Document:

EXHIBIT
      10.7

    

    

    June
      25,
      2007

    

    

    Mr.
      Carter Stewart

    Gallatin
      Resources, LLC

    314
      East
      Thayer Avenue

    Bismarck,
      North Dakota 58501

    

    
      	RE:	
              Offer
                to Purchase 
                Plum
                  Hill Prospect

                Yates
                  County, New York

              

            

    

    
    

     

    Dear
      Mr.
      Stewart: 

    

    The
      purpose of this letter is to set forth the basic terms and conditions under
      which Northern Oil and Gas, Inc. (NOGS) has agreed to acquire, and Gallatin
      Resources, LLC (Gallatin) has agreed to sell, certain oil and gas leases as
      described in Exhibit “A” (“Purchased Leases”) attached hereto and made a part
      hereof. When accepted in the manner hereinafter provided for, this Letter
      Agreement shall serve to set forth in writing the terms and conditions of such
      purchase and sale, which supersedes all prior correspondence, understands or
      agreements whether made verbally or in writing. It is NOGS sole responsibility
      to perform all due diligence, and otherwise conduct any geologic, operational
      and/or feasibility studies.

    

    The
      basic
      terms are as follows:

    

    NOGS
      agrees to pay $10,000.00 upon full execution of this Letter Agreement. The
      effectiveness of this Agreement is subject to the ability of NOGS to obtain
      a
      third party “fairness opinion” with regards to the terms of this transaction.
      Should NOGS not be able to obtain such an opinion, either the seller or Northern
      may terminate the agreement and both parties agree that the $10,000.00 payment
      by NOGS to Gallatin shall be refunded in full within ten (10) days of the
      termination of the Agreement.

    

    NOGS
      agrees to pay $1,500,000.00 and 275,000 shares of restricted stock in NOGS
      for
      approximately 10,000.00 net acres and approximately 10,000.00 gross acres,
      as
      set forth on the attached Exhibit “A” (“Purchased Leases”).

    

    Gallatin
      shall convey all Purchased Leases unto NOGS utilizing a mutually acceptable
      form
      of assignment and shall deliver the Purchased Leases unto NOGS with an
      eighty-one (81%) percent NRI.

    

    Closing
      on this transaction shall take place no later than August 17, 2007. Closing
      may
      be by mail or in person as decided by NOGS and Gallatin. At such Closing, NOGS
      shall authorize the issuance of 275,000 shares of restricted stock and wire
      transfer $1,490,000.00 to Gallatin’s account and Gallatin shall deliver the
      appropriate assignment unto NOGSS. If NOGS does not wire transfer $1,490,000.00
      by 5:00 p.m. EDT on August 17, 2007, this Agreement shall become null and
      void.

    

    Gallatin
      shall provide documentation NOGS deems necessary to satisfy NOGS as to title
      of
      the Purchased Leases. Upon 30 days prior to closing, Gallatin shall provide
      NOGS
      with copies of all Purchased Leases, confirmation of payment for all bonus,
      delay rentals or other monies owing third parties for the Purchased Leases,
      and
      copies of all ownership reports or other title information which Selling Party
      has in its possession that relate to lands covered by the Purchased Leases.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOGS
      agrees to provide Gallatin with copies of all well information obtained by
      NOGS,
      it’s contractors or assigns, from any well drilled on the Purchased Leases or
      lands pooled, unitized or communitized therewith. Such well information may
      include, but not limited to, all applications or filings filed with the State
      of
      New York, daily drilling reports, logs, test results, core analysis, production
      tests and production reports.

    

    NOGS
      and
      Gallatin have agreed upon an Area of Mutual Interest, as shown in Exhibit “B”
(“AMI”). 

    

    If
      you
      agree with the terms and conditions set forth in this Letter Agreement, please
      so indicate by signing below in the space provided and returning one (1)
      executed copy of this letter to the undersigned via facsimile transmission
      to
      952-476-9801.

    

    Sincerely,

    

    

    

    Michael
      L. Reger, CEO

    Northern
      Oil and Gas, Inc.

    

    

    Agreed
      to
      and accepted this 25th day of June, 2007

     

    
      	Gallatin Resources,
              LLC	 	 	 
	 	 	 	 	 
	By:	/s/
              Carter
              Stewart 	 	 	 
	Title:	
              
PresidentUnassociated Document

    EXHIBIT
      4.1

     

    Approved
      by Board of Directors on July 6, 2005

    Amended
      by Board of Directors on July 21, 2005

    Approved
      by Stockholders on August 16, 2005

     

    Chiste
      Corporation

    

    2005
      Performance Equity Plan

     

    Section
      1. Purpose;
      Definitions.

     

    1.1 Purpose.
      The
      purpose of the Chiste Corporation (“Company”) 2005 Performance Equity Plan is to
      enable the Company to offer to its employees, officers, directors and
      consultants whose past, present and/or potential contributions to the Company
      and its Subsidiaries have been, are or will be important to the success of
      the
      Company, an opportunity to acquire a proprietary interest in the Company. The
      various types of long-term incentive awards that may be provided under the
      Plan
      will enable the Company to respond to changes in compensation practices, tax
      laws, accounting regulations and the size and diversity of its businesses.
      All
      share numbers are stated on a post-reverse split basis of the Common Stock
      at
      the rate of one for 25 outstanding shares. If the such reverse split is not
      approved or a different ratio is selected, the number of shares stated herein
      will be adjusted accordingly.

     

    1.2 Definitions.
      For
      purposes of the Plan, the following terms shall be defined as set forth
      below:

     

    (a) “Agreement”
      means the agreement between the Company and the Holder, or such other document
      as may be determined by the Committee, setting forth the terms and conditions
      of
      an award under the Plan.

     

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

     

    (c) “Cause”
      means the termination of employment of a Holder by the Company for a reason
      defined by the Committee as being for cause for purposes of this Plan.
      Notwithstanding the forgoing, if a Holder is a party to a written agreement
      embodying the material terms of his employment by the Company or a Subsidiary
      and “cause” has been defined thereunder, the definition of “cause” contained in
      such written agreement shall control.

     

    (d) 
      (i) an unauthorized use or disclosure of the Company's or a Subsidiary’s
      confidential information or trade secrets by a Holder, which use or disclosure
      causes material harm to the Company of the Subsidiary, (ii) a material
      breach of any agreement between the Company or a Subsidiary and the Holder
      that
      relates to or was entered into in connection with the Holder’s employment by, or
      consultancy with, the Company or a Subsidiary (“Employment/Consulting
      Agreement”), (iii) a material failure to comply with the written policies
      or rules of the Company or a Subsidiary, (iv) conviction of, or plea of
      "guilty" or "no contest" to, a felony under the laws of the United States or
      any
      state thereof, (v) a continued failure to perform assigned duties,
      consistent with any Employment/Consulting Agreement, after receiving written
      notification of such failure from the Board, (vi) repeated acts of
      insubordination, or (vii) irresponsible, unauthorized acts or any willful
      misconduct, gross negligence or willful failure to act which has, or can
      reasonably be expected to have, a material adverse effect on the business,
      financial condition or performance, reputation or prospects of the
      Company

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) “Code”
      means the Internal Revenue Code of 1986, as amended from time to time, and
      any
      successor thereto, and the regulations promulgated thereunder.

     

    (f) “Committee”
      means the Compensation Committee of the Board or any other committee of the
      Board that the Board may designate to administer the Plan or any portion
      thereof. If no Committee is so designated, then all references in this Plan
      to
“Committee” shall mean the Board.

     

    (g) “Common
      Stock” means the Common Stock of the Company, $0.01 par value per
      share.

     

    (h) “Company”
      means Chiste Corporation, a corporation organized under the laws of the State
      of
      Nevada.

     

    (i) “Deferred
      Stock” means Common Stock to be received under an award made pursuant to Section
      8, below, at the end of a specified deferral period.

     

    (j) “Disability”
      means physical or mental impairment as determined under procedures established
      by the Committee for purposes of the Plan. Notwithstanding the forgoing, if
      a
      Holder is a party to a written agreement embodying the material terms of his
      employment by the Company or a Subsidiary and “disability” has been defined
      thereunder, the definition of “disability” contained in such written agreement
      shall control.

     

    (k) “Effective
      Date” means the date set forth in Section 12.1 below.

     

    (l) “Fair
      Market Value”, unless otherwise required by any applicable provision of the Code
      or any regulations issued thereunder, means, as of any given date: (i) if the
      Common Stock is listed on a national securities exchange or quoted on the Nasdaq
      National Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board, the
      last
      sale price of the Common Stock in the principal trading market for the Common
      Stock on such date, as reported by the exchange, Nasdaq or the NASD, as the
      case
      may be, or if no sale was reported on that date, then on the last preceding
      date
      on which such sale took place; (ii) if the Common Stock is not listed on a
      national securities exchange or quoted on the Nasdaq National Market, Nasdaq
      SmallCap Market or the NASD OTC Bulletin Board, but is traded in the residual
      over-the-counter market, the last sale price of the Common Stock on such date,
      as reported by Pinksheets, LLC or similar publisher of such information, or
      if
      no sale was reported on that date, then on the last preceding date on which
      such
      sale took place; and (iii) if the fair market value of the Common Stock cannot
      be determined pursuant to clause (i) or (ii) above, such price as the Committee
      shall determine, in good faith. Notwithstanding the foregoing, the Committee
      may
      use any other definition of Fair Market Value consistent with applicable tax,
      accounting and other rules.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (m) “Holder”
      means a person who has received an award under the Plan.

     

    (n) “Incentive
      Stock Option” means any Stock Option intended to be and designated as an
“incentive stock option” within the meaning of Section 422 of the
      Code.

     

    (o) “Nonqualified
      Stock Option” means any Stock Option that is not an Incentive Stock
      Option.

     

    (p) “Normal
      Retirement” means retirement from active employment with the Company or any
      Subsidiary on or after such age which may be designated by the Committee as
      “retirement age” for any particular Holder. If no age is designated, it shall be
      62.

     

    (q) “Other
      Stock-Based Award” means an award under Section 9, below, that is valued in
      whole or in part by reference to, or is otherwise based upon, Common
      Stock.

     

    (r) “Parent”
      means any present or future “parent corporation” of the Company, as such term is
      defined in Section 424(e) of the Code.

     

    (s) “Plan”
      means the Chiste Corporation 2005 Performance Equity Plan, as hereinafter
      amended from time to time.

     

    (t) “Repurchase
      Value” shall mean the Fair Market Value in the event the award to be settled
      under Section 2.2(h) or repurchased under Section 10.2 is comprised of shares
      of
      Common Stock and the difference between Fair Market Value and the Exercise
      Price
      (if lower than Fair Market Value) in the event the award is a Stock Option
      or
      Stock Appreciation Right; in each case, multiplied by the number of shares
      subject to the award.

     

    (u) “Restricted
      Stock” means Common Stock received under an award made pursuant to Section 7,
      below, that is subject to restrictions under said Section 7.

     

    (v) “SAR
      Value” means the excess of the Fair Market Value (on the exercise date) over the
      exercise price that the participant would have otherwise had to pay to exercise
      the related Stock Option, multiplied by the number of shares for which the
      Stock
      Appreciation Right is exercised.

     

    (w) “Stock
      Appreciation Right” means the right to receive from the Company, on surrender of
      all or part of the related Stock Option, without a cash payment to the Company,
      a number of shares of Common Stock equal to the SAR Value divided by the Fair
      Market Value (on the exercise date).

     

    (x) “Stock
      Option” or “Option” means any option to purchase shares of Common Stock which is
      granted pursuant to the Plan.

     

    (y) “Stock
      Reload Option” means any option granted under Section 5.3 of the
      Plan.

     

    (z) “Subsidiary”
      means any present or future “subsidiary corporation” of the Company, as such
      term is defined in Section 424(f) of the Code.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (aa) “Vest”
      means to become exercisable or to otherwise obtain ownership rights in an
      award.

     

    Section
      2. Administration.

     

    2.1 Committee
      Membership.
      The
      Plan shall be administered by the Board or a Committee. Committee members shall
      serve for such term as the Board may in each case determine, and shall be
      subject to removal at any time by the Board. If the Common Stock is registered
      under Section 12 of the Exchange Act, then the Committee members, to the extent
      possible and deemed to be appropriate by the Board, shall be “non-employee
      directors” as defined in Rule 16b-3 promulgated under the Securities Exchange
      Act of 1934, as amended (“Exchange Act”), and “outside directors” within the
      meaning of Section 162(m) of the Code.

     

    2.2 Powers
      of Committee.
      The
      Committee shall have full authority to award, pursuant to the terms of the
      Plan:
      (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock,
      (iv)
      Deferred Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based Awards.
      For purposes of illustration and not of limitation, the Committee shall have
      the
      authority (subject to the express provisions of this Plan):

     

    (a) to
      select
      the officers, employees, directors and consultants of the Company or any
      Subsidiary to whom Stock Options, Stock Appreciation Rights, Restricted Stock,
      Deferred Stock, Reload Stock Options and/or Other Stock-Based Awards may from
      time to time be awarded hereunder.

     

    (b) to
      determine the terms and conditions, not inconsistent with the terms of the
      Plan,
      of any award granted hereunder (including, but not limited to, number of shares,
      share exercise price or types of consideration paid upon exercise of such
      options, such as other securities of the Company or other property, any
      restrictions or limitations, and any vesting, exchange, surrender, cancellation,
      acceleration, termination, exercise or forfeiture provisions, as the Committee
      shall determine);

     

    (c) to
      determine any specified performance goals or such other factors or criteria
      which need to be attained for the vesting of an award granted
      hereunder;

     

    (d) to
      determine the terms and conditions under which awards granted hereunder are
      to
      operate on a tandem basis and/or in conjunction with or apart from other equity
      awarded under this Plan and cash and non-cash awards made by the Company or
      any
      Subsidiary outside of this Plan;

     

    (e) to
      permit
      a Holder to elect to defer a payment under the Plan under such rules and
      procedures as the Committee may establish, including the payment or crediting
      of
      interest on deferred amounts denominated in cash and of dividend equivalents
      on
      deferred amounts denominated in Common Stock;

     

    (f) to
      determine the extent and circumstances under which Common Stock and other
      amounts payable with respect to an award hereunder shall be deferred that may
      be
      either automatic or at the election of the Holder; 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (g) to
      substitute (i) new Stock Options for previously granted Stock Options, which
      previously granted Stock Options have higher option exercise prices and/or
      contain other less favorable terms, and (ii) new awards of any other type for
      previously granted awards of the same type, which previously granted awards
      are
      upon less favorable terms; and

     

    (h) to
      make
      payments and distributions with respect to awards (i.e., to “settle” awards)
      through cash payments in an amount equal to the Repurchase Value.

     

    Notwithstanding
      anything contained herein to the contrary, the Committee shall not grant to
      any
      one Holder in any one calendar year awards for more than 1,100,000 shares in
      the
      aggregate.

     

    2.3 Interpretation
      of Plan.

     

    (a) Committee
      Authority.
      Subject
      to Section 11, below, the Committee shall have the authority to adopt, alter
      and
      repeal such administrative rules, guidelines and practices governing the Plan
      as
      it shall from time to time deem advisable to interpret the terms and provisions
      of the Plan and any award issued under the Plan (and to determine the form
      and
      substance of all Agreements relating thereto), and to otherwise supervise the
      administration of the Plan. Subject to Section 11, below, all decisions made
      by
      the Committee pursuant to the provisions of the Plan shall be made in the
      Committee’s sole discretion and shall be final and binding upon all persons,
      including the Company, its Subsidiaries and Holders.

     

    (b) Incentive
      Stock Options.
      Anything in the Plan to the contrary notwithstanding, no term or provision
      of
      the Plan relating to Incentive Stock Options (including but not limited to
      Stock
      Reload Options or Stock Appreciation rights granted in conjunction with an
      Incentive Stock Option) or any Agreement providing for Incentive Stock Options
      shall be interpreted, amended or altered, nor shall any discretion or authority
      granted under the Plan be so exercised, so as to disqualify the Plan under
      Section 422 of the Code or, without the consent of the Holder(s) affected,
      to
      disqualify any Incentive Stock Option under such Section 422.

     

    Section
      3. Stock
      Subject to Plan.

     

    3.1 Number
      of Shares.
      The
      total number of shares of Common Stock reserved and available for issuance
      under
      the Plan shall be 1,100,000 shares. Shares of Common Stock under the Plan
      (“Shares”) may consist, in whole or in part, of authorized and unissued shares
      or treasury shares. If any shares of Common Stock that have been granted
      pursuant to a Stock Option cease to be subject to a Stock Option, or if any
      shares of Common Stock that are subject to any Stock Appreciation Right,
      Restricted Stock award, Deferred Stock award, Reload Stock Option or Other
      Stock-Based Award granted hereunder are forfeited or any such award otherwise
      terminates without a payment being made to the Holder in the form of Common
      Stock, such shares shall again be available for distribution in connection
      with
      future grants and awards under the Plan. If a Holder pays the exercise price
      of
      a Stock Option by surrendering any previously owned shares and/or arranges
      to
      have the appropriate number of shares otherwise issuable upon exercise withheld
      to cover the withholding tax liability associated with the Stock Option
      exercise, then the number of shares available under the Plan shall be increased
      by the lesser of (i) the number of such surrendered shares and shares used
      to
      pay taxes; and (ii) the number of shares purchased under such Stock
      Option.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    3.2 Adjustment
      Upon Changes in Capitalization, Etc.
      In the
      event of any merger, reorganization, consolidation, common stock dividend
      payable on shares of Common Stock, Common Stock split or reverse split,
      combination or exchange of shares of Common Stock, or other extraordinary or
      unusual event which results in a change in the shares of Common Stock of the
      Company as a whole, the Committee shall determine, in its sole discretion,
      whether such change equitably requires an adjustment in the terms of any award
      (including number of shares subject to the award and the exercise price) or
      the
      aggregate number of shares reserved for issuance under the Plan. Any such
      adjustments will be made by the Committee, whose determination will be final,
      binding and conclusive.

     

    Section
      4. Eligibility.

     

    Awards
      may be made or granted to employees, officers, directors and consultants who
      are
      deemed to have rendered or to be able to render significant services to the
      Company or its Subsidiaries and who are deemed to have contributed or to have
      the potential to contribute to the success of the Company. No Incentive Stock
      Option shall be granted to any person who is not an employee of the Company
      or a
      Subsidiary at the time of grant. Notwithstanding the foregoing, an award may
      be
      made or granted to a person in connection with his hiring or retention, or
      at
      any time on or after the date he reaches an agreement (oral or written) with
      the
      Company with respect to such hiring or retention, even though it may be prior
      to
      the date the person first performs services for the Company or its Subsidiaries;
      provided, however, that no portion of any such award shall vest prior to the
      date the person first performs such services.

     

    Section
      5. Stock
      Options.

     

    5.1 Grant
      and Exercise.
      Stock
      Options granted under the Plan may be of two types: (i) Incentive Stock Options
      and (ii) Nonqualified Stock Options. Any Stock Option granted under the Plan
      shall contain such terms, not inconsistent with this Plan, or with respect
      to
      Incentive Stock Options, not inconsistent with the Plan and the Code, as the
      Committee may from time to time approve. The maximum number of Shares that
      may
      be issuable upon the exercise of Incentive Stock Options awarded under the
      Plan
      shall be 1,100,000. The Committee shall have the authority to grant Incentive
      Stock Options or Non-Qualified Stock Options, or both types of Stock Options
      which may be granted alone or in addition to other awards granted under the
      Plan. To the extent that any Stock Option intended to qualify as an Incentive
      Stock Option does not so qualify, it shall constitute a separate Nonqualified
      Stock Option.

     

    5.2 Terms
      and Conditions.
      Stock
      Options granted under the Plan shall be subject to the following terms and
      conditions:

     

    (a) Option
      Term.
      The
      term of each Stock Option shall be fixed by the Committee; provided, however,
      that an Incentive Stock Option may be granted only within the ten-year period
      commencing from the Effective Date and may only be exercised within ten years
      of
      the date of grant (or five years in the case of an Incentive Stock Option
      granted to an optionee who, at the time of grant, owns Common Stock possessing
      more than 10% of the total combined voting power of all classes of voting stock
      of the Company (“10% Stockholder”).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b) Exercise
      Price.
      The
      exercise price per share of Common Stock purchasable under a Stock Option shall
      be determined by the Committee at the time of grant and may not be less than
      100% of the Fair Market Value on the date of grant (or, if greater, the par
      value of a share of Common Stock); provided, however, that (i) the exercise
      price of an Incentive Stock Option granted to a 10% Stockholder shall not be
      less than 110% of the Fair Market Value on the date of grant; and (ii) if the
      Stock Option is granted in connection with the recipient’s hiring, retention,
      reaching an agreement (oral or written) with the Company with respect to such
      hiring or retention, promotion or similar event, the option exercise price
      may
      be not less than the Fair Market Value on the date on which the recipient is
      hired or retained, reached such agreement with respect to such hiring or
      retention, or is promoted (or similar event), if the grant of the Stock Option
      occurs not more than 120 days after the date of such hiring, retention,
      agreement, promotion or other event.

     

    (c) Exercisability.
      Stock
      Options shall be exercisable at such time or times and subject to such terms
      and
      conditions as shall be determined by the Committee and as set forth in Section
      10, below. If the Committee provides, in its discretion, that any Stock Option
      is exercisable only in installments, i.e., that it vests over time, the
      Committee may waive such installment exercise provisions at any time at or
      after
      the time of grant in whole or in part, based upon such factors as the Committee
      shall determine.

     

    (d) Method
      of Exercise.
      Subject
      to whatever installment, exercise and waiting period provisions are applicable
      in a particular case, Stock Options may be exercised in whole or in part at
      any
      time during the term of the Option by giving written notice of exercise to
      the
      Company specifying the number of shares of Common Stock to be purchased. Such
      notice shall be accompanied by payment in full of the purchase price, which
      shall be in cash or, if provided in the Agreement, either in shares of Common
      Stock (including Restricted Stock and other contingent awards under this Plan)
      or partly in cash and partly in such Common Stock, or such other means which
      the
      Committee determines are consistent with the Plan’s purpose and applicable law,
      including, but not limited to, permitting payment by surrender of a portion
      of
      the Stock Option that has a “value” equal to the difference between the purchase
      price of the Common Stock issuable upon exercise of the Option and the Fair
      Market Value on the date prior to exercise, multiplied by the number of Shares
      underlying the portion of the Stock Option being surrendered, all as may be
      set
      forth in the Agreement representing such Stock Option. Cash payments shall
      be
      made by wire transfer, certified or bank check or personal check, in each case
      payable to the order of the Company; provided, however, that the Company shall
      not be required to deliver certificates for shares of Common Stock with respect
      to which an Option is exercised until the Company has confirmed the receipt
      of
      good and available funds in payment of the purchase price thereof (except that,
      in the case of an exercise arrangement approved by the Committee and described
      in the last sentence of this paragraph, payment may be made as soon as
      practicable after the exercise). Payments in the form of Common Stock shall
      be
      valued at the Fair Market Value on the date prior to the date of exercise.
      Such
      payments shall be made by delivery of stock certificates in negotiable form
      that
      are effective to transfer good and valid title thereto to the Company, free
      of
      any liens or encumbrances. Subject to the terms of the Agreement, the Committee
      may, in its sole discretion, at the request of the Holder, deliver upon the
      exercise of a Nonqualified Stock Option a combination of shares of Deferred
      Stock and Common Stock; provided, however, that, notwithstanding the provisions
      of Section 8 of the Plan, such Deferred Stock shall be fully vested and not
      subject to forfeiture. A Holder shall have none of the rights of a Stockholder
      with respect to the shares subject to the Option until such shares shall be
      transferred to the Holder upon the exercise of the Option. The Committee may
      permit a Holder to elect to pay the Exercise Price upon the exercise of a Stock
      Option by irrevocably authorizing a third party to sell shares of Common Stock
      (or a sufficient portion of the shares) acquired upon exercise of the Stock
      Option and remit to the Company a sufficient portion of the sale proceeds to
      pay
      the entire Exercise Price and any tax withholding resulting from such
      exercise.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (e) Transferability.
      Except
      as may be set forth in the next sentence of this Section or in the Agreement,
      no
      Stock Option shall be transferable by the Holder other than by will or by the
      laws of descent and distribution, and all Stock Options shall be exercisable,
      during the Holder’s lifetime, only by the Holder (or, to the extent of legal
      incapacity or incompetency, the Holder’s guardian or legal representative).
      Notwithstanding the foregoing, a Holder, with the approval of the Committee,
      may
      transfer a Stock Option (i) (A) by gift, for no consideration, or (B) pursuant
      to a domestic relations order, in either case, to or for the benefit of the
      Holder’s “Immediate Family” (as defined below), or (ii) to an entity in which
      the Holder and/or members of Holder’s Immediate Family own more than fifty
      percent of the voting interest, in exchange for an interest in that entity,
      subject to such limits as the Committee may establish and the execution of
      such
      documents as the Committee may require. In such event, the transferee shall
      remain subject to all the terms and conditions applicable to the Stock Option
      prior to such transfer. The term “Immediate Family” shall mean any child,
      stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
      sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
      daughter-in-law, brother-in-law or sister-in-law, including adoptive
      relationships, any person sharing the Holder’s household (other than a tenant or
      employee), a trust in which these persons have more than fifty percent
      beneficial interest, and a foundation in which these persons (or the Holder)
      control the management of the assets.

     

    (f) Termination
      by Reason of Death.
      If a
      Holder’s employment by the Company or a Subsidiary terminates by reason of
      death, any Stock Option held by such Holder, unless otherwise determined by
      the
      Committee and set forth in the Agreement, shall thereupon automatically
      terminate, except that the portion of such Stock Option that has vested on
      the
      date of death may thereafter be exercised by the legal representative of the
      estate or by the legatee of the Holder under the will of the Holder, for a
      period of one year (or such other greater or lesser period as the Committee
      may
      specify in the Agreement) from the date of such death or until the expiration
      of
      the stated term of such Stock Option, whichever period is shorter.

     

    (g) Termination
      by Reason of Disability.
      If a
      Holder’s employment by the Company or any Subsidiary terminates by reason of
      Disability, any Stock Option held by such Holder, unless otherwise determined
      by
      the Committee and set forth in the Agreement, shall thereupon automatically
      terminate, except that the portion of such Stock Option that has vested on
      the
      date of termination may thereafter be exercised by the Holder for a period
      of
      one year (or such other greater or lesser period as the Committee may specify
      in
      the Agreement) from the date of such termination of employment or until the
      expiration of the stated term of such Stock Option, whichever period is
      shorter.

     

    
      
        
        

      

      
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    (h) Other
      Termination.
      Subject
      to the provisions of Section 13.3, below, and unless otherwise determined by
      the
      Committee and set forth in the Agreement, if such Holder’s employment or
      retention by, or association with, the Company or any Subsidiary terminates
      for
      any reason other than death or Disability, the Stock Option shall thereupon
      automatically terminate, except that if the Holder’s employment is terminated by
      the Company or a Subsidiary (i) without cause the vested portion of the Stock
      Option on the date of termination may be exercised for the lesser of 30 days
      after termination of employment or the balance of such Stock Option’s term (ii)
      due to Normal Retirement, then the vested portion of the Stock Option on the
      date of termination may be exercised for the lesser of six months after
      termination of employment or the balance of such Stock Option’s
      term.

     

    (i) Additional
      Incentive Stock Option Limitation.
      In the
      case of an Incentive Stock Option, the aggregate Fair Market Value (on the
      date
      of grant of the Option) with respect to which Incentive Stock Options become
      exercisable for the first time by a Holder during any calendar year (under
      all
      such plans of the Company and its Parent and Subsidiaries) shall not exceed
      $100,000.

     

    (j) Buyout
      and Settlement Provisions.
      The
      Committee may at any time, in its sole discretion, offer to repurchase a Stock
      Option previously granted, based upon such terms and conditions as the Committee
      shall establish and communicate to the Holder at the time that such offer is
      made.

     

    5.3 Stock
      Reload Option.
      If a
      Holder tenders shares of Common Stock to pay the exercise price of a Stock
      Option (“Underlying Option”) and/or arranges to have a portion of the shares
      otherwise issuable upon exercise withheld to pay the applicable withholding
      taxes, then the Holder may receive, at the discretion of the Committee, a new
      Stock Reload Option to purchase that number of shares of Common Stock equal
      to
      the number of shares tendered to pay the exercise price and the withholding
      taxes (but only if such tendered shares were held by the Holder for at least
      six
      months). Stock Reload Options may be any type of option permitted under the
      Code
      and will be granted subject to such terms, conditions, restrictions and
      limitations as may be determined by the Committee from time to time. Such Stock
      Reload Option shall have an exercise price equal to the Fair Market Value as
      of
      the date of exercise of the Underlying Option. Unless the Committee determines
      otherwise, a Stock Reload Option may be exercised commencing one year after
      it
      is granted and shall expire on the date of expiration of the Underlying Option
      to which the Reload Option is related.

     

    Section
      6. Stock
      Appreciation Rights.

     

    6.1 Grant
      and Exercise.
      The
      Committee may grant Stock Appreciation Rights to participants who have been
      or
      are being granted Stock Options under the Plan as a means of allowing such
      participants to exercise their Stock Options without the need to pay the
      exercise price in cash. In the case of a Nonqualified Stock Option, a Stock
      Appreciation Right may be granted either at or after the time of the grant
      of
      such Nonqualified Stock Option. In the case of an Incentive Stock Option, a
      Stock Appreciation Right may be granted only at the time of the grant of such
      Incentive Stock Option.

     

    
      
        
        

      

      
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    6.2 Terms
      and Conditions.
      Stock
      Appreciation Rights shall be subject to the following terms and
      conditions:

     

    (a) Exercisability.
      Stock
      Appreciation Rights shall be exercisable as shall be determined by the Committee
      and set forth in the Agreement, subject to the limitations, if any, imposed
      by
      the Code with respect to related Incentive Stock Options.

     

    (b) Termination.
      A Stock
      Appreciation Right shall terminate and shall no longer be exercisable upon
      the
      termination or exercise of the related Stock Option.

     

    (c) Method
      of Exercise.
      Stock
      Appreciation Rights shall be exercisable upon such terms and conditions as
      shall
      be determined by the Committee and set forth in the Agreement and by
      surrendering the applicable portion of the related Stock Option. Upon such
      exercise and surrender, the Holder shall be entitled to receive a number of
      shares of Common Stock equal to the SAR Value divided by the Fair Market Value
      on the date the Stock Appreciation Right is exercised.

     

    (d) Shares
      Affected Upon Plan.
      The
      granting of a Stock Appreciation Right shall not affect the number of shares
      of
      Common Stock available under for awards under the Plan. The number of shares
      available for awards under the Plan will, however, be reduced by the number
      of
      shares of Common Stock acquirable upon exercise of the Stock Option to which
      such Stock Appreciation Right relates.

     

    Section
      7. Restricted
      Stock.

     

    7.1 Grant.
      Shares
      of Restricted Stock may be awarded either alone or in addition to other awards
      granted under the Plan. The Committee shall determine the eligible persons
      to
      whom, and the time or times at which, grants of Restricted Stock will be
      awarded, the number of shares to be awarded, the price (if any) to be paid
      by
      the Holder, the time or times within which such awards may be subject to
      forfeiture (“Restriction Period”), the vesting schedule and rights to
      acceleration thereof and all other terms and conditions of the
      awards.

     

    7.2 Terms
      and Conditions.
      Each
      Restricted Stock award shall be subject to the following terms and
      conditions:

     

    (a) Certificates.
      Restricted Stock, when issued, will be represented by a stock certificate or
      certificates registered in the name of the Holder to whom such Restricted Stock
      shall have been awarded. During the Restriction Period, certificates
      representing the Restricted Stock and any securities constituting Retained
      Distributions (as defined below) shall bear a legend to the effect that
      ownership of the Restricted Stock (and such Retained Distributions) and the
      enjoyment of all rights appurtenant thereto are subject to the restrictions,
      terms and conditions provided in the Plan and the Agreement. Such certificates
      shall be deposited by the Holder with the Company, together with stock powers
      or
      other instruments of assignment, each endorsed in blank, which will permit
      transfer to the Company of all or any portion of the Restricted Stock and any
      securities constituting Retained Distributions that shall be forfeited or that
      shall not become vested in accordance with the Plan and the
      Agreement.

     

    
      
        
        

      

      
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    (b) Rights
      of Holder.
      Restricted Stock shall constitute issued and outstanding shares of Common Stock
      for all corporate purposes. The Holder will have the right to vote such
      Restricted Stock, to receive and retain all regular cash dividends and other
      cash equivalent distributions as the Board may in its sole discretion designate,
      pay or distribute on such Restricted Stock and to exercise all other rights,
      powers and privileges of a holder of Common Stock with respect to such
      Restricted Stock, with the exceptions that (i) the Holder will not be entitled
      to delivery of the stock certificate or certificates representing such
      Restricted Stock until the Restriction Period shall have expired and unless
      all
      other vesting requirements with respect thereto shall have been fulfilled;
      (ii)
      the Company will retain custody of the stock certificate or certificates
      representing the Restricted Stock during the Restriction Period; (iii) other
      than regular cash dividends and other cash equivalent distributions as the
      Board
      may in its sole discretion designate, pay or distribute, the Company will retain
      custody of all distributions (“Retained Distributions”) made or declared with
      respect to the Restricted Stock (and such Retained Distributions will be subject
      to the same restrictions, terms and conditions as are applicable to the
      Restricted Stock) until such time, if ever, as the Restricted Stock with respect
      to which such Retained Distributions shall have been made, paid or declared
      shall have become vested and with respect to which the Restriction Period shall
      have expired; (iv) a breach of any of the restrictions, terms or conditions
      contained in this Plan or the Agreement or otherwise established by the
      Committee with respect to any Restricted Stock or Retained Distributions will
      cause a forfeiture of such Restricted Stock and any Retained Distributions
      with
      respect thereto.

     

    (c) Vesting;
      Forfeiture.
      Upon
      the expiration of the Restriction Period with respect to each award of
      Restricted Stock and the satisfaction of any other applicable restrictions,
      terms and conditions (i) all or part of such Restricted Stock shall become
      vested in accordance with the terms of the Agreement, subject to Section 10,
      below, and (ii) any Retained Distributions with respect to such Restricted
      Stock
      shall become vested to the extent that the Restricted Stock related thereto
      shall have become vested, subject to Section 10, below. Any such Restricted
      Stock and Retained Distributions that do not vest shall be forfeited to the
      Company and the Holder shall not thereafter have any rights with respect to
      such
      Restricted Stock and Retained Distributions that shall have been so
      forfeited.

     

    Section
      8. Deferred
      Stock.

     

    8.1 Grant.
      Shares
      of Deferred Stock may be awarded either alone or in addition to other awards
      granted under the Plan. The Committee shall determine the eligible persons to
      whom and the time or times at which grants of Deferred Stock will be awarded,
      the number of shares of Deferred Stock to be awarded to any person, the duration
      of the period (“Deferral Period”) during which, and the conditions under which,
      receipt of the shares will be deferred, and all the other terms and conditions
      of the awards.

     

    8.2 Terms
      and Conditions.
      Each
      Deferred Stock award shall be subject to the following terms and
      conditions:

     

    (a) Certificates.
      At the
      expiration of the Deferral Period (or the Additional Deferral Period referred
      to
      in Section 8.2 (d) below, where applicable), share certificates shall be issued
      and delivered to the Holder, or his legal representative, representing the
      number equal to the shares covered by the Deferred Stock award.

     

    
      
        
        

      

      
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    (b) Rights
      of Holder.
      A
      person entitled to receive Deferred Stock shall not have any rights of a
      Stockholder by virtue of such award until the expiration of the applicable
      Deferral Period and the issuance and delivery of the certificates representing
      such Common Stock. The shares of Common Stock issuable upon expiration of the
      Deferral Period shall not be deemed outstanding by the Company until the
      expiration of such Deferral Period and the issuance and delivery of such Common
      Stock to the Holder.

     

    (c) Vesting;
      Forfeiture.
      Upon
      the expiration of the Deferral Period with respect to each award of Deferred
      Stock and the satisfaction of any other applicable restrictions, terms and
      conditions all or part of such Deferred Stock shall become vested in accordance
      with the terms of the Agreement, subject to Section 10, below. Any such Deferred
      Stock that does not vest shall be forfeited to the Company and the Holder shall
      not thereafter have any rights with respect to such Deferred Stock.

     

    (d) Additional
      Deferral Period.
      A
      Holder may request to, and the Committee may at any time, defer the receipt
      of
      an award (or an installment of an award) for an additional specified period
      or
      until a specified event (“Additional Deferral Period”). Subject to any
      exceptions adopted by the Committee, such request must generally be made at
      least one year prior to expiration of the Deferral Period for such Deferred
      Stock award (or such installment).

     

    Section
      9. Other
      Stock-Based Awards.

     

    Other
      Stock-Based Awards may be awarded, subject to limitations under applicable
      law,
      that are denominated or payable in, valued in whole or in part by reference
      to,
      or otherwise based on or related to, shares of Common Stock, as deemed by the
      Committee to be consistent with the purposes of the Plan, including, without
      limitation, purchase rights, shares of Common Stock awarded which are not
      subject to any restrictions or conditions, convertible or exchangeable
      debentures, or other rights convertible into shares of Common Stock and awards
      valued by reference to the value of securities of or the performance of
      specified Subsidiaries. Other Stock-Based Awards may be awarded either alone
      or
      in addition to or in tandem with any other awards under this Plan or any other
      plan of the Company. Each other Stock-Based Award shall be subject to such
      terms
      and conditions as may be determined by the Committee.

     

    Section
      10. Accelerated
      Vesting and Exercisability.

     

    (a)  Non-Approved
      Transactions.
      If any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act
      of 1934, as amended (“Exchange Act”)), is or becomes the “beneficial owner” (as
      referred in Rule 13d-3 under the Exchange Act), directly or indirectly, of
      securities of the Company representing 35% or more of the combined voting power
      of the Company’s then outstanding securities in one or more transactions, and
      the Board does not authorize or otherwise approve such acquisition, then the
      vesting periods of any and all Stock Options and other awards granted and
      outstanding under the Plan shall be accelerated and all such Stock Options
      and
      awards will immediately and entirely vest, and the respective holders thereof
      will have the immediate right to purchase and/or receive any and all Common
      Stock subject to such Stock Options and awards on the terms set forth in this
      Plan and the respective agreements respecting such Stock Options and awards.
      

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b)  Approved
      Transactions.
      The
      Committee may, in the event of an acquisition of substantially all of the
      Company’s assets or at least 65% of the combined voting power of the Company’s
      then outstanding securities in one or more transactions (including by way of
      merger or reorganization) which has been approved by the Company’s Board of
      Directors, (i) accelerate the vesting of any and all Stock Options and other
      awards granted and outstanding under the Plan, and (ii) require a Holder of
      any
      award granted under this Plan to relinquish such award to the Company upon
      the
      tender by the Company to Holder of cash in an amount equal to the Repurchase
      Value of such award.

     

    Section
      11. Amendment
      and Termination.

     

    The
      Board
      may at any time, and from time to time, amend alter, suspend or discontinue
      any
      of the provisions of the Plan, but no amendment, alteration, suspension or
      discontinuance shall be made that would impair the rights of a Holder under
      any
      Agreement theretofore entered into hereunder, without the Holder’s consent,
      except as set forth in this Plan.

     

    Section
      12. Term
      of Plan.

     

    12.1 Effective
      Date.
      The
      Plan shall be effective as of July 6, 2005 (“Effective Date”), provided,
      however, that if the Plan is not approved by the Company’s stockholders within
      one year after the Effective Date, any Incentive Stock Options awarded under
      the
      Plan prior to the one year anniversary shall no longer be deemed Incentive
      Stock
      Options, but shall otherwise remain in full force and effect. 

     

    12.2 Termination
      Date.
      Unless
      terminated by the Board, this Plan shall continue to remain effective until
      such
      time as no further awards may be granted and all awards granted under the Plan
      are no longer outstanding. Notwithstanding the foregoing, grants of Incentive
      Stock Options may be made only during the ten year period following the
      Effective Date. 

     

    Section
      13. General
      Provisions.

     

    13.1 Written
      Agreements.
      Each
      award granted under the Plan shall be confirmed by, and shall be subject to
      the
      terms of, the Agreement executed by the Company and the Holder, or such other
      document as may be determined by the Committee. The Committee may terminate
      any
      award made under the Plan if the Agreement relating thereto is not executed
      and
      returned to the Company within 10 days after the Agreement has been delivered
      to
      the Holder for his or her execution.

     

    13.2 Unfunded
      Status of Plan.
      The
      Plan is intended to constitute an “unfunded” plan for incentive and deferred
      compensation. With respect to any payments not yet made to a Holder by the
      Company, nothing contained herein shall give any such Holder any rights that
      are
      greater than those of a general creditor of the Company.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    13.3 Employees.

     

    (a) Termination
      for Cause.
      The
      Committee may, if a Holder’s employment with the Company or a Subsidiary is
      terminated for cause, annul any award granted under this Plan to such employee
      and, in such event, the Committee, in its sole discretion, may require such
      Holder to return to the Company the economic value of any Shares that was
      realized or obtained by such Holder at any time during the period beginning
      on
      that date that is six months prior to the date such Holder’s employment with the
      Company is terminated. In such event, Holder agrees to remit to the Company,
      in
      cash, an amount equal to the difference between the Fair Market Value of the
      Shares on the date of termination (or the sales price of such Shares if the
      Shares were sold during such six month period) and the price the Holder paid
      the
      Company for such Shares.

     

    (b) No
      Right of Employment.
      Nothing
      contained in the Plan or in any award hereunder shall be deemed to confer upon
      any Holder who is an employee of the Company or any Subsidiary any right to
      continued employment with the Company or any Subsidiary, nor shall it interfere
      in any way with the right of the Company or any Subsidiary to terminate the
      employment of any Holder who is an employee at any time.

     

    13.4 Investment
      Representations; Company Policy.
      The
      Committee may require each person acquiring shares of Common Stock pursuant
      to a
      Stock Option or other award under the Plan to represent to and agree with the
      Company in writing that the Holder is acquiring the shares for investment
      without a view to distribution thereof. Each person acquiring shares of Common
      Stock pursuant to a Stock Option or other award under the Plan shall be required
      to abide by all policies of the Company in effect at the time of such
      acquisition and thereafter with respect to the ownership and trading of the
      Company’s securities.

     

    13.5 Additional
      Incentive Arrangements.
      Nothing
      contained in the Plan shall prevent the Board from adopting such other or
      additional incentive arrangements as it may deem desirable, including, but
      not
      limited to, the granting of Stock Options and the awarding of Common Stock
      and
      cash otherwise than under the Plan; and such arrangements may be either
      generally applicable or applicable only in specific cases.

     

    13.6 Withholding
      Taxes.
      Not
      later than the date as of which an amount must first be included in the gross
      income of the Holder for Federal income tax purposes with respect to any Stock
      Option or other award under the Plan, the Holder shall pay to the Company,
      or
      make arrangements satisfactory to the Committee regarding the payment of, any
      Federal, state and local taxes of any kind required by law to be withheld or
      paid with respect to such amount. If permitted by the Committee, tax withholding
      or payment obligations may be settled with Common Stock, including Common Stock
      that is part of the award that gives rise to the withholding requirement. The
      obligations of the Company under the Plan shall be conditioned upon such payment
      or arrangements and the Company or the Holder’s employer (if not the Company)
      shall, to the extent permitted by law, have the right to deduct any such taxes
      from any payment of any kind otherwise due to the Holder from the Company or
      any
      Subsidiary.

     

    13.7 Governing
      Law.
      The
      Plan and all awards made and actions taken thereunder shall be governed by
      and
      construed in accordance with the laws of the State of New York (without regard
      to choice of law provisions); provided, however, that all matters relating
      to or
      involving corporate law shall be governed by the laws of the State of
      Nevada.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    13.8 Other
      Benefit Plans.
      Any
      award granted under the Plan shall not be deemed compensation for purposes
      of
      computing benefits under any retirement plan of the Company or any Subsidiary
      and shall not affect any benefits under any other benefit plan now or
      subsequently in effect under which the availability or amount of benefits is
      related to the level of compensation (unless required by specific reference
      in
      any such other plan to awards under this Plan).

     

    13.9 Non-Transferability.
      Except
      as otherwise expressly provided in the Plan or the Agreement, no right or
      benefit under the Plan may be alienated, sold, assigned, hypothecated, pledged,
      exchanged, transferred, encumbranced or charged, and any attempt to alienate,
      sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the
      same shall be void.

     

    13.10 Applicable
      Laws.
      The
      obligations of the Company with respect to all Stock Options and awards under
      the Plan shall be subject to (i) all applicable laws, rules and regulations
      and
      such approvals by any governmental agencies as may be required, including,
      without limitation, the Securities Act of 1933 (the “Securities Act”), as
      amended, and (ii) the rules and regulations of any securities exchange on which
      the Common Stock may be listed.

     

    13.11 Conflicts.
      If any
      of the terms or provisions of the Plan or an Agreement conflict with the
      requirements of Section 422 of the Code, then such terms or provisions shall
      be
      deemed inoperative to the extent they so conflict with such requirements.
      Additionally, if this Plan or any Agreement does not contain any provision
      required to be included herein under Section 422 of the Code, such provision
      shall be deemed to be incorporated herein and therein with the same force and
      effect as if such provision had been set out at length herein and therein.
      If
      any of the terms or provisions of any Agreement conflict with any terms or
      provisions of the Plan, then such terms or provisions shall be deemed
      inoperative to the extent they so conflict with the requirements of the Plan.
      Additionally, if any Agreement does not contain any provision required to be
      included therein under the Plan, such provision shall be deemed to be
      incorporated therein with the same force and effect as if such provision had
      been set out at length therein.

     

    13.12 Non-Registered
      Stock.
      The
      shares of Common Stock to be distributed under this Plan have not been, as
      of
      the Effective Date, registered under the Securities Act of 1933, as amended,
      or
      any applicable state or foreign securities laws and the Company has no
      obligation to any Holder to register the Common Stock or to assist the Holder
      in
      obtaining an exemption from the various registration requirements, or to list
      the Common Stock on a national securities exchange or any other trading or
      quotation system, including the Nasdaq National Market and Nasdaq SmallCap
      Market.

     

    
      
        
        

      

      
        15

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