Document:

Exhibit 10.4

Exhibit 10.4

WELLTEK INCORPORATED

2008 EQUITY INCENTIVE PLAN

1. Purposes of the Plan. The purposes of this Welltek Incorporated 2008 Equity Incentive Plan
(the “Plan”) are to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentives to Employees, Directors and Consultants, and to
promote the success of the Company and the Company’s Affiliates. Options granted under the Plan may
be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the
time of grant. Stock Purchase Rights, time vested and/or performance vested Restricted Stock, Stock
Appreciation Rights and Unrestricted Shares may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

“Administrator” means the Board or a committee that has been delegated the responsibility of
administering the Plan in accordance with Section 4 of the Plan.

“Affiliate” means any Parent and/or Subsidiary.

“Applicable Laws” means the requirements relating to the administration of equity compensation
plans under the applicable corporate and securities laws of any of the states in the United States,
U.S. federal securities laws, the Code, the rules and regulations of any stock exchange or
quotation system on which the Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

“Award” means the grant of an Option, a Stock Purchase Right, a Stock Appreciation Right, a
Stock Award and/or Unrestricted Shares.

“Board” means the Board of Directors of the Company.

“Cause” means, unless otherwise specifically provided in a Participant’s Option Agreement,
Stock Purchase Agreement, Stock Appreciation Right Agreement or Stock Award Agreement, a finding by
the Administrator that the Participant’s employment with or service to the Company or any Affiliate
was terminated due to one or more of the following: (i) the Participant’s use of alcohol or any
unlawful controlled substance to an extent that it interferes with the performance of the
Participant’s duties; (ii) the Participant’s commission of any act of fraud, insubordination,
misappropriation or personal dishonesty relating to or involving the Company or any Affiliate in
any material respect; (iii) the Participant’s gross negligence; (iv) the Participant’s violation of
any express direction of the Company or of any Affiliate or any material violation of any rule,
regulation, policy or plan established by the Company or any Affiliate from time to time regarding
the conduct of its employees or its business; (v) the Participant’s disclosure or use of
confidential information of the Company or any Affiliate, other than as required in the performance
of the Participant’s duties; (vi) actions by the Participant that are determined by the
Administrator to be clearly contrary to the best interests of the Company and/or its Affiliates as
determined in good faith by the Administrator; (vii) the Participant’s conviction of a crime
constituting a felony or any other crime involving moral turpitude; or (viii)any other act or
omission which, in the determination of the Administrator, is materially detrimental to the
business of the Company or of an Affiliate. Notwithstanding the foregoing, if a
Participant has entered into a written employment or consulting agreement with the Company
that specifies the conditions or circumstances under which the Participant’s service may be
terminated for cause, then the terms of such agreement shall apply for purposes of determining
whether “Cause” shall have occurred for purposes of this Plan.

 

 

 

“Change in Control Event” has the meaning set forth in Section 16(c).

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means a committee of Directors appointed by the Board in accordance with Section 4
of the Plan.

“Common Stock” means the common stock, par value $0.0001 per share, of the Company.

“Company” means Welltek Incorporated, a Nevada corporation.

“Consultant” means any person, including an advisor, engaged by the Company or an Affiliate to
render services to such entity, other than an Employee or a Director.

“Director” means a member of the Board or of the board of directors of an Affiliate.

“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

“Employee” means any person, including officers and Directors, serving as an employee of the
Company or an Affiliate. An individual shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary or any successor. For purposes of an Option
initially granted as an Incentive Stock Option, if a leave of absence of more than three months
precludes such Option from being treated as an Incentive Stock Option under the Code, such Option
thereafter shall be treated as a Nonstatutory Stock Option for purposes of this Plan. Neither
service as a Director nor payment of a director’s fee by the Company shall be sufficient to
constitute “employment” by the Company.

“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i) if the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the NASDAQ National Market or
the NASDAQ Capital Market, the Fair Market Value of a Share shall be the closing
sales price of a Share (or the closing bid, if no such sales were reported) as
quoted on such exchange or system for the last market trading day prior to the day
of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;

 

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(ii) if the Common Stock is regularly quoted by a recognized securities dealer
but is not listed in the manner contemplated by clause (i) above, the Fair Market
Value of a Share shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

(iii) if neither clause (i) above nor clause (ii) above applies, the Fair
Market Value shall be determined in good faith by the Administrator.

“Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

“Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.

“Notice of Grant” means a written or electronic notice evidencing certain terms and conditions
of an Award.

“Option” means a stock option granted pursuant to the Plan.

“Option Agreement” means an agreement between the Company and an Optionee evidencing the terms
and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms
and conditions of the Plan and the applicable Notice of Grant.

“Optioned Stock” means the Common Stock subject to an Option or Stock Purchase Right.

“Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the
Plan.

“Parent” means a “parent corporation” of the Company (or, in the context of Section 16(c) of
the Plan, of a successor corporation), whether now or hereafter existing, as defined in Section
424(e) of the Code.

“Participant” shall mean any Service Provider who holds an Option, a Stock Purchase Right, a
Stock Appreciation Right, a Stock Award or Unrestricted Shares granted or issued pursuant to the
Plan.

“Restricted Period” has the meaning set forth in Section 12(a).

“Restricted Stock” means shares of Common Stock acquired pursuant to a grant of a Stock Award
under Section 12 of the Plan.

“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to such Rule 16b-3, as such
rule is in effect when discretion is being exercised with respect to the Plan.

“Section 16(b)” means Section 16(b) of the Exchange Act.

 

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“Service Provider” means an Employee, Director or Consultant.

“Share” means a share of the Common Stock, as adjusted in accordance with Section 16 of the
Plan.

“Stock Appreciation Right” means a right granted pursuant to Section 14 of the Plan, as
evidenced by a Notice of Grant. Stock Appreciation Rights may be awarded either in tandem with
Options (“Tandem Stock Appreciation Rights”) or on a stand-alone basis (“Nontandem Stock
Appreciation Rights”).

“Stock Appreciation Right Agreement” means an agreement between the Company and the grantee of
a Stock Appreciation Right, approved by the Administrator, evidencing the terms and conditions of
an individual Stock Appreciation Right grant. Each Stock Appreciation Right Agreement shall be
subject to the terms and conditions of the Plan and the applicable Notice of Grant.

“Stock Award” means an Award of Shares pursuant to Section 12 of the Plan.

“Stock Award Agreement” means an agreement, approved by the Administrator, providing the terms
and conditions of a Stock Award. Each Stock Award Agreement shall be subject to the terms and
conditions of the Plan and the applicable Notice of Grant.

“Stock Award Shares” means Shares subject to a Stock Award.

“Stock Awardee” means the holder of an outstanding Stock Award granted under the Plan.

“Stock Purchase Agreement” means a written agreement between the Company and an Optionee,
approved by the Administrator, evidencing the terms and restrictions applicable to stock purchased
under a Stock Purchase Right. Each Stock Purchase Agreement shall be subject to the terms and
conditions of the Plan and the applicable Notice of Grant.

“Stock Purchase Awardee” means the holder of an outstanding Stock Purchase Right granted under
the Plan.

“Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 11 of the
Plan, as evidenced by a Notice of Grant.

“Stock Purchase Stock” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 11 of the Plan.

“Subsidiary” means a “subsidiary corporation” of the Company (or, in the context of Section
16(c) of the Plan, of a successor corporation), whether now or hereafter existing, as defined in
Section 424(f) of the Code.

“Substitute Options” has the meaning set forth in Section 17.

“Unrestricted Shares” means a grant of Shares made on an unrestricted basis pursuant to
Section 13 of the Plan.

 

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3. Subject to the Plan. Subject to the provisions of Section 16 of the Plan, the initial
maximum number of shares of Common Stock that may be issued under the Plan shall be 3,000,000
shares. For purposes of the foregoing limitation, the shares of Common Stock underlying any Awards
that are forfeited, canceled, reacquired by the Company, satisfied without the issuance of Common
Stock or otherwise terminated (other than by exercise) shall be added back to the number of shares
of Common Stock available for issuance under the Plan. Notwithstanding the foregoing, no more than
500,000 Shares of Common Stock may be granted to any one Participant with respect to Options, Stock
Purchase Rights and Stock Appreciation Rights during any one calendar year period. Common Stock to
be issued under the Plan may be either authorized and unissued shares or shares held in treasury by
the Company.

4. Administration of the Plan.

(a) Appointment of Committee. To the extent the Plan is administered by a Committee to be
appointed by the Board, the Committee shall consist of not less than two members of the Board and
shall be comprised solely of members of the Board who qualify as both non-employee directors as
defined in Rule 16b-3(b)(3) of the Exchange Act and outside directors within the meaning of
Department of Treasury Regulations issued under Section 162(m) of the Code. The Board shall have
the power to add or remove members of the Committee, from time to time, and to fill vacancies
thereon arising by resignation, death, removal, or otherwise. Meetings shall be held at such times
and places as shall be determined by the Committee. A majority of the members of the Committee
shall constitute a quorum for the transaction of business, and the vote of a majority of those
members present at any meeting shall decide any question brought before that meeting.

(b) Powers of the Administrator. Subject to the provisions of the Plan, the Administrator
shall have the authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Options, Stock Purchase Rights,
Stock Awards, Stock Appreciation Rights and Unrestricted Shares may be granted
hereunder;

(iii) to determine the number of shares of Common Stock to be covered by each
Award granted hereunder;

(iv) to approve forms of agreement for use under the Plan;

(v) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder and of any Option Agreement, Stock Purchase
Agreement, Stock Award Agreement and Stock Appreciation Right Agreement. Such terms
and conditions include, but are not limited to, the exercise price, the time or
times when Options or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting, acceleration or waiver of forfeiture provisions,
and any restriction or limitation regarding any Option, Stock Purchase Right, Stock
Award, Stock Appreciation Right or grant of Unrestricted Shares or the Shares of
Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;

 

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(vi) to construe and interpret the terms of the Plan, Awards granted pursuant
to the Plan and agreements entered into pursuant to the Plan;

(vii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;

(viii) to modify or amend each Option or Stock Purchase Right (subject to
Section 19(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than otherwise provided for
in the Plan, provided, however, any such extension shall be consistent with Code
Section 422(a)(2) and other Applicable Laws;

(ix) to allow Optionees to satisfy withholding tax obligations by having the
Company withhold from the Shares to be issued upon exercise of an Option that number
of Shares having a Fair Market Value equal to the amount required to be withheld,
provided that withholding is calculated at no less than the minimum statutory
withholding level. The Fair Market Value of the Shares to be withheld shall be
determined as of the date that the income resulting from exercise of the Option is
recognized by the Optionee. All determinations to have Shares withheld for this
purpose shall be made by the Administrator in its discretion;

(x) to authorize any person to execute on behalf of the Company any agreement
entered into pursuant to the Plan and any instrument required to effect the grant of
an Award previously granted by the Administrator; and

(xi) to make all other determinations deemed necessary or advisable for
purposes of administering the Plan.

(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and
interpretations shall be final and binding on all holders of Awards. Neither the Administrator, nor
any member or delegate thereof, shall be liable for any act, omission, interpretation, construction
or determination made in good faith in connection with the Plan, and each of the foregoing shall be
entitled in all cases to indemnification and reimbursement by the Company in respect of any claim,
loss, damage or expense (including without limitation reasonable attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any directors’ and
officers’ liability insurance coverage which may be in effect from time to time.

 

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5. Eligibility. Nonstatutory Stock Options, Stock Purchase Rights, Stock Awards, Stock
Appreciation Rights and Unrestricted Shares may be granted to all Service Providers. Incentive
Stock Options may be granted only to Employees. Notwithstanding anything contained herein to the
contrary, an Award may be granted to a person who is not then a Service Provider; provided,
however, that the grant of such Award shall be conditioned upon such person’s becoming a
Service Provider at or prior to the time of the execution of the agreement evidencing such Award.

6. Limitations.

(a) Each Option shall be designated in the applicable Option Agreement as either an Incentive
Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, if an
Employee first becomes eligible in any given year to exercise Incentive Stock Options for Shares
having a Fair Market Value in excess of $100,000, those Options representing the excess shall be
treated as Nonstatutory Stock Options. In the previous sentence, “Incentive Stock Options” include
Incentive Stock Options granted under any plan of the Company or any Affiliate. For the purpose of
deciding which Options apply to Shares that “exceed” the $100,000 limit, Incentive Stock Options
shall be taken into account in the same order as granted. The Fair Market Value of the Shares shall
be determined as of the time the Option with respect to such Shares is granted.

(b) Neither the Plan nor any Award nor any agreement entered into pursuant to the Plan shall
confer upon a Participant any right with respect to continuing the grantee’s relationship as a
Service Provider with the Company or any Affiliate, nor shall they interfere in any way with the
Participant’s right or the right of the Company or any Affiliate to terminate such relationship at
any time, with or without cause.

7. Term of the Plan. The Plan shall become effective upon approval by the Company’s
shareholders and shall continue in effect for a term of ten (10) years unless terminated earlier
under Section 19 of the Plan.

8. Term of Options. The term of each Option shall be stated in the applicable Option Agreement
or, if not so stated, ten years from the date of grant. However, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns,
directly or indirectly, stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company and any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may
be provided in the applicable Option Agreement.

9. Option Exercise Price; Exercisabiity.

(a) Exercise Price. The per share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be determined by the Administrator, subject to the following:

(i) In the case of an Incentive Stock Option:

(A) granted to an Employee who, at the time the Incentive Stock Option
is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company and any Affiliate, the
per Share exercise price shall be not less than 110% of the Fair Market
Value per Share on the date of grant, or

 

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(B) granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall be not
less than 100% of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option, the per Share exercise price
shall be not less than 100% of the Fair Market Value per Share on the date of grant.

(iii) Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than 100% (or 110%, if clause (i)(A) above applies) of the
Fair Market Value per Share on the date of grant pursuant to a merger or other
comparable corporate transaction, but in no event shall Options be granted at a per
Share exercise price that would cause the Options to be deemed a deferral of
compensation under Code Section 409A.

(b) Exercise Period and Conditions. At the time that an Option is granted, the Administrator
shall fix the period within which the Option may be exercised and shall determine any conditions
that must be satisfied before the Option may be exercised.

10.
Exercise of Options; Consideration.

(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be
exercisable according to the terms of the Plan and at such times and under such conditions as
determined by the Administrator and set forth in the Option Agreement, provided, however, that
unless otherwise determined by the Administrator and provided for in the Option Agreement, each
Option shall vest and become exercisable as to one-sixth (1/6) of the Shares subject to the Option
on the date that is six months after the date of grant, and as to an additional one-sixth (1/6) of
the Shares subject to the Option every six months thereafter until fully vested and exercisable.
Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled
during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. An
Option shall be deemed exercised when the Company receives: (i) written or electronic notice of
exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option,
and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment
may consist of any consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and Section 10(f) of the Plan. Shares issued upon exercise of an
Option shall be issued in the name of the Optionee. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 16 of the Plan. Exercising an Option in any manner
shall decrease the number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is exercised.

 

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(b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service
Provider, other than as a result of the Optionee’s death, Disability or termination for Cause, the
Optionee may exercise his or her Option within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Notice of Grant).
In the absence of a specified time in the Option Agreement and except as otherwise provided in
Sections 10(c), 10(d) and 10(e) of this Plan, the Option shall remain exercisable for three months
following the Optionee’s termination (but in no event later than the expiration of the term of such
Option). If, on the date of termination, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option in full within the time specified by
the Administrator, the unexercised portion of the Option shall terminate, and the Shares covered by
such unexercised portion of the Option shall revert to the Plan. Notwithstanding anything contained
herein to the contrary, an Optionee who changes his or her status as a Service Provider (e.g., from
being an Employee to being a Consultant) shall not be deemed to have ceased being a Service
Provider for purposes of this Section 10(b), nor shall a transfer of employment among the Company
and any Affiliate be considered a termination of employment; provided, however, that if an
Optionee owning Incentive Stock Options ceases being an Employee but continues as a Consultant,
such Incentive Stock Options shall be deemed to be Nonstatutory Stock Options three months after
the date of such cessation.

(c) Disability of an Optionee. If an Optionee ceases to be a Service Provider as a result of
the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time
as is specified in the Option Agreement to the extent the Option is vested on the date of
termination (but in no event later than the expiration of the term of such Option as set forth in
the Notice of Grant). In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for twelve (12) months following the Optionee’s termination (but in no event
later than the expiration of the term of such Option). If, on the date of termination, the Optionee
is not vested as to his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her
Option in full within the time specified herein, the unexercised portion of the Option shall
terminate, and the Shares covered by such unexercised portion of the Option shall revert to the
Plan.

(d) Death of an Optionee. If an Optionee dies while a Service Provider, the Option may be
exercised within such period of time as is specified in the Option Agreement (but in no event later
than the expiration of the term of such Option as set forth in the Notice of Grant), by the
Optionee’ s estate or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of death. In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee’s death (but in no event later than the expiration of the term of
such Option). If, at the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall revert to the Plan. If the Option is
not so exercised in full within the time specified herein, the unexercised portion of the Option
shall terminate, and the Shares covered by the unexercised portion of such Option shall revert to
the Plan.

 

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(e) Termination for Cause. Unless otherwise provided in a Service Provider’s Option Agreement,
if a Service Provider’s relationship with the Company is terminated for Cause, then such Service
Provider shall have no right to exercise any of such Service Provider’s Options at any time on or
after the effective date of such termination. All Shares covered by such Options and not acquired
by exercise prior to the date of such termination shall revert to the Plan.

(f) Form of Consideration. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of:

(i) cash;

(ii) check;

(iii) other Shares of the Company’s capital stock which (A) have been owned by
the Optionee for more than six months on the date of surrender, and (B) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;

(iv) consideration received by the Company under a cashless exercise program
permitted by the Administrator, including a cashless exercise program utilizing the
services of a single broker acceptable to the Administrator;

(v) a reduction in the amount of any Company liability to the Optionee,
including any liability attributable to the Optionee’s participation in any
Company-sponsored deferred compensation program or arrangement;

(vi) any combination of the foregoing methods of payment; or

(vii) such other consideration and method of payment for the issuance of Shares
to the extent permitted by Applicable Laws.

11. Stock Purchase Rights.

(a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or
in tandem with Options or other Awards granted under the Plan and/or cash awards made outside of
the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the Stock Purchase Awardee in writing or electronically, by means of a Notice
of Grant and/or a Stock Purchase Agreement in the form determined by the Administrator, of the
terms, conditions and restrictions related to the offer, including the number of Shares that the
Stock Purchase Awardee shall be entitled to purchase and the price to be paid for such Shares. The
offer shall be accepted by execution of a Stock Purchase Agreement in a form determined by the
Administrator and payment of the applicable purchase price.

 

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(b) Repurchase Option. Unless the Administrator determines otherwise, the Stock Purchase
Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary
termination of the Stock Purchase Awardee’s service with the Company for any reason (including
death or Disability). The purchase price for Shares repurchased pursuant to the Stock Purchase
Agreement shall be the original price paid by the Stock Purchase Awardee and may be paid by
cancellation of any indebtedness of the Stock Purchase Awardee to the Company. The repurchase
option shall lapse at a rate determined by the Administrator; provided, however, that
unless otherwise determined by the Administrator, the
restrictions shall lapse as to one-sixth (1/6) of the Shares subject to the Stock Purchase
Agreement on the date that is six months after the date of grant, and as to an additional one-sixth
(1/6) of the Shares subject to the Stock Purchase Agreement every six months thereafter.

(c) Other Provisions. The Stock Purchase Agreement shall contain such other terms, provisions
and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole
discretion.

(d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the Stock Purchase
Awardee shall have the rights equivalent to those of a shareholder, and shall be a shareholder when
his or her purchase is entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for which the record date is
prior to the date the Stock Purchase Right is exercised, except as provided in Section 16 of the
Plan.

(e) Code §409A. Notwithstanding anything contained herein to the contrary, Stock Purchase
Rights shall not be awarded if the Administrator, on the basis of advice of counsel, determines
that the grant of such Stock Purchase Rights would violate Section 409A of the Code.

12. Stock Awards. The Administrator may, in its sole discretion, grant (or sell at par value
or such higher purchase price as it determines) Shares to any Service Provider, as defined herein,
subject to such terms and conditions, including vesting and/or performance conditions, as the
Administrator sets forth in a Stock Award Agreement evidencing such grant. Stock Awards may be
granted or sold in respect of past services or other valid consideration or in lieu of any cash
compensation otherwise payable to such individual. The grant of Stock Awards shall be subject to
the following provisions:

(a) At the time a Stock Award is made, the Administrator shall establish a vesting period (the
“Restricted Period”) applicable to the Stock Award Shares subject to such Stock Award or shall
determine that such Stock Award is not subject to any vesting requirements. Subject to the right of
the Administrator to establish a Restricted Period that extends vesting dates to later or earlier
dates than the dates provided in this sentence, the Restricted Period of a Stock Award, if any,
shall lapse as to one-sixth (1/6) of the Shares subject to the Stock Award on the date that is six
months after the date of grant, and as to an additional one-sixth (1/6) of the Shares subject to
the Stock Award every six months thereafter until unrestricted. The Administrator may, in its sole
discretion, at the time a grant is made, prescribe restrictions in addition to or in lieu of the
expiration of the Restricted Period, including the satisfaction of corporate or individual
performance objectives. The Administrator may provide that all restrictions on Stock Award Shares
shall lapse if certain performance criteria are met and that, if such criteria are not met, that
such restrictions shall lapse if certain vesting conditions are satisfied. None of the Stock Award
Shares may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during
the Restricted Period applicable to such Stock Award Shares or prior to the satisfaction of any
other restrictions prescribed by the Administrator with respect to such Stock Award Shares.

 

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(b) The Company shall issue, in the name of each Service Provider to whom Stock Award Shares
have been granted, stock certificates representing the total number of Stock
Award Shares granted to such person, as soon as reasonably practicable after the grant. The
Company, at the direction of the Administrator, shall hold such certificates, properly endorsed for
transfer, for the Stock Awardee’s benefit until such time as the Stock Award Shares are forfeited
to the Company, or the restrictions lapse.

(c) Unless otherwise provided by the Administrator, holders of Stock Award Shares shall have
the right to vote such Shares and have the right to receive any cash dividends with respect to such
Shares. All distributions, if any, received by a Stock Awardee with respect to Stock Award Shares
as a result of any stock split, stock distribution, combination of shares, or other similar
transaction shall be subject to the restrictions of this Section 12.

(d) Subject to the terms of the applicable Stock Award Agreement, any Stock Award Shares
granted to a Service Provider pursuant to the Plan shall be forfeited if, prior to the date on
which all restrictions applicable to such Stock Award shall have lapsed, the Stock Awardee
voluntarily terminates employment with the Company or its Affiliates or resigns or voluntarily
terminates his consultancy arrangement with the Company or its Affiliates or if the Stock Awardee’s
employment or consultancy arrangement is terminated for Cause. If the Stock Awardee’ s employment
or consultancy arrangement terminates for any other reason, the Stock Award Shares held by such
person shall be forfeited, unless the Administrator, in its sole discretion, shall determine
otherwise. Upon such forfeiture, the Stock Award Shares that are forfeited shall be retained in the
treasury of the Company and be available for subsequent awards under the Plan.

(e) Upon the satisfaction of the conditions prescribed by the Administrator with respect to a
particular Stock Award, the restrictions applicable to the related Stock Award Shares shall lapse
and, at the Stock Awardee’s request, a stock certificate for the number of Stock Award Shares with
respect to which the restrictions have lapsed shall be delivered, free of all such restrictions
under the Plan, to the Stock Awardee or his beneficiary or estate, as the case may be.

13. Unrestricted Shares. The Administrator may grant Unrestricted Shares in accordance with
the following provisions:

(a) The Administrator may cause the Company to grant Unrestricted Shares to Service Providers
at such time or times, in such amounts and for such reasons as the Administrator, in its sole
discretion, shall determine. No payment (other than the par value thereof, in the Administrator’s
discretion) shall be required for Unrestricted Shares.

 

12

 

(b) The Company shall issue, in the name of each Service Provider to whom Unrestricted Shares
have been granted, stock certificates representing the total number of Unrestricted Shares granted
to such individual, and shall deliver such certificates to such Service Provider as soon as
reasonably practicable after the date of grant or on such later date as the Administrator shall
determine at the time of grant.

14. Stock Appreciation Rights. The Administrator may grant Stock Appreciation Rights in
accordance with the following provisions:

(a) Tandem Stock Appreciation Rights may be awarded by the Administrator in connection with
any Option granted under the Plan, either at the time such Option is granted or thereafter at any
time prior to the exercise, termination or expiration of such Option. The base price of any Tandem
Stock Appreciation Rights shall be not less than the Fair Market Value of a share of Common Stock
on the date of grant of the related Option. Nontandem Stock Appreciation Rights may also be granted
by the Administrator at any time. At the time of grant of Nontandem Stock Appreciation Rights, the
Administrator shall specify the number of shares of Common Stock covered by such right and the base
price of shares of Common Stock to be used in connection with the calculation described in Section
14(d). The base price of any Nontandem Stock Appreciation Rights shall be not less than the Fair
Market Value of a share of Common Stock on the date of grant. Stock Appreciation Rights shall be
subject to such terms and conditions not inconsistent with the other provisions of the Plan as the
Administrator shall determine.

(b) Tandem Stock Appreciation Rights shall be exercisable only to the extent that the related
Option is exercisable and shall be exercisable only for such period as the Administrator may
determine (which period may expire prior to the expiration date of the related Option); provided,
however, if no such period is specified, a Tandem Stock Appreciation Right shall be exercisable
only for the period that the related Option is exercisable. Upon the exercise of all or a portion
of Tandem Stock Appreciation Rights, the related Option shall be canceled with respect to an equal
number of shares of Common Stock. Shares of Common Stock subject to Options, or portions thereof,
surrendered upon exercise of Tandem Stock Appreciation Rights shall not be available for subsequent
awards under the Plan. Nontandem Stock Appreciation Rights shall be exercisable during such period
as the Administrator shall determine.

(c) Tandem Stock Appreciation Rights shall entitle the applicable Participant to surrender to
the Company unexercised the related Option, or any portion thereof, and, subject to Section 14(f)
to receive from the Company in exchange therefore that number of shares of Common Stock having an
aggregate Fair Market Value equal to (A) the excess of (i) the Fair Market Value of one (1) share
of Common Stock as of the date the Tandem Stock Appreciation Rights are exercised over (ii) the
Option exercise price per share specified in such Option, multiplied by (B) the number of shares of
Common Stock subject to the Option, or portion thereof, which is surrendered. In addition, the
Optionee shall be entitled to receive an amount equal to any credit against the Option exercise
price which would have been allowed had the Option, or portion thereof, been exercised. Cash shall
be delivered in lieu of any fractional shares.

 

13

 

(d) The exercise of Nontandem Stock Appreciation Rights shall, subject to Section 14(f),
entitle the recipient to receive from the Company that number of shares of Common Stock having an
aggregate Fair Market Value equal to (A) the excess of (i) the Fair Market Value of one (1) share
of Common Stock as of the date on which the Nontandem Stock Appreciation Rights are exercised over
(ii) the base price of the shares covered by the Nontandem Stock Appreciation Rights, multiplied by
(B) the number of shares of Common Stock covered by the Nontandem Stock Appreciation Rights, or the
portion thereof, being exercised. Cash shall be delivered in lieu of any fractional shares.

(e) As soon as is reasonably practicable after the exercise of any Stock Appreciation Rights,
the Company shall (i) issue, in the name of the recipient, stock certificates representing the
total number of full shares of Common Stock to which the recipient is entitled
pursuant to Section 14(c) and Section 14(d) and cash in an amount equal to the Fair Market
Value, as of the date of exercise, of any resulting fractional shares, or (ii) if the Administrator
causes the Company to elect to settle all or part of its obligations arising out of the exercise of
the Stock Appreciation Rights in cash pursuant to Section 14(f), deliver to the recipient an amount
in cash equal to the Fair Market Value, as of the date of exercise, of the shares of Common Stock
it would otherwise be obligated to deliver.

(f) The Administrator, in its discretion, may cause the Company to settle all or any part of
its obligation arising out of the exercise of Stock Appreciation Rights by the payment of cash in
lieu of all or part of the shares of Common Stock it would otherwise be obligated to deliver in an
amount equal to the Fair Market Value of such shares on the date of exercise.

15. Non-Transferability. Unless determined otherwise by the Administrator, an Option, Stock
Appreciation Right, Stock Purchase Right and Stock Award (until such time as all restrictions
lapse) may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and, in the case of an Option, Stock
Appreciation Right or Stock Purchase Right, may be exercised, during the lifetime of a Participant,
only by the Participant. If the Administrator makes an Award transferable, such Award shall contain
such additional terms and conditions as the Administrator deems appropriate. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide in the Option Agreement regarding
a given Option that the Optionee may transfer, without consideration for the transfer, his or her
Nonstatutory Stock Options to members of his or her immediate family, to trusts for the benefit of
such family members, or to partnerships in which such family members are the only partners,
provided that the transferee agrees in writing with the Company to be bound by all of the terms and
conditions of this Plan and the applicable Option. During the period when Shares subject to Stock
Purchase Agreements and Stock Award Shares are restricted (by virtue of vesting schedules or
otherwise), such Shares may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution.

 

14

 

16. Adjustments Upon Changes in Capitalization; Dissolution; Change in Control and Other
Events.

(a) Changes in Capitalization. Subject to any required action by the shareholders of the
Company, the number of Shares of Common Stock covered by each outstanding Option, Stock Purchase
Right, Stock Award Agreement and Stock Appreciation Right and the number of Shares of Common Stock
that have been authorized for issuance under the Plan but as to which no Awards have yet been
granted or that have been returned to the Plan upon cancellation or expiration of an Option, Stock
Purchase Right, Stock Award Agreement or Stock Appreciation Right, as well as the price per share
of Common Stock covered by each such outstanding Option, Stock Purchase Right or Stock Appreciation
Right, shall be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an
Award hereunder.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the
Company, the Administrator shall notify each holder of an Award as soon as practicable prior to the
effective date of such proposed dissolution or liquidation. The Administrator in its discretion may
provide for an Optionee to have the right to exercise his or her Option or Stock Appreciation Right
and for a holder of a Stock Purchase Right to exercise his or her Stock Purchase Right until ten
(10) days prior to such transaction as to all of the Shares covered thereby, including Shares as to
which an applicable Option or Stock Appreciation Right would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option applicable to any Shares
purchased upon exercise of a Stock Purchase Right or any restrictions as to any Stock Award shall
lapse as to all such Shares covered thereby, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been previously
exercised, an Option, Stock Purchase Right or Stock Appreciation Right will terminate immediately
prior to the consummation of such proposed action.

(c) Merger or Asset Sale. In the event of a merger or consolidation of the Company with or
into another corporation or any other entity or the exchange of substantially all of the
outstanding stock of the Company for shares of another entity or other property in which, after any
such transaction the prior shareholders of the Company own less than fifty percent (50%) of the
voting shares of the continuing or surviving entity, or in the event of the sale of all or
substantially all of the assets of the Company, (any such event, a “Change of Control Event”),
then, absent a provision to the contrary in any particular Option Agreement, Restricted Stock
Purchase Agreement, Stock Purchase Right Agreement, Stock Appreciation Right Agreement or Stock
Award (in which case the terms of such shall supersede each of the provisions of this Section 16(c)
that are inconsistent with such Agreement or Award), each outstanding Option, Stock Purchase Right,
Restricted Stock, Stock Appreciation Right and Stock Award shall be assumed or an equivalent
option, right, share or award substituted by the successor corporation or a parent or subsidiary of
the successor corporation. In the event that the Administrator determines that the successor corporation or a

 

15

 

parent or a subsidiary of the successor corporation has refused to assume or
substitute an equivalent option, right, agreement or award for each outstanding Option, Stock
Purchase Right, Restricted Stock, Stock Appreciation Right and Stock Award, the awardee shall fully
vest in and have the right to exercise each outstanding Option, Stock Appreciation Right and Stock
Purchase Right as to all of the stock covered thereby, including Shares that would not otherwise be
vested or exercisable, and all vesting periods under Restricted Stock Purchase Agreements and Stock
Awards shall be deemed to have been satisfied. If an Option, Stock Appreciation Right and/or Stock
Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the
event of a Change of Control, the Administrator shall notify all awardees that all outstanding
Options, Stock Appreciation Rights and Stock Purchase Rights shall be fully exercisable for a
period of twenty (20) days from the date of such notice and that any Options, Stock Appreciation
Rights and Stock Purchase Rights that are not exercised within such period shall terminate upon the
expiration of such period. For
the purposes of this paragraph, all outstanding Options, Stock Appreciation Rights and Stock
Purchase Rights shall be considered assumed if, following the consummation of the Change of
Control, the Option, Stock Appreciation Right and Stock Purchase Right confers the right to
purchase or receive, for each Share subject to the Option, Stock Appreciation Right or Stock
Purchase Right immediately prior to the consummation of the Change of Control, the consideration
(whether stock, cash, or other property) received in the Change of Control by holders of Common
Stock for each Share held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Change of Control is not solely
common stock of the successor corporation or its parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon the exercise of the
Option, Stock Appreciation Right or Stock Purchase Right, for each Share subject to the Option,
Stock Appreciation Right or Stock Purchase Right, to be solely common stock of the successor
corporation or its parent or subsidiary equal in fair market value to the per share consideration
received by holders of Common Stock in the Change of Control.

17. Substitute Options. In the event that the Company, directly or indirectly, acquires
another entity, the Board may authorize the issuance of stock options (“Substitute Options”) to the
individuals performing services for the acquired entity in substitution of stock options previously
granted to those individuals in connection with their performance of services for such entity upon
such terms and conditions as the Board shall determine, taking into account the conditions of Code
Section 424(a), as from time to time amended or superseded, in the case of a Substitute Option that
is intended to be an Incentive Stock Option. Shares of capital stock underlying Substitute Stock
Options shall not constitute Shares issued pursuant to this Plan for any purpose.

18. Date of Grant. The date of grant of an Option, Stock Purchase Right, Stock Award, Stock
Appreciation Right or Unrestricted Share shall be, for all purposes, the date on which the
Administrator makes the determination granting such Option, Stock Purchase Right, Stock Award,
Stock Appreciation Right or Unrestricted Share, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each grantee within a reasonable
time after the date of such grant.

 

16

 

19. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate
the Plan.

(b) Shareholder Approval. The Company shall obtain shareholder approval of any Plan amendment
to the extent necessary to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of
the Plan shall adversely affect the rights of any Participant with respect to an outstanding Award,
unless mutually agreed otherwise between the Participant and the Administrator, which agreement
shall be in writing and signed by the Participant and the Company. Termination of the Plan shall
not affect the Administrator’s ability to exercise the
powers granted to it hereunder with respect to Awards granted under the Plan prior to the date
of such termination.

20. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued in connection with the grant of any Stock
Award or Unrestricted Share or the exercise of any Option, Stock Appreciation Right or Stock
Purchase Right unless such grant or the exercise of such Option, Stock Appreciation Right or Stock
Purchase Right and the issuance and delivery of such Shares shall comply with Applicable Laws.

(b) Investment Representations. As a condition to the grant of any Award or the exercise of
any Option, Stock Appreciation Right or Stock Purchase Right, the Company may require the person
receiving such Award or exercising such Option, Stock Appreciation Right or Stock Purchase Right to
represent and warrant at the time of any such exercise or grant that the applicable Shares are
being acquired only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is required.

(c) Additional Conditions. The Administrator shall have the authority to condition the grant
of any Award or rights in such other manner that the Administrator determines to be appropriate,
provided that such condition is not inconsistent with the terms of the Plan. Such conditions may
include, among other things, obligations of recipients to execute lock-up agreements and
shareholder agreements in the future. The Administrator may implement such measures as the
Administrator deems appropriate to determine whether Shares acquired as a result of the exercise of
an Incentive Stock Option have been the subject of a “disqualifying disposition” for federal income
tax purposes, including requiring the Optionee to hold such Shares in his or her own name and
requiring that the Optionee notify the Administrator of any such “disqualifying disposition.”

(d) Trading Policy Restrictions. Option, Stock Appreciation Right and Stock Purchase Right
exercises and other Awards under the Plan shall be subject to the terms and conditions of any
insider trading policy established by the Company or the Administrator.

 

17

 

21. Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction over the Company, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.

22. Reservation of Shares. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan.

23. Shareholder Approval. The Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted, or earlier as required by the
rules of the stock exchange governing trading of the Company’s stock.
Such shareholder approval shall be obtained in the manner and to the degree required under
Applicable Laws.

24. Withholding; Notice of Sale. The Company shall be entitled to withhold from any amounts
payable to an Employee any amounts which the Company determines, in its discretion, are required to
be withheld under any Applicable Law as a result of any action taken by a holder of an Award.

25. Governing Law. This Plan shall be governed by the laws of the state of Nevada, without
regard to conflict of law principles.

 

18EX-4.2

Exhibit 4.2

	Incorporated in the Cayman Islands
This is to certify that
is / are ftf. registerafl shareholders nf: No. of Shares
Type of Share
Par Value US$
Date of Record
ertificate Number
% Paid
The above shares are subject to the Memorandum and Articles of Association of the Company
and transferrable in accordance therewith.
Given under the Common
of the Company
Director
Director / Secretary

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