Document:

Exhibit 10.26

 

WESCO AIRCRAFT HOLDINGS, INC.
 2011 EQUITY INCENTIVE AWARD PLAN

 

STOCK OPTION GRANT NOTICE

 

Wesco Aircraft Holdings, Inc., a Delaware corporation, (the “Company”), pursuant to its 2011 Equity Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares of Common Stock (“Stock”) set forth below (the “Option”).  The Option is subject to the terms and conditions set forth in this Stock Option Grant Notice (the “Grant Notice”) and the Stock Option Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Notice and the Agreement.

 

	
Participant:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Grant Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exercise Price per Share:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Total Exercise Price:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Total Number of Shares 
   Subject to the Option:
    	
 
    	
              shares
    
	
 
    	
 
    	
 
    
	
Expiration Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Vesting Schedule:
    	
 
    	
[To   be specified in individual agreements]
    
	
 
    	
 
    	
 
    
	
Type of Option:
    	
 
    	
Non-Qualified   Stock Option
    

 

By his or her signature and the Company’s signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and the Grant Notice.  Participant has reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of the Grant Notice, the Agreement and the Plan.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, the Grant Notice or the Agreement.

 

	
WESCO AIRCRAFT HOLDINGS, INC.
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Print   Name:
    	
 
    	
 
    	
Print   Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

EXHIBIT A

TO STOCK OPTION GRANT NOTICE

 

STOCK OPTION AGREEMENT

 

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant an Option under the Plan to purchase the number of shares of Stock set forth in the Grant Notice.

 

ARTICLE 1.

 

GENERAL

 

1.1                                 Defined Terms.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

 

1.2                                 Incorporation of Terms of Plan.  The Option is subject to the terms and conditions set forth in this Agreement and in the Grant Notice and the Plan, which are incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

 

ARTICLE 2.

 

GRANT OF OPTION

 

2.1                                 Grant of Option.  In consideration of Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustments as provided in Section 12.2 of the Plan.

 

2.2                                 Exercise Price.  The exercise price per share of the shares of Stock subject to the Option (the “Exercise Price”) shall be as set forth in the Grant Notice.

 

2.3                                 Consideration to the Company.  In consideration of the grant of the Option by the Company, Participant agrees to render faithful and efficient services to the Company or any Subsidiary.  Nothing in the Plan, the Grant Notice or this Agreement shall confer upon Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

 

ARTICLE 3.

 

PERIOD OF EXERCISABILITY

 

3.1                                 Commencement of Exercisability.

 

(a)                                  Subject to Sections 3.2, 3.3, 5.9 and 5.14 hereof, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.

 

 

(b)                                 No portion of the Option which has not become vested and exercisable at the date of Participant’s Termination of Service shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Participant.

 

3.2                                 Duration of Exercisability.  The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative.  Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof.

 

3.3                                 Expiration of Option.  The Option may not be exercised to any extent by anyone after the first to occur of the following events:

 

(a)                                  The expiration date set forth in the Grant Notice;

 

(b)                                 Except as the Administrator may otherwise approve, in the event of Participant’s Termination of Service other than for Cause or by reason of Participant’s death or disability, the expiration of three (3) months from the date of Participant’s Termination of Service;

 

(c)                                  Except as the Administrator may otherwise approve, the expiration of one (1) year from the date of Participant’s Termination of Service by reason of Participant’s death or disability; or

 

(d)                                 Except as the Administrator may otherwise approve, upon Participant’s Termination of Service for Cause.

 

As used in this Agreement, “Cause” shall mean (a) the Board’s determination that Participant failed to substantially perform his or her duties (other than any such failure resulting from Participant’s disability); (b) the Board’s determination that Participant failed to carry out, or comply with any lawful and reasonable directive of the Board or Participant’s immediate supervisor; (c) Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony, indictable offense or crime involving moral turpitude; (d) Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s (or any of its Subsidiaries’) premises or while performing Participant’s duties and responsibilities; or (e) Participant’s commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against the Company of any of its Subsidiaries.  Notwithstanding the foregoing, if Participant is a party to a written employment or consulting agreement with the Company (or its Subsidiary), then “Cause” shall be as such term is defined in the applicable written employment or consulting agreement.

 

3.4                                 Tax Withholding.  Notwithstanding any other provision of this Agreement:

 

(a)                                  The Company and its Subsidiaries have the authority to deduct or withhold, or require Participant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable event arising pursuant to this Agreement.  The Company and its Subsidiaries may withhold or Participant may make such payment in one or more of the forms specified below:

 

(i)                                     by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises;

 

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(ii)                                  by the deduction of such amount from other compensation payable to Participant;

 

(iii)                               with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by requesting that the Company withhold a net number of shares of Stock issuable upon the exercise of the Option having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

 

(iv)                              with respect to any withholding taxes arising in connection with the exercise of the Option, with the consent of the Administrator, by tendering to the Company shares of Stock having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

 

(v)                                 with respect to any withholding taxes arising in connection with the exercise of the Option, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or

 

(vi)                              in any combination of the foregoing.

 

(b)                                 With respect to any withholding taxes arising in connection with the Option, in the event Participant fails to provide timely payment of all sums required pursuant to Section 3.4(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 3.4(a)(ii) or Section 3.4(a)(iii) above, or any combination of the foregoing as the Company may determine to be appropriate.  The Company shall not be obligated to deliver any certificate representing shares of Stock issuable with respect to the exercise of the Option to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the exercise of the Option or any other taxable event related to the Option.

 

(c)                                  In the event any tax withholding obligation arising in connection with the Option will be satisfied under Section 3.4(a)(iii) above, then the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those shares of Stock that are issuable upon exercise of the Option as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises.  Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 3.4(c), including the transactions described in the previous sentence, as applicable.  The Company may refuse to issue any shares of Stock to Participant until the foregoing tax withholding obligations are satisfied.

 

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(d)                                 Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Stock.  The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant’s tax liability.

 

ARTICLE 4.

 

EXERCISE OF OPTION

 

4.1                                 Person Eligible to Exercise.  During the lifetime of Participant, only Participant may exercise the Option or any portion thereof.  After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

 

4.2                                 Partial Exercise.  Subject to Section 5.2, any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof.

 

4.3                                 Manner of Exercise.  Subject to Section 5.7 of the Plan, the Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company), during regular business hours, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof:

 

(a)                                  An exercise notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator;

 

(b)                                 The receipt by the Company of full payment for the shares of Stock with respect to which the Option or portion thereof is exercised, in such form of consideration permitted under Section 4.4 hereof that is acceptable to the Administrator;

 

(c)                                  The payment of any applicable withholding tax in accordance with Section 3.4;

 

(d)                                 Any other written representations or documents as may be required in the Administrator’s sole discretion to effect compliance with Applicable Law; and

 

(e)                                  In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 hereof by any person or persons other than Participant, appropriate proof of the right of such person or persons to exercise the Option.

 

Notwithstanding any of the foregoing, the Administrator shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from time to time.

 

4.4                                 Method of Payment.  Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of Participant:

 

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(a)                                  Cash or check;

 

(b)                                 With the consent of the Administrator, surrender of shares of Stock (including, without limitation, shares of Stock otherwise issuable upon exercise of the Option) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof;

 

(c)                                  Through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or

 

(d)                                 Any other form of legal consideration acceptable to the Administrator.

 

4.5                                 Conditions to Issuance of Stock.  The Company shall not be required to issue or deliver any shares of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: (A) the admission of such shares of Stock to listing on all stock exchanges on which such Stock is then listed, (B) the completion of any registration or other qualification of such shares of Stock under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, (C) the obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable, (D) the receipt by the Company of full payment for such shares of Stock, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof, and (E) the receipt of full payment of any applicable withholding tax in accordance with Section 3.4 by the Company or its Subsidiary with respect to which the applicable withholding obligation arises.

 

4.6                                 Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and until certificates representing such shares of Stock (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars and delivered to Participant (including through electronic delivery to a brokerage account).  No adjustment will be made for a dividend or other right for which the record date is prior to the date of such issuance, recordation and delivery, except as provided in Section 12.2 of the Plan. Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such shares of Stock, including, without limitation, the right to receipt of dividends and distributions on such shares.

 

ARTICLE 5.

 

OTHER PROVISIONS

 

5.1                                 Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons.

 

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To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

 

5.2                                 Whole Shares.  The Option may only be exercised for whole shares of Stock.

 

5.3                                 Option Not Transferable.  Subject to Section 4.1 hereof, the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the shares of Stock underlying the Option have been issued, and all restrictions applicable to such shares of Stock have lapsed.  Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

 

5.4                                 Adjustments.  The Administrator may accelerate the vesting of all or a portion of the Option in such circumstances as it, in its sole discretion, may determine.  In addition, upon the occurrence of certain events relating to the Stock contemplated by Section 12.2 of the Plan (including, without limitation, an extraordinary cash dividend on such Stock), the Administrator shall make such adjustments as the Administrator deems appropriate in the number of shares of Stock subject to the Option, the exercise price of the Option and the kind of securities that may be issued upon exercise of the Option. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and Section 12.2 of the Plan.

 

5.5                                 Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records.  By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to that party.  Any notice which is required to be given to Participant shall, if Participant is then deceased, be given to the person entitled to exercise the Option pursuant to Section 4.1 hereof by written notice under this Section 5.5.  Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

 

5.6                                 Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

5.7                                 Governing Law.  The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

 

5.8                                 Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to Applicable Law.  To the

 

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extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

 

5.9                                 Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of Participant.

 

5.10                           Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in Section 5.3 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

5.11                           Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

5.12                           Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

 

5.13                           Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

5.14                           Section 409A.  This Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”).  However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

 

5.15                           Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

 

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5.16                           Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Stock as a general unsecured creditor with respect to options, as and when exercised pursuant to the terms hereof.

 

5.17                           Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

 

5.18                           Broker-Assisted Sales.  In the event of any broker-assisted sale of shares of Stock in connection with the payment of withholding taxes as provided in Section 3.4(a)(v) or Section 3.4(c) or the payment of the exercise price as provided in Section 4.4(c): (A) any shares of Stock to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation or exercise of the Option, as applicable, occurs or arises, or as soon thereafter as practicable; (B) such shares of Stock may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (D) to the extent the proceeds of such sale exceed the applicable tax withholding obligation or exercise price, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation or exercise price; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligation arises, an amount sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

 

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A-8Americas Wind Energy Corp.: Exhibit 10.1 - Filed by newsfilecorp.com

AMERICAS WIND ENERGY CORPORATION
 2011 STOCK OPTION
PLAN

          This
2011 Stock Option Plan (the “Plan”) provides for the grant of options to acquire
common shares (the “Common Shares”) in the capital of AMERICAS WIND ENERGY
CORPORATION, a corporation formed under the laws of the State of Nevada (the
“Corporation”). Stock options granted under this Plan that qualify under Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”) are referred
to in this Plan as “Incentive Stock Options” and stock options that do not
qualify under Section 422 of the Code are referred to as “Non-Qualified Stock
Options”. Incentive Stock Options and Non-Qualified Stock Options granted under
this Plan are collectively referred to as “Options”.

1.           
 PURPOSE

1.1           The
purpose of this Plan is to retain the services of valued key employees and
consultants of the Corporation and such other persons as the Plan Administrator
shall select in accordance with Section 3 below, and to encourage such persons
to acquire a greater proprietary interest in the Corporation, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Corporation, and to serve as an aid and inducement in the hiring of new
employees and to provide an equity incentive to consultants and other persons
selected by the Plan Administrator.

1.2           This
Plan shall at all times be subject to all legal requirements relating to the
administration of stock option plans, if any, under applicable corporate laws,
applicable United States federal and state securities laws, the Code, the rules
of any applicable stock exchange or stock quotation system, and the rules of any
foreign jurisdiction applicable to Options granted to residents therein
(collectively, the “Applicable Laws”).

2.           
 ADMINISTRATION

2.1          
This Plan shall be administered initially by the Board of Directors of the
Corporation (the “Board”), except that the Board may, in its discretion,
establish a committee composed of two (2) or more members of the Board or two
(2) or more other persons to administer the Plan, which committee (the
“Committee”) may be an executive, compensation or other committee, including a
separate committee especially created for this purpose. The Board or, if
applicable, the Committee is referred to herein as the “Plan Administrator”.

2.2          
If and so long as the Common Stock is registered under Section 12(b) or 12(g) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
the Corporation wishes to grant Incentive Stock Options, then the Board shall
consider in selecting the Plan Administrator and the membership of any
Committee, with respect to any persons subject or likely to become subject to
Section 16 of the Exchange Act, the provisions regarding (a) “outside directors”
as contemplated by Section 162(m) of the Code, and (b) “Non-Employee Directors”
as contemplated by Rule 16b-3 under the Exchange Act.

2.3          
The Committee shall have the powers and authority vested in the Board hereunder
(including the power and authority to interpret any provision of the Plan or of
any Option). The members of any such Committee shall serve at the pleasure of
the Board. A majority of the members of the Committee shall constitute a quorum,
and all actions of the Committee shall be taken by a majority of the members
present. Any action may be taken by a written instrument signed by all of the
members of the Committee and any action so taken shall be fully effective as if
it had been taken at a meeting.

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2.4           Subject
to the provisions of this Plan and any Applicable Laws, and with a view to
effecting the purpose of the Plan, the Plan Administrator shall have sole
authority, in its absolute discretion, to:

	 	(a) 	
      construe and interpret this Plan;

	 	 	 
	 	(b) 	
      define the terms used in the Plan;

	 	 	 
	 	(c) 	
      prescribe, amend and rescind the rules and regulations
      relating to this Plan;

	 	 	 
	 	(d) 	
      correct any defect, supply any omission or reconcile any
      inconsistency in this Plan;

	 	 	 
	 	(e) 	
      grant Options under this Plan;

	 	 	 
	 	(f) 	
      determine the individuals to whom Options shall be
      granted under this Plan and whether the Option is granted as an Incentive
      Stock Option or a Non-Qualified Stock Option;

	 	 	 
	 	(g) 	
      determine the time or times at which Options shall be
      granted under this Plan;

	 	 	 
	 	(h) 	
      determine the number of Common Shares subject to each
      Option, the exercise price of each Option, the duration of each Option and
      the times at which each Option shall become exercisable;

	 	 	 
	 	(i) 	
      determine all other terms and conditions of the Options;
      and

	 	 	 
	 	(j) 	
      make all other determinations and interpretations
      necessary and advisable for the administration of the
  Plan.

2.5          
All decisions, determinations and interpretations made by the Plan Administrator
shall be binding and conclusive on all participants in the Plan and on their
legal representatives, heirs and beneficiaries.

3.            
ELIGIBILITY

3.1          
Incentive Stock Options may be granted to any individual who, at the time the
Option is granted, is an employee of the Corporation or any Related Corporation
(as defined below) (“Employees”).

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3.2           Non-Qualified
Stock Options may be granted to Employees and to such other persons who are not
Employees as the Plan Administrator shall select, subject to any Applicable
Laws.

3.3          
Options may be granted in substitution for outstanding Options of another
corporation in connection with the merger, consolidation, acquisition of
property or stock or other reorganization between such other corporation and the
Corporation or any subsidiary of the Corporation. Options also may be granted in
exchange for outstanding Options. 

3.4           Any
person to whom an Option is granted under this Plan is referred to as an
“Optionee”. Any person who is the owner of an Option is referred to as a
“Holder”.

3.5           As
used in this Plan, the term “Related Corporation” shall mean any corporation
(other than the Corporation) that is a “Parent Corporation” of the Corporation
or “Subsidiary Corporation” of the Corporation, as those terms are defined in
Sections 424(e) and 424(f), respectively, of the Code (or any successor
provisions) and the regulations thereunder (as amended from time to time).

4.            
STOCK

4.1           The
Plan Administrator is authorized to grant Options to acquire up to a total of
6,700,000 Common Shares. The number of Common Shares with respect to which
Options may be granted hereunder is subject to adjustment as set forth in
Section 5.1(m) hereof. In the event that any outstanding Option expires or is
terminated for any reason, the Common Shares allocable to the unexercised
portion of such Option may again be subject to an Option granted to the same
Optionee or to a different person eligible under Section 3 of this Plan;
provided however, that any cancelled Options will be counted against the maximum
number of shares with respect to which Options may be granted to any particular
person as set forth in Section 3 hereof.

5.            
TERMS AND CONDITIONS OF OPTIONS

5.1           Each
Option granted under this Plan shall be evidenced by a written agreement
approved by the Plan Administrator (each, an “Agreement”). Agreements may
contain such provisions, not inconsistent with this Plan or any Applicable Laws,
as the Plan Administrator in its discretion may deem advisable. All Options also
shall comply with the following requirements:

	 	(a) 	
      Number of Shares and Type of Option

	 	 	 	 
	 		
      Each Agreement shall state the number of Common Shares to
      which it pertains and whether the Option is intended to be an Incentive
      Stock Option or a Non-Qualified Stock Option; provided
  that:

	 	 	 	 
	 		(i) 	
      the number of Common Shares that may be reserved pursuant
      to the exercise of Options granted to any person shall not exceed 5% of
      the issued and outstanding Common Shares of the
  Corporation;

- 4 -

	 		(ii) 	
      in the absence of action to the contrary by the Plan
      Administrator in connection with the grant of an Option, all Options shall
      be Non-Qualified Stock Options;

	 	 	 	 
	 		(iii) 	
      the aggregate fair market value (determined at the Date
      of Grant, as defined below) of the Common Shares with respect to which
      Incentive Stock Options are exercisable for the first time by the Optionee
      during any calendar year (granted under this Plan and all other Incentive
      Stock Option plans of the Corporation, a Related Corporation or a
      predecessor corporation) shall not exceed U.S.$100,000, or such other
      limit as may be prescribed by the Code as it may be amended from time to
      time (the “Annual Limit”); and

	 	 	 	 
	 		(iv) 	
      any portion of an Option which exceeds the Annual Limit
      shall not be void but rather shall be a Non-Qualified Stock
  Option.

	 	 	 	 
	 	(b) 	
      Date of Grant

	 	 	 	 
	 		
      Each Agreement shall state the date the Plan
      Administrator has deemed to be the effective date of the Option for
      purposes of this Plan (the “Date of Grant”).

	 	 	 	 
	 	(c) 	
      Option Price

	 	 	 	 
	 		
      Each Agreement shall state the price per Common Share at
      which it is exercisable. The Plan Administrator shall act in good faith to
      establish the exercise price in accordance with Applicable Laws;
      provided that:

	 	 	 	 
	 		(i) 	
      the per share exercise price for an Incentive Stock
      Option or any Option granted to a “covered employee” as such term is
      defined for purposes of Section 162(m) of the Code shall not be less than
      the fair market value per Common Share at the Date of Grant as determined
      by the Plan Administrator in good faith;

	 	 	 	 
	 		(ii) 	
      with respect to Incentive Stock Options granted to
      greater-than-ten percent (>10%) shareholders of the Corporation (as
      determined with reference to Section 424(d) of the Code), the exercise
      price per share shall not be less than one hundred ten percent (110%) of
      the fair market value per Common Share at the Date of Grant as determined
      by the Plan Administrator in good faith; and

	 	 	 	 
	 		(iii) 	
      Options granted in substitution for outstanding options
      of another corporation in connection with the merger, consolidation,
      acquisition of property or stock or other reorganization involving such
      other corporation and the Corporation or any subsidiary of the Corporation
      may be granted with an exercise price equal to the exercise price for the
      substituted option of the other corporation, subject to any adjustment
      consistent with the terms of the transaction pursuant to which the
      substitution is to occur.

- 5 -

	 	(d) 	
      Duration of Options

	 	 	 	 
	 		
      At the time of the grant of the Option, the Plan
      Administrator shall designate, subject to Section 5.1(g) below, the
      expiration date of the Option, which date shall not be later than five (5)
      years from the Date of Grant; provided, that the expiration date of
      any Incentive Stock Option granted to a greater-than-ten percent (>10%)
      shareholder of the Corporation (as determined with reference to Section
      424(d) of the Code) shall not be later than five (5) years from the Date
      of Grant. In the absence of action to the contrary by the Plan
      Administrator in connection with the grant of a particular Option, and
      except in the case of Incentive Stock Options as described above, all
      Options granted under this Section 5 shall expire five (5) years from the
      Date of Grant.

	 	 	 	 
	 	(e) 	
      Vesting Schedule

	 	 	 	 
	 		
      No Option shall be exercisable until it has vested. The
      vesting schedule for each Option shall be specified by the Plan
      Administrator at the time of grant of the Option prior to the provision of
      services with respect to which such Option is granted.

	 	 	 	 
	 		
      The Plan Administrator may specify a vesting schedule for
      all or any portion of an Option based on the achievement of performance
      objectives established in advance of the commencement by the Optionee of
      services related to the achievement of the performance objectives.
      Performance objectives shall be expressed in terms of objective criteria,
      including but not limited to, one or more of the following: return on
      equity, return on assets, share price, market share, sales, earnings per
      share, costs, net earnings, net worth, inventories, cash and cash
      equivalents, gross margin or the Corporation’s performance relative to its
      internal business plan. Performance objectives may be in respect of the
      performance of the Corporation as a whole (whether on a consolidated or
      unconsolidated basis), a Related Corporation, or a subdivision, operating
      unit, product or product line of either of the foregoing. Performance
      objectives may be absolute or relative and may be expressed in terms of a
      progression or a range. An Option that is exercisable (in full or in part)
      upon the achievement of one or more performance objectives may be
      exercised only following written notice to the Optionee and the
      Corporation by the Plan Administrator that the performance objective has
      been achieved.

	 	 	 	 
	 	(f) 	
      Acceleration of Vesting

	 	 	 	 
	 		
      The vesting of one or more outstanding Options may be
      accelerated by the Plan Administrator at such times and in such amounts as
      it shall determine in its sole discretion.

	 	 	 	 
	 	(g) 	
      Term of Option

	 	 	 	 
	 		(i) 	
      Vested Options shall terminate, to the extent not
      previously exercised, upon the occurrence of the first of the following
      events:

- 6 -

	 		A. 	
      the expiration of the Option, as designated by the Plan
      Administrator in accordance with Section 5.1(d) above;

	 	 	 	 
	 		B. 	
      the date of an Optionee’s termination of employment or
      contractual relationship with the Corporation or any Related Corporation
      for cause (as determined by the Plan Administrator, acting
    reasonably);

	 	 	 	 
	 		C. 	
      the expiration of three (3) months from the date of an
      Optionee’s termination of employment or contractual relationship with the
      Corporation or any Related Corporation for any reason whatsoever other
      than cause, death or Disability (as defined below) unless, in the case of
      a Non-Qualified Stock Option, the exercise period is extended by the Plan
      Administrator until a date not later than the expiration date of the
      Option; or

	 	 	 	 
	 		D. 	
      the expiration of one year (1) from termination of an
      Optionee’s employment or contractual relationship by reason of death or
      Disability (as defined below) unless, in the case of a Non-Qualified Stock
      Option, the exercise period is extended by the Plan Administrator until a
      date not later than the expiration date of the Option.

	 	 	 	 
	 	(ii) 	
      Notwithstanding Section 5.1(g)(i) above, any vested
      Options which have been granted to the Optionee in the Optionee’s capacity
      as a director of the Corporation or any Related Corporation shall
      terminate upon the occurrence of the first of the following
  events:

	 	 	 	 
	 		A. 	
      the event specified in Section 5.1(g)(i)A
above;

	 	 	 	 
	 		B. 	
      the event specified in Section 5.1(g)(i)D above;
    and

	 	 	 	 
	 		C. 	
      the expiration of three (3) months from the date the
      Optionee ceases to serve as a director of the Corporation or Related
      Corporation, as the case may be unless, in the case of a Non- Qualified
      Stock Option, the exercise period is extended by the Plan Administrator
      until a date not later than the expiration date of the Option.

	 	 	 	 
	 	(iii) 	
      Upon the death of an Optionee, any vested Options held by
      the Optionee shall be exercisable only by the person or persons to whom
      such Optionee’s rights under such Option shall pass by the Optionee’s will
      or by the laws of descent and distribution of the Optionee’s domicile at
      the time of death and only until such Options terminate as provided
      above.

	 	 	 	 
	 	(iv) 	
      For purposes of the Plan, unless otherwise defined in the
      Agreement, “Disability” shall mean medically determinable physical or
      mental impairment which has lasted or can be expected to last for a
      continuous period of not less than twelve (12) months or that can
      be expected to result in death. The Plan Administrator shall determine
      whether an Optionee has incurred a Disability on the basis of medical
      evidence acceptable to the Plan Administrator. Upon making a determination
      of Disability, the Plan Administrator shall, for purposes of the Plan,
      determine the date of an Optionee’s termination of employment or
  contractual relationship.

- 7 -

	 		(v) 	
      Unless accelerated in accordance with Section 5.1(f)
      above, unvested Options shall terminate immediately upon termination of
      employment of the Optionee by the Corporation for any reason whatsoever,
      including death or Disability.

	 	 	 	 
	 		(vi) 	
      For purposes of this Plan, transfer of employment between
      or among the Corporation and/or any Related Corporation shall not be
      deemed to constitute a termination of employment with the Corporation or
      any Related Corporation. Employment shall be deemed to continue while the
      Optionee is on military leave, sick leave or other bona fide leave
      of absence (as determined by the Plan Administrator). The foregoing
      notwithstanding, employment shall not be deemed to continue beyond the
      first ninety (90) days of such leave, unless the Optionee’s re-employment
      rights are guaranteed by statute or by contract.

	 	 	 	 
	 	(h) 	
      Exercise of Options

	 	 	 	 
	 		(i) 	
      Options shall be exercisable, in full or in part, at any
      time after vesting, until termination. If less than all of the Common
      Shares included in the vested portion of any Option are purchased, the
      remainder may be purchased at any subsequent time prior to the expiration
      of the Option term. Only whole Common Shares may be issued pursuant to an
      Option, and to the extent that an Option covers less than one (1) share,
      it is unexercisable.

	 	 	 	 
	 		(ii) 	
      Options or portions thereof may be exercised by giving
      written notice to the Corporation, which notice shall specify the number
      of Common Shares to be purchased, and be accompanied by payment in the
      amount of the aggregate exercise price for the Common Shares so purchased,
      which payment shall be in the form specified in Section 5.1(i) below. The
      Corporation shall not be obligated to issue, transfer or deliver a
      certificate representing Common Shares to the Holder of any Option, until
      provision has been made by the Holder, to the satisfaction of the
      Corporation, for the payment of the aggregate exercise price for all
      Common Shares for which the Option shall have been exercised and for
      satisfaction of any tax withholding obligations associated with such
      exercise. During the lifetime of an Optionee, Options are exercisable only
      by the Optionee.

	 	 	 	 
	 	(i) 	
      Payment upon Exercise of
Option

- 8 -

Upon the exercise of any Option, the
aggregate exercise price shall be paid to the Corporation in cash or by
certified or cashier’s check. In addition, if pre-approved in writing by the
Plan Administrator who may arbitrarily withhold consent, the Holder may pay for
all or any portion of the aggregate exercise price by complying with one or more
of the following alternatives:

	 	(i) 	
      by delivering a properly executed exercise notice
      together with irrevocable instructions to a broker promptly to sell or
      margin a sufficient portion of the Common Shares and deliver directly to
      the Corporation the amount of sale or margin loan proceeds to pay the
      exercise price; or

	 	 	 
	 	(ii) 	
      by complying with any other payment mechanism approved by
      the Plan Administrator at the time of
exercise.

	 	(j) 	
      No Rights as a Shareholder

	 	 	 	 
			A Holder shall have no rights as a shareholder of
      the Corporation with respect to any Common Shares covered by an Option
      until such Holder becomes a record holder of such Common Shares,
      irrespective of whether such Holder has given notice of exercise. Subject
      to the provisions of Section 5.1(m) hereof, no rights shall accrue to a
      Holder and no adjustments shall be made on account of dividends (ordinary
      or extraordinary, whether in cash, securities or other property) or
      distributions or other rights declared on, or created in, the Common
      Shares for which the record date is prior to the date the Holder becomes a
      record holder of the Common Shares covered by the Option, irrespective of
      whether such Holder has given notice of exercise.
	 	 	 	 
	 	(k) 	
      Non-transferability of Options

	 	 	 	 
	 		
      Options granted under this Plan and the rights and
      privileges conferred by this Plan may not be transferred, assigned,
      pledged or hypothecated in any manner (whether by operation of law or
      otherwise) other than by will, by applicable laws of descent and
      distribution, and shall not be subject to execution, attachment or similar
      process. Upon any attempt to transfer, assign, pledge, hypothecate or
      otherwise dispose of any Option or of any right or privilege conferred by
      this Plan contrary to the provisions hereof, or upon the sale, levy or any
      attachment or similar process upon the rights and privileges conferred by
      this Plan, such Option shall thereupon terminate and become null and
      void.

	 	 	 	 
	 	(l) 	
      Securities Regulation and Tax Withholding

	 	 	 	 
			
      (i) 
	Common Shares shall not be issued with
      respect to an Option unless the exercise of such Option and the issuance
      and delivery of such Common Shares shall comply with all Applicable Laws,
      and such issuance shall be further subject to the approval of counsel for
      the Corporation with respect to such compliance, including the
      availability of an exemption from prospectus and registration requirements
      for the issuance and sale of such Common Shares. The inability of the
      Corporation to obtain from any regulatory body the authority deemed by the
      Corporation to be necessary for the lawful issuance and sale of any Common Shares
      under this Plan, or the unavailability of an exemption from prospectus and
      registration requirements for the issuance and sale of any Common Shares
      under this Plan, shall relieve the Corporation of any liability with
      respect to the non- issuance or sale of such Common Shares.

- 9 -

	 	(ii) 	
      As a condition to the exercise of an Option, the Plan
      Administrator may require the Holder to represent and warrant in writing
      at the time of such exercise that the Common Shares are being purchased
      only for investment and without any then-present intention to sell or
      distribute such Common Shares. If necessary under Applicable Laws, the
      Plan Administrator may cause a stop-transfer order against such Common
      Shares to be placed on the stock books and records of the Corporation, and
      a legend indicating that the Common Shares may not be pledged, sold or
      otherwise transferred unless an opinion of counsel is provided stating
      that such transfer is not in violation of any Applicable Laws, may be
      stamped on the certificates representing such Common Shares in order to
      assure an exemption from registration. The Plan Administrator also may
      require such other documentation as may from time to time be necessary to
      comply with applicable securities laws. THE CORPORATION HAS NO OBLIGATION
      TO UNDERTAKE REGISTRATION OF OPTIONS OR THE COMMON SHARES ISSUABLE UPON
      THE EXERCISE OF OPTIONS.

	 	 	 	 
	 	(iii) 	
      The Holder shall pay to the Corporation by certified or
      cashier’s check, promptly upon exercise of an Option or, if later, the
      date that the amount of such obligations becomes determinable, all
      applicable federal, state, local and foreign withholding taxes that the
      Plan Administrator, in its discretion, determines to result upon exercise
      of an Option or from a transfer or other disposition of Common Shares
      acquired upon exercise of an Option or otherwise related to an Option or
      Common Shares acquired in connection with an Option. Upon approval of the
      Plan Administrator, a Holder may satisfy such obligation by complying with
      one or more of the following alternatives selected by the Plan
      Administrator:

	 	 	 	 
	 		A. 	
      by delivering to the Corporation Common Shares previously
      held by such Holder or by the Corporation withholding Common Shares
      otherwise deliverable pursuant to the exercise of the Option, which Common
      Shares received or withheld shall have a fair market value at the date of
      exercise (as determined by the Plan Administrator) equal to any
      withholding tax obligations arising as a result of such exercise, transfer
      or other disposition; or

	 	 	 	 
	 		B. 	
      by complying with any other payment mechanism approved by
      the Plan Administrator from time to time.

- 10 -

	 		(iv) 	
      The issuance, transfer or delivery of certificates
      representing Common Shares pursuant to the exercise of Options may be
      delayed, at the discretion of the Plan Administrator, until the Plan
      Administrator is satisfied that the applicable requirements of all
      Applicable Laws and the withholding provisions of the Code have been met
      and that the Holder has paid or otherwise satisfied any withholding tax
      obligation as described in Section 5.1(l)(iii) above.

	 	 	 	 	 
	 	(m) 	
      Adjustments Upon Changes In Capitalization

	 	 	 	 	 
	 		(i) 	
      The aggregate number and class of shares for which
      Options may be granted under this Plan, the number and class of shares
      covered by each outstanding Option, and the exercise price per share
      thereof (but not the total price), and each such Option, shall all be
      proportionately adjusted for any increase or decrease in the number of
      issued Common Shares of the Corporation resulting from:

	 	 	 	 	 
	 			A. 	
      a subdivision or consolidation of Common Shares or any
      like capital adjustment, or

	 	 	 	 	 
	 			B. 	
      the issuance of any Common Shares, or securities
      exchangeable for or convertible into Common Shares, to the holders of all
      or substantially all of the outstanding Common Shares by way of a stock
      dividend (other than the issue of Common Shares, or securities
      exchangeable for or convertible into Common Shares, to holders of Common
      Shares pursuant to their exercise of options to receive dividends in the
      form of Common Shares, or securities convertible into Common Shares, in
      lieu of dividends paid in the ordinary course on the Common
  Shares).

	 	 	 	 	 
	 		(ii) 	
      Except as provided in Section 5.1(m)(iii) hereof, upon a
      merger (other than a merger of the Corporation in which the holders of
      Common Shares immediately prior to the merger have the same proportionate
      ownership of common shares in the surviving corporation immediately after
      the merger), consolidation, acquisition of property or stock, separation,
      reorganization (other than a mere re-incorporation or the creation of a
      holding Corporation) or liquidation of the Corporation, as a result of
      which the shareholders of the Corporation, receive cash, shares or other
      property in exchange for or in connection with their Common Shares, any
      Option granted hereunder shall terminate, but the Holder shall have the
      right to exercise such Holder’s Option immediately prior to any such
      merger, consolidation, acquisition of property or shares, separation,
      reorganization or liquidation, and to be treated as a shareholder of
      record for the purposes thereof, to the extent the vesting requirements
      set forth in the Option agreement have been
satisfied.

- 11 -

	 	 	(iii) 	
      If the shareholders of the Corporation receive shares in
      the capital of another corporation ("Exchange Shares") in exchange for
      their Common Shares in any transaction involving a merger (other than a
      merger of the Corporation in which the holders of Common Shares
      immediately prior to the merger have the same proportionate ownership of
      Common Shares in the surviving corporation immediately after the merger),
      consolidation, acquisition of property or shares, separation or
      reorganization (other than a mere re-incorporation or the creation of a
      holding Corporation), all Options granted hereunder shall be converted
      into options to purchase Exchange Shares unless the Corporation and the
      corporation issuing the Exchange Shares, in their sole discretion,
      determine that any or all such Options granted hereunder shall not be
      converted into options to purchase Exchange Shares but instead shall
      terminate in accordance with, and subject to the Holder’s right to
      exercise the Holder’s Options pursuant to, the provisions of Section
      5.1(m)(ii). The amount and price of converted options shall be determined
      by adjusting the amount and price of the Options granted hereunder in the
      same proportion as used for determining the number of Exchange Shares the
      holders of the Common Shares receive in such merger, consolidation,
      acquisition or property or stock, separation or reorganization. Unless
      accelerated by the Board, the vesting schedule set forth in the option
      agreement shall continue to apply to the options granted for the Exchange
      Shares.

	 	 	 	 
	 	 	(iv) 	
      In the event of any adjustment in the number of Common
      Shares covered by any Option, any fractional shares resulting from such
      adjustment shall be disregarded and each such Option shall cover only the
      number of full shares resulting from such adjustment.

	 	 	 	 
	 	 	(v) 	
      All adjustments pursuant to Section 5.1(m) shall be made
      by the Plan Administrator, and its determination as to what adjustments
      shall be made, and the extent thereof, shall be final, binding and
      conclusive.

	 	 	 	 
	 	 	(vi) 	
      The grant of an Option shall not affect in any way the
      right or power of the Corporation to make adjustments, reclassifications,
      reorganizations or changes of its capital or business structure, to merge,
      consolidate or dissolve, to liquidate or to sell or transfer all or any
      part of its business or assets.

6.            
EFFECTIVE DATE; AMENDMENT; SHAREHOLDER APPROVAL

6.1          
Options may be granted by the Plan Administrator from time to time on or after
the date on which this Plan is adopted by the Board (the “Effective Date”).

6.2          
Unless sooner terminated by the Board, this Plan shall terminate on the tenth
anniversary of the Effective Date. No Option may be granted after such
termination or during any suspension of this Plan.

- 12 -

6.3           Any
Incentive Stock Options granted by the Plan Administrator prior to the
ratification of this Plan by the shareholders of the Corporation shall be
granted subject to approval of this Plan by the holders of a majority of the
Corporation's outstanding voting shares, passed without meeting pursuant the
Nevada General Corporation Law or by voting either in person or by proxy at a
duly held shareholders' meeting within twelve (12) months before or after the
Effective Date. If such shareholder approval is sought and not obtained, all
Incentive Stock Options granted prior thereto and thereafter shall be considered
Non-Qualified Stock Options and any Options granted to Covered Employees will
not be eligible for the exclusion set forth in Section 162(m) of the Code with
respect to the deductibility by the Corporation of certain compensation.

7.            
NO OBLIGATIONS TO EXERCISE OPTION

7.1          
The grant of an Option shall impose no obligation upon the Optionee to exercise
such Option.

8.           
 NO RIGHT TO OPTIONS OR TO EMPLOYMENT

8.1           Whether
or not any Options are to be granted under this Plan shall be exclusively within
the discretion of the Plan Administrator, and nothing contained in this Plan
shall be construed as giving any person any right to participate under this
Plan. The grant of an Option shall in no way constitute any form of agreement or
understanding binding on the Corporation or any Related Corporation, express or
implied, that the Corporation or any Related Corporation will employ or contract
with an Optionee for any length of time, nor shall it interfere in any way with
the Corporation’s or, where applicable, a Related Corporation’s right to
terminate Optionee’s employment at any time, which right is hereby reserved.

9.            
APPLICATION OF FUNDS

9.1          
The proceeds received by the Corporation from the sale of Common Shares issued
upon the exercise of Options shall be used for general corporate purposes,
unless otherwise directed by the Board.

10.            
INDEMNIFICATION OF PLAN ADMINISTRATOR

10.1          
In addition to all other rights of indemnification they may have as members of
the Board, members of the Plan Administrator shall be indemnified by the
Corporation for all reasonable expenses and liabilities of any type or nature,
including attorneys’ fees, incurred in connection with any action, suit or
proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Corporation), except to
the extent that such expenses relate to matters for which it is adjudged that
such Plan Administrator member is liable for willful misconduct; provided, that
within fifteen (15) days after the institution of any such action, suit or
proceeding, the Plan Administrator member involved therein shall, in writing,
notify the Corporation of such action, suit or proceeding, so that the
Corporation may have the opportunity to make appropriate arrangements to
prosecute or defend the same.

- 13 -

11.            
AMENDMENT OF PLAN

11.1           The
Plan Administrator may, at any time, modify, amend or terminate this Plan or
modify or amend Options granted under this Plan, including, without limitation,
such modifications or amendments as are necessary to maintain compliance with
the Applicable Laws. The Plan Administrator may condition the effectiveness of
any such amendment on the receipt of shareholder approval at such time and in
such manner as the Plan Administrator may consider necessary for the Corporation
to comply with or to avail the Corporation and/or the Optionees of the benefits
of any securities, tax, market listing or other administrative or regulatory
requirements.

Effective Date: June 20, 2011

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