Document:

arix10_1.htm

    

     

    AMERIRESOURCE
TECHNOLOGIES, INC.

     

     

    2008
Stock Incentive Plan

     

     

    (Amendment
No. 2)

     

     

    

     

     

    SECTION 1. General Purpose
of the Plan; Definitions.

     

     

    The name of the plan is the
AmeriResource Technologies, Inc. AMENDED 2008 STOCK INCENTIVE PLAN (the "Plan").
The purpose of the Plan is to encourage and enable officers, directors, and
employees of AmeriResource Technologies, Inc. (the "Company") and its
Subsidiaries and other persons to acquire a proprietary interest in the Company.
It is anticipated that providing such persons with a direct stake in the
Company's welfare will assure a closer identification of their interests with
those of the Company and its shareholders, thereby stimulating their efforts on
the Company's behalf and strengthening their desire to remain with the
Company.

     

     

    The following terms shall be defined as
set forth below:

     

     

    "Award" or "Awards", except where
referring to a particular category of grant under the Plan, shall include
Incentive Stock Options, Non-Statutory Stock Options, Restricted Stock Awards,
Unrestricted Stock Awards, Performance Share Awards and Stock Appreciation
Rights.

     

     

    "Board" means the Board of Directors of
the Company.

     

     

    "Cause" means (i) any material breach
by the participant of any agreement to which the participant and the Company are
both parties, and (ii) any act or omission justifying termination of the
participant's employment for cause, as determined by the Committee.

     

     

    "Change of Control" shall have the
meaning set forth in Section 15.

     

     

    "Code" means the Internal Revenue Code
of 1986, as amended, and any successor Code, and related rules, regulations and
interpretations.

     

     

    "Conditioned Stock Award" means an
Award granted pursuant to Section 6.

     

     

    "Committee" shall have the meaning set
forth in Section 2.

     

     

    "Disability" means disability as set
forth in Section 22(e)(3) of the Code.

     

     

    "Effective Date" means the date on
which the Plan is approved by the Board of Directors, as set forth in Section
17.

     

     

    "Eligible Person" shall have the
meaning set forth in Section 4.

     

     

    "Fair Market Value" on any given date
means the price per share of the Stock on such date as reported by a nationally
recognized stock exchange, or, if the Stock is not listed on such an exchange,
as reported by NASDAQ, or, if the Stock is not quoted on NASDAQ, the fair market
value of the Stock as determined by the Committee.

     

     

    "Incentive Stock Option" means any
Stock Option designated and qualified as an "incentive stock option" as defined
in Section 422 of the Code.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Non-Statutory Stock Option" means any
Stock Option that is not an Incentive Stock Option.

     

     

    "Normal Retirement" means retirement
from active employment with the Company and its Subsidiaries in accordance with
the retirement policies of the Company and its Subsidiaries then in
effect.

     

     

    "Outside Director" means any director
who (i) is not an employee of the Company or of any "affiliated group," as such
term is defined in Section 1504(a) of the Code, which includes the Company (an
"Affiliate"), (ii) is not a former employee of the Company or any Affiliate who
is receiving compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the Company's or any Affiliate's taxable
year, (iii) has not been an officer of the Company or any Affiliate and (iv)
does not receive remuneration from the Company or any Affiliate, either directly
or indirectly, in any capacity other than as a director. "Outside Director"
shall be determined in accordance with Section 162(m) of the Code and the
Treasury regulations issued thereunder.

     

     

    "Option" or "Stock Option" means any
option to purchase shares of Stock granted pursuant to Section 5.

     

     

    "Performance Share Award" means an
Award granted pursuant to Section 8.

     

     

    "Stock" means the Common Stock, par
value $0.0001, of the Company, subject to adjustments pursuant to Section
3.

     

     

    "Stock Appreciation Right" means an
Award granted pursuant to Section 9.

     

     

    "Subsidiary" means a subsidiary as
defined in Section 424 of the Code.

     

     

    "Unrestricted Stock Award" means Awards
granted pursuant to Section 7.

     

     

    SECTION 2. Administration of
Plan; Committee Authority to Select Participants and Determine
Awards.

     

     

    (a) Committee. The Plan shall be
administered by either by (i) a committee of the Board consisting of not less
than two Directors (the "Committee"), or (ii) in the absence of a committee, the
Board of Directors may act as the Committee at any time. Except as specifically
reserved to the Board under the terms of the Plan, the Committee shall have full
and final authority to operate, manage and administer the Plan on behalf of the
Company. Action by the Committee shall require the affirmative vote of a
majority of all members thereof. The Board may establish an additional
single-member committee (consisting of an executive officer) that shall have the
power and authority to grant Awards to non-executive officers and to make all
other determinations under the Plan with respect thereto.

     

     

    (b) Powers of Committee. The Committee
shall have the power and authority to grant and modify Awards consistent with
the terms of the Plan, including the power and authority:

     

     

    (i) to select the persons to whom
Awards may from time to time be granted;

     

     

    (ii) to determine the time or times of
grant, and the extent, if any, of Incentive Stock Options, Non-Statutory Stock
Options, Restricted Stock, Unrestricted Stock, Performance Shares and Stock
Appreciation Rights, or any combination of the foregoing, granted to any one or
more participants;

     

     

    (iii) to determine the number of shares
to be covered by any Award;

     

     

    (iv) to determine and modify the terms
and conditions, including restrictions, not inconsistent with the terms of the
Plan, of any Award, which terms and conditions may differ among individual
Awards and participants, and to approve the form of written instruments
evidencing the Awards; provided, however, that no such action shall adversely
affect rights under any outstanding Award without the participant's
consent;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (v) to accelerate the exercisability or
vesting of all or any portion of any Award;

     

     

    (vi) subject to the provisions of
Section 5(b), to extend the period in which any outstanding Stock Option or
Stock Appreciation Right may be exercised;

     

     

    (vii) to
determine whether, to what extent, and under what circumstances Stock and other
amounts payable with respect to an Award shall be deferred either automatically
or at the election of the participant and whether and to what extent the Company
shall pay or credit amounts equal to interest (at rates determined by the
Committee) or dividends or deemed dividends on such deferrals; and

     

     

    (viii) to
adopt, alter and repeal such rules, guidelines and practices for administration
of the Plan and for its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any Award (including related
written instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection with
the Plan; and to otherwise supervise the administration of the
Plan.

     

     

    All decisions and interpretations of
the Committee shall be binding on all persons, including the Company and Plan
participants.

     

     

    SECTION 3. Shares Issuable
under the Plan; Mergers; Substitution.

     

     

    (a) Shares Issuable. The maximum number
of shares of Stock with respect to which Awards (including Stock Appreciation
Rights) may be granted under the Plan shall be One Billion Five Hundred Million
(1,500,000,000); such number to supplement, and not to replace, any prior plans
authorized by the Corporation's board of directors. For purposes of this
limitation, the shares of Stock underlying any Awards which are forfeited,
cancelled, reacquired by the Company or otherwise terminated (other than by
exercise) shall be added back to the shares of Stock with respect to which
Awards may be granted under the Plan so long as the participants to whom such
Awards had been previously granted received no benefits of ownership of the
underlying shares of Stock to which the Award related. Subject to such overall
limitation, any type or types of Award may be granted with respect to shares,
including Incentive Stock Options. Shares issued under the Plan may be
authorized but unissued shares or shares reacquired by the Company.

     

     

    (b) Stock Dividends, Mergers, etc. In
the event that after approval of the Plan by the directors of the Company in
accordance with Section 17, the Company effects a stock dividend, stock split or
similar change in capitalization affecting the Stock, the Committee shall make
appropriate adjustments in (i) the number and kind of shares of stock or
securities with respect to which Awards may thereafter be granted (including
without limitation the limitations set forth in Section 3(a) and Section 3(b)
above), (ii) the number and kind of shares remaining subject to outstanding
Awards, and (iii) the option or purchase price in respect of such shares. In the
event of any merger, consolidation, dissolution or liquidation of the Company,
the Committee in its sole discretion may, as to any outstanding Awards, make
such substitution or adjustment in the aggregate number of shares reserved for
issuance under the Plan and in the number and purchase price (if any) of shares
subject to such Awards as it may determine and as may be permitted by the terms
of such transaction, or accelerate, amend or terminate such Awards upon such
terms and conditions as it shall provide (which, in the case of the termination
of the vested portion of any Award, shall require payment or other consideration
which the Committee deems equitable in the circumstances), subject, however, to
the provisions of Section 15.

     

     

    (c) Substitute Awards. The Committee
may grant Awards under the Plan in substitution for stock and stock based awards
held by employees of another Corporation who concurrently become employees of
the Company or a Subsidiary as the result of a merger or consolidation of the
employing Corporation with the Company or a Subsidiary or the acquisition by the
Company or a Subsidiary of property or stock of the employing Corporation. The
Committee may direct that the substitute awards be granted on such terms and
conditions as the Committee considers appropriate in the circumstances. Shares
which may be delivered under such substitute awards may be in addition to the
maximum number of shares provided for in Section 3(a).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION 4.
Eligibility.

     

     

    Awards may be granted to officers,
directors, and employees of and consultants and advisers to the Company or its
Subsidiaries ("Eligible Persons").

     

     

    SECTION 5. Stock
Options.

     

     

    The Committee may grant to Eligible
Persons options to purchase stock.

     

     

    Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time
approve.

     

     

    Stock Options granted under the Plan
may be either Incentive Stock Options (subject to compliance with applicable
law) or Non-Statutory Stock Options. Unless otherwise so designated, an Option
shall be a Non-Statutory Stock Option. To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Statutory Stock
Option.

     

     

    No Incentive Stock Option shall be
granted under the Plan after the fifth anniversary of the earlier of the date of
adoption of the Plan.

     

     

    The Committee in its discretion may
determine the effective date of Stock Options, provided, however, that grants of
Incentive Stock Options shall be made only to persons who are, on the effective
date of the grant, employees of the Company or any Subsidiary. Stock Options
granted pursuant to this Section 5(a) shall be subject to the following terms
and conditions and the terms and conditions of Section 13 and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable.

     

     

    (a) Exercise Price. The exercise price
per share for the Stock covered by a Stock Option granted pursuant to this
Section 5(a) shall be determined by the Committee at the time of
grant.

     

     

    (b) Option Term. The term of each Stock
Option shall be fixed by the Committee, but no Incentive Stock Option shall be
exercisable more than five (5) years after the date the option is granted. If an
employee owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than ten percent (10%) of the combined voting power of
all classes of stock of the Company or any Subsidiary or parent Corporation and
an Incentive Stock Option is granted to such employee, the term of such option
shall be no more than five (5) years from the date of grant.

     

     

    (c) Exercisability; Rights of a
Shareholder. Stock Options shall become vested and exercisable at such time or
times, whether or not in installments, as shall be determined by the Committee
at or after the grant date. The Committee may at any time accelerate the
exercisability of all or any portion of any Stock Option. An Optionee shall have
the rights of a shareholder only as to shares acquired upon the exercise of a
Stock Option and not as to unexercised Stock Options.

     

     

    (d) Method of Exercise. Stock Options
may be exercised in whole or in part, by delivering written notice of exercise
to the Company, specifying the number of shares to be purchased. Payment of the
purchase price may be made by one or more of the following methods:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) In cash or by certified or bank
check or other instrument acceptable to the Committee;

     

     

    (ii) If permitted by the Committee, in
its discretion, in the form of shares of Stock that are not then subject to
restrictions and that has been owned by the Optionee for a period of at least
six months. Such surrendered shares shall be valued at Fair Market Value on the
exercise date; or

     

     

    (iii) By the Optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that
in the event the Optionee chooses to pay the purchase price as so provided, the
Optionee and the broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Committee shall prescribe as
a condition of such payment procedure. The Company need not act upon such
exercise notice until the Company receives full payment of the exercise price;
or

     

     

    (iv) By any other means (including,
without limitation, by delivery of a promissory note of the Optionee payable on
such terms as are specified by the Committee) which the Committee determines are
consistent with the purpose of the Plan and with applicable laws and
regulations.

     

     

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

     

     

    (e) Non-transferability of Options.
Except as the Committee may provide with respect to a Non-Statutory Stock
Option, no Stock Option shall be transferable other than by will or by the laws
of descent and distribution and all Stock Options shall be exercisable, during
the Optionee’s lifetime, only by the Optionee.

     

     

    (f) Annual Limit on Incentive Stock
Options. To the extent required for "incentive stock option" treatment under
Section 422 of the Code, the aggregate Fair Market Value (determined as of the
time of grant) of the Stock with respect to which incentive stock options
granted under this Plan and any other Plan of the Company or its Subsidiaries
become exercisable for the first time by an Optionee during any calendar year
shall be determined by the Committee.

     

     

    (g) Form of Settlement. Shares of Stock
issued upon exercise of a Stock Option shall be free of all restrictions under
the Plan, except as otherwise provided in this Plan.

     

     

    SECTION 6. Restricted Stock
Awards.

     

     

    (a) Nature of Restricted Stock Award.
The Committee in its discretion may grant Restricted Stock Awards to any
Eligible Person, entitling the recipient to acquire, for a purchase price
determined by the Committee, shares of Stock subject to such restrictions and
conditions as the Committee may determine at the time of grant ("Restricted
Stock"), including continued employment and/or achievement of pre-established
performance goals and objectives.

     

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Rights as a Shareholder. Upon
complying with Section 6(b) above, a participant shall have all the rights of a
shareholder with respect to the Restricted Stock, including voting and dividend
rights, subject to non-transferability restrictions and Company repurchase or
forfeiture rights described in this Section 6 and subject to such other
conditions contained in the written instrument evidencing the Restricted Award.
Unless the Committee shall otherwise determine, certificates evidencing shares
of Restricted Stock shall remain in the possession of the Company until such
shares are vested as provided in Section 6(e) below.

     

     

    (d) Restrictions. Shares of Restricted
Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or
disposed of except as specifically provided herein. In the event of termination
of employment by the Company and its Subsidiaries for any reason (including
death, Disability, Normal Retirement and for Cause), the Company shall have the
right, at the discretion of the Committee, to repurchase shares of Restricted
Stock with respect to which conditions have not lapsed at their purchase price,
or to require forfeiture of such shares to the Company if acquired at no cost,
from the participant or the participant's legal representative. The Company must
exercise such right of repurchase or forfeiture within ninety (90) days
following such termination of employment (unless otherwise specified in the
written instrument evidencing the Restricted Stock Award).

     

     

    (e) Vesting of Restricted Stock. The
Committee at the time of grant shall specify the date or dates and/or the
attainment of pre-established performance goals, objectives and other conditions
on which the non-transferability of the Restricted Stock and the Company's right
of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." The Committee at any time may
accelerate such date or dates and otherwise waive or, subject to Section 13,
amend any conditions of the Award.

     

     

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

     

     

    SECTION 7. Unrestricted
Stock Awards.

     

     

    (a) Grant or Sale of Unrestricted
Stock. The Committee in its discretion may grant or sell to any Eligible Person
shares of Stock free of any restrictions under the Plan ("Unrestricted Stock")
at a purchase price determined by the Committee. Shares of Unrestricted Stock
may be granted or sold as described in the preceding sentence in respect of past
services or other valid consideration.

     

     

    (b) Restrictions on Transfers. The
right to receive unrestricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, other than by will or the laws of descent and
distribution.

     

     

    SECTION 8. Performance Share
Awards.

     

     

    (a) Nature of Performance Shares. A
Performance Share Award is an award entitling the recipient to acquire shares of
Stock upon the attainment of specified performance goals. The Committee may make
Performance Share Awards independent of or in connection with the granting of
any other Award under the Plan. Performance Share Awards may be granted under
the Plan to any Eligible Person. The Committee in its discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals applicable under each such Award, the periods during which performance is
to be measured, and all other limitations and conditions applicable to the
awarded Performance Shares.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION 9. Stock
Appreciation Rights.

     

     

    The Committee in its discretion may
grant Stock Appreciation Rights to any Eligible Person (i) alone, or (ii)
simultaneously with the grant of a Stock Option and in conjunction therewith or
in the alternative thereto. A Stock Appreciation Right shall entitle the
participant upon exercise thereof to receive from the Company, upon written
request to the Company at its principal offices (the "Request"), a number of
shares of Stock (with or without restrictions as to substantial risk of
forfeiture and transferability, as determined by the Committee in its sole
discretion), an amount of cash, or any combination of Stock and cash, as
specified in the Request (but subject to the approval of the Committee in its
sole discretion, at any time up to and including the time of payment, as to the
making of any cash payment), having an aggregate Fair Market Value equal to the
product of (i) the excess of Fair Market Value, on the date of such Request,
over the exercise price per share of Stock specified in such Stock Appreciation
Right or its related Option, multiplied by (ii) the number of shares of Stock
for which such Stock Appreciation Right shall be exercised. Notwithstanding the
foregoing, the Committee may specify at the time of grant of any Stock
Appreciation Right that such Stock Appreciation Right may be exercisable solely
for cash and not for Stock.

     

     

    SECTION 10. Termination of
Stock Options and Stock Appreciation Rights.

     

     

    (a) Incentive Stock
Options:

     

     

    (i) Termination by Death. If any
participant's employment by the Company and its Subsidiaries terminates by
reason of death, any Incentive Stock Option owned by such participant may
thereafter be exercised to the extent exercisable at the date of death, by the
legal representative or legatee of the participant, for a period of two (2)
years (or such other period as the Committee shall specify at any time) from the
date of death, or until the expiration of the stated term of the Incentive Stock
Option, if earlier.

     

     

    (ii) Termination by Reason of
Disability or Normal Retirement.

     

     

    (A) Any Incentive Stock Option held by
a participant whose employment by the Company and its Subsidiaries has
terminated by reason of Disability may thereafter be exercised, to the extent it
was exercisable at the time of such termination, for a period of one (1) year
(or such other period as the Committee shall specify at any time) from the date
of such termination of employment, or until the expiration of the stated term of
the Option, if earlier.

     

     

    (B) Any Incentive Stock Option held by
a participant whose employment by the Company and its Subsidiaries has
terminated by reason of Normal Retirement may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for a period of
ninety (90) days (or such other period as the Committee shall specify at any
time) from the date of such termination of employment, or until the expiration
of the stated term of the Option, if earlier.

     

     

    (C) The Committee shall have sole
authority and discretion to determine whether a participant's employment has
been terminated by reason of Disability or Normal Retirement.

     

     

    (D) Except as otherwise provided by the
Committee at the time of grant, the death of a participant during a period
provided in this Section 10(a)(ii) for the exercise of an Incentive Stock Option
shall extend such period for two (2) years from the date of death, subject to
termination on the expiration of the stated term of the Option, if
earlier.

     

     

    (iii) Termination for Cause. If any
participant's employment by the Company and its Subsidiaries has been terminated
for Cause, any Incentive Stock Option held by such participant shall immediately
terminate and be of no further force and effect; provided, however, that the
Committee may, in its sole discretion, provide that such Option can be exercised
for a period of up to thirty (30) days from the date of termination of
employment or until the expiration of the stated term of the Option, if
earlier.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iv) Other Termination. Unless
otherwise determined by the Committee, if a participant's employment by the
Company and its Subsidiaries terminates for any reason other than death,
Disability, Normal Retirement or for Cause, any Incentive Stock Option held by
such participant may thereafter be exercised, to the extent it was exercisable
on the date of termination of employment, for ninety (90) days (or such other
period as the Committee shall specify at any time) from the date of termination
of employment or until the expiration of the stated term of the Option, if
earlier.

     

     

    (b) Non-Statutory Stock Options and
Stock Appreciation Rights. Any Non-Statutory Stock Option or Stock Appreciation
Right granted under the Plan shall contain such terms and conditions with
respect to its termination as the Committee, in its discretion, may from time to
time determine.

     

     

    SECTION 11. Tax
Withholding.

     

     

    (a) Payment by Participant. Each
participant shall, no later than the date as of which the value of an Award or
of any Stock or other amounts received thereunder first becomes includable in
the gross income of the participant for Federal income tax purposes, pay to the
Company, or make arrangements satisfactory to the Committee regarding payment of
any Federal, state, local and/or payroll taxes of any kind required by law to be
withheld with respect to such income. The Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.

     

     

    (b) Payment in Shares. A Participant
may elect, with the consent of the Committee, to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from shares of Stock to be issued pursuant to an Award a number of
shares with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the minimum withholding amount due with respect to
such Award, or (ii) transferring to the Company shares of Stock owned by the
participant for a period of at least six months and with an aggregate Fair
Market Value (as of the date the minimum withholding is effected) that would
satisfy the withholding amount due.

     

     

    SECTION 12. Transfer, Leave
of Absence, Etc.

     

     

    For purposes of the Plan, the following
events shall not be deemed a termination of employment:

     

     

    (i) a transfer to the employment of the
Company from a Subsidiary or from the Company to a Subsidiary, or from one
Subsidiary to another;

     

     

    (ii) an approved leave of absence for
military service or sickness, or for any other purpose approved by the Company,
if the employee's right to re-employment is guaranteed either by a statute or by
contract or under the policy pursuant to which the leave of absence was granted
or if the Committee otherwise so provides in writing.

     

     

    SECTION 13. Amendments and
Termination.

     

     

    The Board may at any time amend or
discontinue the Plan and the Committee may at any time amend or cancel any
outstanding Award (or provide substitute Awards at the same or reduced exercise
or purchase price or with no exercise or purchase price, but such price, if any,
must satisfy the requirements which would apply to the substitute or amended
Award if it were then initially granted under this Plan) for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. However, no such amendment, unless approved by the directors of the
Company, shall be effective if it would cause the Plan to fail to satisfy the
incentive stock option requirements of the Code.

     

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    SECTION 14. Status of
Plan.

     

     

    With respect to the portion of any
Award which has not been exercised and any payments in cash, Stock or other
consideration not received by a participant, a participant shall have no rights
greater than those of a general creditor of the Company unless the Committee
shall otherwise expressly determine in connection with any Award or Awards. In
its sole discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the Company's obligations to deliver Stock or make payments
with respect to Awards hereunder, provided that the existence of such trusts or
other arrangements is consistent with the provision of the foregoing
sentence.

     

     

    SECTION 15. Change of
Control Provisions.

     

     

    Upon the occurrence of a Change of
Control as defined in this Section 15:

     

     

    (i) subject to the provisions of clause
(iii) below, after the effective date of such Change of Control, each holder of
an outstanding Stock Option, Restricted Stock Award, Performance Share Award or
Stock Appreciation Right shall be entitled, upon exercise of such Award, to
receive, in lieu of shares of Stock (or consideration based upon the Fair Market
Value of Stock), shares of such stock or other securities, cash or property (or
consideration based upon shares of such stock or other securities, cash or
property) as the holders of shares of Stock received in connection with the
Change of Control;

     

     

    (ii) the Committee may accelerate the
time for exercise of, and waive all conditions and restrictions on, each
unexercised and unexpired Stock Option, Restricted Stock Award, Performance
Share Award and Stock Appreciation Right, effective upon a date prior or
subsequent to the effective date of such Change of Control, specified by the
Committee; or

     

     

    (iii) each outstanding Stock Option,
Restricted Stock Award, Performance Share Award and Stock Appreciation Right may
be cancelled by the Committee as of the effective date of any such Change of
Control provided that (x) notice of such cancellation shall be given to each
holder of such an Award and (y) each holder of such an Award shall have the
right to exercise such Award to the extent that the same is then exercisable or,
in full, if the Committee shall have accelerated the time for exercise of all
such unexercised and unexpired Awards, during the thirty (30) day period
preceding the effective date of such Change of Control.

     

     

    (b) "Change of Control" shall mean the
occurrence of any one of the following events:

     

     

    (i) any "person" (as such term is used
in Sections 13(d) and 14(d)(2) of the Act) becomes a "beneficial owner" (as such
term is defined in Rule 13d-3 promulgated under the Act) (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit Plan of the Company, or any Corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the combined voting
power of the Company's then outstanding securities; or

     

     

    (ii) the stockholders of the Company
approve a merger or consolidation of the Company with any other Corporation or
other entity, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than sixty-five percent
(65%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or

     

     

    (iii) the stockholders of the Company
approve a Plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION 16. General
Provisions.

     

     

    (a) No Distribution; Compliance with
Legal Requirements. The Committee may require each person acquiring shares
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution
thereof.

     

     

    No shares of Stock shall be issued
pursuant to an Award until all applicable securities laws and other legal and
stock exchange requirements have been satisfied. The Committee may require the
placing of such stop orders and restrictive legends on certificates for Stock
and Awards as it deems appropriate.

     

     

    (b) Delivery of Stock Certificates;
Delivery of stock certificates to participants under this Plan shall be deemed
effected for all purposes when the Company or a stock transfer agent of the
Company shall have delivered such certificates in the United States mail,
addressed to the participant, at the participant's last known address on file
with the Company.

     

     

    (c) Other Compensation Arrangements; No
Employment Rights. Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, including trusts,
subject to stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in specific
cases. The adoption of the Plan or any Award under the Plan does not confer upon
any employee any right to continued employment with the Company or any
Subsidiary.

     

     

    SECTION 17. Effective Date
of Plan.

     

     

    The Plan shall become effective upon
approval by the board of directors of the Company.

     

     

    SECTION 18. Governing
Law.

     

     

    This Plan shall be governed by, and
construed and enforced in accordance with, the substantive laws of the State of
Delaware without regard to its principles of conflicts of laws.

     

     

    
    

     

    
      	 By:  /s/
      Delmar Janovec
	 
	 Delmar
      Janovec
	 President  &
      Secretary of
	

               AmeriResource
      Technologies,
      Inc.DEALERADVANCE
                  INC. 2008 INCENTIVE STOCK PLAN

              
	  
 

      

       

      This
        Dealeradvance,
        inc. 2008 Incentive Stock Plan
        (the
        "Plan")
        is
        designed to retain directors, executives and selected employees and reward
        them
        for making major contributions to the success of the Company. These objectives
        are accomplished by making long-term incentive awards under the Plan thereby
        providing Participants with a proprietary interest in the growth and performance
        of the Company.

      

      
        	
                1.

              	
                Definitions.

              

      

      

      
        	 	
                (a)

              	
                "Board"
                  -
                  The Board of Directors of the
                  Company.

              

      

      

      
        	 	
                (b)

              	
                "Code"
                  -
                  The Internal Revenue Code of 1986, as amended from time to
                  time.

              

      

      

      
        	 	
                (c)

              	
                "Committee"
                  -
                  The Compensation Committee of the Company's Board, or such other
                  committee
                  of the Board that is designated by the Board to administer the
                  Plan,
                  composed of not less than two members of the Board all of whom
                  are
                  disinterested persons, as contemplated by Rule 16b-3 ("Rule
                  16b-3")
                  promulgated under the Securities Exchange Act of 1934, as amended
                  (the
                  "Exchange
                  Act").

              

      

      

      
        	 	
                (d)

              	
                "Company"
                  -
                  DealerAdvance, Inc. and its subsidiaries including subsidiaries
                  of
                  subsidiaries.

              

      

      

      
        	 	
                (e)

              	
                "Exchange Act"
                  -
                  The Securities Exchange Act of 1934, as amended from time to
                  time.

              

      

      

      
        	 	
                (f)

              	
                "Fair
                  Market Value"
                  -
                  The fair market value of the Company's issued and outstanding Stock
                  as
                  determined in good faith by the Board or
                  Committee.

              

      

      

      
        	 	
                (g)

              	
                "Grant"
                  -
                  The grant of any form of stock option, stock award, or stock purchase
                  offer, whether granted singly, in combination or in tandem, to
                  a
                  Participant pursuant to such terms, conditions and limitations
                  as the
                  Committee may establish in order to fulfill the objectives of the
                  Plan.

              

      

      

      
        	 	
                (h)

              	
                "Grant
                  Agreement"
                  -
                  An agreement between the Company and a Participant that sets forth
                  the
                  terms, conditions and limitations applicable to a
                  Grant.

              

      

      

      
        	 	
                (i)

              	
                "Option"
                  -
                  Either an Incentive Stock Option, in accordance with Section 422
                  of Code,
                  or a Nonstatutory Option, to purchase the Company's Stock that
                  may be
                  awarded to a Participant under the Plan. A Participant who receives
                  an
                  award of an Option shall be referred to as an "Optionee."

              

      

      

      
        	 	
                (j)

              	
                "Participant"
                  -
                  A director, officer, or employee of the Company to whom an Award
                  has been
                  made under the Plan.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                (k)

              	
                "Restricted
                  Stock Purchase Offer"
                  -
                  A Grant of the right to purchase a specified number of shares of
                  Stock
                  pursuant to a written agreement issued under the
                  Plan.

              

      

      

      
        	 	
                (l)

              	
                "Securities
                  Act"
                  -
                  The Securities Act of 1933, as amended from time to
                  time.

              

      

      

      
        	 	
                (m)

              	
                "Stock"
                  -
                  Authorized and issued or unissued shares of common stock of the
                  Company.

              

      

      

      
        	 	
                (n)

              	
                "Stock
                  Award"
                  -
                  A Grant made under the Plan in stock or denominated in units of
                  stock for
                  which the Participant is not obligated to pay additional
                  consideration.

              

      

      

      
        	
                2.

              	
                Administration.
                  The Plan shall be administered by the Board, provided however,
                  that the
                  Board may delegate such administration to the Committee. Subject
                  to the
                  provisions of the Plan, the Board and/or the Committee shall have
                  authority to (a) grant, in its discretion, Incentive Stock Options
                  in
                  accordance with Section 422 of the Code, or Nonstatutory Options,
                  Stock
                  Awards or Restricted Stock Purchase Offers; (b) determine in good
                  faith
                  the fair market value of the Stock covered by any Grant; (c) determine
                  which eligible persons shall receive Grants and the number of shares,
                  restrictions, terms and conditions to be included in such Grants;
                  (d)
                  construe and interpret the Plan; (e) promulgate, amend and rescind
                  rules
                  and regulations relating to its administration, and correct defects,
                  omissions and inconsistencies in the Plan or any Grant; (f) consistent
                  with the Plan and with the consent of the Participant, as appropriate,
                  amend any outstanding Grant or amend the exercise date or dates
                  thereof;
                  (g) determine the duration and purpose of leaves of absence which
                  may be
                  granted to Participants without constituting termination of their
                  employment for the purpose of the Plan or any Grant; and (h) make
                  all
                  other determinations necessary or advisable for the Plan's administration.
                  The interpretation and construction by the Board of any provisions
                  of the
                  Plan or selection of Participants shall be conclusive and final.
                  No member
                  of the Board or the Committee shall be liable for any action or
                  determination made in good faith with respect to the Plan or any
                  Grant
                  made thereunder.

              

      

      

      
        	
                3.

              	
                Eligibility.

              

      

      

      
        	 	
                (a)

              	
                General:
                  The persons who shall be eligible to receive Grants shall be directors,
                  officers, or employees of the Company. An Optionee may hold more
                  than one
                  Option. Any issuance of a Grant to an officer or director of the
                  Company
                  subsequent to the first registration of any of the securities of
                  the
                  Company under the Exchange Act shall comply with the requirements
                  of Rule
                  16b-3.

              

      

      

      
        	 	
                (b)

              	
                Incentive
                  Stock Options:
                  Incentive Stock Options may only be issued to employees of the
                  Company
                  that have been employed with the Company for a period of no less
                  than six
                  (6) months. Incentive Stock Options may be granted to officers
                  or
                  directors, provided they are also employees of the Company. Payment
                  of a
                  director's fee shall not be sufficient to constitute employment
                  by the
                  Company.

              

      

       

      
        
           

        

        
          -
            2 -

          
            

          

        

        
           

        

      

       

      The
        Company shall not grant an Incentive Stock Option under the Plan to any employee
        if such Grant would result in such employee holding the right to exercise
        for
        the first time in any one calendar year, under all Incentive Stock Options
        granted under the Plan or any other plan maintained by the Company, with
        respect
        to shares of Stock having an aggregate fair market value, determined as of
        the
        date of the Option is granted, in excess of $100,000. Should it be determined
        that an Incentive Stock Option granted under the Plan exceeds such maximum
        for
        any reason other than a failure in good faith to value the Stock subject
        to such
        option, the excess portion of such option shall be considered a Nonstatutory
        Option. To the extent the employee holds two (2) or more such Options which
        become exercisable for the first time in the same calendar year, the foregoing
        limitation on the exercisability of such Option as Incentive Stock Options
        under
        the Federal tax laws shall be applied on the basis of the order in which
        such
        Options are granted. If, for any reason, an entire Option does not qualify
        as an
        Incentive Stock Option by reason of exceeding such maximum, such Option shall
        be
        considered a Nonstatutory Option.

      

      
        	 	
                (c)

              	
                Nonstatutory
                  Option:
                  The provisions of the foregoing Section 3(b) shall not apply to
                  any Option
                  designated as a "Nonstatutory
                  Option"
                  or which sets forth the intention of the parties that the Option
                  be a
                  Nonstatutory Option.

              

      

      

      
        	 	
                (d)

              	
                Stock
                  Awards and Restricted Stock Purchase Offers:
                  The provisions of this Section 3 shall not apply to any Stock Award
                  or
                  Restricted Stock Purchase Offer under the
                  Plan.

              

      

      

      
        	
                4.

              	
                Stock.

              

      

      

      
        	 	
                (a)

              	
                Authorized
                  Stock:
                  Stock subject to Grants may be either unissued or reacquired
                  Stock.

              

      

      

      
        	 	
                (b)

              	
                Number
                  of Shares:
                  Subject to adjustment as provided in Section 5(i) of the Plan,
                  the total
                  number of shares of Stock which may be purchased or granted directly
                  by
                  Options, Stock Awards or Restricted Stock Purchase Offers, or purchased
                  indirectly through exercise of Options granted under the Plan shall
                  not
                  exceed Forty Million (40,000,000). If any Grant shall for any reason
                  terminate or expire, any shares allocated thereto but remaining
                  unpurchased upon such expiration or termination shall again be
                  available
                  for Grants with respect thereto under the Plan as though no Grant
                  had
                  previously occurred with respect to such shares. Any shares of
                  Stock
                  issued pursuant to a Grant and repurchased pursuant to the terms
                  thereof
                  shall be available for future Grants as though not previously covered
                  by a
                  Grant.

              

      

      

      
        	 	
                (c)

              	
                Reservation
                  of Shares:
                  The Company shall reserve and keep available at all times during
                  the term
                  of the Plan such number of shares as shall be sufficient to satisfy
                  the
                  requirements of the Plan. If, after reasonable efforts, which efforts
                  shall not include the registration of the Plan or Grants under
                  the
                  Securities Act, the Company is unable to obtain authority from
                  any
                  applicable regulatory body, which authorization is deemed necessary
                  by
                  legal counsel for the Company for the lawful issuance of shares
                  hereunder,
                  the Company shall be relieved of any liability with respect to
                  its failure
                  to issue and sell the shares for which such requisite authority
                  was so
                  deemed necessary unless and until such authority is
                  obtained.

              

      

      

      
        	
              	(d)	
                Application
                  of Funds:
                   The
                  proceeds received by the Company from the sale of Stock pursuant
                  to the
                  exercise of Options or rights under Stock Purchase Agreements will
                  be used
                  for general corporate purposes.

              

      

      

      
        	 	
                (e)

              	
                No
                  Obligation to Exercise:
                  The issuance of a Grant shall impose no obligation upon the Participant
                  to
                  exercise any rights under such
                  Grant.

              

      

       

      
        
           

        

        
          -
            3 -

          
            

          

        

        
           

        

      

       

      
        	
                5.

              	
                Terms
                  and Conditions of Options. Options granted hereunder shall be evidenced
                  by
                  agreements between the Company and the respective Optionees, in
                  such form
                  and substance as the Board or Committee shall from time to time
                  approve.
                  The form of Incentive Stock Option Agreement attached hereto as
                  Exhibit
                  A
                  and the three forms of a Nonstatutory Stock Option Agreement for
                  employees, and for directors, attached hereto as Exhibit
                  B-1, Exhibit
                  B-2,
                  respectively, shall be deemed to be approved by the Board. Option
                  agreements need not be identical, and in each case may include
                  such
                  provisions as the Board or Committee may determine, but all such
                  agreements shall be subject to and limited by the following terms
                  and
                  conditions:

              

      

      

      
        	 	
                (a)

              	
                Number
                  of Shares:
                  Each Option shall state the number of shares to which it
                  pertains.

              

      

      

      
        	 	
                (b)

              	
                Exercise
                  Price:
                  Each Option shall state the exercise price, which shall be determined
                  as
                  follows:

              

      

      

      
        	
              	(i)	
                Any
                  Incentive Stock Option granted to a person who at the time the
                  Option is
                  granted owns (or is deemed to own pursuant to Section 424(d) of
                  the Code)
                  stock possessing more than ten percent (10%) of the total combined
                  voting
                  power or value of all classes of stock of the Company ("Ten
                  Percent Holder")
                  shall have an exercise price of no less than 110% of the Fair Market
                  Value
                  of the Stock as of the date of grant;
                  and

              

      

      

      
        	
              	(ii)	
                Incentive
                  Stock Options granted to a person who at the time the Option is
                  granted is
                  not a Ten Percent Holder shall have an exercise price of no less
                  than 100%
                  of the Fair Market Value of the Stock as of the date of
                  grant.

              

      

      

      For
        the
        purposes of this Section 5(b), the Fair Market Value shall be as determined
        by
        the Board in good faith, which determination shall be conclusive and binding;
        provided however, that if there is a public market for such Stock, the Fair
        Market Value per share shall be the average of the bid and asked prices (or
        the
        closing price if such stock is listed on the NASDAQ National Market System
        or
        Small Cap Issue Market) on the date of grant of the Option, or if listed
        on a
        stock exchange, the closing price on such exchange on such date of
        grant.

      

      
        	 	
                (c)

              	
                Medium
                  and Time of Payment:
                  The exercise price shall become immediately due upon exercise of
                  the
                  Option and shall be paid in cash or check made payable to the Company.
                  Should the Company's outstanding Stock be registered under Section
                  12(g)
                  of the Exchange Act at the time the Option is exercised, then the
                  exercise
                  price may also be paid as follows:

              

      

       

      
        	
              	(i)	
                in
                  shares of Stock held by the Optionee for the requisite period necessary
                  to
                  avoid a charge to the Company's earnings for financial reporting
                  purposes
                  and valued at Fair Market Value on the exercise date,
                  or

              

      

      

      
        	
              	(ii)	
                through
                  a special sale and remittance procedure pursuant to which the Optionee
                  shall concurrently provide irrevocable written instructions (a)
                  to a
                  Company designated brokerage firm to effect the immediate sale
                  of the
                  purchased shares and remit to the Company, out of the sale proceeds
                  available on the settlement date, sufficient funds to cover the
                  aggregate
                  exercise price payable for the purchased shares plus all applicable
                  Federal, state and local income and employment taxes required to
                  be
                  withheld by the Company by reason of such purchase and (b) to the
                  Company
                  to deliver the certificates for the purchased shares directly to
                  such
                  brokerage firm in order to complete the sale
                  transaction.

              

      

       

      
        
           

        

        
          -
            4 -

          
            

          

        

        
           

        

      

       

      At
        the
        discretion of the Board, exercisable either at the time of Option grant or
        of
        Option exercise, the exercise price may also be paid (i) by Optionee's delivery
        of a promissory note in form and substance satisfactory to the Company and
        permissible under the Securities Rules of the applicable state and bearing
        interest at a rate determined by the Board in its sole discretion, but in
        no
        event less than the minimum rate of interest required to avoid the imputation
        of
        compensation income to the Optionee under the Federal tax laws, or (ii) in
        such
        other form of consideration permitted by the applicable state corporations
        law
        as may be acceptable to the Board.

      

      
        	 	
                (d)

              	
                Term
                  and Exercise of Options:
                  Any Option granted to an employee of the Company shall become exercisable
                  over a period of no longer than ten (10) years, and no less than
                  ten
                  percent (10%) of the shares covered thereby shall become exercisable
                  annually. No Option shall be exercisable, in whole or in part,
                  prior to
                  one (1) year from the date it is granted unless the Board shall
                  specifically determine otherwise, as provided herein. In no event
                  shall
                  any Option be exercisable after the expiration of ten (10) years
                  from the
                  date it is granted, and no Incentive Stock Option granted to a
                  Ten Percent
                  Holder shall, by its terms, be exercisable after the expiration
                  of ten
                  (10) years from the date of the Option. Unless otherwise specified
                  by the
                  Board or the Committee in the resolution authorizing such Option,
                  the date
                  of grant of an Option shall be deemed to be the date upon which
                  the Board
                  or the Committee authorizes the granting of such Option.
                  

              

      

      

      Each
        Option shall be exercisable to the nearest whole share, in installments or
        otherwise, as the respective Option agreements may provide. During the lifetime
        of an Optionee, the Option shall be exercisable only by the Optionee and
        shall
        not be assignable or transferable by the Optionee, and no other person shall
        acquire any rights therein. To the extent not exercised, installments (if
        more
        than one) shall accumulate, but shall be exercisable, in whole or in part,
        only
        during the period for exercise as stated in the Option agreement, whether
        or not
        other installments are then exercisable.

      

      
        	 	
                (e)

              	
                Termination
                  of Status as Employee, or Director:
                  If
                  Optionee's status as an employee shall terminate for any reason
                  other than
                  Optionee's disability or death, then Optionee (or if the Optionee
                  shall
                  die after such termination, but prior to exercise, Optionee's personal
                  representative or the person entitled to succeed to the Option)
                  shall have
                  the right to exercise the portions of any of Optionee's Incentive
                  Stock
                  Options which were exercisable as of the date of such termination,
                  in
                  whole or in part, not less than 30 days nor more than three (3)
                  months
                  after such termination (or, in the event of "termination
                  for good cause"
                  as that term is defined in the applicable state case law related
                  thereto,
                  or by the terms of the Plan or the Option Agreement or an employment
                  agreement, the Option shall automatically terminate as of the termination
                  of employment as to all shares covered by the Option).
                  

              

      

       

      
        
           

        

        
          -
            5 -

          
            

          

        

        
           

        

      

       

      With
        respect to Nonstatutory Options granted to employees, or directors, the Board
        may specify such period for exercise, not less than 30 days (except that
        in the
        case of "termination
        for cause"
        or
        removal of a director, the Option shall automatically terminate as of the
        termination of employment or services as to shares covered by the Option,
        following termination of employment or services as the Board deems reasonable
        and appropriate. The Option may be exercised only with respect to installments
        that the Optionee could have exercised at the date of termination of employment
        or services. Nothing contained herein or in any Option granted pursuant hereto
        shall be construed to affect or restrict in any way the right of the Company
        to
        terminate the employment or services of an Optionee with or without
        cause.

      

      
        	 	
                (f)

              	
                Disability
                  of Optionee:
                  If
                  an Optionee is disabled (within the meaning of Section 22(e)(3)
                  of the
                  Code) at the time of termination, the three (3) month period set
                  forth in
                  Section 5(e) shall be a period, as determined by the Board and
                  set forth
                  in the Option, of not less than six months nor more than one year
                  after
                  such termination. 

              

      

      

      
        	 	
                (g)

              	
                Death
                  of Optionee:
                  If
                  an Optionee dies while employed by, or serving as a Director of
                  the
                  Company, the portion of such Optionee's Option which was exercisable
                  at
                  the date of death may be exercised, in whole or in part, by the
                  estate of
                  the decedent or by a person succeeding to the right to exercise
                  such
                  Option at any time within (i) a period, as determined by the Board
                  and set
                  forth in the Option, of not less than six (6) months nor more than
                  one (1)
                  year after Optionee's death, which period shall not be more, in
                  the case
                  of a Nonstatutory Option, than the period for exercise following
                  termination of employment or services, or (ii) during the remaining
                  term
                  of the Option, whichever is the lesser. The Option may be so exercised
                  only with respect to installments exercisable at the time of Optionee's
                  death and not previously exercised by the
                  Optionee.

              

      

      

      
        	 	
                (h)

              	
                Nontransferability
                  of Option:
                  No
                  Option shall be transferable by the Optionee, except by will or
                  by the
                  laws of descent and distribution.

              

      

      

      
        	 	
                (i)

              	
                Recapitalization:
                  Subject to any required action of shareholders, the number of shares
                  of
                  Stock covered by each outstanding Option, and the exercise price
                  per share
                  thereof set forth in each such Option, shall be proportionately
                  adjusted
                  for any increase or decrease in the number of issued shares of
                  Stock of
                  the Company resulting from a stock split, stock dividend, combination,
                  subdivision or reclassification of shares, or the payment of a
                  stock
                  dividend, or any other increase or decrease in the number of such
                  shares
                  affected without receipt of consideration by the Company; provided,
                  however, the conversion of any convertible securities of the Company
                  shall
                  not be deemed to have been "effected
                  without receipt of consideration"
                  by the Company.

              

      

      

      In
        the
        event of a proposed dissolution or liquidation of the Company, a merger or
        consolidation in which the Company is not the surviving entity, or a sale
        of all
        or substantially all of the assets or capital stock of the Company
        (collectively, a "Reorganization"),
        unless otherwise provided by the Board, this Option shall terminate immediately
        prior to such date as is determined by the Board, which date shall be no
        later
        than the consummation of such Reorganization. In such event, if the entity
        which
        shall be the surviving entity does not tender to Optionee an offer, for which
        it
        has no obligation to do so, to substitute for any unexercised Option a stock
        option or capital stock of such surviving of such surviving entity, as
        applicable, which on an equitable basis shall provide the Optionee with
        substantially the same economic benefit as such unexercised Option, then
        the
        Board may grant to such Optionee, in its sole and absolute discretion and
        without obligation, the right for a period commencing thirty (30) days prior
        to
        and ending immediately prior to the date determined by the Board pursuant
        hereto
        for termination of the Option or during the remaining term of the Option,
        whichever is the lesser, to exercise any unexpired Option or Options without
        regard to the installment provisions of Paragraph 6(d) of the Plan; provided,
        that any such right granted shall be granted to all Optionees not receiving
        an
        offer to receive substitute options on a consistent basis, and provided further,
        that any such exercise shall be subject to the consummation of such
        Reorganization.

       

      
        
           

        

        
          -
            6 -

          
            

          

        

        
           

        

      

       

      Subject
        to any required action of shareholders, if the Company shall be the surviving
        entity in any merger or consolidation, each outstanding Option thereafter
        shall
        pertain to and apply to the securities to which a holder of shares of Stock
        equal to the shares subject to the Option would have been entitled by reason
        of
        such merger or consolidation.

      

      In
        the
        event of a change in the Stock of the Company as presently constituted, which
        is
        limited to a change of all of its authorized shares without par value into
        the
        same number of shares with a par value, the shares resulting from any such
        change shall be deemed to be the Stock within the meaning of the
        Plan.

      

      To
        the
        extent that the foregoing adjustments relate to stock or securities of the
        Company, such adjustments shall be made by the Board, whose determination
        in
        that respect shall be final, binding and conclusive. Except as expressly
        provided in this Section 5(i), the Optionee shall have no rights by reason
        of
        any subdivision or consolidation of shares of stock of any class or the payment
        of any stock dividend or any other increase or decrease in the number of
        shares
        of stock of any class, and the number or price of shares of Stock subject
        to any
        Option shall not be affected by, and no adjustment shall be made by reason
        of,
        any dissolution, liquidation, merger, consolidation or sale of assets or
        capital
        stock, or any issue by the Company of shares of stock of any class or securities
        convertible into shares of stock of any class.

      

      The
        Grant
        of an Option pursuant to the Plan shall not affect in any way the right or
        power
        of the Company to make any adjustments, reclassifications, reorganizations
        or
        changes in its capital or business structure or to merge, consolidate, dissolve,
        or liquidate or to sell or transfer all or any part of its business or
        assets.

      

      
        	 	
                (j)

              	
                Rights
                  as a Shareholder:
                  An
                  Optionee shall have no rights as a shareholder with respect to
                  any shares
                  covered by an Option until the effective date of the issuance of
                  the
                  shares following exercise of such Option by Optionee. No adjustment
                  shall
                  be made for dividends (ordinary or extraordinary, whether in cash,
                  securities or other property) or distributions or other rights
                  for which
                  the record date is prior to the date such stock certificate is
                  issued,
                  except as expressly provided in Section 5(i) hereof.
                  

              

      

      

      
        	 	
                (k)

              	
                Modification,
                  Acceleration, Extension, and Renewal of Options:
                  Subject to the terms and conditions and within the limitations
                  of the
                  Plan, the Board may modify an Option, or, once an Option is exercisable,
                  accelerate the rate at which it may be exercised, and may extend
                  or renew
                  outstanding Options granted under the Plan or accept the surrender
                  of
                  outstanding Options (to the extent not theretofore exercised) and
                  authorize the granting of new Options in substitution for such
                  Options,
                  provided such action is permissible under applicable state securities
                  law.
                  Notwithstanding the provisions of this Section 5(k), however, no
                  modification of an Option shall, without the consent of the Optionee,
                  alter to the Optionee's detriment or impair any rights or obligations
                  under any Option theretofore granted under the
                  Plan.

              

      

       

      
        
           

        

        
          -
            7 -

          
            

          

        

        
           

        

      

       

      
        	 	
                (l)

              	
                Exercise
                  Before Exercise Date:
                  At
                  the discretion of the Board, the Option may, but need not, include
                  a
                  provision whereby the Optionee may elect to exercise all or any
                  portion of
                  the Option prior to the stated exercise date of the Option or any
                  installment thereof. Any shares so purchased prior to the stated
                  exercise
                  date shall be subject to repurchase by the Company upon termination
                  of
                  Optionee's employment as contemplated by Section 5(n) hereof prior
                  to the
                  exercise date stated in the Option and such other restrictions
                  and
                  conditions as the Board or Committee may deem
                  advisable.

              

      

      

      
        	 	
                (m)

              	
                Other
                  Provisions:
                  The Option agreements authorized under the Plan shall contain such
                  other
                  provisions, including, without limitation, restrictions upon the
                  exercise
                  of the Options, as the Board or the Committee shall deem advisable.
                  Shares
                  shall not be issued pursuant to the exercise of an Option, if the
                  exercise
                  of such Option or the issuance of shares thereunder would violate,
                  in the
                  opinion of legal counsel for the Company, the provisions of any
                  applicable
                  law or the rules or regulations of any applicable governmental
                  or
                  administrative agency or body, such as the Code, the Securities
                  Act, the
                  Exchange Act, state and securities laws, and the rules promulgated
                  under
                  the foregoing or the rules and regulations of any exchange upon
                  which the
                  shares of the Company are listed. Without limiting the generality
                  of the
                  foregoing, the exercise of each Option shall be subject to the
                  condition
                  that if at any time the Company shall determine that (i) the satisfaction
                  of withholding tax or other similar liabilities, or (ii) the listing,
                  registration or qualification of any shares covered by such exercise
                  upon
                  any securities exchange or under any state or federal law, or (iii)
                  the
                  consent or approval of any regulatory body, or (iv) the perfection
                  of any
                  exemption from any such withholding, listing, registration, qualification,
                  consent or approval is necessary or desirable in connection with
                  such
                  exercise or the issuance of shares thereunder, then in any such
                  event,
                  such exercise shall not be effective unless such withholding, listing
                  registration, qualification, consent, approval or exemption shall
                  have
                  been effected, obtained or perfected free of any conditions not
                  acceptable
                  to the Company.

              

      

      

      
        	 	
                (n)

              	
                Repurchase
                  Agreement:
                  The Board may, in its discretion, require as a condition to the
                  Grant of
                  an Option hereunder, that an Optionee execute an agreement with
                  the
                  Company, in form and substance satisfactory to the Board in its
                  discretion
                  ("Repurchase
                  Agreement"),
                  (i) restricting the Optionee's right to transfer shares purchased
                  under
                  such Option without first offering such shares to the Company or
                  another
                  shareholder of the Company upon the same terms and conditions as
                  provided
                  therein; and (ii) providing that upon termination of Optionee's
                  employment
                  with the Company, for any reason, the Company (or another shareholder
                  of
                  the Company, as provided in the Repurchase Agreement) shall have
                  the right
                  at its discretion (or the discretion of such other shareholders)
                  to
                  purchase and/or redeem all such shares owned by the Optionee on
                  the date
                  of termination of his or her employment at a price equal to: (A)
                  the fair
                  value of such shares as of such date of termination; or (B) if
                  such
                  repurchase right lapses at 20% of the number of shares per year,
                  the
                  original purchase price of such shares, and upon terms of payment
                  permissible under applicable state securities rules; provided that
                  in the
                  case of Options or Stock Awards granted to officers, directors,
                  or
                  affiliates of the Company, such repurchase provisions may be subject
                  to
                  additional or greater restrictions as determined by the Board or
                  Committee.

              

      

       

      
        
           

        

        
          -
            8 -

          
            

          

        

        
           

        

      

       

      
        	
                6.

              	
                Stock
                  Awards and Restricted Stock Purchase
                  Offers.

              

      

      

      
        	 	
                (a)

              	
                Types
                  of Grants.

              

      

      

      
        	
              	(i)	
                Stock
                  Award.
                  All or part of any Stock Award under the Plan may be subject to
                  conditions
                  established by the Board or the Committee, and set forth in the
                  Stock
                  Award Agreement, which may include, but are not limited to, continuous
                  service with the Company, achievement of specific business objectives,
                  increases in specified indices, attaining growth rates and other
                  comparable measurements of Company performance. Such Awards may
                  be based
                  on Fair Market Value or other specified valuation. All Stock Awards
                  will
                  be made pursuant to the execution of a Stock Award Agreement substantially
                  in the form attached hereto as Exhibit
                  C.

              

      

      

      
        	
              	(ii)	
                Restricted
                  Stock Purchase Offer.
                  A
                  Grant of a Restricted Stock Purchase Offer under the Plan shall
                  be subject
                  to such (i) vesting contingencies related to the Participant's
                  continued
                  association with the Company for a specified time and (ii) other
                  specified
                  conditions as the Board or Committee shall determine, in their
                  sole
                  discretion, consistent with the provisions of the Plan. All Restricted
                  Stock Purchase Offers shall be made pursuant to a Restricted Stock
                  Purchase Offer substantially in the form attached hereto as Exhibit
                  D.

              

      

      

      
        	 	
                (b)

              	
                Conditions
                  and Restrictions.
                  Shares of Stock which Participants may receive as a Stock Award
                  under a
                  Stock Award Agreement or Restricted Stock Purchase Offer under
                  a
                  Restricted Stock Purchase Offer may include such restrictions as
                  the Board
                  or Committee, as applicable, shall determine, including restrictions
                  on
                  transfer, repurchase rights, right of first refusal, and forfeiture
                  provisions. When transfer of Stock is so restricted or subject
                  to
                  forfeiture provisions it is referred to as "Restricted
                  Stock".
                  Further, with Board or Committee approval, Stock Awards or Restricted
                  Stock Purchase Offers may be deferred, either in the form of installments
                  or a future lump sum distribution. The Board or Committee may permit
                  selected Participants to elect to defer distributions of Stock
                  Awards or
                  Restricted Stock Purchase Offers in accordance with procedures
                  established
                  by the Board or Committee to assure that such deferrals comply
                  with
                  applicable requirements of the Code including, at the choice of
                  Participants, the capability to make further deferrals for distribution
                  after retirement. Any deferred distribution, whether elected by
                  the
                  Participant or specified by the Stock Award Agreement, Restricted
                  Stock
                  Purchase Offers or by the Board or Committee, may require the payment
                  be
                  forfeited in accordance with the provisions of Section 6(c). Dividends
                  or
                  dividend equivalent rights may be extended to and made part of
                  any Stock
                  Award or Restricted Stock Purchase Offers denominated in Stock
                  or units of
                  Stock, subject to such terms, conditions and restrictions as the
                  Board or
                  Committee may establish.

              

      

       

      
        
           

        

        
          -
            9 -

          
            

          

        

        
           

        

      

       

      
        	 	
                (c)

              	
                Cancellation
                  and Rescission of Grants.
                  Unless the Stock Award Agreement or Restricted Stock Purchase Offer
                  specifies otherwise, the Board or Committee, as applicable, may
                  cancel any
                  unexpired, unpaid, or deferred Grants at any time if the Participant
                  is
                  not in compliance with all other applicable provisions of the Stock
                  Award
                  Agreement or Restricted Stock Purchase Offer, the Plan and with
                  the
                  following conditions:

              

      

      

      
        	
              	(i)	
                A
                  Participant shall not render services for any organization or engage
                  directly or indirectly in any business which, in the judgment of
                  the chief
                  executive officer of the Company or other senior officer designated
                  by the
                  Board or Committee, is or becomes competitive with the Company,
                  or which
                  organization or business, or the rendering of services to such
                  organization or business, is or becomes otherwise prejudicial to
                  or in
                  conflict with the interests of the Company. For Participants whose
                  employment has terminated, the judgment of the chief executive
                  officer
                  shall be based on the Participant's position and responsibilities
                  while
                  employed by the Company, the Participant's post-employment
                  responsibilities and position with the other organization or business,
                  the
                  extent of past, current and potential competition or conflict between
                  the
                  Company and the other organization or business, the effect on the
                  Company's customers, suppliers and competitors and such other
                  considerations as are deemed relevant given the applicable facts
                  and
                  circumstances. A Participant who has retired shall be free, however,
                  to
                  purchase as an investment or otherwise, stock or other securities
                  of such
                  organization or business so long as they are listed upon a recognized
                  securities exchange or traded over-the-counter, and such investment
                  does
                  not represent a substantial investment to the Participant or a
                  greater
                  than ten percent (10%) equity interest in the organization or
                  business.

              

      

      

      
        	
              	(ii)	
                A
                  Participant shall not, without prior written authorization from
                  the
                  Company, disclose to anyone outside the Company, or use in other
                  than the
                  Company's business, any confidential information or material, as
                  defined
                  in the Company's Proprietary Information and Invention Agreement
                  or
                  similar agreement regarding confidential information and intellectual
                  property, relating to the business of the Company, acquired by
                  the
                  Participant either during or after employment with the Company.
                  

              

      

      

      
        	
              	(iii)	
                A
                  Participant, pursuant to the Company's Proprietary Information
                  and
                  Invention Agreement, shall disclose promptly and assign to the
                  Company all
                  right, title and interest in any invention or idea, patentable
                  or not,
                  made or conceived by the Participant during employment by the Company,
                  relating in any manner to the actual or anticipated business, research
                  or
                  development work of the Company and shall do anything reasonably
                  necessary
                  to enable the Company to secure a patent where appropriate in the
                  United
                  States and in foreign countries.

              

      

      

      
        	
              	(iv)	
                Upon
                  exercise, payment or delivery pursuant to a Grant, the Participant
                  shall
                  certify on a form acceptable to the Committee that he or she is
                  in
                  compliance with the terms and conditions of the Plan. Failure to
                  comply
                  with all of the provisions of this Section 6(c) prior to, or during
                  the
                  six months after, any exercise, payment or delivery pursuant to
                  a Grant
                  shall cause such exercise, payment or delivery to be rescinded.
                  The
                  Company shall notify the Participant in writing of any such rescission
                  within two years after such exercise, payment or delivery. Within
                  ten days
                  after receiving such a notice from the Company, the Participant
                  shall pay
                  to the Company the amount of any gain realized or payment received
                  as a
                  result of the rescinded exercise, payment or delivery pursuant
                  to a Grant.
                  Such payment shall be made either in cash or by returning to the
                  Company
                  the number of shares of Stock that the Participant received in
                  connection
                  with the rescinded exercise, payment or
                  delivery.

              

      

       

      
        
           

        

        
          -
            10 -

          
            

          

        

        
           

        

      

       

      
        	 	
                (d)

              	
                Nonassignability.

              

      

      

      
        	
              	(i)	
                Except
                  pursuant to Section 6(e)(iii) and except as set forth in Section
                  6(d)(ii),
                  no Grant or any other benefit under the Plan shall be assignable
                  or
                  transferable, or payable to or exercisable by, anyone other than
                  the
                  Participant to whom it was granted.

              

      

      

      
        	
              	(ii)	
                Where
                  a Participant terminates employment and retains a Grant pursuant
                  to
                  Section 6(e)(ii) in order to assume a position with a governmental,
                  charitable or educational institution, the Board or Committee,
                  in its
                  discretion and to the extent permitted by law, may authorize a
                  third party
                  (including but not limited to the trustee of a "blind" trust),
                  acceptable
                  to the applicable governmental or institutional authorities, the
                  Participant and the Board or Committee, to act on behalf of the
                  Participant with regard to such
                  Awards.

              

      

      

      
        	 	
                (e)

              	
                Termination
                  of Employment.
                  If
                  the employment or service to the Company of a Participant terminates,
                  other than pursuant to any of the following provisions under this
                  Section
                  6(e), all unexercised, deferred and unpaid Stock Awards or Restricted
                  Stock Purchase Offers shall be cancelled immediately, unless the
                  Stock
                  Award Agreement or Restricted Stock Purchase Offer provides otherwise:
                  

              

      

      

      
        	
              	(i)	
                Retirement
                  Under a Company Retirement Plan.
                  When a Participant's employment terminates as a result of retirement
                  in
                  accordance with the terms of a Company retirement plan, the Board
                  or
                  Committee may permit Stock Awards or Restricted Stock Purchase
                  Offers to
                  continue in effect beyond the date of retirement in accordance
                  with the
                  applicable Grant Agreement and the exercisability and vesting of
                  any such
                  Grants may be accelerated.

              

      

      

      
        	
              	(ii)	
                Rights
                  in the Best Interests of the Company.
                  When a Participant resigns from the Company and, in the judgment
                  of the
                  Board or Committee, the acceleration and/or continuation of outstanding
                  Stock Awards or Restricted Stock Purchase Offers would be in the
                  best
                  interests of the Company, the Board or Committee may (i) authorize,
                  where
                  appropriate, the acceleration and/or continuation of all or any
                  part of
                  Grants issued prior to such termination and (ii) permit the exercise,
                  vesting and payment of such Grants for such period as may be set
                  forth in
                  the applicable Grant Agreement, subject to earlier cancellation
                  pursuant
                  to Section 9 or at such time as the Board or Committee shall deem
                  the
                  continuation of all or any part of the Participant's Grants are
                  not in the
                  Company's best interest.

              

      

      

      
        	
              	(iii)	
                Death
                  or Disability of a Participant. 

              

      

      

      
        	 	
                (1)

              	
                In
                  the event of a Participant's death, the Participant's estate or
                  beneficiaries shall have a period up to the expiration date specified
                  in
                  the Grant Agreement within which to receive or exercise any outstanding
                  Grant held by the Participant under such terms as may be specified
                  in the
                  applicable Grant Agreement. Rights to any such outstanding Grants
                  shall
                  pass by will or the laws of descent and distribution in the following
                  order: (a) to beneficiaries so designated by the Participant; if
                  none,
                  then (b) to a legal representative of the Participant; if none,
                  then (c)
                  to the persons entitled thereto as determined by a court of competent
                  jurisdiction. Grants so passing shall be made at such times and
                  in such
                  manner as if the Participant were
                  living.

              

      

       

      
        
           

        

        
          -
            11 -

          
            

          

        

        
           

        

      

       

      
        	 	
                (2)

              	
                In
                  the event a Participant is deemed by the Board or Committee to
                  be unable
                  to perform his or her usual duties by reason of mental disorder
                  or medical
                  condition which does not result from facts which would be grounds
                  for
                  termination for cause, Grants and rights to any such Grants may
                  be paid to
                  or exercised by the Participant, if legally competent, or a committee
                  or
                  other legally designated guardian or representative if the Participant
                  is
                  legally incompetent by virtue of such
                  disability.

              

      

      

      
        	 	
                (3)

              	
                After
                  the death or disability of a Participant, the Board or Committee
                  may in
                  its sole discretion at any time (1) terminate restrictions in Grant
                  Agreements; (2) accelerate any or all installments and rights;
                  and (3)
                  instruct the Company to pay the total of any accelerated payments
                  in a
                  lump sum to the Participant, the Participant's estate, beneficiaries
                  or
                  representative; notwithstanding that, in the absence of such termination
                  of restrictions or acceleration of payments, any or all of the
                  payments
                  due under the Grant might ultimately have become payable to other
                  beneficiaries.

              

      

      

      
        	 	
                (4)

              	
                In
                  the event of uncertainty as to interpretation of or controversies
                  concerning this Section 6, the determinations of the Board or Committee,
                  as applicable, shall be binding and
                  conclusive.

              

      

      

      
        	
                7.

              	
                Investment
                  Intent. All Grants under the Plan are intended to be exempt from
                  registration under the Securities Act provided by Rule 701 thereunder.
                  Unless and until the granting of Options or sale and issuance of
                  Stock
                  subject to the Plan are registered under the Securities Act or
                  shall be
                  exempt pursuant to the rules promulgated thereunder, each Grant
                  under the
                  Plan shall provide that the purchases or other acquisitions of
                  Stock
                  thereunder shall be for investment purposes and not with a view
                  to, or for
                  resale in connection with, any distribution thereof. Further, unless
                  the
                  issuance and sale of the Stock have been registered under the Securities
                  Act, each Grant shall provide that no shares shall be purchased
                  upon the
                  exercise of the rights under such Grant unless and until (i) all
                  then
                  applicable requirements of state and federal laws and regulatory
                  agencies
                  shall have been fully complied with to the satisfaction of the
                  Company and
                  its counsel, and (ii) if requested to do so by the Company, the
                  person
                  exercising the rights under the Grant shall (i) give written assurances
                  as
                  to knowledge and experience of such person (or a representative
                  employed
                  by such person) in financial and business matters and the ability
                  of such
                  person (or representative) to evaluate the merits and risks of
                  exercising
                  the Option, and (ii) execute and deliver to the Company a letter
                  of
                  investment intent and/or such other form related to applicable
                  exemptions
                  from registration, all in such form and substance as the Company
                  may
                  require. If shares are issued upon exercise of any rights under
                  a Grant
                  without registration under the Securities Act, subsequent registration
                  of
                  such shares shall relieve the purchaser thereof of any investment
                  restrictions or representations made upon the exercise of such
                  rights.

              

      

       

      
        
           

        

        
          -
            12 -

          
            

          

        

        
           

        

      

       

      
        	
                8.

              	
                Amendment,
                  Modification, Suspension or Discontinuance of the Plan. The Board
                  may,
                  insofar as permitted by law, from time to time, with respect to
                  any shares
                  at the time not subject to outstanding Grants, suspend or terminate
                  the
                  Plan or revise or amend it in any respect whatsoever, except that
                  without
                  the approval of the shareholders of the Company, no such revision
                  or
                  amendment shall (i) increase the number of shares subject to the
                  Plan,
                  (ii) decrease the price at which Grants may be granted, (iii) materially
                  increase the benefits to Participants, or (iv) change the class
                  of persons
                  eligible to receive Grants under the Plan; provided, however, no
                  such
                  action shall alter or impair the rights and obligations under any
                  Option,
                  or Stock Award, or Restricted Stock Purchase Offer outstanding
                  as of the
                  date thereof without the written consent of the Participant thereunder.
                  No
                  Grant may be issued while the Plan is suspended or after it is
                  terminated,
                  but the rights and obligations under any Grant issued while the
                  Plan is in
                  effect shall not be impaired by suspension or termination of the
                  Plan.

              

      

      

      In
        the
        event of any change in the outstanding Stock by reason of a stock split,
        stock
        dividend, combination or reclassification of shares, recapitalization, merger,
        or similar event, the Board or the Committee may adjust proportionally (a)
        the
        number of shares of Stock (i) reserved under the Plan, (ii) available for
        Incentive Stock Options and Nonstatutory Options and (iii) covered by
        outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock
        prices related to outstanding Grants; and (c) the appropriate Fair Market
        Value
        and other price determinations for such Grants. In the event of any other
        change
        affecting the Stock or any distribution (other than normal cash dividends)
        to
        holders of Stock, such adjustments as may be deemed equitable by the Board
        or
        the Committee, including adjustments to avoid fractional shares, shall be
        made
        to give proper effect to such event. In the event of a corporate merger,
        consolidation, acquisition of property or stock, separation, reorganization
        or
        liquidation, the Board or the Committee shall be authorized to issue or assume
        stock options, whether or not in a transaction to which Section 424(a) of
        the
        Code applies, and other Grants by means of substitution of new Grant Agreements
        for previously issued Grants or an assumption of previously issued
        Grants.

      

      
        	
                9.

              	
                Tax
                  Withholding. The Company shall have the right to deduct applicable
                  taxes
                  from any Grant payment and withhold, at the time of delivery or
                  exercise
                  of Options, Stock Awards or Restricted Stock Purchase Offers or
                  vesting of
                  shares under such Grants, an appropriate number of shares for payment
                  of
                  taxes required by law or to take such other action as may be necessary
                  in
                  the opinion of the Company to satisfy all obligations for withholding
                  of
                  such taxes. If Stock is used to satisfy tax withholding, such stock
                  shall
                  be valued based on the Fair Market Value when the tax withholding
                  is
                  required to be made. 

              

      

       

      
        	
                10.

              	
                Availability
                  of Information. During the term of the Plan and any additional
                  period
                  during which a Grant granted pursuant to the Plan shall be exercisable,
                  the Company shall make available, not later than one hundred and
                  twenty
                  (120) days following the close of each of its fiscal years, such
                  financial
                  and other information regarding the Company as is required by the
                  bylaws
                  of the Company and applicable law to be furnished in an annual
                  report to
                  the shareholders of the Company. 

              

      

       

      
        	
                11.

              	
                Notice.
                  Any written notice to the Company required by any of the provisions
                  of the
                  Plan shall be addressed to the chief personnel officer or to the
                  chief
                  executive officer of the Company, and shall become effective when
                  it is
                  received by the office of the chief personnel officer or the chief
                  executive officer. 

              

      

       

      
        
           

        

        
          -
            13 -

          
            

          

        

        
           

        

      

       

      
        	
                12.

              	
                Indemnification
                  of Board. In addition to such other rights or indemnifications
                  as they may
                  have as directors or otherwise, and to the extent allowed by applicable
                  law, the members of the Board and the Committee shall be indemnified
                  by
                  the Company against the reasonable expenses, including attorneys'
                  fees,
                  actually and necessarily incurred in connection with the defense
                  of any
                  claim, action, suit or proceeding, or in connection with any appeal
                  thereof, 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 Grant granted thereunder, and against all amounts paid by them
                  in
                  settlement thereof (provided such settlement is approved by independent
                  legal counsel selected by the Company) or paid by them in satisfaction
                  of
                  a judgment in any such claim, action, suit or proceeding, except
                  in any
                  case in relation to matters as to which it shall be adjudged in
                  such
                  claim, action, suit or proceeding that such Board or Committee
                  member is
                  liable for negligence or misconduct in the performance of his or
                  her
                  duties; provided that within sixty (60) days after institution
                  of any such
                  action, suit or Board proceeding the member involved shall offer
                  the
                  Company, in writing, the opportunity, at its own expense, to handle
                  and
                  defend the same. 

              

      

       

      
        	
                13.

              	
                Governing
                  Law. The Plan and all determinations made and actions taken pursuant
                  hereto, to the extent not otherwise governed by the Code or the
                  securities
                  laws of the United States, shall be governed by the law of the
                  State of
                  Texas and construed accordingly. 

              

      

      

      
        	
                14.

              	
                Effective
                  and Termination Dates. The Plan shall become effective on the date
                  it is
                  approved by the holders of a majority of the shares of Stock then
                  outstanding. The Plan shall terminate ten years later, subject
                  to earlier
                  termination by the Board pursuant to Section 8.

              

      

      

      
        
           

        

        
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