restrictions and Company
repurchase or forfeiture rights described in the Plan and subject to such other conditions
contained in the Award. Unless the Board shall otherwise determine, certificates evidencing shares
of Restricted Stock shall remain in the possession of the Company until such shares are vested as
provided in Section 8(c) below.

(e) Restrictions. In the event of termination of employment by the Company for any
reason, including death, Disability, Retirement and for Cause, the Company shall have the right, at
the discretion of the Board, to repurchase shares of Restricted Stock that have not then vested at
their purchase price, or to require forfeiture of such shares to the Company if acquired at no
cost, from the Participant or the Participant’s legal representative or legatee. Unless otherwise
specified in the Award, the Company must exercise such right of repurchase or forfeiture within 90
days following such termination of employment.

(f) Waiver, Deferral and Reinvestment of Dividends. The written instrument evidencing
the Award may require or permit the immediate payment, waiver, deferral or investment of dividends
paid on the Restricted Stock.

9. Restricted Units.

(a) General. The Board may grant Awards entitling recipients to acquire in the
future: (i) shares of Common Stock, (ii) an equivalent amount of cash, or (iii) a combination of
shares of Common Stock and cash, as determined by the Board in its sole discretion, with such
rights and subject to such restrictions and conditions as the Board may determine at the time of
grant, (each, a “Restricted Unit”; together with Restricted Stock, a “Restricted Award”).

(b) Vesting of Restricted Units. Restricted Units shall become vested and exercisable
at such time or times, whether or not in installments, as shall be determined by the Board. In the
alternative, the Board may specify that a Restricted Unit shall become vested and exercisable upon
the achievement of such performance goals, objectives and other conditions as it may establish at
the time of grant.

(c) No Rights as Stockholder. A Participant holding Restricted Units shall not have
the rights of a stockholder with respect to the shares of Common Stock, if any, issuable under such
Restricted Units, unless and until such shares are issued to the Participant pursuant to the
provisions of the Restricted Units and this Plan.

 

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10. Unrestricted Stock.

The Board may grant Awards entitling recipients to acquire, for such purchase price, if any,
as may be determined by the Board, shares of Common Stock free of any vesting restrictions or
conditions under the Plan (“Unrestricted Stock”) at a purchase price determined by the Board if
such shares of Common Stock are registered under the Securities Act. Shares of Unrestricted Stock
may be granted or sold in respect of past services or other valid consideration.

11. Other Stock-Based Awards.

The Board may grant other types of equity-based or equity-related Awards in such amounts and
subject to such terms and conditions as the Board may determine. Such Awards may entail the
transfer of actual shares of Common Stock to Participants or payment in cash or otherwise of
amounts based on the value of shares of Common Stock, and may include, without limitation, Awards
designed to comply with or take advantage of the applicable local laws of jurisdictions other than
the United States.

12. Adjustments for Changes in Common Stock and Certain Other Events.

(a) Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of shares of Common
Stock other than an ordinary cash dividend: (i) the number and class of securities available under
this Plan, (ii) the number and class of securities and exercise price per share subject to each
Option then outstanding, (iii) the repurchase price per share of Common Stock subject to each
Restricted Award then outstanding, and (iv) the terms of each other stock-based Award then
outstanding, shall be adjusted appropriately by the Company, or substituted Awards may be made, if
applicable, to the extent the Board shall determine, in good faith, that such an adjustment or
substitution is necessary or appropriate. Any adjustment under this Section 12(a) shall become
effective at the close of business on the date the subdivision or combination becomes effective, or
as of the record date of such dividend, or in the event that no record date is fixed, upon the
making of such dividend. If this Section 12(a) applies and Section 12(c) also applies to any
event, Section 12(c) shall be applicable to such event, and this Section 12(a) shall not be
applicable.

(b) Liquidation or Dissolution. In the event the shareholders of the Company approve
a plan of complete liquidation or dissolution of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets, the Board shall
provide that: (i) except to the extent specifically provided to the contrary in any Award, all then
unexercised Options and SARs outstanding will: (A) become exercisable in full as of a specified
time at least 10 business days prior to the effective date of such liquidation, dissolution, sale
or disposition, and (B) terminate effective upon such liquidation, dissolution, sale or
disposition, except to the extent exercised before such effective date, and (ii) except to the
extent specifically provided to any Restricted Award, all restrictions and conditions on all
Restricted Awards then outstanding shall automatically be deemed terminated or satisfied.

(c) Reorganization and Change in Control Events.

 

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(1) Definitions.

(a) A “Reorganization Event” shall mean:

(i) any merger or consolidation of the Company with or into another entity as a result
of which all of the outstanding shares of Common Stock are converted into or exchanged for
the right to receive cash, securities or other property; or

(ii) any exchange of all of the outstanding shares of Common Stock for cash, securities
or other property pursuant to a share exchange transaction.

(b) A “Change in Control Event” shall mean:

(i) the acquisition by an individual, entity or group within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act (each, a “Person”) of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person beneficially owns
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) 30% or more of either
(x) the then-outstanding shares of common stock of the Company (the “Outstanding Common
Stock”) or (y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Voting
Securities”); provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly
from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange
of any security exercisable for, convertible into or exchangeable for common stock or voting
securities of the Company, unless the Person exercising, converting or exchanging such
security acquired such security directly from the Company or an underwriter or agent of the
Company), (B) any acquisition by any employee benefit plan or related trust sponsored or
maintained by the Company or any corporation controlled by the Company, or (C) any
acquisition by any corporation pursuant to a Business Combination (as defined in Section
12(c)(1)(b)(iii) below) that complies with clauses (x) and (y) of subsection (iii) of this
definition;

(ii) an event that results in the Continuing Directors (as defined below) not
constituting a majority of the Board (or, if applicable, the board of directors of a
successor corporation to the Company). “Continuing Director” means, at any date, a member
of the Board: (x) who was a member of the Board on the date of the initial adoption of this
Plan by the Board, or (y) who was nominated or elected subsequent to such date by at least a
majority of the directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such nomination or election;
provided, however, that there shall be excluded from this clause (y) any individual whose
initial assumption of office occurred as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other than the Board; or

 

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(iii) the consummation of a merger, consolidation, reorganization, recapitalization or
share exchange involving the Company or a sale or other disposition of all or substantially
all of the assets of the Company (a “Business Combination”), unless, immediately following
such Business Combination, each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial owners of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business Combination, which
shall include, without limitation, a corporation that as a result of such transaction owns
the Company or all or substantially all of the Company’s assets either directly or through
one or more subsidiaries (such resulting or acquiring corporation is referred to herein as
the “Acquiring Corporation”) in substantially the same proportions as their ownership of the
Outstanding Common Stock and Outstanding Voting Securities, respectively, immediately prior
to such Business Combination, and (y) no Person (excluding the Acquiring Corporation or any
employee benefit plan or related trust maintained or sponsored by the Company or by the
Acquiring Corporation) beneficially owns, directly or indirectly, 30% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined
voting power of the then-outstanding securities of such corporation entitled to vote
generally in the election of directors (except to the extent that such ownership existed
prior to the Business Combination).

 

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(2) Effect on Options and SARs.

(a) Reorganization Event. Upon the occurrence of a Reorganization Event (regardless
of whether such event also constitutes a Change in Control Event), or the execution by the Company
of any agreement with respect to a Reorganization Event (regardless of whether such event will
result in a Change in Control Event), the Board shall provide that all outstanding Options and SARs
shall be assumed, or equivalent options shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof); provided, however, that if such Reorganization Event also
constitutes a Change in Control Event, except to the extent specifically provided to the contrary
in the instrument evidencing any Option or SAR or any other agreement between a Participant and the
Company, such assumed or substituted options shall be immediately exercisable in full upon the
occurrence of such Reorganization Event. For purposes hereof, an Option or SAR shall be considered
to be assumed if, following consummation of the Reorganization Event, the Option or SAR confers the
right to purchase, for each share of Common Stock subject to the Option or SAR immediately prior to
the consummation of the Reorganization Event, the consideration (whether cash, securities or other
property) received as a result of the Reorganization Event by holders of Common Stock for each
share of Common Stock held immediately prior to the consummation of the Reorganization Event (and
if holders were offered a choice of consideration, the type of consideration chosen by the holders
of a majority of the outstanding shares of Common Stock); provided, however, that if the
consideration received as a result of the Reorganization Event is not solely common stock of the
acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of
the acquiring or succeeding corporation (or an affiliate thereof), provide for the consideration to
be received upon the exercise of Options and SARs to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) equivalent in fair market value to
the per share consideration received by holders of outstanding shares of Common Stock as a result
of the Reorganization Event.

Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an affiliate
thereof) does not agree to assume, or substitute for, such Options and SARs, then the Board shall,
upon written notice to the Participants, provide that all then unexercised Options and SARs will
become exercisable in full as of a specified time prior to the Reorganization Event and will
terminate immediately prior to the consummation of such Reorganization Event, except to the extent
exercised by the Participants before the consummation of such Reorganization Event; provided,
however, that in the event of a Reorganization Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share of Common Stock
surrendered pursuant to such Reorganization Event (the “Acquisition Price”), then the Board may
instead provide that all outstanding Options and SARs shall terminate upon consummation of such
Reorganization Event and that each Participant shall receive, in exchange therefor, a cash payment
equal to the amount (if any) by which: (A) the Acquisition Price multiplied by the number of shares
of Common Stock subject to such outstanding Options and SARs (whether or not then exercisable),
exceeds (B) the aggregate exercise price of such Options.

(b) Change in Control Event that is not a Reorganization Event. Upon the occurrence
of a Change in Control Event that does not also constitute a Reorganization
Event, except to the extent specifically provided to the contrary in any Option or SAR Award,
all Options and SARs then outstanding shall automatically become immediately exercisable in full.

 

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(3) Effect on Restricted Awards and Awards of Unrestricted Stock.

(a) Reorganization Event that is not a Change in Control Event. Upon the occurrence of
a Reorganization Event that is not a Change in Control Event, the repurchase and other rights of
the Company under each outstanding Restricted Award shall inure to the benefit of the Company’s
successor and shall apply to the cash, securities or other property that the Common Stock was
converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the
same extent as they applied to the Common Stock subject to such Restricted Award.

(b) Change in Control Event. Upon the occurrence of a Change in Control Event
(regardless of whether such event also constitutes a Reorganization Event), except to the extent
specifically provided to the contrary in the Restricted Award, all restrictions and conditions on
all Restricted Awards then outstanding shall automatically be deemed terminated or satisfied.

(d) Notice of Adjustment. When any adjustment is required to be made in under this
Section 12, the Company shall promptly notify the Participant of such event and of the number of
shares of Common Stock or other securities or property thereafter owned or that may be acquired
under an Award.

(e) No Impairment. The Company and the Participant will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company or the Participant, respectively, but will at all times in good
faith assist in the carrying out of all the provisions of this Section 12 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights or the Company and
the Participant against impairment

13. Termination of Awards.

(a) Termination by Death. If any Participant’s employment by, or other relationship
with, the Company terminates by reason of death: (i) any Options or SARs then owned by such
Participant may thereafter be exercised, to the extent exercisable at the date of death by the
legal representative or legatee of the Participant, until the earlier of the date that is one year
(or such longer period as the Board shall specify at any time) after the date of death or until the
date of expiration of the stated term of the Options or SARs, if earlier, and (ii) any restrictions
and conditions on any Restricted Awards then owned by the Participant shall automatically be deemed
terminated or satisfied on the date of death, and the legal representative or legatee of the
Participant shall have the right to acquire any shares of Common Stock underlying the Restricted
Awards until the earlier of the date that is one year (or such longer period as the Board shall
specify at any time) after the date of death or until the expiration of the stated term of the
Restricted Award.

(b) Termination by Reason of Disability or Retirement.

 

-12-

 

(1) If a Participant’s employment by, or other relationship with, the Company terminates by
reason of disability as set forth in Section 22(e)(3) of the Code (“Disability”): (i) any Options
or SARs then owned by such Participant may thereafter be exercised, to the extent they were
exercisable at the time of such termination of employment, until the earlier of the date that is
one year (or such longer period as the Board shall specify at any time) after the date of such
termination of employment or the date of expiration of the stated term of the Options or SARs, and
(ii) any restrictions and conditions on any Restricted Awards then owned by the Participant shall
automatically be deemed terminated or satisfied on the date of such termination of employment, and
the legal representative or guardian of the Participant shall have the right to acquire any shares
of Common Stock underlying the Restricted Awards until the earlier of the date that is one year (or
such longer period as the Board shall specify at any time) after the date of such termination of
employment or the date of expiration of the stated term of the Restricted Award.

(2) If a Participant retires in good standing from active employment or service with the
Company in accordance with the retirement policies of the Company then in effect (“Retirement”),
(i) any Options and SARs then held by the Participant may thereafter be exercised, to the extent
they were exercisable at the time of such termination, until the earlier of the date that is three
months (or such longer period as the Board shall specify at any time) after the date of such
Retirement or until the date of expiration of the stated term of the Options or SARs, and (ii) any
restrictions and conditions on any Restricted Awards then owned by the Participant shall
automatically be deemed terminated or satisfied on the date of such Retirement and the Participant
shall have the right to acquire any shares of Common Stock underlying the Restricted Awards until
the earlier of the date that is three months (or such longer period as the Board shall specify at
any time) after the date of such Retirement or the date of expiration of the stated term of the
Restricted Award.

(3) The Board shall have sole authority and discretion to determine whether a Participant’s
employment or services has been terminated by reason of Disability or Retirement.

(c) Termination for Cause. If a Participant’s employment by, or other relationship
with, the Company terminates for “Cause,” any Options, SARs and Restricted Awards held by such
Participant shall immediately terminate and be of no further force and effect; provided, however,
that the Board may, in its sole discretion, provide that any such Options and SARs may be exercised
until the earlier of the date that is three months after the date of such termination (or such
longer period as the Board shall specify at any time) of employment or the date of expiration of
the stated term of the Options or SARs.

“Cause” shall have the meaning ascribed to such term in any written employment, consulting,
advisory or other agreement between the applicable Participant and the Company; provided, however,
that if no such agreement exists or, if such agreement exists but no such term is provided or
defined therein, “Cause” shall mean a determination by the Company (including the Board) that the
Participant’s employment or other relationship with the Company should be terminated as a result
of: (i) a material breach by the Participant of any agreement to which the Participant and the
Company are parties, (ii) any act, other than Retirement, or omission to act by the Participant
that may have a material and adverse effect on the business of the Company or on the Participant’s
ability to perform services for the Company, including, without limitation, the
proven or admitted commission of any crime (other than an ordinary traffic violation), or (iii) any
material misconduct or material neglect of duties by the Participant in connection with the
business or affairs of the Company.

 

-13-

 

(d) Other Termination. Except as provided under the Plan or under the terms of any
Award, if a Participant’s employment by, or other relationship with, the Company terminates for any
reason other than death, Disability, Retirement or for Cause: (i) any Options and SARs held by such
Participant may thereafter be exercised, to the extent they are exercisable on the date of
termination of employment, until the earlier of the date that is 90 days (or such longer period as
the Board shall specify at any time) after the date of such termination of employment or the date
of expiration of the stated term of the Options and SARs, and (ii) any restrictions and conditions
on any Restricted Awards then owned by the Participant shall automatically be deemed terminated or
satisfied on the date of such Retirement and the Participant shall have the right to acquire any
shares of Common Stock underlying the Restricted Awards until the earlier of the date that is 90
days (or such longer period as the Board shall specify at any time) after the date of such
termination of employment or the date of expiration of the stated term of the Restricted Award.

(e) Transfer and Leave of Absence. For purposes of the Plan, the following events
shall not be deemed a termination of employment: (i) a transfer of employment between any of the
Company, a parent, a subsidiary or any other affiliate of the Company, and (ii) an approved leave
of absence for military service or sickness, or for any other purpose approved by the Board, if the
employee’s right to re-employment is guaranteed by a statute, by contract or under the policy
pursuant to which the leave of absence was granted, or if the Board otherwise so provides in
writing.

14. Withholding.

(a) Payment by Participant. Each Participant shall pay to the Company, or make
arrangements satisfactory to the Board regarding payment of, any federal, state, local, provincial
and/or payroll taxes of any kind required by law to be withheld with respect to such income. The
Company may, to the extent permitted by law, deduct any such taxes from any payment of any kind
otherwise due to a Participant whether or not pursuant to the Plan.

(b) Payment in Shares. A Participant may elect, with the consent of the Board, to
have such tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company
to withhold from shares of Common Stock to be issued pursuant to an Award a number of shares of
Common Stock having an aggregate Fair Market Value that would satisfy the minimum withholding
amount due with respect to such Award, or (ii) delivering to the Company a number of Mature Shares
with an aggregate Fair Market Value that would satisfy the minimum withholding amount due. The
Company may require that any fractional share amount be settled in cash. For the purposes of this
Section 14(b), Fair Market Value shall be determined as of the date on which the amount of tax to
be withheld is determined.

(c) Notice of Disqualifying Disposition. If any Participant shall make any
disposition of shares of Common Stock delivered pursuant to the exercise of an Incentive Stock
Option under the circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such disposition
within 10 days thereof.

 

-14-

 

15. Status of Participant. With respect to the portion of any Award that has not been
exercised and any payments in cash, shares of Common Stock or other consideration not received by a
Participant, a Participant shall have no rights greater than those of a general unsecured creditor
of the Company unless the Board shall otherwise expressly determine in connection with an Award.
The Board may, in its sole discretion, authorize the creation of trusts or other arrangements to
meet the Company’s obligations to deliver shares of Common Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other arrangements is consistent
with the provision of the preceding sentence.

16. General Provisions Applicable to Awards.

(a) Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award or as otherwise provided in the Plan, no Award or any right or obligation thereunder
may be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, whether voluntarily or involuntarily, by the person to whom they are granted, except
by will or the laws of descent and distribution. Awards shall be exercisable only during the life
of the Participant to whom an Award was granted and only by the Participant or the Participant’s
legal representative. References to a Participant, to the extent relevant in the context, shall
include references to authorized transferees. Notwithstanding the immediately proceeding three (3)
sentences, the Board may permit a Participant to transfer any Award to any person or entity that
the Board so determines under such terms and conditions that it deems appropriate in its sole
discretion. Any assignment in violation of the provisions of this Section 16(a) shall be void.
All of the terms and conditions of this Plan and any Awards shall be binding upon any such
permitted successors and assigns of the Participant.

(b) Agreements Evidencing Awards. Each Award granted under the Plan shall be
evidenced by a written document that shall contain such provisions and conditions as the Board
deems appropriate. By accepting an Award pursuant to the Plan, a Participant thereby agrees that
the Award shall be subject to all of the terms and provisions of the Plan and the applicable Award.

(c) Non-Uniform Determinations. Except as otherwise provided by the Plan, each Award
may be made alone or in addition to or in relation to any other Award. The terms of each Award
need not be identical, and the Board need not treat Participants uniformly, regardless of whether
such persons are similarly situated. Without limiting the generality of the foregoing, the Board
shall be entitled, among other things, to make non-uniform and selective determinations when
issuing Awards, and to grant non-uniform and selective Awards as to: (i) the persons to receive
Awards, (ii) the terms and provisions of Awards, and (iii) whether a Participant’s employment has
been terminated for purposes of the Plan.

(d) Acceleration. The Board may at any time provide that any Award shall become
immediately exercisable in full or in part, free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be.

 

-15-

 

(e) Delivery of Shares. The Company will not be obligated to deliver any shares of
Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under
the Plan until: (i) all conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with
the issuance and delivery of such shares have been satisfied, including any applicable securities
laws and any applicable stock exchange or stock market rules and regulations, and (iii) the
Participant has executed and delivered to the Company such representations or agreements as the
Company may consider appropriate to satisfy the requirements of any applicable laws, rules or
regulations. The Board may, at any time, provide that, at the time any shares of Common Stock
would otherwise be delivered pursuant to an Award, the Participant shall instead receive an
instrument evidencing the right to future delivery of shares of Common Stock at such time or times,
and on such conditions, as the Board shall specify. The Board may at any time accelerate the time
at which delivery of all or any part of the shares of Common Stock shall take place.

(f) Stock Certificates. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless otherwise determined by
the Board, deposited by the Participant, together with a stock power endorsed in blank, with the
Company or the Company’s designee. At the expiration of the applicable restriction periods, the
Company or such designee shall deliver the certificates no longer subject to such restrictions to
the Participant or if the Participant has died, to the Participant’s legal representative or
legatee. Delivery of stock certificates to Participants under this Plan shall be deemed effected
for all purposes when the Company or a stock transfer agent of the Company shall have delivered
such certificates in the United States mail, addressed to the Participant, at the Participant’s
last known address on file with the Company.

17. Miscellaneous

(a) No Right To Employment or Other Status. No person shall have any claim or right
to be granted an Award. The adoption of the Plan and grant of an Award shall not be construed as
giving a Participant the right to continued employment or any other relationship with the Company.
The Company expressly reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the Plan or any Award.

(b) Nature of Payments. Any and all grants of Awards and deliveries of shares of
Common Stock, cash, securities or other property under the Plan shall be in consideration of
services performed or to be performed for the Company by the Participant. Awards under the Plan
may, in the discretion of the Board, be made in substitution in whole or in part for cash or other
compensation otherwise payable to a Participant. All such grants and deliveries shall constitute a
special discretionary incentive payment to the Participant and shall not be required to be taken
into account in computing the amount of salary or compensation of the Participant for the purpose
of determining any contributions to or any benefits under any pension, retirement, profit-sharing,
bonus, life insurance, severance or other benefit plan of the Company or under any agreement with
the Participant, unless the Company specifically provides otherwise.

 

-16-

 

(c) No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until delivery of the shares to
the Participant or the Participant’s legal representative or legatee. In the event the Company
effects a split of the shares of Common Stock by means of a stock dividend and the exercise price
of and the number of shares subject to an Option are adjusted as of the date of the distribution of
the dividend (rather than as of the record date for such dividend), a Participant who exercises an
Option between the record date and the distribution date for such stock dividend shall be entitled
to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock
acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding
as of the close of business on the record date for such stock dividend.

(d) Effective Date of Plan. The Plan shall become effective on the date on which it
is adopted by the Board; provided, however, that: (i) no Award granted to a Participant shall
become effective until any shareholder approval of the Company to issue the underlying securities
necessary under applicable legal, regulatory or listing requirements shall be obtained, and (ii) no
Award granted to a Participant that is intended to comply with Section 162(m) shall become
exercisable, vested or realizable, as applicable to such Award, unless and until the Plan has been
approved by the Company’s stockholders to the extent stockholder approval is required by Section
162(m) in the manner required under Section 162(m).

(e) Entire Agreement. This Plan and any Award contain the entire agreement between
the parties with respect to the subject matter hereof and supercede all prior agreements and
understandings, both written and oral, between the parties with respect to the subject matter
hereof, and no party shall be liable or bound to any other party in any manner by any warranties,
representations, guarantees or covenants except as specifically set forth in the Plan and any
Award. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.

(f) Amendment of Plan or Award. The Board may at any time amend or discontinue the
Plan and amend or cancel any outstanding Award, including in any manner that adversely affects the
rights, duties or obligations of any Participant, and including but not limited to, substituting
therefor another Award of the same or a different type, changing the date of exercise or
realization, converting an Incentive Stock Option to a Nonstatutory Stock Option, and converting an
Option into a SAR, for the purpose of satisfying changes in law or for any other lawful purpose.
Unless otherwise determined by the Board, stockholder approval of any suspension, discontinuance,
revision or amendment shall be obtained only to the extent necessary to comply with any applicable
law, rule or regulation. To the extent required by Section 162(m), no Award granted to a
Participant that is intended to comply with Section 162(m) after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Award, unless and until such
amendment shall have been approved by the Company’s stockholders if required by Section 162(m)
(including the vote required under Section 162(m)). No Award shall be made that is conditioned
upon stockholder approval of any amendment to the Plan.

 

-17-

 

(g) Severability. If any provision of the Plan or any Award or the application
thereof to any person or circumstance is held to be invalid or unenforceable to any extent, the
remainder of the Plan or any Award shall remain in full force and effect and shall be reformed to
render the Agreement valid and enforceable while reflecting to the greatest extent permissible the
intent of the parties.

(h) Successors and Assigns. The terms and conditions of the Plan and any Award shall
be binding upon and inure to the benefit of the Company and its successors and assigns.

(i) Termination of Plan. The Plan shall terminate upon the tenth anniversary of its
effective date. The Board may terminate the Plan at any time prior to such date. No Award may be
granted under the Plan after the Plan has been terminated. No Award granted while this Plan is in
effect shall be altered or impaired by termination of the Plan, except upon the consent of the
holder of such Award. The power of the Board to construe and interpret this Plan and the Awards
granted prior to the termination of the Plan shall continue after such termination.

(j) Other Compensatory Arrangements. Neither the adoption of the Plan by the Board
nor the submission of the Plan to the shareholders of the Company for approval shall be construed
as creating any limitations on the power of the Board to adopt such other incentive arrangements as
it may deem desirable, and such arrangements may be either generally applicable or applicable only
in specific cases.

(k) Consents and Legal Requirements. If the Board shall at any time determine that
any Consent (as defined below) is necessary or desirable as a condition of, or in connection with,
the granting of any Award, the delivery of shares of Common Stock, or the delivery of any cash,
securities or other property under the Plan, or the taking of any other action thereunder (each
such action being hereinafter referred to as a “Plan Action”), then such Plan Action shall not be
taken, in whole or in part, unless and until such Consent shall have been effected or obtained to
the full satisfaction of the Board. The Board may require each person acquiring shares of Common
Stock pursuant to an Award to represent to and agree with the Company in writing that such person
is acquiring the shares for investment purposes only and without a view to distribution thereof.
The Board may also direct that any certificate evidencing shares delivered pursuant to the Plan
shall bear a legend setting forth such restrictions on transferability as the Board may determine
to be necessary or desirable, and may advise the transfer agent to place a stop order against any
legended shares.

“Consent” as use herein with respect to any Plan Action includes (i) any and all listings,
registrations or qualifications in respect thereof upon any securities exchange or under any
federal, state or local law, or law, rule or regulation of a jurisdiction outside the United
States, (ii) any and all written agreements and representations by the Participant with respect to
the disposition of shares, or with respect to any other matter, which the Committee may deem
necessary or desirable to comply with the terms of any such listing, registration or qualification,
or to obtain an exemption from the requirement that any such listing, registration or qualification
be made, (iii) any and all other consents, clearances and approvals in respect of a plan action by
any governmental or other regulatory body or any stock exchange or self-regulatory agency, and (iv)
any and all consents or authorizations required to comply with, or required to be obtained
under, applicable local law or otherwise required by the Board. Nothing herein shall require the
Company to list, register or qualify the shares of Common Stock on any securities exchange.

 

-18-

 

(l) Section 83(b) Election. No election under Section 83(b) of the Code (relating to
the inclusion of gross income in the year of transfer the amounts specified in such Code section)
or under a similar provision of the law of a jurisdiction outside the United States may be made
unless expressly permitted by the terms of the Award or by action of the Board in writing prior to
the making of such election. If a Participant, in connection with the acquisition of shares of
Common Stock under the Plan or otherwise, is expressly permitted under the terms of the Award or by
such Board action to make any such election and the Participant makes the election, the Participant
shall notify the Board of such election within 10 days of filing notice of the election with the
Internal Revenue Service or other governmental authority, in addition to any filing or notification
required pursuant to the regulations issued under Section 83(b) of the Code or other applicable
provision.

(m) Absence of Third-Party Beneficiary Rights. Unless expressly provided in the Plan
or any Award, no provision of the Plan or any Award is intended, nor will be interpreted, to
provide or create any third-party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, officer, director, shareholder, employee, partner of any party hereto or any
other person or entity, and, except as so provided, all provisions hereof and thereof will be
solely between the parties to the Plan and any Award.

(n) Provisions for Foreign Participants. The Board may modify the terms and
conditions of Awards granted to Participants who are foreign nationals or employed outside the
United States, establish sub-plans under the Plan, or adopt such modifications or procedures as the
Board may determine to be necessary or advisable, to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit, accounting or other matters.

(o) Liability of the Company. The Company and any affiliate that is in existence or
hereafter comes into existence shall not be liable to a Participant or other persons as to: (i) the
non-issuance or sale of shares of Common Stock as to which the Company has been unable to obtain
approval from any regulatory body having jurisdiction deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any shares of Common Stock hereunder, and (ii) any tax
consequence expected, but not realized, by any Participant or other person due to the receipt,
exercise or settlement of any Option, SAR or other Award granted hereunder.

(p) Governing Law. This Plan and any Award shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.

 

-19-Filed by Bowne Pure Compliance

 

Exhibit 10.2

THE SECURITIES
EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING
SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144, OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES, REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.

OPTION TO PURCHASE COMMON
STOCK

OF

NEUTRON ENTERPRISES, INC.

Void after October 11, 2012

This certifies
that, for value received,
                                                
(“Holder”) is entitled, subject to the terms set forth below, to
purchase from NEUTRON ENTERPRISES, INC., a Nevada corporation (the
“Company”), shares of the common stock, $.001 par value per share,
of the Company (“Common Stock”), as constituted on October 12,
2007 (the “Option Issue Date”), with the Notice of Exercise
attached hereto duly executed, and simultaneous payment therefor in lawful
money of the United States or as otherwise provided in Section 3 hereof,
at the Exercise Price then in effect. The number, character and Exercise Price
of the shares of Common Stock issuable upon exercise hereof are subject to
adjustment as provided herein.

1. Term of
Option. This Option shall be exercisable, in whole or in part, on the date
hereof and ending at 5:00 p.m. EST on October 11, 2012 (the “Option
Termination Date”) and shall be void thereafter.

2. Number
of Shares, Exercise Price, Restrictions, Repurchase Right, and Escrow.

2.1 Number of
Shares. The number of shares of Common Stock which may be purchased
pursuant to this Option shall be
                                                
shares (the “Shares”), subject, however, to adjustment pursuant
to Section 11 hereof.

2.2 Exercise
Price. The Exercise Price at which this Option, or portion thereof, may be
exercised shall be $0.50 per Share, subject, however, to adjustment pursuant to
Section 11 hereof.

1

 

2.3
Restrictions. Transfer of the Shares issued upon exercise of this Option is
subject to the following restrictions:

(a) From the Option Issue Date through April 11,
2008, the Holder shall not offer to sell, sell, or contract to sell or, lend,
pledge, hypothecate or otherwise transfer or dispose of, directly or
indirectly, any Shares; and

(b) Subject to Section 2.4 below, from and including
April 12, 2008 through October 11, 2008, the Holder shall not offer
to sell, sell, or contract to sell or, lend, pledge, hypothecate or otherwise
transfer or dispose of, directly or indirectly, [50% of the number of shares
granted] Shares.

2.4 Repurchase Right.

(a) If, prior to April 12, 2008, Holder’s
employment with or services to the Company are terminated by the Company for
Cause, and Holder has exercised this Option, in whole or in part, as of the
date of such termination, the Company shall have the right, but not the
obligation, to purchase up to all of the Shares issued to Holder at a purchase
price equal to the Exercise Price of the Shares (the “Repurchase
Price”). The Company shall exercise such right within forty-five
(45) days after such termination.

(b) If, on or after April 12, 2008 and prior to
October 12, 2008, Holder’s employment by or services to the Company
are terminated by the Company for Cause, and Holder has exercised this Option,
in whole or in part, as of the date of such termination, the Company shall have
the right, but not the obligation, to purchase that number of Shares in excess
of [50% of the number of shares granted] at the Repurchase Price. The
Company shall exercise such right within forty-five (45) days after such
termination.

(c) If, prior to October 12, 2008, Holder ceases to
be employed by or provide services to the Company due to Holder’s
resignation, and Holder has exercised this Option, in whole or in part, as of
the date of such resignation or during the thirty (30) day period
thereafter, the Company shall have the right, but not the obligation, to
purchase that number of Shares in excess of [50% of the number of shares
granted] at the Repurchase Price. The Company shall exercise such right
within forty-five (45) days after such resignation.

2.5 Escrow.

(a) If Holder exercises this Option, in whole or in part,
prior to October 12, 2008, or in the event Holder has resigned from the
Company, prior to November 11, 2008, a certificate representing the Shares
issuable upon such exercise shall be issued in the name of Holder and shall be
escrowed with the Secretary of the Company (the “Escrow Agent”).
Each deposited certificate shall be accompanied by a Stock Power

2

2

 

duly endorsed in
blank by Holder. The deposited certificates shall remain in escrow until such
time or times as the restrictions imposed under Section 2.3 and repurchase
rights under Section 2.4 have terminated. Upon delivery of the
certificates to the Escrow Agent, Holder shall be issued an instrument of
deposit acknowledging the number of Shares delivered in escrow to the Escrow
Agent.

(b) The Shares shall be subject to the following terms and
conditions relating to their release from escrow or their delivery to the
Company in connection with a repurchase:

(i) Subject to the termination of the repurchase rights
set forth in Section 2.4, on April 12, 2008, all restrictions shall
be removed from the certificates representing up to [50% of the number of
shares granted] Shares and the Secretary of the Company shall deliver to
Holder certificates representing such Shares free and clear of all restrictions
(except for any applicable securities law restrictions) within 10 business days
thereafter.

(ii) Subject to the termination of the repurchase rights
set forth in Section 2.4, on October 12, 2008, all restrictions shall
be removed from the certificates representing the Shares and the Secretary of
the Company shall deliver to Holder certificates representing such Shares free
and clear of all restrictions (except for any applicable securities law
restrictions) within 10 business days thereafter.

(iii) Should Company repurchase any Shares pursuant to
Section 2.4, then the escrowed certificates representing such repurchased
Shares shall be delivered to the Company for cancellation concurrently with
such repurchase. Upon such repurchase, Holder shall cease to have any further
rights or claims with respect to such Shares. To facilitate the performance or
observance by Holder of this Section 2.5(b)(iii), Holder hereby
irrevocably appoints (which appointment is coupled with an interest) the
Secretary as the attorney-in-fact of Holder to transfer any Shares so
repurchased to the Company, and Holder agrees that the transfer of stock
certificates with respect to such repurchased Shares shall be specifically
performable by the Company in a court of equity or law.

3. Exercise
of Option.

3.1 Payment of
Exercise Price. Subject to the terms hereof, the purchase rights
represented by this Option are exercisable by the Holder in whole or in part,
at any time, or from time to time, by the surrender of this Option and the
Notice of Exercise annexed hereto duly completed and executed on behalf of the
Holder, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address
of the Holder appearing on the books of the Company) accompanied by payment of
the Exercise Price in full (i) in cash or by bank or certified check for
the Shares with respect to which this Option is exercised; (ii) by
delivery to the Company of shares of the Company’s Common Stock having a
Fair Market Value (as defined below) equal to the aggregate Exercise Price of
the Shares being purchased which Holder is the record and beneficial owner of
and which have been

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held by the Holder for at least six
(6) months; provided, however, that such method of payment is then
permitted under applicable law; (iii) if the sale of the Shares is covered
by an effective registration statement, by delivering to the Company a Notice
of Exercise together with an irrevocable direction to a broker-dealer
registered under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), to sell a sufficient portion of the Shares and
deliver the sales proceeds directly to the Company to pay the Exercise Price;
(iv) by reducing the number of shares of the Company’s Common Stock
otherwise issuable under this Option to Holder upon the exercise of the Option
by a number of shares of Common Stock having a Fair Market Value equal to such
aggregated exercise price; provided, however, that such method of payment is
then permitted under applicable law; or (v) by any combination of the
procedures set forth in subsections (i), (ii), (iii) and (iv) of this
Section 3.1.

3.2 Fair Market
Value. If previously owned shares of Common Stock are tendered as payment
of the Exercise Price, the value of such shares shall be the “Fair Market
Value” of such shares on the trading date immediately preceding the date
of exercise. For the purpose of this Agreement, the “Fair Market
Value” shall be:

(a) If the
Common Stock is admitted to quotation on the National Association of Securities
Dealers Automated Quotation System (“NASDAQ”), the Fair
Market Value on any given date shall be the average of the highest bid and
lowest asked prices of the Common Stock as reported for such date or, if no bid
and asked prices were reported for such date, for the last day preceding such
date for which such prices were reported;

(b) If the
Common Stock is admitted to trading on a United States securities exchange or
the NASDAQ National Market System, the Fair Market Value on any date shall be
the closing price reported for the Common Stock on such exchange or system for
such date or, if no sales were reported for such date, for the last day
preceding such date for which a sale was reported;

(c) If the
Common Stock is traded in the over-the-counter market and not on any national
securities exchange nor in the NASDAQ Reporting System, the Fair Market Value
shall be the average of the mean between the last bid and ask prices per share,
as reported by the National Quotation Bureau, Inc., or an equivalent generally
accepted reporting service, or if not so reported, the average of the closing
bid and asked prices for a share as furnished to the Company by any member of
the National Association of Securities Dealers, Inc., selected by the Company
for that purpose; or

(d) If the
Fair Market Value of the Common Stock cannot be determined on the basis
previously set forth in this definition on the date that the Fair Market Value
is to be determined, the Board of Directors of the Company shall in good faith
determine the Fair Market Value of the Common Stock on such date.

If the tender of previously owned
shares would result in an issuance of a whole number of Shares and a fractional
Share of Common Stock, the value of such fractional share shall be paid to the
Company in cash or by check by the Holder.

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3.3 Termination
of Employment or Service; Death.

(a) If
Holder’s employment or services are terminated by the Company for any
reason other than for Cause (as defined below), this Option may be exercised
only within two (2) years after the termination of employment or cessation
of service and prior to the Option Termination Date.

(b) If
Holder’s employment or services are terminated by the Company

for Cause (as defined below), then
this Option shall forthwith terminate.

For purposes of
this Option, the term “Cause” shall mean (i) if Holder
is a party to a written agreement with the Company, or provides services to the
Company pursuant to a written services agreement between the Company and a
third party, which contains a definition of “cause” or “for
cause” or words of similar import for purposes of termination of
employment or service thereunder by the Company, “cause” or
“for cause” as defined in such agreement; and (ii) in all
other cases (A) the Holder’s intentional and persistent failure,
dereliction, or refusal to perform such duties as are reasonably assigned to
him or her by the officers or directors of the Company; (B) the
Holder’s fraud, dishonesty or other deliberate injury to the Company in
the performance of his or her duties on behalf of, or for, the Company;
(C) the Holder’s conviction of a crime which constitutes a felony
involving moral turpitude, fraud or deceit in the jurisdiction in which the
Holder is employed, regardless of whether such crime involves the Company; or
(D) the willful commission by the Holder of a criminal or other act that
causes substantial economic damage to the Company or substantial injury to the
business reputation of the Company. For purposes of this Option, no act, or
failure to act, on the part of any person shall be considered
“willful” unless done or omitted to be done by the person other
than in good faith and without reasonable belief that the person’s action
or omission was in the best interest of the Company.

(c) If Holder
shall die while employed by or providing services to the Company and prior to
the Option Termination Date, this Option may be exercised only within two
(2) years after Holder’s death, prior to the Option Termination
Date, and only by the Holder’s personal representative or persons
entitled thereto under the Holder’s will or the laws of descent and
distribution.

(d) If Holder
ceases to be employed or provide services to the Company due to Holder’s
resignation, any part of this Option to which Holder is then entitled to
exercise may be exercised in accordance with the following schedule:

(i) If Holder
resigns prior to October 12, 2008, then Holder may exercise this Option to
purchase [50% of the Shares] Shares within 30 days of the
termination of employment or cessation of services and prior to the Option
Termination Date and the Option to purchase the remaining [50% of the
Shares] Shares shall forthwith terminate; and

(ii) If
Holder resigns on or after October 12, 2008, then Holder may exercise this
Option within 30 days of the termination of employment or cessation of
services and prior to the Option Termination Date.

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(e) This
Option may not be exercised for more Shares (subject to adjustment as provided
in Section 11 hereof) after the termination of the Holder’s
employment, cessation of services to the Company, or death, as the case may be,
than the Holder was entitled to purchase thereunder at the time of the
termination of the Holder’s employment, the cessation of services to the
Company, or death.

3.4 Exercise
Date; Delivery of Certificates. This Option shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and Holder shall be treated for all
purposes as the holder of record of such Shares as of the close of business on
such date. As promptly as practicable on or after such date and in any event
within ten (10) days thereafter, the Company at its expense shall issue
and deliver to the Holder a certificate or certificates for the number of
Shares issuable upon such exercise. In the event that this Option is exercised
in part, the Company at its expense will execute and deliver a new Option of
like tenor exercisable for the number of shares for which this Option may then
be exercised.

4. No
Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Option. In lieu of
any fractional share to which the Holder would otherwise be entitled, the
Company shall make a cash payment equal to the Exercise Price multiplied by
such fraction.

5. Replacement of Option. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Option and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and
substance to the Company or, in the case of mutilation, on surrender and
cancellation of this Option, the Company at its expense shall execute and
deliver, in lieu of this Option, a new Option of like tenor and amount.

6. Rights
of Stockholder. Except as otherwise contemplated herein, the Holder shall
not be entitled to vote or receive dividends or be deemed the holder of Common
Stock or any other securities of the Company that may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, or change of
stock to no par value, consolidation, merger, conveyance or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise until the Option shall have been exercised as provided herein.

7. Transfer
of Option.

7.1. Non-
Transferability. This Option shall not be assigned, transferred, pledged or
hypothecated in any way, nor subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
this Option contrary to the provisions

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hereof, and the levy of an
execution, attachment, or similar process upon the Option, shall be null and
void and without effect.

7.2. Compliance
with Securities Laws; Restrictions on Transfers. In addition to
restrictions on transfer of this Option and Shares set forth in
Section 7.1 above.

(a) The
Holder of this Option, by acceptance hereof, acknowledges that this Option and
the Shares to be issued upon exercise hereof are being acquired solely for the
Holder’s own account and not as a nominee for any other party, and for
investment (unless such shares are subject to resale pursuant to an effective
prospectus), and that the Holder will not offer, sell or otherwise dispose of
any Shares to be issued upon exercise hereof except under circumstances that
will not result in a violation of applicable federal and state securities laws.
Upon exercise of this Option, the Holder shall, if requested by the Company,
confirm in writing, in a form satisfactory to the Company, that the Shares of
Common Stock so purchased are being acquired solely for the Holder’s own
account and not as a nominee for any other party, for investment (unless such
shares are subject to resale pursuant to an effective prospectus), and not with
a view toward distribution or resale.

(b) Neither
this Option nor any share of Common Stock issued upon exercise of this Option
may be offered for sale or sold, or otherwise transferred or sold in any
transaction which would constitute a sale thereof within the meaning of the
1933 Act, unless (i) such security has been registered for sale under the
1933 Act and registered or qualified under applicable state securities laws
relating to the offer and sale of securities; or (ii) exemptions from the
registration requirements of the 1933 Act and the registration or qualification
requirements of all such state securities laws are available and the Company
shall have received an opinion of counsel that the proposed sale or other
disposition of such securities may be effected without registration under the
1933 Act and would not result in any violation of any applicable state
securities laws relating to the registration or qualification of securities for
sale, such counsel and such opinion to be satisfactory to the Company. The
Holder of this Option, by acceptance hereof, acknowledges that the Company has
no obligation to file a registration statement with the Securities and Exchange
Commission or any state securities commission to register the issuance of the
Shares upon exercise hereof or the sale or transfer of the Shares after
issuance.

(c) All
Shares issued upon exercise hereof shall be stamped or imprinted with a legend
in substantially the following form (in addition to any legend required by
state securities laws).

THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED HEREBY HAVE BEEN TAKEN
BY THE REGISTERED OWNER FOR INVESTMENT, AND WITHOUT A VIEW TO RESALE OR
DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN
EXEMPTION THEREFROM.

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THE SECURITIES REPRESENTED HEREBY
ARE SUBJECT TO ADDITIONAL TRANSFER RESTRICTIONS AND REPURCHASE RIGHTS AS SET
FORTH IN THAT CERTAIN OPTION TO PURCHASE COMMON STOCK OF NEUTRON ENTERPRISES,
INC., DATED OCTOBER 12, 2007.

(d) Holder
recognizes that investing in the Option and the Shares involves a high degree
of risk, and Holder is in a financial position to hold the Option and the
Shares indefinitely and is able to bear the economic risk and withstand a
complete loss of its investment in the Option and the Shares. The Holder is a
sophisticated investor and is capable of evaluating the merits and risks of
investing in the Company. The Holder has had an opportunity to discuss the
Company’s business, management and financial affairs with the
Company’s management, has been given full and complete access to
information concerning the Company, and has utilized such access to its
satisfaction for the purpose of obtaining information or verifying information
and has had the opportunity to inspect the Company’s operation. Holder
has had the opportunity to ask questions of, and receive answers from the
management of the Company (and any person acting on its behalf) concerning the
Option and the Shares and the agreements and transactions contemplated hereby,
and to obtain any additional information as Holder may have requested in making
its investment decision.

(e) Holder
acknowledges and represents: (i) that he has been afforded the opportunity
to review and is familiar with the business prospects and finances of the
Company and has based his decision to invest solely on the information
contained therein and has not been furnished with any other literature,
prospectus or other information except as included in such reports;
(ii) Holder is acquiring the Options and Shares for investment purposes
only and not with a view toward distribution; (iii) he understands that no
federal or state agency has approved or disapproved the Option or Shares or
made any finding or determination as to the fairness of the Option and Common
Stock for investment; and (iv) that the Company has made no
representations, warranties, or assurances as to (A) the future trading
value of the Common Stock, (B) whether there will be a public market for
the resale of the Common Stock or (C) the filing of a registration
statement with the Securities and Exchange Commission or any state securities
commission to register the issuance of the Shares upon exercise hereof or the
sale or transfer of the Shares after issuance.

8. Reservation and Issuance of Stock; Payment of
Taxes.

(a) The
Company covenants that during the term that this Option is exercisable, the
Company will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Shares upon the exercise of
this Option, and from time to time will take all steps necessary to amend its
Articles of Incorporation to provide sufficient reserves of shares of Common
Stock issuable upon the exercise of the Option.

(b) The
Company further covenants that all shares of Common Stock issuable upon the due
exercise of this Option will be free and clear from all taxes or liens, charges
and security interests created by the Company with respect to the issuance
thereof, however, the Company shall not be obligated or liable for the payment
of any taxes, liens or charges of Holder,

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or any other party contemplated by
Section 7, incurred in connection with the issuance of this Option or the
Common Stock upon the due exercise of this Option. The Company agrees that its
issuance of this Option shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the shares of Common Stock upon the exercise of this
Option. The Common Stock issuable upon the due exercise of this Option, will,
upon issuance in accordance with the terms hereof, be duly authorized, validly
issued, fully paid and non-assessable.

(c) Upon
exercise of the Option, the Company shall have the right to require the Holder
to remit to the Company an amount sufficient to satisfy federal, state and
local tax withholding requirements prior to the delivery of any certificate for
Shares of Common Stock purchased pursuant to the Option, if in the opinion of
counsel to the Company such withholding is required under applicable tax laws.

(d) If Holder
is obligated to pay the Company an amount required to be withheld under
applicable tax withholding requirements may pay such amount (i) in cash;
(ii) in the discretion of the Board of Directors of the Company, through
the delivery to the Company of previously-owned shares of Common Stock having
an aggregate Fair Market Value equal to the tax obligation provided that the
previously owned shares delivered in satisfaction of the withholding
obligations must have been held by the Holder for at least six (6) months;
(iii) in the discretion of the Board of Directors of the Company, through
the withholding of Shares of Common Stock otherwise issuable to the Holder in
connection with the Option exercise; or (iv) in the discretion of the
Board of Directors of the Company, through a combination of the procedures set
forth in subsections (i), (ii) and (iii) of this Section 8(d).

9. Notices.

(a) Whenever
the Exercise Price or number of shares purchasable hereunder shall be adjusted
pursuant to Section 11 hereof, the Company shall issue a certificate
signed by its Chief Financial Officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Exercise Price and number of
shares purchasable hereunder after giving effect to such adjustment, and shall
cause a copy of such certificate to be mailed (by first-class mail, postage
prepaid) to the Holder of this Option.

(b) All
notices, advices and communications under this Option shall be deemed to have
been given, (i) in the case of personal delivery, on the date of such
delivery and (ii) in the case of mailing, on the third business day
following the date of such mailing, addressed as follows:

If to the
Company:

Neutron
Enterprises, Inc. 

3500 De Maisonneuve West 

2 Place Alexis Nihon
Suite 1650 

Montreal, Quebec, Canada H3Z 3C1

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Attn: Chief
Executive Officer

With a copy
to: 

Fox Rothschild LLP 

P.O. Box 5231 

Princeton, NJ 08543-
5231 

Attn.: Vincent A. Vietti, Esquire

and to the
Holder: 

at the address set forth in the records of the Company.

Either of the
Company or the Holder may from time to time change the address to which notices
to it are to be mailed hereunder by notice in accordance with the provisions of
this Paragraph 9.

10. Amendments.

(a) The
Company may amend, modify or terminate this Option, including but not limited
to, substituting therefor another Option of the same or a different type and
changing the date of exercise or realization, provided that the Holder’s
consent to such action shall be required unless the Company determines that the
action, taking into account any related action, would not materially and
adversely affect the Holder.

(b) No waivers
of, or exceptions to, any term, condition or provision of this Option, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.

11. Adjustments. The number of Shares of Common
Stock purchasable hereunder and the Exercise Price is subject to adjustment
from time to time upon the occurrence of certain events, as follows:

11.1. Split,
Subdivision, Combination of Shares, Reclassification or Recapitalization.
In the event of any stock split, reverse stock split, stock dividend,
recapitalization, combination of shares, reclassification of shares, spin-off
or other similar change in capitalization or event, applicable to securities as
to which purchase rights under this Option exist or any distribution to holders
of the securities as to which purchase rights under this Option exist other
than an ordinary cash dividend, the Exercise Price and the number and kind of
securities issuable upon exercise of this Option shall be proportionately
adjusted. Any adjustment under this Section 11.1 shall become effective at
the close of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend. If this
Section 11.1 applies and Section 11.3 also applies to any event,
Section 11.3 shall be applicable to such event, and this Section 11.1
shall not be applicable.

11.2 Liquidation
or Dissolution. In the event the shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company or an agreement

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for the sale or disposition by the
Company of all or substantially all of the Company’s assets, this Option
will: (i) become exercisable in full as of a specified time at least 10
business days prior to the effective date of such liquidation, dissolution,
sale or disposition, and (ii) terminate effective upon such liquidation,
dissolution, sale or disposition, except to the extent exercised before such
effective date

11.3 Reorganization and Change in Control Events.

(1) Definitions.

(a) A
“Reorganization Event” shall mean:

(i) any merger
or consolidation of the Company with or into another entity as a result of
which all of the outstanding shares of Common Stock are converted into or
exchanged for the right to receive cash, securities or other property; or

(ii) any
exchange of all of the outstanding shares of Common Stock for cash, securities
or other property pursuant to a share exchange transaction.

(b) A
“Change in Control Event” shall mean:

(i) the
acquisition by an individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (each, a
“Person”) of beneficial ownership of any capital stock of the
Company if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 30% or more of
either (x) the then-outstanding shares of common stock of the Company (the
“Outstanding Common Stock”) or (y) the combined voting power
of the then-outstanding securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Voting Securities”);
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change in Control Event: (A) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (B) any acquisition by any employee benefit plan or related
trust sponsored or maintained by the Company or any corporation controlled by
the Company, or (C) any acquisition by any corporation pursuant to a
Business Combination (as defined in Section 11.3(1)(b)(iii) below) that
complies with clauses (x) and (y) of subsection (iii) of this
definition;

(ii) an event
that results in the Continuing Directors (as defined below) not constituting a
majority of the Board (or, if applicable, the board of directors of a successor
corporation to the Company). “Continuing Director” means, at any
date, a member of the Board: (x) who was a member of the Board on the date
of the initial issuance of this Option, or (y) who was nominated or
elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were

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Continuing Directors at the time of
such nomination or election; provided, however, that there shall be excluded
from this clause (y) any individual whose initial assumption of office
occurred as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other than the
Board; or

(iii) the
consummation of a merger, consolidation, reorganization, recapitalization or
share exchange involving the Company or a sale or other disposition of all or
substantially all of the assets of the Company (a “Business
Combination”), unless, immediately following such Business Combination,
each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Common Stock and Outstanding Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock and
the combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors, respectively, of the resulting or
acquiring corporation in such Business Combination, which shall include,
without limitation, a corporation that as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”)
in substantially the same proportions as their ownership of the Outstanding
Common Stock and Outstanding Voting Securities, respectively, immediately prior
to such Business Combination, and (y) no Person (excluding the Acquiring
Corporation or any employee benefit plan or related trust maintained or
sponsored by the Company or by the Acquiring Corporation) beneficially owns,
directly or indirectly, 30% or more of the then-outstanding shares of common
stock of the Acquiring Corporation, or of the combined voting power of the then-
outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior
to the Business Combination).

(2) Effect
on Option.

(a) Reorganization Event. Upon the occurrence of a
Reorganization Event (regardless of whether such event also constitutes a
Change in Control Event), or the execution by the Company of any agreement with
respect to a Reorganization Event (regardless of whether such event will result
in a Change in Control Event), this Options shall be assumed, or equivalent
options shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof); provided, however, that if such Reorganization Event also
constitutes a Change in Control Event, such assumed or substituted options
shall be immediately exercisable in full upon the occurrence of such
Reorganization Event. For purposes hereof, this Option shall be considered to
be assumed if, following consummation of the Reorganization Event, this Option
confers the right to purchase, for each share of Common Stock subject to this
Option immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a
result of the Reorganization Event is not solely common stock of

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the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with the consent of the
acquiring or succeeding corporation (or an affiliate thereof), provide for the
consideration to be received upon the exercise of this Option to consist solely
of common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration
received by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.

Notwithstanding the
foregoing, if the acquiring or succeeding corporation (or an affiliate thereof)
does not agree to assume, or substitute for, this, then the this Options shall
become exercisable in full as of a date at least thirty (30) days prior to
the Reorganization Event and will terminate immediately prior to the
consummation of such Reorganization Event, except to the extent exercised by
Holder before the consummation of such Reorganization Event; provided, however,
that in the event of a Reorganization Event under the terms of which holders of
Common Stock will receive upon consummation thereof a cash payment for each
share of Common Stock surrendered pursuant to such Reorganization Event (the
“Acquisition Price”), then this Option shall terminate upon
consummation of such Reorganization Event and Holder shall receive, in exchange
therefor, a cash payment equal to the amount (if any) by which: (A) the
Acquisition Price multiplied by the number of shares of Common Stock issuable
upon exercise of this Option (whether or not then exercisable), exceeds
(B) the aggregate exercise price of such Options.

(b) Change
in Control Event that is not a Reorganization Event. Upon the occurrence of
a Change in Control Event that does not also constitute a Reorganization Event,
this Option shall automatically become immediately exercisable in full.

12. Intentionally Omitted.

13. Severability. Whenever possible, each provision
of this Option shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Option is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect the validity, legality or enforceability of any other provision of
this Option in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Option
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

14. Governing Law. The corporate law of the State
of Nevada shall govern all issues and questions concerning the relative rights
of the Company and its stockholders. All other questions concerning the
construction, validity, interpretation and enforceability of this Option and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Nevada, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Nevada or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Nevada.

15. Jurisdiction. The Holder and the Company agree
to submit to personal jurisdiction and to waive any objection as to venue in
the federal or state courts of Nevada.

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Service of process on the Company or
the Holder in any action arising out of or relating to this Option shall be
effective if mailed to such party at the address listed in Section 9
hereof.

16. Arbitration. If a dispute arises as to
interpretation of this Option, it shall be decided finally by three arbitrators
in an arbitration proceeding conforming to the Rules of the American
Arbitration Association applicable to commercial arbitration. The arbitrators
shall be appointed as follows: one by the Company, one by the Holder and the
third by the said two arbitrators, or, if they cannot agree, then the third
arbitrator shall be appointed by the American Arbitration Association. The
third arbitrator shall be chairman of the panel and shall be impartial. The
arbitration shall take place in Las Vegas, Nevada. The decision of a majority
of the arbitrators shall be conclusively binding upon the parties and final,
and such decision shall be enforceable as a judgment in any court of competent
jurisdiction. Each party shall pay the fees and expenses of the arbitrator
appointed by it, its counsel and its witnesses. The parties shall share equally
the fees and expenses of the impartial arbitrator.

17. Corporate Power; Authorization; Enforceable
Obligations. The execution, delivery and performance by the Company of this
Option: (i) are within the Company’s corporate power; (ii) have
been duly authorized by all necessary or proper corporate action;
(iii) are not in contravention of the Company’s articles of
incorporation or bylaws; (iv) will not violate in any material respect, any law
or regulation, including any and all Federal and state securities laws, or any
order or decree of any court or governmental instrumentality; and (v) will
not, in any material respect, conflict with or result in the breach or
termination of, or constitute a default under any agreement or other material
instrument to which the Company is a party or by which the Company is bound.

18. Successors and Assigns. This Option shall inure
to the benefit of and be binding on the respective successors, assigns and
legal representatives of the Holder and the Company.

* * * * *

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IN WITNESS WHEREOF,
the Company has caused this Option to be executed as of the
     day of October, 2007.

NEUTRON
ENTERPRISES, INC.

By:
                                                

Mitchell Rosen

Executive Vice President and Chief Financial
Officer

AGREED AND ACCEPTED:

                                                                       

                                                                       

Signature

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NOTICE OF EXERCISE

	To:	Chief Financial Officer
Neutron Enterprises, Inc.

(1) The
undersigned hereby elects to purchase
                     shares
of Common Stock of Neutron Enterprises, Inc., pursuant to the terms of the
attached Option, and tenders herewith payment of the purchase price for such
shares in full in the following manner (please check one of the following
choices):

o In Cash

o Cashless exercise
through a broker;

o Delivery of
previously owned shares; or

o Net Exercise

(2) In
exercising this Option, the undersigned hereby confirms and acknowledges that
the shares of Common Stock to be issued upon conversion thereof are being
acquired solely for the account of the undersigned and not as a nominee for any
other party, and for investment (unless such shares are subject to resale
pursuant to an effective prospectus), and that the undersigned will not offer,
sell or otherwise dispose of any such shares of Common Stock except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws.

(3) Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned.

 

                                                             

                                                             

                                                             

(Date)

(Signature)

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