Document:

2006 Stock Incentive Plan

    EMERGING
      VISION, INC.

     

    2006
      Stock Incentive Plan

    

    1.  Purpose
      of the Plan.
      The
      Emerging Vision, Inc. 2006 Stock Incentive Plan (the “Plan”) is intended to
      advance the interests of Emerging Vision, Inc. (the “Company”) by inducing
      individuals or entities of outstanding ability and potential to join and remain
      with, or provide consulting or advisory services to, the Company, by encouraging
      and enabling eligible employees, non-employee Directors, consultants and
      advisors to acquire proprietary interests in the Company, and by providing
      the
      participating employees, non-employee Directors, consultants and advisors with
      an additional incentive to promote the success of the Company. This is
      accomplished by providing for the granting of “Options,” which term as used
      herein includes both “Incentive Stock Options” and “Nonstatutory Stock Options,”
as later defined, and “Restricted Stock” to employees, non-employee Directors,
      consultants and advisors.

     

    2.  Administration.
      The
      Plan shall be administered by the Board of Directors of the Company (the “Board”
or “Board of Directors”) or by a committee (the “Committee”) consisting of at
      least three (3) persons chosen by the Board of Directors. Except as herein
      specifically provided, the interpretation and construction by the Board of
      Directors or the Committee of any provision of the Plan or of any Option, or
      with respect to any Restricted Stock, granted under it shall be final and
      conclusive. The receipt of Options or Restricted Stock by Directors, or any
      members of the Committee, shall not preclude their vote on any matters in
      connection with the administration or interpretation of the Plan.

     

    3.  Shares
      Subject to the Plan.
      The
      shares subject to Options granted under the Plan, and shares granted as
      Restricted Stock under the Plan, shall be shares of the Company’s common stock,
      par value $.01 per share (the “Common Stock”), whether authorized but unissued
      or held in the Company’s treasury, or shares purchased from stockholders
      expressly for use under the Plan. The maximum number of shares of Common Stock
      which may be issued pursuant to Options or as Restricted Stock granted under
      the
      Plan shall not exceed in the aggregate Twenty Million (20,000,000) shares.
      The
      Company shall at all times while the Plan is in force reserve such number of
      shares of Common Stock as will be sufficient to satisfy the requirements of
      all
      outstanding Options granted under the Plan. In the event any Option granted
      under the Plan shall expire or terminate for any reason without having been
      exercised in full or shall cease for any reason to be exercisable in whole
      or in
      part, the unpurchased shares subject thereto shall again be available for
      Options and grants of Restricted Stock under the Plan. In the event any shares
      of Restricted Stock are forfeited for any reason, the shares forfeited shall
      again be available for Options and grants of Restricted Stock under the Plan.
      In
      the event shares of Common Stock are delivered to, or withheld by, the Company
      pursuant to Sections 13(b) or 25 hereof, only the net number of shares issued,
      i.e., net of the shares so delivered or withheld, shall be considered to have
      been issued pursuant to the Plan.

     

    4.  Participation.
      The
      class of individuals that shall be eligible to receive Options (“Optionees”) and
      Restricted Stock (“Grantees”) under the Plan shall be (a) with respect to
      Incentive Stock Options described in Section 6 hereof, all employees of either
      the Company or any parent or subsidiary corporation of the Company, and (b)
      with
      respect to Nonstatutory Stock Options described in Section 7 hereof and
      Restricted Stock described in Section 17 hereof, all employees, and non-employee
      Directors of, or consultants and advisors to, either the Company or any parent
      or subsidiary corporation of the Company; provided, however, neither
      Nonstatutory Stock Options nor Restricted Stock shall be granted to any such
      consultant or advisor unless (i) the consultant or advisor is a natural person
      (or an entity wholly-owned by the consultant or advisor), (ii)
      bona fide
      services
      have been or are to be rendered by such consultant or advisor and (iii) such
      services are not in connection with the offer or sale of securities in a capital
      raising transaction and do not directly or indirectly promote or maintain a
      market for the Company’s securities. The Board of Directors or the Committee, in
      its sole discretion, but subject to the provisions of the Plan, shall determine
      the employees and non-employee Directors of, and the consultants and advisors
      to, the Company and its parent and subsidiary corporations to whom Options
      and
      Restricted Stock shall be granted, and the number of shares to be covered by
      each Option and each Restricted Stock grant, taking into account the nature
      of
      the employment or services rendered by the individuals or entities being
      considered, their annual compensation, their present and potential contributions
      to the success of the Company, and such other factors as the Board of Directors
      or the Committee may deem relevant. For purposes hereof, a non-employee to
      whom
      an offer of employment has been extended shall be considered an employee,
      provided that the Options granted to such individual shall not be exercisable,
      and the Restricted Stock granted shall not vest, in whole or in part, for a
      period of at least one year from the date of grant and in the event the
      individual does not commence employment with the Company, the Options and/or
      Restricted Stock granted shall be considered null and void.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.  Stock
      Option Agreement.
      Each
      Option granted under the Plan shall be authorized by the Board of Directors
      or
      the Committee, and shall be evidenced by a Stock Option Agreement which shall
      be
      executed by the Company and by the individual or entity to whom such Option
      is
      granted. The Stock Option Agreement shall specify the number of shares of Common
      Stock as to which any Option is granted, the period during which the Option
      is
      exercisable, the option price per share thereof, and such other terms and
      provisions as the Board of Directors or the Committee may deem necessary or
      appropriate.

     

    6.  Incentive
      Stock Options.
      The
      Board of Directors or the Committee may grant Options under the Plan which
      are
      intended to meet the requirements of Section 422 of the Internal Revenue Code
      of
      1986, as amended (the “Code”), with respect to “incentive stock options,” and
      which are subject to the following terms and conditions and any other terms
      and
      conditions as may at any time be required by Section 422 of the Code (referred
      to herein as an “Incentive Stock Option”):

    (a)  No
      Incentive Stock Option shall be granted to individuals other than employees
      of
      the Company or of a parent or subsidiary corporation of the
      Company.

    (b)  Each
      Incentive Stock Option under the Plan must be granted prior to June 19, 2016,
      which is within ten (10) years from the date the Plan was adopted by the Board
      of Directors.

    (c)  The
      option price of the shares subject to any Incentive Stock Option shall not
      be
      less than the fair market value (as defined in subsection (f) of this Section
      6)
      of the Common Stock at the time such Incentive Stock Option is granted;
      provided, however, if an Incentive Stock Option is granted to an individual
      who
      owns, at the time the Incentive Stock Option is granted, more than ten percent
      (10%) of the total combined voting power of all classes of stock of the Company
      or of a parent or subsidiary corporation of the Company (a “10% Stockholder”),
      the option price of the shares subject to the Incentive Stock Option shall
      be at
      least one hundred ten percent (110%) of the fair market value of the Common
      Stock at the time such Incentive Stock Option is granted.

    (d)  No
      Incentive Stock Option granted under the Plan shall be exercisable after the
      expiration of ten (10) years from the date of its grant. However, if an
      Incentive Stock Option is granted to a 10% Stockholder, such Incentive Stock
      Option shall not be exercisable after the expiration of five (5) years from
      the
      date of its grant. Every Incentive Stock Option granted under the Plan shall
      be
      subject to earlier termination as expressly provided in Section 12
      hereof.

    (e)  For
      purposes of determining stock ownership under this Section 6, the attribution
      rules of Section 424(d) of the Code shall apply.

    (f)  For
      purposes of the Plan, fair market value shall be determined by the Board of
      Directors or the Committee. If the Common Stock is listed on a national
      securities exchange or The Nasdaq Stock Market (“Nasdaq”) or traded on the
      Over-the-Counter market, fair market value shall be the closing selling price
      or, if not available, the closing bid price or, if not available, the high
      bid
      price of the Common Stock quoted on such exchange or Nasdaq, or on the
      Over-the-Counter market, as reported by the exchange, Nasdaq or the OTC
      Electronic Bulletin Board, or if the Common Stock is not so reported, then
      by
      the Pink Sheets, LLC, as the case may be, on the day immediately preceding
      the
      day on which the Option is granted (or, if granted after the close of business
      for trading, then on the day on which the Option is granted), or, if there
      is no
      selling or bid price on that day, the closing selling price, closing bid price
      or high bid price, as the case may be, on the most recent day which precedes
      that day and for which such prices are available. If there is no selling or
      bid
      price for the ninety (90) day period preceding the date of grant of an Option
      hereunder, fair market value shall be determined in good faith by the Board
      of
      Directors or the Committee.

     

    7.  Nonstatutory
      Stock Options.
      The
      Board of Directors or the Committee may grant Options under the Plan which
      are
      not intended to meet the requirements of Section 422 of the Code, as well as
      Options which are intended to meet the requirements of Section 422 of the Code
      but the terms of which provide that they will not be treated as Incentive Stock
      Options (referred to herein as a “Nonstatutory Stock Option”). Nonstatutory
      Stock Options shall be subject to the following terms and
      conditions:

    (a)  A
      Nonstatutory Stock Option may be granted to any individual or entity eligible
      to
      receive an Option under the Plan pursuant to clause (b) of Section 4
      hereof.

    (b)  The
      option price of the shares subject to a Nonstatutory Stock Option shall be
      determined by the Board of Directors or the Committee.

    (c)  A
      Nonstatutory Stock Option granted under the Plan may be of such duration as
      shall be determined by the Board of Directors or the Committee (subject to
      earlier termination as expressly provided in Section 12 hereof).

     

    8.  Reload
      Options.
      The
      Board of Directors or the Committee may grant Options with a reload feature.
      A
      reload feature shall only apply when the option price is paid by delivery of
      Common Stock (as set forth in Section 13(b)(ii)) or by having the Company reduce
      the number of shares otherwise issuable to an Optionee (as provided for in
      the
      last sentence of Section 13(b)) (a “Net Exercise”). The Stock Option Agreement
      for the Options containing the reload feature shall provide that the Option
      holder shall receive, contemporaneously with the payment of the option price
      in
      shares of Common Stock or in the event of a Net Exercise, a reload stock option
      (the “Reload Option”) to purchase that number of shares of Common Stock equal to
      the sum of (i) the number of shares of Common Stock used to exercise the Option
      (or not issued in the case of a Net Exercise), and (ii) with respect to
      Nonstatutory Stock Options, the number of shares of Common Stock used to satisfy
      any tax withholding requirement incident to the exercise of such Nonstatutory
      Stock Option. The terms of the Plan applicable to the Option shall be equally
      applicable to the Reload Option with the following exceptions: (i) the option
      price per share of Common Stock deliverable upon the exercise of the Reload
      Option, (A) in the case of a Reload Option which is an Incentive Stock Option
      being granted to a 10% Stockholder, shall be one hundred ten percent (110%)
      of
      the fair market value of a share of Common Stock on the date of grant of the
      Reload Option and (B) in the case of a Reload Option which is an Incentive
      Stock
      Option being granted to a person other than a 10% Stockholder or is a
      Nonstatutory Stock Option, shall be the fair market value of a share of Common
      Stock on the date of grant of the Reload Option; and (ii) the term of the Reload
      Option shall be equal to the remaining option term of the Option (including
      a
      Reload Option) which gave rise to the Reload Option. The Reload Option shall
      be
      evidenced by an appropriate amendment to the Stock Option Agreement for the
      Option which gave rise to the Reload Option. In the event the exercise price
      of
      an Option containing a reload feature is paid by check and not in shares of
      Common Stock, the reload feature shall have no application with respect to
      such
      exercise.

     

    9.  Rights
      of Option Holders.
      The
      holder of an Option granted under the Plan shall have none of the rights of
      a
      stockholder with respect to the stock covered by his Option until such stock
      shall be transferred to him upon the exercise of his Option.

     

    10.  Alternate
      Stock Appreciation Rights.
      

    (a)  Concurrently
      with, or subsequent to, the award of any Option to purchase one or more shares
      of Common Stock, the Board of Directors or the Committee may, in its sole
      discretion, subject to the provisions of the Plan and such other terms and
      conditions as the Board of Directors or the Committee may prescribe, award
      to
      the Optionee with respect to each share of Common Stock covered by an Option
      (“Related Option”), a related alternate stock appreciation right (“SAR”),
      permitting the Optionee to be paid the appreciation on the Related Option in
      lieu of exercising the Related Option. An SAR granted with respect to an
      Incentive Stock Option must be granted together with the Related Option. An
      SAR
      granted with respect to a Nonstatutory Stock Option may be granted together
      with, or subsequent to, the grant of such Related Option.

    (b)  Each
      SAR
      granted under the Plan shall be authorized by the Board of Directors or the
      Committee, and shall be evidenced by an SAR Agreement which shall be executed
      by
      the Company and by the individual or entity to whom such SAR is granted. The
      SAR
      Agreement shall specify the period during which the SAR is exercisable, and
      such
      other terms and provisions not inconsistent with the Plan.

    (c)  An
      SAR
      may be exercised only if and to the extent that its Related Option is eligible
      to be exercised on the date of exercise of the SAR. To the extent that a holder
      of an SAR has a current right to exercise, the SAR may be exercised from time
      to
      time by delivery by the holder thereof to the Company at its principal office
      (attention: Secretary) of a written notice of the number of shares with respect
      to which it is being exercised. Such notice shall be accompanied by the
      agreements evidencing the SAR and the Related Option. In the event the SAR
      shall
      not be exercised in full, the Secretary of the Company shall endorse or cause
      to
      be endorsed on the SAR Agreement and the Related Option Agreement the number
      of
      shares which have been exercised thereunder and the number of shares that remain
      exercisable under the SAR and the Related Option and return such SAR and Related
      Option to the holder thereof.

    (d)  The
      amount of payment to which an Optionee shall be entitled upon the exercise
      of
      each SAR shall be equal to one hundred percent (100%) of the amount, if any,
      by
      which the fair market value of a share of Common Stock on the exercise date
      exceeds the exercise price per share of the Related Option; provided, however,
      the Company may, in its sole discretion, withhold from any such cash payment
      any
      amount necessary to satisfy the Company’s obligation for withholding taxes with
      respect to such payment.

    (e)  The
      amount payable by the Company to an Optionee upon exercise of a SAR may, in
      the
      sole determination of the Company, be paid in shares of Common Stock, cash
      or a
      combination thereof, as set forth in the SAR Agreement. In the case of a payment
      in shares, the number of shares of Common Stock to be paid to an Optionee upon
      such Optionee’s exercise of an SAR shall be determined by dividing the amount of
      payment determined pursuant to Section 10(d) hereof by the fair market value
      of
      a share of Common Stock on the exercise date of such SAR. For purposes of the
      Plan, the exercise date of an SAR shall be the date the Company receives written
      notification from the Optionee of the exercise of the SAR in accordance with
      the
      provisions of Section 10(c) hereof. As soon as practicable after exercise,
      the
      Company shall either deliver to the Optionee the amount of cash due such
      Optionee or a certificate or certificates for such shares of Common Stock.
      All
      such shares shall be issued with the rights and restrictions specified
      herein.

    (f)  SARs
      shall terminate or expire upon the same conditions and in the same manner as
      the
      Related Options, and as set forth in Section 12 hereof. 

    (g)  The
      exercise of any SAR shall cancel and terminate the right to purchase an equal
      number of shares covered by the Related Option.

    (h)  Upon
      the
      exercise or termination of any Related Option, the SAR with respect to such
      Related Option shall terminate to the extent of the number of shares of Common
      Stock as to which the Related Option was exercised or terminated.

    (i)  An
      SAR
      granted pursuant to the Plan shall be transferable to the same extent as the
      Related Option. 

    (j)  All
      references in this Plan to “Options” shall be deemed to include “SARs” where
      applicable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    11.  Transferability
      of Options.
      

    (a)  No
      Option
      granted under the Plan shall be transferable by the individual or entity to
      whom
      it was granted other than by will or the laws of descent and distribution,
      and,
      during the lifetime of an individual, shall not be exercisable by any other
      person, but only by him. 

    (b)  Notwithstanding
      Section 11(a) above, a Nonstatutory Stock Option granted under the Plan may
      be
      transferred in whole or in part during an Optionee’s lifetime, upon the approval
      of the Board of Directors or the Committee, to an Optionee’s “family members”
(as such term is defined in Rule 701(c)(3) of the Securities Act of 1933, as
      amended, and General Instruction A(1)(a)(5) to Form S-8) through a gift or
      domestic relations order. The transferred portion of a Nonstatutory Stock Option
      may only be exercised by the person or entity who acquires a proprietary
      interest in such option pursuant to the transfer. The terms applicable to the
      transferred portion shall be the same as those in effect for the Option
      immediately prior to such transfer and shall be set forth in such documents
      issued to the transferee as the Board of Directors or the Committee may deem
      appropriate. As used in this Plan the terms “Optionee” and “holder of an Option”
shall refer to the grantee of the Option and not any transferee
      thereof.

     

    12.  Effect
      of Termination of Employment or Death on Options.

    (a)  Unless
      otherwise provided in the Stock Option Agreement, and except as provided in
      subsections (b) and (c) of this Section 12, if the employment of an employee
      by,
      or the services of a non-employee Director for, or consultant or advisor to,
      the
      Company or a parent or subsidiary corporation of the Company shall be terminated
      for any reason, whether for cause, without cause, voluntarily by the employee,
      non-employee Director, consultant or advisor, or for any other reason, then
      (i)
      if such Option is an Incentive Stock Option, such Option may be exercised at
      any
      time within three (3) months after such termination, subject to the provisions
      of subsection (d) of this Section 12, or (ii) if such Option is a Nonstatutory
      Stock Option, such Option may be exercised at any time within two (2) years
      after such termination, subject to the provisions of subsection (d) of this
      Section 12. For purposes of this subsection (a), an employee, non-employee
      Director, consultant or advisor who leaves the employ or services of the Company
      to become an employee or non-employee Director of, or a consultant or advisor
      to, a parent or subsidiary corporation of the Company or a corporation (or
      subsidiary or parent corporation of the corporation) which has assumed the
      Option of the Company as a result of a corporate reorganization or like event
      shall not be considered to have terminated his employment or
      services.

    (b)  Unless
      otherwise provided in the Stock Option Agreement, if the holder of an Option
      under the Plan dies (i) while employed by, or while serving as a non-employee
      Director for or a consultant or advisor to, the Company or a parent or
      subsidiary corporation of the Company, or (ii) within three (3) months after
      the
      termination of his employment or services, then such Option may, subject to
      the
      provisions of subsection (d) of this Section 12, be exercised by the estate
      of
      the employee or non-employee Director, consultant or advisor, or by a person
      who
      acquired the right to exercise such Option by bequest or inheritance or by
      reason of the death of such employee or non-employee Director, consultant or
      advisor, at any time within two (2) years after such death.

    (c)  Unless
      otherwise provided in the Stock Option Agreement, if the holder of an Option
      under the Plan ceases employment or services because of permanent and total
      disability (within the meaning of Section 22(e)(3) of the Code) (“Permanent
      Disability”) while employed by, or while serving as a non-employee Director for
      or consultant or advisor to, the Company or a parent or subsidiary corporation
      of the Company, then (i) if such Option is an Incentive Stock Option, such
      Option may, subject to the provisions of subsection (d) of this Section 12,
      be
      exercised at any time within one (1) year after his termination of employment
      due to the disability, or (ii) if such Option is a Nonstatutory Stock Option,
      such option may, subject to the provisions of subsection (d) of this Section
      12,
      be exercised at any time within two (2) years after his termination of
      employment, termination of Directorship or termination of consulting or advisory
      services, as the case may be, due to the disability.

    (d)  An
      Option
      may not be exercised pursuant to this Section 12 except to the extent that
      the
      holder was entitled to exercise the Option at the time of termination of
      employment, termination of Directorship, termination of consulting or advisory
      services, or death, and in any event may not be exercised after the expiration
      of the Option.

     

    13.  Exercise
      of Options.

    (a)  Unless
      otherwise provided in the Stock Option Agreement, any Option granted under
      the
      Plan shall be exercisable in whole at any time, or in part from time to time,
      prior to expiration. The Board of Directors or the Committee, in its absolute
      discretion, may provide in any Stock Option Agreement that the exercise of
      any
      Options granted under the Plan shall be subject (i) to such condition or
      conditions as it may impose, including, but not limited to, a condition that
      the
      holder thereof remain in the employ or service of, or continue to provide
      consulting or advisory services to, the Company or a parent or subsidiary
      corporation of the Company for such period or periods from the date of grant
      of
      the Option as the Board of Directors or the Committee, in its absolute
      discretion, shall determine; and (ii) to such limitations as it may impose,
      including, but not limited to, a limitation that the aggregate fair market
      value
      (determined at the time the Option is granted) of the Common Stock with respect
      to which Incentive Stock Options are exercisable for the first time by any
      employee during any calendar year (under all plans of the Company and its parent
      and subsidiary corporations) shall not exceed one hundred thousand dollars
      ($100,000). In addition, in the event that under any Stock Option Agreement
      the
      aggregate fair market value (determined at the time the Option is granted)
      of
      the Common Stock with respect to which Incentive Stock Options are exercisable
      for the first time by any employee during any calendar year (under all plans
      of
      the Company and its parent and subsidiary corporations) exceeds one hundred
      thousand dollars ($100,000), the Board of Directors or the Committee may, when
      shares are transferred upon exercise of such Options, designate those shares
      which shall be treated as transferred upon exercise of an Incentive Stock Option
      and those shares which shall be treated as transferred upon exercise of a
      Nonstatutory Stock Option.

    (b)  An
      Option
      granted under the Plan shall be exercised by the delivery by the holder thereof
      to the Company at its principal office (attention of the Secretary) of written
      notice of the number of shares with respect to which the Option is being
      exercised. Such notice shall be accompanied, or followed within ten (10) days
      of
      delivery thereof, by payment of the full option price of such shares, and
      payment of such option price shall be made by the holder’s delivery of (i) his
      check payable to the order of the Company, or (ii) previously acquired Common
      Stock, the fair market value of which shall be determined as of the date of
      exercise (provided that the shares delivered pursuant hereto are acceptable
      to
      the Board of Directors or the Committee in its sole discretion) or (iii) if
      provided for in the Stock Option Agreement, his check payable to the order
      of
      the Company in an amount at least equal to the par value of the Common Stock
      being acquired, together with a promissory note, in form and upon such terms
      as
      are acceptable to the Board or the Committee, made payable to the order of
      the
      Company in an amount equal to the balance of the exercise price, or (iv) by
      the
      holder’s delivery of any combination of the foregoing (i), (ii) and (iii).
      Alternatively, if provided for in the Stock Option Agreement, the holder may
      elect to have the Company reduce the number of shares otherwise issuable by
      a
      number of shares having a fair market value equal to the exercise price of
      the
      Option being exercised.

     

    14.  Adjustment
      Upon Change in Capitalization.

    (a)  In
      the
      event that the outstanding Common Stock is hereafter changed by reason of
      reorganization, merger, consolidation, recapitalization, reclassification,
      stock
      split-up, combination of shares, reverse split, stock dividend or the like,
      an
      appropriate adjustment shall be made by the Board of Directors or the Committee
      in the aggregate number of shares available under the Plan, in the number of
      shares and option price per share subject to outstanding Options, and in any
      limitation on exerciseability referred to in Section 13(a)(ii) hereof which
      is
      set forth in outstanding Incentive Stock Options. If the Company shall be
      reorganized, consolidated, or merged with another corporation, the holder of
      an
      Option shall be entitled to receive upon the exercise of his Option the same
      number and kind of shares of stock or the same amount of property, cash or
      securities as he would have been entitled to receive upon the happening of
      any
      such corporate event as if he had been, immediately prior to such event, the
      holder of the number of shares covered by his Option; provided, however, that
      in
      such event the Board of Directors or the Committee shall have the discretionary
      power to take any action necessary or appropriate to prevent any Incentive
      Stock
      Option granted hereunder which is intended to be an “incentive stock option”
from being disqualified as such under the then existing provisions of the Code
      or any law amendatory thereof or supplemental thereto; and provided, further,
      however, that in such event the Board of Directors or the Committee shall have
      the discretionary power to take any action necessary or appropriate to prevent
      such adjustment from being deemed or considered as the adoption of a new plan
      requiring shareholder approval under Section 422 of the Code and the regulations
      promulgated thereunder.

    (b)  Any
      adjustment in the number of shares shall apply proportionately to only the
      unexercised portion of the Option granted hereunder. If fractions of a share
      would result from any such adjustment, the adjustment shall be revised to the
      next lower whole number of shares.

     

    15.  Further
      Conditions of Exercise of Options.

    (a)  Unless
      prior to the exercise of the Option the shares issuable upon such exercise
      have
      been registered with the Securities and Exchange Commission pursuant to the
      Securities Act of 1933, as amended, the notice of exercise shall be accompanied
      by a representation or agreement of the person or estate exercising the Option
      to the Company to the effect that such shares are being acquired for investment
      purposes and not with a view to the distribution thereof, and such other
      documentation as may be required by the Company, unless in the opinion of
      counsel to the Company such representation, agreement or documentation is not
      necessary to comply with such Act.

    (b)  If
      the
      Common Stock is listed on any securities exchange, including, without
      limitation, Nasdaq or the OTC Electronic Bulletin Board, the Company shall
      not
      be obligated to deliver any Common Stock pursuant to this Plan until it has
      been
      listed on each such exchange. In addition, the Company shall not be obligated
      to
      deliver any Common Stock pursuant to this Plan until there has been
      qualification under or compliance with such federal or state laws, rules or
      regulations as the Company may deem applicable. The Company shall use reasonable
      efforts to obtain such listing, qualification and compliance.

     

    16.  Restricted
      Stock Grant Agreement.
      Each
      Restricted Stock grant under the Plan shall be authorized by the Board of
      Directors or the Committee, and shall be evidenced by a Restricted Stock Grant
      Agreement which shall be executed by the Company and by the individual or entity
      to whom such Restricted Stock is granted. The Restricted Stock Grant Agreement
      shall specify the number of shares of Restricted Stock granted, the vesting
      periods and such other terms and provisions as the Board of Directors or the
      Committee may deem necessary or appropriate.

     

    17.  Restricted
      Stock Grants.
      

    (a)  The
      Board
      of Directors or the Committee may grant Restricted Stock under the Plan to
      any
      individual or entity eligible to receive Restricted Stock pursuant to clause
      (b)
      of Section 4 hereof.

    (b)  In
      addition to any other applicable provisions hereof and except as may otherwise
      be specifically provided in a Restricted Stock Grant Agreement, the following
      restrictions in this Section 17(b) shall apply to grants of Restricted Stock
      made by the Board or the Committee: 

    (i)  No
      shares
      granted pursuant to a grant of Restricted Stock may be sold, transferred,
      pledged, assigned or otherwise alienated or hypothecated until, and to the
      extent that, such shares are vested.

    (ii)  Shares
      granted pursuant to a grant of Restricted Stock shall vest as determined by
      the
      Board or the Committee, as provided for in the Restricted Stock Grant Agreement.
      The foregoing notwithstanding (but subject to the provisions of (iii) hereof
      and
      subject to the discretion of the Board or the Committee), a Grantee shall
      forfeit all shares not previously vested, if any, at such time as the Grantee
      is
      no longer employed by, or serving as a Director of, or rendering consulting
      or
      advisory services to, the Company or a parent or subsidiary corporation of
      the
      Company. All forfeited shares shall be returned to the Company.

    (c)  In
      determining the vesting requirements with respect to a grant of Restricted
      Stock, the Board or the Committee may impose such restrictions on any shares
      granted as it may deem advisable including, without limitation, restrictions
      relating to length of service, corporate performance, attainment of individual
      or group performance objectives, and federal or state securities laws, and
      may
      legend the certificates representing Restricted Stock to give appropriate notice
      of such restrictions. Any such restrictions shall be specifically set forth
      in
      the Restricted Stock Grant Agreement.

    (d)  Certificates
      representing shares granted that are subject to restrictions shall be held
      by
      the Company or, if the Board or the Committee so specifies, deposited with
      a
      third-party custodian or trustee until lapse of all restrictions on the shares.
      After such lapse, certificates for such shares (or the vested percentage of
      such
      shares) shall be delivered by the Company to the Grantee; provided, however,
      that the Company need not issue fractional shares.

    (e)  During
      any applicable period of restriction, the Grantee shall be the record owner
      of
      the Restricted Stock and shall be entitled to vote such shares and receive
      all
      dividends and other distributions paid with respect to such shares while they
      are so restricted. However, if any such dividends or distributions are paid
      in
      shares of Company stock or cash or other property during an applicable period
      of
      restriction, the shares, cash and/or other property deliverable shall be held
      by
      the Company or third party custodian or trustee and be subject to the same
      restrictions as the shares with respect to which they were issued. Moreover,
      the
      Board or the Committee may provide in each grant such other restrictions, terms
      and conditions as it may deem advisable with respect to the treatment and
      holding of any stock, cash or property that is received in exchange for
      Restricted Stock granted pursuant to the Plan.

    (f)  Each
      Grantee making an election pursuant to Section 83(b) of the Code shall, upon
      making such election, promptly provide a copy thereof to the
      Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    18.  Effectiveness
      of the Plan.
      The
      Plan was adopted by the Board of Directors on June 20, 2006. The Plan shall
      be
      subject to approval on or before June 19, 2007, which is within one (1) year
      of
      adoption of the Plan by the Board of Directors, by the affirmative vote of
      the
      holders of a majority of the votes of the outstanding shares of capital stock
      of
      the Company present in person or represented by proxy at a meeting of
      stockholders and entitled to vote thereon (or in the case of action by written
      consent in lieu of a meeting of stockholders, the number of votes required
      by
      applicable law to act in lieu of a meeting) (“Stockholder Approval”). In the
      event such Stockholder Approval is withheld or otherwise not received on or
      before the latter date, the Plan and, unless otherwise provided in the Stock
      Option Agreement and/or the Restricted Stock Grant Agreement, all Options and
      Restricted Stock that may have been granted hereunder shall become null and
      void. 

     

    19.  Termination,
      Modification and Amendment.

    (a)  The
      Plan
      (but not Options previously granted under the Plan) shall terminate on June
      19,
      2016, which is within ten (10) years from the date of its adoption by the Board
      of Directors, or sooner as hereinafter provided, and no Option or Restricted
      Stock shall be granted after termination of the Plan. The foregoing shall not
      be
      deemed to limit the vesting period for Options or Restricted Stock granted
      pursuant to the Plan.

    (b)  The
      Plan
      may from time to time be terminated, modified, or amended if Stockholder
      Approval of the termination, modification or amendment is obtained.

    (c)  The
      Board
      of Directors may at any time, on or before the termination date referred to
      in
      Section 19(a) hereof, without Stockholder Approval, terminate the Plan, or
      from
      time to time make such modifications or amendments to the Plan as it may deem
      advisable; provided, however, that the Board of Directors shall not, without
      Stockholder Approval, (i) increase (except as otherwise provided by Section
      14
      hereof) the maximum number of shares as to which Incentive Stock Options may
      be
      granted hereunder, change the designation of the employees or class of employees
      eligible to receive Incentive Stock Options, or make any other change which
      would prevent any Incentive Stock Option granted hereunder which is intended
      to
      be an “incentive stock option” from qualifying as such under the then existing
      provisions of the Code or any law amendatory thereof or supplemental thereto
      or
      (ii) make any other modifications or amendments that require Stockholder
      Approval pursuant to applicable law, regulation or exchange requirements. In
      the
      event Stockholder Approval is not received within one (1) year of adoption
      by
      the Board of Directors of the change provided for in (i) or (ii) above, then,
      unless otherwise provided in the Stock Option Agreement and/or Restricted Stock
      Grant Agreement (but subject to applicable law), the change and all Options,
      SARs and Restricted Stock that may have been granted pursuant thereto shall
      be
      null and void.

    (d)  No
      termination, modification, or amendment of the Plan may, without the consent
      of
      the individual or entity to whom any Option or Restricted Stock shall have
      been
      granted, adversely affect the rights conferred by such Option or Restricted
      Stock grant.

     

    20.  Not
      a Contract of Employment.
      Nothing
      contained in the Plan or in any Stock Option Agreement or Restricted Stock
      Grant
      Agreement executed pursuant hereto shall be deemed to confer upon any individual
      or entity to whom an Option or Restricted Stock is or may be granted hereunder
      any right to remain in the employ or service of the Company or a parent or
      subsidiary corporation of the Company or any entitlement to any remuneration
      or
      other benefit pursuant to any consulting or advisory arrangement.

     

    21.  Use
      of Proceeds.
      The
      proceeds from the sale of shares pursuant to Options or Restricted Stock granted
      under the Plan shall constitute general funds of the Company.

     

    22.  Indemnification
      of Board of Directors or Committee.
      In
      addition to such other rights of indemnification as they may have, the members
      of the Board of Directors or the Committee, as the case may be, shall be
      indemnified by the Company to the extent permitted under applicable law against
      all costs and expenses reasonably incurred by them in connection with any
      action, suit, or proceeding to which they or any of them may be a party by
      reason of any action taken or failure to act under or in connection with the
      Plan or any rights granted thereunder and against all amounts paid by them
      in
      settlement thereof or paid by them in satisfaction of a judgment of any such
      action, suit or proceeding, except a judgment based upon a finding of bad faith.
      Upon the institution of any such action, suit, or proceeding, the member or
      members of the Board of Directors or the Committee, as the case may be, shall
      notify the Company in writing, giving the Company an opportunity at its own
      cost
      to defend the same before such member or members undertake to defend the same
      on
      his or their own behalf.

     

    23.  Captions.
      The use
      of captions in the Plan is for convenience. The captions are not intended to
      provide substantive rights.

     

    24.  Disqualifying
      Dispositions.
      If
      Common Stock acquired upon exercise of an Incentive Stock Option granted under
      the Plan is disposed of within two years following the date of grant of the
      Incentive Stock Option or one year following the issuance of the Common Stock
      to
      the Optionee, or is otherwise disposed of in a manner that results in the
      Optionee being required to recognize ordinary income, rather than capital gain,
      from the disposition (a “Disqualifying Disposition”), the holder of the Common
      Stock shall, immediately prior to such Disqualifying Disposition, notify the
      Company in writing of the date and terms of such Disqualifying Disposition
      and
      provide such other information regarding the Disqualifying Disposition as the
      Company may reasonably require.

     

    25.  Withholding
      Taxes.
      

    (a)  Whenever
      under the Plan shares of Common Stock are to be delivered to an Optionee upon
      exercise of a Nonstatutory Stock Option or to a Grantee of Restricted Stock,
      the
      Company shall be entitled to require as a condition of delivery that the
      Optionee or Grantee remit or, at the discretion of the Board or the Committee,
      agree to remit when due, an amount sufficient to satisfy all current or
      estimated future Federal, state and local income tax withholding requirements,
      including, without limitation, the employee’s portion of any employment tax
      requirements relating thereto. At the time of a Disqualifying Disposition,
      the
      Optionee shall remit to the Company in cash the amount of any applicable
      Federal, state and local income tax withholding and the employee’s portion of
      any employment taxes.

    

    (b)  The
      Board
      of Directors or the Committee may, in its discretion, provide any or all holders
      of Nonstatutory Stock Options or Grantees of Restricted Stock with the right
      to
      use shares of Common Stock in satisfaction of all or part of the withholding
      taxes to which such holders may become subject in connection with the exercise
      of their Options or their receipt of Restricted Stock. Such right may be
      provided to any such holder in either or both of the following
      formats:

    (i)  The
      election to have the Company withhold, from the shares of Common Stock otherwise
      issuable upon the exercise of such Nonstatutory Stock Option or otherwise
      deliverable as a result of the vesting of Restricted Stock, a portion of those
      shares with an aggregate fair market value equal to the percentage of the
      withholding taxes (not to exceed one hundred percent (100%)) designated by
      the
      holder.

    (ii)  The
      election to deliver to the Company, at the time the Nonstatutory Stock Option
      is
      exercised or Restricted Stock is granted or vested, one or more shares of Common
      Stock previously acquired by such holder (other than in connection with the
      Option exercise or Restricted Stock grant triggering the withholding taxes)
      with
      an aggregate fair market value equal to the percentage of the withholding taxes
      (not to exceed one hundred percent (100%)) designated by the
      holder.

     

    26.  Other
      Provisions.
      Each
      Option granted, and each Restricted Stock grant, under the Plan may contain
      such
      other terms and conditions not inconsistent with the Plan as may be determined
      by the Board or the Committee, in its sole discretion. Notwithstanding the
      foregoing, each Incentive Stock Option granted under the Plan shall include
      those terms and conditions which are necessary to qualify the Incentive Stock
      Option as an “incentive stock option” within the meaning of Section 422 of the
      Code and the regulations thereunder and shall not include any terms and
      conditions which are inconsistent therewith.

     

    27.  Definitions.
      For
      purposes of the Plan, the terms “parent corporation” and “subsidiary
      corporation” shall have the meanings set forth in Sections 424(e) and 424(f) of
      the Code, respectively, and the masculine shall include the feminine and the
      neuter as the context requires.

     

    28.  Governing
      Law.
      The
      Plan shall be governed by, and all questions arising hereunder shall be
      determined in accordance with, the laws of the State of New York, excluding
      choice of law principles thereof.m -- Converted by S, created by BCL Technologies Inc., for SEC Filing

                                                                               
MANAGEMENT AGREEMENT

January 1, 2006.

BETWEEN: 

	  	BLACK DIAMOND HOLDINGS CORP.,
      a British
      Columbia corporation with offices at  
	  	600-595 Hornby St., Vancouver, BC V6C
      2E8  
	  	Phone No. (604) 646-5620  
	  	(Herein referred to as the "Company")  
	  	Of the First Part  
	AND:  	  
	  	BRADLEY JAMES
      MOYNES,
      businessman, with an office at  
	  	600-595 Hornby St., Vancouver, BC V6C
      2E8  
	  	Phone No. (604) 646-5620  
	  	(Herein referred to as the "President")  
	  	Of the Second Part 
  

WHEREAS:

	·     
    	The President has accepted an
      engagement to work for the Company in accordance with the terms and
      conditions of this
Agreement. 
	 

THIS AGREEMENT WITNESSES that in
consideration of the premises, mutual covenants and agreements herein
contained,
the parties agree as
follows:

	1. 
          	Services:
    
	 
	1.1   
        	The President shall
      work on behalf of the company, including without limitation the following
      services: 
	 
	1.2   
        	As President and CEO,
      oversee all operations of the Company, including the operations of the
      wholly owned 
	 
	 	 	subsidiary, Black Diamond
      Importers Inc. and Liberty Valley Wines LLC. 
	 
	2. 
          	Compensation: 
	 
	 	a) 
          	The President shall be paid an
      annual salary of $60,000.00 USD. 
	 
	 	b) 
          	The parties acknowledge and agree
      that the President is an employee of the Company. 
	 

3. Terms and
Termination:

	a) 
          	The term of this Agreement
      commences on the date set out at the top of the first page hereof and
      continues for the period of
 one (1) years. The parties may extend
      the term by mutual consent in writing. 
	 
	b) 
          	Either party may terminate this
      Agreement at any time and for any reason upon providing the other party
      with one year 
written notice of termination. Such termination shall
      not affect any amount owing, obligation or liability existing or
      incurred
prior to the date of such termination, including fees payable
      to the Manager. 
	 

	4. 
          	General: 
	 
	 	a) This Agreement shall not be modified, amended, rescinded or waived,
      in whole or in part, except by written amendment 
signed by the parties
      hereto. 
	 

Page 1 of 2

	b) 
          	Each of the parties acknowledges
      and confirms that he/she has been provided sufficient opportunity to
      obtain the 
recommended independent legal advice and understands the
      terms of, and its rights and obligations under this Agreement.
  
	 
	c) 
          	Time is of the essence with
      respect to the performance of obligations in this Agreement. 
	 
	d) 
          	This Agreement shall inure to the
      benefit of and be binding on all of the parties hereto and their
      respective executors, 
administrators, successors and permitted
      assigns. 
	 
	e) 
          	This Agreement shall be construed
      and governed by the laws of the Province of British Columbia.

	 
	f) 
          	The headings to the articles,
      paragraphs, parts or clauses of this Agreement and the table of contents
      are inserted for 
convenience only and shall not affect the
      construction hereof. 
	 
	g) 
          	The parties hereto acknowledge
      that they have carefully read this Agreement and understand and agree to
      be bound by all 
of the terms and conditions found herein.

	 

IN WITNESS WHEREOF the parties hereto have
caused this Agreement to be duly executed and delivered as of the day and

year first above written.

______________________________
Brad J.
Moynes
President
Black Diamond Holdings Corp.

Accepted By:

Page 2 of 2

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