Document:

Exhibit
      10.1 - 2001 STOCK OPTION PLAN

    

    APD
      ANTIQUITIES, INC.

    2001 STOCK
      OPTION PLAN

    (Adopted
      by the Board of Directors on January 15, 2001)

    

    1. Purpose.

    

    This
      2001
      Stock Option Plan is intended to encourage stock ownership in APD Antiquities
      Inc. by the officers, directors, employees, consultants, and advisors of the
      Company or its affiliates in order to promote their interest in the success
      of
      the Company and to encourage their continued affiliation. All options granted
      under this 2001 Stock Option Plan are intended to be either (a) Incentive Stock
      Options or (b) Non-Statutory Stock Options.

    

    2. Definitions.

    

    As
      used
      herein the following definitions shall apply:

    

    "Act"
      shall mean the Securities Exchange Act of 1934, as amended from time to
      time.

    

    “Advisor”
      shall mean an individual who provides bona fide services to the Company or
      Affiliate pursuant to a written contract.

    

    "Affiliate"
      shall mean any corporation defined as a "parent corporation" or a "subsidiary
      corporation" by Code Section 424(e) and (f), respectively.

    

    "Agreement"
      shall mean either a 2001 Incentive Stock Option Agreement or a 2001
      Non-Statutory Stock Option Agreement, embodying the terms of the agreement
      between the Company and the Optionee with respect to Optionee's
      Option.

    

    "Board"
      shall mean the Board of Directors of the Company.

    

    "Code"
      shall mean the Internal Revenue Code of 1986, as amended from time to
      time.

    

    "Company"
      shall mean APD Antiquities Inc., a Nevada corporation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Consultant"
      shall mean any person who is placed on the Company's Consultants List by
      the Board
      and
      who agrees in writing to be included thereon.

    

    "Disability"
      or "Disabled" shall mean the condition of being "disabled" within the meaning
      of
      Section 422(c)(6) of the Code or any successor provision.

    

    “Disinterested
      Person” means a Non-Employee Director as defined in Rule 16b-3 of the Exchange
      Act of 1934, as amended.

     

    "Employee"
      shall mean any salaried employee of the Company or its Affiliates, including
      those employees who are officers of the Company or its Affiliates.

    

    "Fair
      Market Value" of Stock on a given date shall mean an amount per share as
      determined by the Board or its delegates by applying any reasonable valuation
      method determined without regard to any restriction other than a restriction
      which, by its terms, will never lapse. Notwithstanding the preceding, if the
      Stock is traded upon an established stock exchange, then the "Fair Market Value"
      of Stock on a given date per share shall be deemed to be the average of the
      highest and lowest selling price per share of the Stock on the principal stock
      exchange on which the Stock is then trading or, if there was no trading of
      the
      Stock on that day, on the next preceding day on which there was such trading;
      if
      the Stock is not traded upon an established stock exchange but is quoted on
      a
      quotation system, the "Fair Market Value" of Stock on a given date shall be
      deemed to be the mean between the closing representative "bid" and "ask" prices
      per share of the Stock on such date as reported by such quotation system or,
      if
      there was no trading of the Stock on that day, on the next preceding day on
      which there was such trading.

    

    "Incentive
      Stock Option" shall mean an option granted pursuant to the Plan which is
      designated by the Board or its delegates as an "Incentive Stock Option" and
      which qualifies as an incentive stock option under Section 422 of the Code
      or
      any successor provision.

    

    "Non-Statutory
      Stock Option" shall mean a stock option granted pursuant to the Plan which
      is
      not an Incentive Stock Option.

    

    "Option"
      shall refer to either or both an Incentive Stock Option or Non-Statutory Stock
      Option, as the context shall indicate.

    

    "Optionee"
      shall mean the recipient of an Incentive Stock Option or a Non-Statutory Stock
      Option.

    

    "Option
      Price" shall mean the price per share of Stock to be paid by the Optionee upon
      exercise of the Option.

    

    "Option
      Stock" shall mean the total number of shares of Stock the Optionee shall
      be entitled
      to purchase pursuant to the Agreement.

    

    "Plan"
      shall mean this APD Antiquities 2001 Stock Option Plan, as amended from time
      to
      time.

    

    "Reporting
      Person" shall mean an Optionee who is required to file statements relating
      to
      his or her beneficial ownership of Stock with the SEC pursuant to Section 16(a)
      of the Act.

     

    
      
        
        

      

      
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    "Rule
      16b-3" shall mean Rule 16b-3 (as amended from time to time), promulgated by
      the
      SEC under the Act, and any successor thereto.

    

    "SEC"
      shall mean the Securities and Exchange Commission.

    

    "Stock"
      shall mean the $0.001 par value Common Stock of the Company.

    

    3. Administration.

    

    The
      Plan
      shall be administered by the Board; provided, however, that the Board may
      delegate all or any part of its authority to administer the Plan in its entirety
      or, with respect to any group or groups of persons eligible to receive Options
      hereunder, to such committee as the Board shall in its sole discretion
      determine. Such committee shall be composed of not fewer than two members (the
      “Committee”), all of the members of which Committee shall be Disinterested
      Persons, if required. Any Disinterested Person shall comply with the
      requirements of Rule 16b-3. The Board or its Committee may adopt, amend and
      rescind such rules and regulations for carrying out the Plan and implementing
      agreements and take such actions as it deems proper. The interpretation,
      construction and application by the Board or its Committee of any of the
      provisions of the Plan or any Option granted thereunder shall be final and
      binding on the Company, all Optionees, their legal representatives, and any
      person who may acquire an Option directly from an Optionee by permitted
      transfer, bequest or inheritance. Reference to administrative acts by the Board
      in the Plan shall also refer to acts by its Committee, unless the context
      otherwise indicates. Whether or not the Board has delegated administrative
      authority, the Board has the final power to determine all questions of policy
      or
      expediency that may arise in administration of the Plan.

     

    4. Eligibility.

    

    Only
      Employees are eligible to receive Incentive Stock Options under the Plan.
      Employees, Officers, Directors, Consultants and Advisors of the Company or
      its
      Affiliates are eligible to receive Non-Statutory Stock Options under the
      Plan.

    

    No
      person
      shall be eligible to receive an Option for a larger number of shares than is
      recommended for him or her by the Board. Any Optionee may hold more than one
      Option (whether Incentive Stock Options, Non-Statutory Stock Options, or both,
      but only on the terms and conditions and subject to the restrictions set forth
      herein.

    

    Incentive
      Stock Options granted to an Employee who owns stock at the time the Incentive
      Stock Option is granted, representing more than ten percent (10%) of the total
      combined voting power of all classes of stock of the Company and its Affiliates,
      shall be granted at an
      Option
      Price at least one hundred ten percent (110%) of the Fair Market Value of the
      Stock at the time
      the
      Incentive Stock Option is granted. In determining ownership of Stock by an
      Employee, the attribution standards set forth in Code Section 424(d) shall
      be
      applicable.

    

    5. Stock
      Subject to the Plan.

    

    Options
      granted under the Plan shall be for shares of the Company's authorized but
      unissued or re-acquired Stock. The aggregate number of shares of Stock which
      may
      be subject to Options
      pursuant to the Plan shall not exceed one million (1,000,000) shares, unless
      adjusted by the Board pursuant to Paragraph 6(l). Stock issued under other
      stock
      option plans of the Company shall not be counted against the maximum number
      of
      shares that can be issued under the Plan.

     

    
      
        
        

      

      
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    In
      the
      event that any outstanding Option expires or is terminated for any reason,
      the
      shares of Stock allocable to the unexercised portion of such Option may again
      be
      subject to an Option under the Plan.

    

    If
      an
      Optionee pays all or part of any Option Price with shares of Stock, the number
      of shares deemed to be issued to the Optionee (and counted against the maximum
      number of shares that can be issued under the Plan) shall be the number of
      shares transferred to the Optionee by the Company, less the number of shares
      transferred by the Optionee to the Company as payment. Stock issued on the
      exercise of an Option which is forfeited in accordance with the conditions
      contained in the grant by the Optionee after issuance shall be deemed to have
      never been issued under the Plan and, accordingly, shall not be counted against
      the maximum number of shares that can be issued under the Plan. Notwithstanding
      the terms of the previous two sentences, the maximum number of shares for which
      Incentive Stock Options may be issued under the Plan shall be one million
      (1,000,000) shares, subject to adjustment by the Board as provided under
      Paragraph 6(l), regardless of the fact that under the terms of the preceding
      sentences, a lesser number of shares is deemed
      to
      be issued pursuant to the exercise of Incentive Stock Options.

     

    6. Terms
      and Conditions of Options.

    

    The
      Board
      or its delegates shall authorize the granting of all Options under the Plan
      with
      such Options to be evidenced by Incentive Stock Option Agreements or
      Non-Statutory Stock Option Agreements, as the case may be. Each Agreement shall
      be in such form as the Board may approve from time to time. Each Agreement
      shall
      comply with and be subject to the following terms and conditions:

    

    (a) Type
      of Option; Number of Shares.
      Each
      particular Option Agreement shall state the type of Options to be granted
      (whether Incentive Stock Options or Non-Statutory Stock Options) and the number
      of shares to which the Option pertains. Under no circumstances shall the
      aggregate Fair Market Value of the Stock (determined as of the time the Option
      is granted) with respect to which Incentive Stock Options are exercisable for
      the first time by any Employee during any calendar year (under all incentive
      stock option plans of the Company and its Affiliates) exceed
      $100,000.

    

    (b) Option
      Price.
      Each
      particular Option Agreement shall state the Option Price. The Option Price
      for
      an Incentive Stock Option shall not be less than one hundred percent (100%)
      of
      the Fair Market Value per share of Stock on the date the Incentive Stock Option
      is granted. The Option Price for a Non-Statutory Stock Option shall be the
      price
      per share of Stock set by the Board or its delegates.

     

    (c) Certificate
      Legends.
      Certificates for shares of Stock issued and delivered to Reporting Persons
      may
      be legended, as the Board deems appropriate, if required by the provisions
      of
      any applicable rule or regulation.

    

    (d) Medium
      and Time of Payment.
      The
      aggregate Option Price shall be payable upon the exercise of the Option and
      shall be paid in any combination of:

     

    
      
        
        

      

      
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    (i) United
      States cash currency;

    

    (ii) a
      cashier's or certified check to the order of the Company;

    

    (iii) a
      personal check acceptable to the Company;

    

    (iv) to
      the
      extent permitted by the Board, shares of Stock of the Company (including
      previously owned Stock or Stock issuable in connection with the Option
      exercise), properly endorsed to the Company, whose Fair Market Value on the
      date
      of exercise equals the aggregate Option Price of the Option being exercised;
      or

    

    
      	 	
              (v)

            	
              to
                the extent permitted by the Board, the Optionee's entering into an
                agreement with the Company, whereby a portion of the Optionee's Options
                are terminated and where the "built-in gain" on any Options which
                are
                terminated as part of such agreement equals the aggregate Option
                Price of
                the Option being exercised. The Company may establish, from time
                to time,
                procedures for a “cashless exercise” of options. "Built-in gain" means the
                excess of the aggregate Fair Market Value of any Stock otherwise
                issuable
                on exercise of a terminated Option, over the aggregate Option Price
                otherwise due the Company on such
                exercise.

            

    

     

    The
      Board
      may permit deemed or constructive transfer of shares in lieu of actual transfer
      and physical delivery of certificates. Except to the extent prohibited by
      applicable law, the Board may take any necessary or appropriate steps in order
      to facilitate the payment of any such Option Price. Without limiting the
      foregoing, the Board may cause the Company to loan the Option Price to the
      Optionee or to guarantee that any Stock to be issued will be delivered to a
      broker or lender in order to allow the Optionee to borrow the Option Price.
      The
      Board, in its sole and exclusive discretion, may require satisfaction of any
      rules or conditions in connection with payment of the Option Price at any
      particular time, in any particular form, or with the Company's assistance.
      If
      Stock used to pay any Option Price is subject to any prior restrictions imposed
      in connection with any plan of the Company (including this Plan), an equal
      number of the shares of Stock acquired on exercise shall be made subject to
      such
      prior restrictions in addition to any further restrictions imposed on such
      Stock
      by the terms of the Optionee's Agreement or by the Plan.

    

    (e) Vesting.
      The
      total number of shares of Stock subject to an Option may, but need not, be
      allotted in periodic installments (which may, but need not, be equal). The
      Option Agreement may provide that from time to time during each of such
      installment periods, the Option may become exercisable ("vest") with respect
      to
      some or all of the shares allotted to that period, and may be exercised with
      respect to some or all of the shares allotted to such period and/or any prior
      period as to which the Option became vested but was not fully exercised. During
      the remainder of the term of the Option (if its term extends beyond the end
      of
      the installment periods), any unexercised Option Stock may be exercised from
      time to time.

     

    
      
        
        

      

      
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    (f) Duration
      of Options.
      Each
      particular Option Agreement shall state the term of the Option; provided,
      however, that all Incentive Stock Options granted under this Plan shall expire
      and not be exercisable after the expiration of ten (10) years from the date
      granted; provided, further, that any Incentive Stock Option granted to an
      Employee who owns stock at the time the Incentive Stock Option is granted
      representing more than ten percent (10%) of the total combined voting power
      of
      all classes of stock of the Company and its Affiliates shall expire and not
      be
      exercisable after the expiration of five (5)
      years
      from the date granted. Non-Statutory Stock Options shall expire and not be
      exercisable after the date set by the Board or its delegates in the particular
      Option Agreement, or on any later date subsequently approved by the Board or
      its
      delegates.

    

    (g) Exercise
      of Options.

    

    (i) Each
      particular Option Agreement shall state when the Optionee's right to purchase
      Stock pursuant to the terms of an Option are exercisable in whole or in part,
      provided, however, that Incentive Stock Options shall not be exercisable by
      an
      Employee more than 90 days after the date that the employment of such Employee
      is voluntarily or involuntarily terminated, except in the case of death or
      disability of the Employee as provided below. Subject
      to the earlier termination of the right to exercise the Options as provided
      under this Plan, Options shall be exercisable in whole or in part as the Board,
      in its sole and exclusive discretion, may provide in the particular Option
      Agreement, as amended. The Board may at any time increase the percentage of
      an
      Option that is otherwise exercisable under the terms of a particular Option
      Agreement. The Board, in its sole and exclusive discretion, may permit the
      issuance of Stock underlying an Option prior to the date the Option is otherwise
      exercisable, provided such Stock is subject to repurchase rights which expire
      pro rata as the Option would otherwise have become exercisable.

    

    (ii) If
      the
      Optionee does not exercise in any one (1) year period the full number of shares
      to which he or she is then entitled to exercise, the Optionee may exercise
      those
      shares in any subsequent year during the term of the Option.

    

    (h) Transfer
      of Options.
      An
      Option
      shall not be transferable except by will or by the laws of decent and
      distribution, and shall be exercisable during the lifetime of the person to
      whom
      the Option is granted only by such person, except as specifically provided
      for
      by the Board. An attempted non-permitted transfer of an Option shall be
      void.

     

    (i) Disability
      of Optionee.
      In the
      event an Optionee's Continuous Status as an Employee, Director or Consultant
      terminates as a result of the Optionee's Disability, the Optionee may exercise
      his or her Option, but only within twelve (12) months from the date of such
      termination (or such shorter period specified in the Option Agreement), and
      only
      to the extent that the Optionee was entitled to exercise it at the date of
      such
      termination (but in no event later than the expiration of the term of such
      Option as set forth in the Option Agreement). If, at the date of termination,
      the Optionee is not entitled to exercise his of her entire Option, the shares
      covered by the unexercisable portion of the Option shall revert to the Plan.
      If,
      after termination, the Optionee does not exercise his or her Option within
      the
      time specified herein, the Option shall terminate, and the shares covered by
      such Option shall revert to the Plan.

     

    
      
        
        

      

      
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    (j) Death
      of Optionee.
      In the
      event of the death of an Optionee, the Option may be exercised, at any time
      within sixteen (16) months following the date of death (or such other period
      specified in the Option Agreement but in no event later than the expiration
      of
      the term of such Option as set forth in the Option Agreement), by the Optionee's
      estate or by a person who acquired the right to exercise the Option by bequest
      or inheritance, but only to the extent the Optionee was entitled to exercise
      the
      Option at the date of death. If, at the time of death, the Optionee was not
      entitled to exercise his or her entire Option, the shares covered by the
      unexercisable portion of the Option shall revert to the Plan. If, after death,
      the Optionee's estate or a person who acquired the right to exercise the Option
      by bequest or inheritance does not exercise the Option within the time specified
      herein, the Option shall terminate, and the shares covered by such Option shall
      revert to the Plan.

     

    (k) Termination
      of Employment or Relationship as an Officer, Director, Consultant or
      Advisor.
      In the
      event that an Optionee who is an Employee, Officer, Director, Consultant or
      Advisor of the Company or its Affiliates shall cease to be employed by or
      perform services for the Company or its Affiliates prior to the Option's
      expiration date (other than upon the Optionee's death or Disability), the
      exercise of Options held by such Optionee shall be subject to such limitations
      on the periods of time during which such Options, except for Incentive Stock
      Options limitations under section 6(g)(i) herein, may be exercised as may be
      specified in the particular Option Agreement, as amended, between the Optionee
      and the Company. Whether authorized leave of absence or absence for military
      or
      governmental service shall constitute termination of employment for purposes
      of
      the Plan shall be determined by the Board in their sole and exclusive
      discretion. No provision of the Plan shall be construed so as to grant any
      individual the right to remain in the employ or service of the Company for
      any
      period of specific duration.

    

    (l) Recapitalization.

    

    (i) The
      number of shares issuable under the Plan and the number and amount of the Option
      Stock and the Option Price of outstanding Options may be proportionately
      adjusted by the Board, in its sole and exclusive discretion, for any increase
      or
      decrease in the number of issued shares of Stock resulting from a subdivision
      or
      consolidation of shares, or for the payment of a stock dividend, or any other
      increase or decrease in the number of such shares effected without receipt
      of
      consideration by the Company in order to preclude the dilution or enlargement
      of
      benefits under the Plan.

    

    (ii) The
      Board, in its sole and exclusive discretion, may make such equitable adjustments
      to the Plan and outstanding Options as it deems appropriate in order to preclude
      the dilution or enlargement of benefits under the Plan, upon exchange of all
      of
      the outstanding stock of the Company for a different class or series of capital
      stock or the separation of assets of the Company, including a spin-off or other
      distribution of stock or property by the Company.

     

    
      
        
        

      

      
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              (iii)

            	
              If
                the Company shall be the surviving corporation in any merger or
                consolidation, each outstanding Option shall pertain to and apply
                to the
                securities to which a holder of the number of shares of Option Stock
                would
                have been entitled. A dissolution or liquidation of the Company,
                a merger
                (other than a merger the principal purpose of which is to change
                the state
                of the Company's incorporation) or consolidation in which the Company
                is
                not the surviving corporation, a reverse merger in which the Company
                is
                the surviving corporation but the Company's Common Stock outstanding
                immediately preceding the merger is converted by virtue of the merger
                into
                other property, or other capital reorganization in which more than
                fifty
                percent (50%) of the Company's Common Stock is exchanged (unless
                the
                dissolution or liquidation plan, merger or consolidation agreement
                or
                capital reorganization corporate documents expressly provide to the
                contrary) shall cause each outstanding Option to terminate, provided,
                that
                each Optionee shall, immediately prior to such event, have the right
                to
                exercise his or her Option in whole or in part, unless the Option
                in
                connection with such event is either to be assumed by the successor
                corporation or parent thereof, or to be replaced with a comparable
                option
                to purchase shares of the capital stock of the successor corporation
                or
                parent thereof, or the Option is to be replaced by a comparable cash
                incentive program of the successor corporation based on the value
                of the
                Option on the date of such event. Notwithstanding the preceding,
                if,
                within one (1) year from the date of such event, an Employee's employment
                is involuntarily terminated, then the Employee's outstanding Options,
                if
                any, shall become immediately
                exercisable.

            

    

    

    (iv) All
      adjustments required by the preceding paragraphs shall be made by the Board,
      whose determination in that respect shall be final, binding and conclusive,
      provided, that adjustments shall not be made in a manner that causes an
      Incentive Stock Option to fail to continue to qualify as an "incentive stock
      option" within the meaning of Code Section 422.

     

    (v) Except
      as
      expressly provided in this Paragraph 6(l), an 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 in the number of shares
      of stock of any class by reason of any dissolution, liquidation, merger,
      consolidation, reorganization, or separation of assets, and any issue by the
      Company of shares of stock of any class, or securities convertible into shares
      of stock of any class, shall not affect, and no adjustment by reason thereof
      shall be made with respect to, the number or amount of the Option Stock or
      the
      Option Price of outstanding Options.

    

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

     

    (m) Rights
      as a Shareholder.
      An
      Optionee shall not have rights as a shareholder with respect to any shares
      until
      the date of the issuance of a stock certificate to him or her for such shares.
      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 of issuance of such stock certificate,
      except as provided in Paragraph 6(l) above.

     

    
      
        
        

      

      
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    (n) Modification,
      Extension and Renewal of Options.
      Subject
      to the terms and conditions of the Plan, the Board may modify (including
      lowering the Option Price or changing Incentive Stock Options into Non-Statutory
      Stock Options), extend or renew outstanding Options granted under the Plan,
      or
      accept the surrender of outstanding Options under this Plan and/or other stock
      option plans of the Company (to the extent not previously exercised) and
      authorize the granting of new Options in substitution therefore. Notwithstanding
      the foregoing, no modification of an Option shall, without the consent of the
      Optionee, alter or impair any rights or obligations under any Option previously
      granted under the Plan.

    

    (o) Securities
      Compliance.
      The
      Company may require any Optionee, or any person to whom an Option is transferred
      under subsection 6(d), as a condition of exercising any such Option, (1) to
      give
      written assurances satisfactory to the Company as to the Optionee's knowledge
      and experience in financial and business matters and/or to employ a purchaser
      representative reasonably satisfactory to the Company who is knowledgeable
      and
      experienced in financial and business matters, and that he or she is capable
      of
      evaluating, alone or together with the purchaser representative, the merits
      and
      risks of exercising the Option; and (2) to give written assurances satisfactory
      to the Company stating that such person is acquiring the stock subject to the
      Option for such person's own account and not with any present intention of
      selling or otherwise distributing the stock. These requirements, and any
      assurances given pursuant to such requirements, shall be inoperative if (i)
      the
      issuance of the shares upon the exercise of the Option has been registered
      under
      a then currently effective registration statement under the Securities Act
      of
      1933, as amended (the "Securities Act"), or (ii) as to any particular
      requirement, a determination is made by counsel for the Company that such
      requirement need not be met in the circumstances under the then applicable
      securities laws. Unless an Optionee could otherwise exercise a Stock Option
      or
      dispose of Stock delivered upon exercise of a Stock Option granted under the
      Plan without incurring liability under Section 16(b) of the Exchange Act, at
      least six months shall elapse from the date of acquisition of the Stock Option
      to the date of disposition of its underlying Stock.

    

    (p) Transfer
      and Exercise of Options.
      To the
      extent required by Code Section 422, each Incentive Stock Option shall state
      that it is not transferable or assignable by Optionee otherwise than by will
      or
      the laws of descent and distribution, and that during an Optionee's lifetime,
      such Incentive Stock Option shall be exercisable only by the
      Optionee.

     

    (q) Other
      Provisions.
      Each
      Option Agreement may contain
      such other provisions, including without limitation, restrictions upon the
      exercise or transferability
      of the Option, as the Board may deem advisable. Any Incentive Stock Option
      Agreement shall contain such limitations and restrictions upon the exercise
      of
      the Incentive
      Stock Option as shall be necessary in order that such Incentive Stock Option
      shall be
      an
      "incentive stock option" as defined in Code Section 422, or to conform
      to any
      change in
      the
      law.

     

    
      
        
        

      

      
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    (r) Withholding
      Taxes.
      When
      the Company becomes required to collect federal and state income and employment
      taxes in connection with the exercise of an Option ("withholding taxes"), the
      Optionee shall promptly pay to the Company the amount of such taxes in cash,
      unless the Board permits or requires payment in another form. Subject to such
      conditions as it may require, the Board, in its sole discretion, may allow
      an
      Optionee to reimburse the Company for payment of withholding taxes with shares
      of Stock. If an Optionee is a Reporting Person at the time of exercise and
      is
      given an election to pay any withholding taxes with Stock, the Board shall
      have
      sole discretion to approve or disapprove such election.

     

    7. Term
      of Plan.

    

    The
      Board
      may suspend or terminate the Plan at any time. Unless sooner terminated, the
      Plan shall not extend beyond a date ten (10) years from the date of adoption
      hereof by the Board. No Incentive Stock Options or Non-statutory Stock Options
      may be granted under the Plan while the Plan is suspended or after it is
      terminated. Rights and obligations under any Option granted while the Plan
      is in
      effect shall not be altered or impaired by suspension or termination of the
      Plan, except with the consent of the person to whom the Option was
      granted.

    

    8. Amendment
      of Plan.

    

    With
      respect to any shares at the time not subject to Options, the Board may from
      time to time, insofar as permitted by law, suspend or discontinue the Plan
      or
      revise or amend the Plan in any respect whatsoever, except that, without
      approval of the stockholders, no such revision or amendment shall change the
      number of shares for which Options may be granted under the Plan, except as
      provided in Section 6(l), change the designation of the class of persons
      eligible to receive Options under the Plan, materially increase the benefits
      accruing to Optionees under the Plan, or decrease the price at which Incentive
      Stock Options may be granted. Furthermore, without the approval of the
      stockholders, the Plan may not be amended in any manner that will cause
      Incentive Stock Options issued under it to fail to meet the requirements of
      "incentive stock options" as defined in Code Section 422. The Board may amend
      the Plan from time to time to the extent necessary to comply with any applicable
      law, rule or other regulatory requirement.

     

    9. Application
      of Funds.

    

    The
      proceeds received by the Company from the sale of Stock pursuant to the exercise
      of an Option will be used for general corporate purposes.

     

    10. No
      Obligation to Exercise Option.

    

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

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    11. Indemnification.

    

    In
      addition to such other rights of indemnification as they may have as Directors,
      Employees or agents of the Company, the Directors, or any individuals who are
      delegated authority by the Board to administer the Plan, shall be indemnified
      by
      the Company against: (i) their reasonable expenses, including attorneys' fees
      actually and necessarily incurred in connection with the defense of any action,
      suit or proceeding, or in connection with any appeal therein, 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 Option granted thereunder; and (ii)
      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 action,. suit or proceeding,
      except in actions to matters as to which it shall be adjudged in such action,
      suit or proceeding that such Director or individual is liable for negligence
      or
      misconduct in the performance of his duties; this indemnification is expressly
      conditioned upon the indemnified party, within ninety (90) days after
      institution of any such action, suit or proceeding, offering the Company in
      writing the opportunity, at its own expense, to handle and defend the
      same.

     

    12. Approval
      of Stockholders.

    

    The
      portions of the Plan dealing with Incentive Stock Options shall not take effect
      unless approved by the stockholders of the Company's preferred (if any) and
      Common Stock, which approval must occur within a period commencing sixty (60)
      months before and ending twelve (12) months after the date the Plan is adopted
      by the Board. Nothing in the Plan shall be construed to limit the authority
      of
      the Company to exercise its corporate rights and powers, including the right
      of
      the Company to grant Non-Statutory Options for proper corporate
      purposes.

     

    
      
        
        

      

      
        11FULL
        CIRCLE INDUSTRIES, INC.

      

      2004 STOCK OPTION PLAN

      

      1. Purposes
        of this
        Plan.
        The
        purposes of this 2004 Stock Option Plan are to attract and
        retain the best available personnel, to provide additional incentive to the
        Employees of Full Circle
        Industries, Inc. (the “Company”) and any of its Subsidiaries, to promote the
        success of the Company’s
        business and to enable the Employees to share in the growth and prosperity
        of
        the Company
        by providing them with an opportunity to purchase stock in the
        Company.

      

      Options
        granted hereunder may be either Incentive Stock Options or Nonstatutory Stock
        Options, at the discretion of the Board and as reflected in the terms of
        the
        written stock option agreement.

      

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

      

      (a) “Board”
        shall mean the Board of Directors of the Company.

      

      (b) “Code”
        shall mean the Internal Revenue Code of the 1986, as amended.

      

      (c) “Common
        Stock” shall mean the Common Stock of the Company.

      

      (d) “Company”
        shall mean Full Circle Industries, Inc., a corporation duly organized under
        the
        laws of the State of Nevada.

      

      (e) “Committee”
        shall mean the Committee appointed by the Board in accordance with Section
        4 of
        this Plan, if one is appointed.

      

      (t) “Continuous
        Employment” or “Continuous Status as an Employee” shall mean the absence of any
        interruption or termination of employment or service as an Employee, Director
        or
        Consultant by or to the Company or any Parent or Subsidiary of the Company
        which
        now exists or is hereafter organized or acquired by or acquires the Company.
        Continuous Employment shall not be considered interrupted in the case of
        sick
        leave, military leave or any other leave of absence approved by the Board
        or in
        the event of transfers between locations of the Company or between the Company,
        its Parent, any of its Subsidiaries or its successors.

      

      (g) “Corporate
        Change’ shall mean one of the following events: (i) the merger, consolidation or
        other reorganization of the Company in which the outstanding Common Stock
        is
        converted into or exchanged for a different class of securities of the Company,
        a class of securities of any other issuer (except a Parent or Subsidiary
        of the
        Company), cash or other property (ii) the sale, lease or exchange of all
        or
        substantially all of the assets of the Company to any other corporation or
        entity (except a Parent or Subsidiary of the Company); or (iii) the adoption
        by
        shareholders of the Company of a plan of liquidation or dissolution. The
        following events are not defined as a “Corporate Change”: (i) a merger,
        consolidation or reorganization of

      the
        Company which would result in the voting stock 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), in combination with the ownership of any trustee or other fiduciary
        holding securities under an employee benefit plan of the Company, at least
        sixty
        percent (60%) of the combined voting power of the voting stock of the Company
        or
        such surviving entity outstanding immediately after such merger, consolidation
        or reorganization of the Company, or (ii) merger, consolidation or
        reorganization of the Company effected to implement a recapitalization of
        the
        Company (or similar transaction) in which no person acquires more than
        forty-nine percent (49%) of the combined voting power of the Company’s then
        outstanding stock;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (h) “Employee”
        shall mean any person, including officers and directors, employed by the
        Company, its Parent, any of its Subsidiaries or its successors; or, for purposes
        of eligibility for Nonstatutory Stock Options, any person employed by the
        Company, including officers and directors, or any consultant to, or director
        of,
        the Company, or any Parent or Subsidiary of the Company, whether or not such
        consultant or director is an employee of such entities.

      

      (i) “Exchange
        Act” shall mean the Securities Exchange Act of 1934, as amended, or any
        successor legislation.

      

      (j) “Incentive
        Stock Option” shall mean an Option intended to quali~ as an incentive stock
        option within the meaning of Section 422 of the Code.

      

      (k) “Non-Employee
        Director” shall mean a director who is a “Non-Employee Director,”
        as such term is defined under Rule 16b-3(b)(3)(i) promulgated pursuant to
        the
Exchange
        Act and any applicable releases and opinions or the Securities and Exchange
        Commission.

      

      (1) “Nonstatutory
        Stock Option” shall mean an Option which is not an Incentive Stock
        Option.

      

      (m) “Option”
        shall mean a stock option granted pursuant to this Plan.

      

      (n) “Option
        Agreement” shall mean a written agreement in such form or forms as the Board
        (subject to the terms and conditions of this Plan) may from time to time
        approve, evidencing an Option.

      

      (o) “Optioned
        Stock” shall mean the Common Stock subject to an Option.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (p) “Optionee”
        shall mean an Employee who is granted an Option.

      

      (q) “Parent”
        shall mean a “parent corporation,” whether now or hereafter existing, as defined
        in Sections 424(e) and (g) of the Code.

      .

      (r) “Plan”
        shall mean this 2004 Stock Option Plan.

      

      (s) “Registration
        Date” shall mean the effective date of the first registration statement which is
        filed by the Company and declared effective pursuant to Section 12(g) of
        the
        Exchange Act, with respect to any class of the Company’s
        securities.

      

      (t) “Securities
        Act” shall mean the Securities Act of 1933, as amended, or any successor
        legislation.

      

      (u) “Share’
        or “Shares” shall mean the Common Stock, as adjusted in accordance with Section
        11 of this Plan.

      

      (v) “Stock
        Purchase Agreement” shall mean an agreement in such form or forms as the Board
        (subject to the terms and conditions of this Plan) may from time to time
        approve, which is to be executed as a condition of purchasing Optioned Stock
        upon exercise of an Option.

      

      (w) “Subsidiary”
        or “Subsidiaries” shall mean one or more subsidiary corporations, whether now or
        hereafter existing, as defined in Sections 424(0 and (g) of the
        Code.

      

      3.
        Stock
        Subject to this Plan.
        Subject
        to the provisions of Section 11 of this Plan,

      
        	•	
                the
                  maximum number of Shares which may be optioned and sold under this
                  Plan is
                  Ten Million Shares. The Shares may be authorized, but unissued
                  or
                  reacquired Shares other than reacquired Shares delivered pursuant
                  to
                  Section 7(c)(iv) hereof as payment of consideration in the exercise
                  of an
                  option.

              

      

      

      If
        (a) an
        Option should expire or become unexercisable for any reason without having
        been
        exercised in fill or (b) if the Company repurchases Shares from the Optionee
        pursuant to the terms of a Stock Purchase Agreement (provided that the Optionee
        did not receive benefits of ownership, such as dividends, which would destroy
        the exemption from the provisions of Section 16(b) of the Exchange Act provided
        by Rule 16b-3 promulgated pursuant to the Exchange Act), the unpurchased Shares
        or repurchased Shares, respectively, which were subject thereto shall, unless
        this Plan shall have been terminated, return to this Plan and become available
        for other Options under this Plan.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      The
        Company intends that as long as it is not subject to the reporting requirements
        of Section 13 or 15(d)
        of
        the
        Exchange Act, and is not an investment company registered or required to
        be
        registered under the Investment Company Act of 1940, as amended, all offers
        and
        sales of Options and Common Stock issuable upon exercise of any Option shall
        be
        exempt from registration under the provisions of Section 5
        of
        the
        Securities Act, and this Plan shall be administered in such a manner so as
        to
        preserve such exemption.

      

      The
        Company intends for this Plan to constitute a written compensatory benefit
        plan
        within the meaning of Rule 701(b) of 17 CFR Section 230.701 (“Rule 701”)
        promulgated by the

      Securities
        and Exchange Commission pursuant to the Securities Act. Unless otherwise
        designated by the Committee at the time an Option is granted, all options
        granted under this Plan by the Company, and the issuance of any Shares upon
        exercise thereof, are intended to be granted in reliance on Rule
        701.

      

      4. Administration of this
        Plan.

      

      (a) Procedure.
        This
        Plan shall be administered by the Board. The Board may appoint a Committee
        consisting of two (2) or more members of the Board (or such greater number
        as is
        required to qualify for the exemption from the provisions of Section 16(b)
        of
        the Exchange Act provided by Rule lób-3 promulgated pursuant to the Exchange
        Act) to administer this Plan on behalf of the Board, subject to such terms
        and
        conditions as the Board may prescribe. Once appointed, the Committee shall
        continue to serve until otherwise directed by the Board. From time to time,
        the
        Board may increase the size of the Committee and appoint additional members
        of
        the Board thereto, remove members (with or without cause) and appoint new
        members of the Board in substitution therefor, fill vacancies, however caused,
        and remove all members of the Committee and, thereafter, directly administer
        this Plan. Members of the Board or Committee who are either eligible for
        Options
        or have been granted Options may vote on any matters affecting the
        administration of this Plan or the grant of Options pursuant to this Plan,
        except that no such member shall act upon the granting of an Option to such
        person nor shall any such member’s presence at a meeting of the Board of
        Directors establish the existence of a quorum at any meeting of the Board
        or the
        Committee during which action is taken with respect to the granting of an
        Option
        to him.

      

      (b) Procedure
        After ReStration Date.
        Notwithstanding the provisions of Section 4(a) above, after the Registration
        Date this Plan shall be administered either by: (i) the full Board, provided
        that at all times each member of the Board is a Non-Employee Director; or
        (ii) a
        Committee which at all times consists solely of Board members who are
        Non-Employee Directors. After the Registration Date, the Board shall take
        all
        action necessary to administer this Plan in accordance with the then-effective
        provisions of Rule 1 6b-3 promulgated under the Exchange Act, provided that
        any
        amendment to this Plan required for compliance with such provisions shall
        be
        made in accordance with Section 13 of this Plan.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (c) Powers
        of the
        Board and/or Committee.
        Subject
        to the provisions of this Plan, the Committee or the Board, as appropriate,
        shall have the authority, in its discretion: (i) to grant Incentive Stock
        Options and Nonstatutory Stock Options; (ii) to determine, upon review of
        relevant information and in accordance with Section 7 of this Plan, the fair
        market value per Share; (iii) to determine the exercise price of the Options,
        which exercise price and type of consideration shall be determined in accordance
        with Section 7 of this Plan; (iv) to determine the Employees to whom, and
        the
        time or times at which, Options shall be granted, and the number of Shares
        to be
        subject to each Option; (v) to prescribe, amend and rescind rules and
        regulations relating to this Plan; (vi) to determine the terms and provisions
        of
        each Option Agreement and each Stock Purchase Agreement (each of which need
        not
        be identical with the terms of other Option Agreements and Stock Purchase
        Agreements) and, with the consent of the holder thereof, to modify or amend
        each
        Option Agreement and Stock Purchase Agreement; (vii) to determine

      whether
        a
        stock repurchase agreement or other agreement will be required to be executed
        by
        any Employee as a condition to the exercise of an Option, and to determine
        the
        terms and provisions of any such agreement (which need not be identical with
        the
        terms of any other such agreement) and, with the consent of the Optionee,
        to
        amend any such agreement; (viii) to interpret this Plan, the Option Agreements,
        the Stock Purchase Agreements or any agreement entered into with respect
        to the
        grant or exercise of Options; (ix) to authorize any person to execute on
        behalf
        of the Company any instrument required to effectuate the grant of an Option
        previously granted by the Board or to take such other actions as may be
        necessary or appropriate with respect to the Company’s rights pursuant to
        Options or agreements relating to the grant or exercise thereof; and (x)
        to make
        such other determinations and establish such other procedures as it deems
        necessary or advisable for the administration of this Plan.

      

      (d) Effect
        of the Board’s or Committee’s Decision.
        All
        decisions, determinations and interpretations of the Board or the Committee
        shall be final and binding on all Optionees and any other holders of
        Options.

      

      5. Eligibility.
        Options
        may be granted only to Employees, which, as defined herein, includes
        consultants. An Employee who has been granted an Option may, if such Employee
        is
        otherwise eligible, be granted additional Options.

      

      6. Term
        of Plan.
        This
        Plan shall become effective upon the earlier to occur of its adoption by
        the
        Board or its approval by vote of a majority of the outstanding shares of
        the

      • Company’s
        capital stock entitled to vote on the adoption of this Plan. This Plan shall
        continue in effect for a term of ten (10) years unless sooner terminated
        in
        accordance with the terms and provisions of this Plan.

      

      7. Oi,tion Price
        and Consideration.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (a) Exercise
        Price.
        The
        exercise price per Share for the Shares to be issued pursuant to the exercise
        of
        an Option shall be such price as is determined by the Board; nrovided,
        however,
        that
        such price shall in no event be less than eighty-five percent (85%) with
        respect
        to Nonstatutory Stock Options, and one hundred percent (100%) with respect
        to
        Incentive Stock Options, of the fair market value per Share on the date of
        grant. In the case of an Option granted to an Employee who, at the time the
        Option is granted, owns stock (as determined under Section 424(d) of the
        Code)
        constituting more than ten percent (10%) of the total combined voting power
        of
        all classes of stock of the Company or its Parent or Subsidiaries, the exercise
        price per Share shall be no less than one hundred ten percent (110%) of the
        fair
        market value per Share on the date of grant.

      

      (b) Fair
        Market Value.
        The
        fair market value per Share on the date of grant shall be determined by the
        Board in its sole discretion, exercised in good faith and consistent with
        the
        laws of The State of Delaware; provided, however,
        that
        where there is a public market for the Common Stock, the fair market value
        per
        Share shall be the average of the closing bid and asked prices of the Common
        Stock on the date of grant, as reported in The
        Wall Street Journal (or,
        if
        not so reported, as otherwise reported by the National Association of
        Securities

      Dealers
        Automated Quotations (“NASDAQ”) System), or, in the event the Common Stock is
        listed on a stock exchange or on the NASDAQ System, the fair market value
        per
        Share shall be the closing price on the exchange or on the NASDAQ System
        as of
        the date of grant of the Option, as reported in The
        Wall Street Journal.

      

      (c) Payment
        of Consideration.
        The
        consideration to be paid for the Shares to be issued upon exercise of an
        Option,
        including the method of payment, shall be determined by the Board and may
        consist entirely of cash, check, promissory notes, Shares held by the Optionee
        for the requisite period necessary to avoid a charge to the Company’s earnings
        for financial reporting purposes which 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, or any combination of such methods of payment.
        Subject to subparagraphs (i) through (iv) hereto, utilization of Shares as
        the
        method of payment may be completed by either (a) the tender of Shares then
        held
        by the Optionee, or (b) the withholding of Shares which would otherwise be
        issued pursuant to an Option pursuant to a broker-dealer sale and remittance
        procedure described in subparagraph (iii) hereto. In making its determination
        as
        to the type of consideration to accept, the Board shall consider if acceptance
        of such consideration is deemed to be such as may be reasonably expected
        to
        benefit the Company.

       

      (i) If
        the
        consideration for the exercise of an Option is a promissory note, it shall
        be a
        full recourse promissory note executed by the Optionee, bearing interest
        at a
        rate which shall be sufficient to preclude the imputation of interest under
        the
        applicable

      
        	•	
                provisions
                  of the Code. Until such time as the promissory note has been paid
                  in full,
                  the Company may retain the Shares purchased upon exercise of the
                  Option in
                  escrow as security for payment of the promissory
                  note.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (ii) If
        the
        consideration for the exercise of an Option is the surrender of previously
        acquired and owned Shares, the Optionee will be required to make representations
        and warranties satisfactory to the Company regarding his or her title to
        the
        Shares used to effect the purchase, including, without limitation,
        representations and warranties that the Optionee has good and marketable
        title
        to such Shares free and clear of any and all liens, encumbrances, charges,
        equities, claims, security interests, options or restrictions and has full
        power
        to deliver such Shares without obtaining the consent or approval of any person
        or governmental authority other than those which have already given consent
        or
        approval in a form satisfactory to the Company. The value of the Shares used
        to
        effect the purchase shall be the fair market value of those Shares as determined
        by the Board in its sole discretion, exercised in good faith.

       

      (iii)
        If
        the consideration for the exercise of an Option is to be paid through a
        broker-dealer sale and remittance procedure, the Optionee shall provide (1)
        irrevocable written instructions to a designated brokerage firm to effect
        the
        immediate sale of the purchased shares and to remit to the Company, out of
        the
        sale proceeds available on the settlement date, sufficient funds to cover
        the
        aggregate option price payable for the purchased Shares plus all applicable
        Federal and State income and employment taxes required to be withheld by
        the

      

      Company
        in connection with such purchase and (2) written instructions to the Company
        to

      .

      deliver
        the certificates for the purchased Shares directly to such brokerage firm
        in
        order to complete the sale transaction.

       

      (iv)
        If
        an Optionee is permitted to exercise an Option by delivering shares of the
        Company’s Common Stock, the option agreement covering such Option may include
        provisions authorizing the Optionce to exercise the Option, in whole or in
        part,
        by: (1) delivering whole shares of the Company’s Common Stock previously owned
        by such Optionee (whether or not acquired through the prior exercise of a
        stock
        option) having a fair market value equal to the option price; and/or (2)
        directing the Company to withhold from the Shares that would otherwise be
        issued
        upon exercise of the Option that number of whole Shares having a fair market
        value equal to the option price. Shares of the Company’s Common Stock so
        delivered or withheld shall be valued at their fair market value on the date
        of
        exercise of the Option, as determined by the Committee and/or the Board,
        as
        appropriate. Any balance of the exercise price shall be paid in cash or by
        check
        or a promissory note, each in accordance with the terms of this Section 7.
        Any
        Shares delivered or withheld in accordance with this provision shall again
        become available for purposes of this Plan and for Options subsequently granted
        thereunder to the extent permissible pursuant to Section 3 of this
        Plan.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      8. Options.

      

      (a) Terms
        and Provisions of Options.
        As
        provided in Section 4 of this Plan and subject to any limitations specified
        herein, the Board and/or Committee shall have the

      
        	•	
                authority
                  to determine the terms and provisions of any Option granted under
                  this
                  Plan or any agreement required to be executed in connection with
                  the grant
                  or exercise of an Option. Each Option granted pursuant to this
                  Plan shall
                  be evidenced by an Option Agreement. Options granted pursuant to
                  this Plan
                  are conditioned upon the Company obtaining any required permit
                  or order
                  from appropriate governmental agencies authorizing the Company
                  to issue
                  such Options and Shares issuable upon exercise
                  thereof.

              

      

      

      (b) Term
        of Option.
        The
        term of each Option may be up to ten (10) years from the date of grant thereof
        as determined by the Board upon the grant of the Option and specified in
        the
        Option Agreement, except that the term of an Option granted to an Employee
        who,
        at the time the Option is granted, owns stock comprising more than ten percent
        (10%) of the total combined voting power of all classes of stock of the Company
        or its Parent or

      
        	•	
                Subsidiaries,
                  shall be five (5) years from the date of grant thereof or such
                  shorter
                  term as may be provided in the Option
                  Agreement.

              

      

      

      (c) Exercise
        of Option.

      

      (i) Procedure
        for Exercise: Rights as a Shareholder.
        Any
        Option shall be exercisable at such times, in such installments and under
        such
        conditions as may be determined by the Board and specified in the Option
        Agreement, including performance criteria with respect to the Company and/or
        the
        Optionee, and as shall be permissible under the terms of this Plan.

      .

      An
        Option
        may be exercised in accordance with the provisions of this Plan as to all
        or any
        portion of the Shares then exercisable under an Option, from time to time
        during
        the term of the Option. An Option may not be exercised for a fraction of
        a
        Share.

      

      An
        Option
        shall be deemed to be exercised when written notice of such exercise has
        been
        given to the Company at its principal business office in accordance with
        the
        terms of the Option Agreement by the person entitled to exercise the Option
        and,
        except when the broker-dealer sale and remittance procedure described in
        Section
        7(c)(iii) hereto is used, full payment for the Shares with respect to which
        the
        Option is exercised has been received by the Company, accompanied by an executed
        Stock Purchase Agreement and any other agreements required by the terms of
        this
        Plan and/or the Option Agreement. Full payment may consist of such consideration
        and method of payment allowable under Section 7 of this Plan. Until the Option
        is properly exercised in accordance with the terms of this paragraph, no
        right
        to vote or receive dividends or any other rights as a stockholder exist with
        respect to the Optioned Stock. No adjustment shall be made for a dividend
        or
        other right for which the record date is prior to the date the Option is
        exercised, except as provided in Section 11 of this Plan.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      As
        soon
        as practicable after any proper exercise of an Option in accordance with
        the
        provisions of this Plan, the Company shall, without transfer or issue tax
        to the
        Optionee, deliver to the Optionee at the principal executive office of the
        Company or such other place as shall be mutually agreed upon between the
        Company
        and the Optionee, a certificate or certificates representing the Shares for
        which the Option shall have been exercised. The time of issuance and delivery
        of
        the certificate(s) representing the Shares for which the Option shall have
        been
        exercised may be postponed by the Company for such period as may be required
        by
        the Company, with reasonable diligence, to comply with any applicable listing
        requirements of any national or regional securities exchange or any law or
        regulation applicable to the issuance or delivery of such Shares. No Option
        may
        be exercised unless this Plan has been duly approved by the shareholders
        of the
        Company in accordance with applicable law. Notwithstanding anything to the
        contrary herein, the terms of.a Stock Purchase Agreement required to be executed
        and delivered in connection with the exercise of an Option may require the
        certificate or certificates representing the Shares purchased upon exercise
        of
        an Option to be delivered and deposited with the Company as security for
        the
        Optionee’s faithful performance of the terms of his Stock Purchase
        Agreement.

      

      Exercise
        of an Option in any manner shall result in a decrease in the number of Shares
        which thereafter may be available, both for purposes of this Plan and for
        sale
        under the Option, by the number of Shares as to which the Option is
        exercised.

      

      (ii) Termination
        of Status as an Employee.
        If an
        Optionee ceases to serve as an Employee for any reason other than death or
        disability and thereby terminates his or her Continuous Status as an Employee,
        such Optionee shall have the right to exercise the Option at any time within
        thirty (30) days (or such other period of time not exceeding three (3) months
        as
        is determined by the Board at the time of granting the Option), following
        the
        date such Optionee ceases his or her Continuous Status as an Employee of
        the
        Company to the extent that such Optionee was entitled to exercise the Option
        at
        the date of such termination; provided,

      .

      however,
        that no
        Option shall be exercisable after the expiration of the term set forth in
        the
        Option Agreement. To the extent that such Optionee was not entitled to exercise
        the Option at the date of such termination, or if such Optionee does not
        exercise such Option (which such Optionee was entitled to exercise) within
        the
        time specified herein, the Option shall terminate.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (iii)
        Death
        or Disability of Optionee.
        If an
        Optionee ceases to serve as an Employee due to death or disability and thereby
        terminates his or her Continuous Status as an Employee, the Option may be
        exercised at any time within six (6) months following the date of death or
        termination of employment due to disability, in the case of death, by the
        Optionee’s estate or by a person who acquired the right to exercise the Option
        by bequest or inheritance, or, in the case of disability, by the Optionee,
        but
        in any case only to the extent the Optionee was entitled to exercise the
        Option
        at the date of his or her termination of employment by death or disability;
        provided, however,
        that no
        Option shall be exercisable after the expiration of the Option term set forth
        in
        the Option Agreement. To the extent that such Optionee was not entitled to
        exercise such Option at the date of his or her termination of employment
        by
        death or disability or if such Option is not exercised (to the extent it
        could
        be exercised) within the time specified herein, the Option shall
        terminate.

      

      (iv)
        Extension
        of Time to Exercise.
        Notwithstanding anything to the contrary in this Section 8, the Board may
        at any
        time and from time to time prior to the termination of a Nonstatutory Stock
        Option, with the consent of the Optionee, extend the period of time during
        which
        the Optionee may exercise his or her Nonstatutory Stock Option following
        the
        date the Optionee ceases such Optionee’s Continuous Status as an Employee;
provided,
        however,
        that
        (1) the maximum period of time during which a Nonstatutory Stock Option shall
        be
        exercisable following such termination date shall not exceed an aggregate
        of six
        (6) months,

      (2)
        the
        Nonstatutory Stock Option shall not become exercisable after the expiration
        of
        the term of such Option as set forth in the Option Agreement as a result
        of such
        extension, and (3) notwithstanding any extension of time during which the
        Nonstatutory Stock Option may be exercised, such Option, unless otherwise
        amended by the Board, shall only be exercisable to the extent to which the
        Optionee was entitled to exercise it on the date Optionee ceased Continuous
        Status as an Employee. To the extent that such Optionee was not entitled
        to
        exercise the Option at the date of such termination, or if such Optionee
        does
        not exercise an Option which Optionee was entitled to exercise within the
        time
        specified herein, the Option shall terminate.

      

      9. Limit on Incentive
        Stock Options.
        The
        aggregate fair market value (determined at the time an Incentive Stock Option
        is
        granted) of the Shares which may be acquired upon exercise of Incentive Stock
        Options for the first time by an Optionee during any calendar year under
        all
        incentive stock option plans of the Company, its Parents or its Subsidiaries,
        if
        any, cannot exceed One Hundred Thousand Dollars ($100,000). Incentive Stock
        Options which exceed this limit must be treated as Nonstatutory Stock Options.
        The Board shall determine, in accordance with the Code, which of an Optionee’s
        Incentive Stock Options will not be treated as Incentive Stock Options as
        a
        result of such limitation and will so notify the Optionee as soon as practicable
        following such determination.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	•	
                10.Nontransferabilitv
                  of Options.
                  Options granted under this Plan may not be
                  sold,

              

      

      
        	•	
                pledged,
                  assigned, hypothecated, gifted, transferred or disposed of in any
                  manner,
                  either voluntarily
                  or involuntarily by operation of law, other than by will or by
                  the laws of
                  descent or distribution,
                  and may be exercised during the lifetime of the Optionee only by
                  such
                  Optionee.

              

      

      

      

      11.
        Adjustments Upon
        Chances in Capitalization
        or Corporate Change.

      

      (a) Subject
        to any required action by the shareholders of the Company, the number of
        Shares
        covered by each outstanding Option, and the number of Shares which have been
        authorized for issuance under this Plan but as to which no Options have yet
        been
        granted or which have been returned to this Plan upon cancellation or expiration
        of an Option or repurchase of shares from an Optionee upon termination of
        employment or service, as well as the exercise or purchase price per Share
        covered by each such outstanding Option, shall be proportionately adjusted
        for
        any increase or decrease in the number of issued Shares resulting from a
        stock
        split, reverse stock split, combination or reclassification of the Common
        Stock,
        or the payment of a stock dividend (but only on 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 (other than stock bonuses
        to
        Employees, including, without limitation, officers and directors); provided, however,
        that
        the conversion of any convertible securities of the Company shall not be
        deemed
        to have been effected without the receipt of consideration. Such adjustment
        shall be made by the Board, whose determination in that respect shall be
        final,
        binding and conclusive. Except as expressly provided herein, no issue 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
        subject to this Plan or an Option.

      

      (b) In
        the
        event of a Corporate Change effected by a transaction in which the consideration
        therefor consists only of stock of another issuer, then the Plan, all Options
        and Option Agreements in force at the date of the Corporate Change shall
        continue to be in full force and effect and shall be assumed by the merging
        or
        acquiring entity.

      

      (c) In
        the
        event of a Corporate Change effected by a transaction in which the consideration
        therefor does not consist solely of the stock of another issuer (e.g., an
        all
        cash or part cash and part stock transaction), then all Options which are
        not
        vested and exercisable at that date shall tenninate immediately.

      

      (d) No
        fractional shares of Common Stock shall be issuable on account of any action
        described in this Section, and the aggregate number of shares into which
        Shares
        then covered by the Option, when changed as the result of such action, shall
        be
        reduced to the largest number of whole shares resulting from such action,
        unless
        the Board, in its sole discretion, shall determine to issue scrip certificates
        in respect to any fractional shares, which scrip certificates, in such event,
        shall be in a form and have such terms and conditions as the Board in its
        discretion shall prescribe.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      .

      
        	•	
                12.
                  Time
                  of Granting
                  Options.
                  The date of grant of an Option shall be the date on which the Board
                  makes
                  the determination granting such Option; provided, however,
                  that if the Board determines that such grant shall be as of some
                  future
                  date, the date of grant shall be such future date. Notice of the
                  determination shall be given to each Employee to whom an Option
                  is so
                  granted within a reasonable time after the date of such
                  grant.

              

      

      

      13.
        Amendment and Termination of this Plan.

      

      (a) Amendment
        and Termination.
        The
        Board may amend or terminate this Plan from time to time in such respects
        as the
        Board may deem advisable and shall make any amendments which may be required
        so
        that Options intended to be Incentive Stock Options shall at all times continue
        to be Incentive Stock Options for the purpose of the Code, except that, without
        approval of the holders of a majority of the outstanding shares of the Company’s
        capital stock, no such revision or amendment shall:

      

      (i)
        Increase the number of Shares subject to this Plan, other than in connection
        with an adjustment under Section 11 of this Plan;

      

      (ii)
        Materially change the designation of the class of Employees eligible to be
        granted Options;

      

      (iii)
        Remove the administration of this Plan from the Board (other than to the
        Committee);

      

      (iv)
        Materially increase the benefits accruing to participants under this Plan;
        or

      

      (v)
        Extend the term of this Plan.

      

      (b) Effect
        of Amendment or Termination.
        Except
        as otherwise provided in Section 11, any amendment or termination of this
        Plan
        shall not affect Options already granted and such Options shall remain in
        full
        force and effect as if this Plan had not been amended or terminated, unless
        mutually agreed otherwise between the Optionee and the Company, which agreement
        must be in writing and signed by the Optionee and the Company.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      14.
        Conditions Upon Issuance of Shares.

      

      (a) Shares
        shall not be issued pursuant to the exercise of an Option unless the exercise
        of
        such Option and the issuance and delivery of such Shares pursuant thereto
        shall
        comply with all relevant provisions of law, including, without limitation,
        the
        Securities Act, the Exchange Act, applicable state securities laws, the rules
        and regulations promulgated thereunder, and the requirement of any stock
        exchange upon which the Shares may then be listed, and shall

      

      be
        further subject to the approval of counsel for the Company with respect to
        such
        compliance.

      .

      (b) As
        a
        condition to the exercise of an Option, the Board may require the person
        exercising such Option to execute an agreement with, and/or may require the
        person exercising such Option to make any representation and warranty to,
        the
        Company as may in the judgment of counsel to the Company be required under
        applicable law or regulation, including but not limited to a representation
        and
        warranty that the Shares are being purchased 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 appropriate under any of
        the
        aforementioned relevant provisions of law.

      

      15.
        Reservation
        of Shares.
        The
        Company, during the term of this Plan, at all times shall reserve and keep
        available such number of Shares as shall be sufficient to satis& the
        requirements of this Plan.

      

      The
        Company, during the term of this Plan, shall use diligent efforts to seek
        to
        obtain

      
        	•	
                from
                  appropriate regulatory agencies any requisite authorization in
                  order to
                  issue and sell such number of Shares as shall be sufficient to
                  satis&
                  the requirements of this Plan. The inability of the Company to
                  obtain the
                  requisite authorization(s) deemed by the Company’s counsel to be necessary
                  for the lawful issuance and sale of any Shares hereunder, or the
                  inability
                  of the Company to confirm to its satisfaction that any issuance
                  and sale
                  of any Shares hereunder will meet applicable legal requirements,
                  shall
                  relieve the Company of any liability in respect to the failure
                  to issue or
                  sell such Shares as to which such requisite authority shall not
                  have been
                  obtained.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      16.
        Stock
        Option and Stock Purchase Agreements.
        Options
        shall be evidenced by written stock option agreements in such form or forms
        as
        the Board shall approve from time to time. Upon the exercise of an Option,
        the
        Optionee shall sign and deliver to the Company a

      
        	•	
                Stock
                  Purchase Agreement (if required to be executed and delivered to
                  the
                  Company by an Optionee as a condition to the exercise of an Option)
                  in
                  such form or forms as the Board shall approve from time to
                  time.

              

      

      

      17.
        Shareholder
        Approval.
        Continuance of this Plan shall be subject to approval by the shareholders
        of the
        Company within twelve (12) months before or after the date this Plan is adopted
        by the Board. If such shareholder approval is obtained at a duly held
        shareholders’ meeting, it may be obtained by the affirmative vote of the holders
        of a majority of the outstanding shares of the Company entitled to vote thereon.
        All Options granted prior to shareholder approval of this Plan are subject
        to
        such approval, and if such approval is not obtained within twelve (12) months
        before or after the date this Plan is adopted by the Board all such Options
        shall expire and shall be of no further force or effect.

      

      18.
        Taxes,
        Fees. Expenses and Withholding of Taxes.

      

      (a) The
        Company shall pay all original issue and transfer taxes (but not income taxes,
        if any) with respect to the grant of Options and/or the issue and transfer
        of
        Shares pursuant to the exercise thereof, and all other fees and expenses
        necessarily incurred by the Company in connection therewith, and will from
        time
        to time use diligent efforts to comply with

      all
        laws
        and regulations which, in the opinion of counsel for the Company, shall be
        applicable thereto.

      

      (b) The
        grant
        of Options hereunder and the issuance of Shares pursuant to the exercise
        thercof
        is conditioned upon the Company’s reservation of the right to withhold, in
        accordance with any applicable law, from any compensation payable to the
        Optionee any taxes required to be withheld by federal, state or local law
        as a
        result of the grant or exercise of such Option or the sale of the Shares
        issued
        upon exercise thereof. To the extent that compensation or other amounts,
        if any,
        payable to the Optionee are insufficient to pay any taxes required to be
        so
        withheld, the Company may, in its sole discretion, require the Optionee,
        as a
        condition of the exercise of an Option, to pay in cash to the Company an
        amount
        sufficient to cover such tax liability or otherwise to make adequate provision
        for the Company’s satisfaction of its withholding obligations under federal and
        state law.

      

      (c) The
        Board
        or the Committee may, in its discretion and upon such terms and conditions
        as it
        may deem appropriate (including the applicable safe-harbor provisions of
        SEC
        Rule 16b-3 and interpretations thereof by the staff of the Securities and
        Exchange Commission) provide any or all holders of outstanding option grants
        under this Plan with the election to have the Company withhold, from the
        shares
        of Common Stock otherwise issuable upon the exercise of such options, one
        or
        more of such shares with an aggregate fair market value equal to the designated
        percentage (any multiple of 5%
        specified
        by the optionee) of the Federal and State income taxes (“Taxes”) incurred in
        connection with the acquisition of such

      
        	•	
                Shares.
                  In lieu of such direct withholding, one or more optionees may also
                  be
                  granted the right to deliver shares of Common Stock to the Company
                  in
                  satisfaction of such Taxes. The withheld or delivered shares shall
                  be
                  valued at the Fair Market Value on the applicable determination
                  date for
                  such Taxes or such other date required by the applicable safe-harbor
                  provisions of SEC Rule 1 6b-3.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      19.
        Liability
        of Company.
        The
        Company, its Parent or any Subsidiary which is in existence or hereafter
        comes
        into existence shall not be liable to an Optionee or other person if it is
        determined for any reason by the Internal Revenue Service or any court having
        jurisdiction that any Options intended to be Incentive Stock Options granted
        hereunder do not qualify as incentive stock options within the meaning of
        Section 422 of the Code.

      

      20.
        Information
        to Optionee.
        The
        Company shall provide without charge at least annually to each Optionee during
        the period his or her Option is outstanding a balance sheet and income statement
        of the Company. In the event that the Company provides annual reports or
        periodic reports to its shareholders during the period in which an Optionee’s
        Option is outstanding, the Company shall provide to each Optionee a copy
        of each
        such report.

      

      21.
        Notices.
        Any
        notice required or permitted hereunder shall be given in writing and shall
        be
        deemed effectively given upon personal delivery or upon deposit in the United
        States mail, as first class, registered or certified mail, with postage and
        fees
        prepaid and addressed (i) if to the Company, at its principal place of business,
        attention: Secretary, or (ii) if to the Optionee at his or her address as
        set
        forth on the signature page of his or her Option Agreement, or at
        such

      other
        address as either party may from time to time designate in writing to other.
        It
        shall be the obligation of each Optionee and each transferee holding Shares
        purchased upon exercise of an Option to provide the Secretary of the Company,
        by
        letter mailed as provided hereinabove, with written notice of his or her
        direct
        mailing address.

      

      22. No
        Enlargement of Employee Rights.
        This
        Plan is purely voluntary on the part of the Company, and the continuance
        of this
        Plan shall not be deemed to constitute a contract between the Company and
        any
        Employee, or to be consideration for or a condition of the employment or
        service
        of any Employee. Nothing contained in this Plan shall be deemed to give any
        Employee the right to be retained in the employ or service of the Company,
        its
        Parent, Subsidiary or a successor corporation, or to interfere with the right
        of
        the Company or any such corporations to discharge or retire any Employee
        at any
        time with or without cause and with or without notice. No Employee shall
        have
        any right to or interest in Options authorized hereunder prior to the grant
        thereof to such Employee, and upon such grant such Employee shall have only
        such
        rights and interests as are expressly provided herein, subject, however,
        to all
        applicable provisions of the Company’s Articles of Incorporation, as the same
        may be amended from time to time.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      23. Legends
        on Certificates.

      

      (a) Federal
        Law.
        Unless
        an appropriate registration statement is filed pursuant to the Securities
        Act of
        1933 with respect to the Options and Shares issuable under this

      • Plan,
        each document or certificate representing such Options or Shares shall be
        endorsed thereon with a legend substantially as follows:

       

      “THIS
        OPTION AND THE SECURITIES WHICH MAY BE

      PURCHASED
        UPON EXERCISE OF THIS SECURITY HAVE

      NOT
        BEEN
        REGISTERED UNDER THE SECURITIES ACTOF

      1933,
        AS
        AMENDED, AND HAVE BEEN ACQUIRED FOR

      INVESTMENT
        AND NOT WITH A VIEW TO, OR IN

      CONNECTION
        WITH, THE SALE OR DISTRIBUTION

      THEREOF.
        NO SALE, TRANSFER, OR DISTRIBUTION MAY

      BE
        EFFECTED WITHOUT AN EFFECTIVE REGISTRATION

      STATEMENT
        RELATING THERETO OR AN OPINION OF

      COUNSEL
        SATISFACTORY TO THE COMPANY THAT

      SUCH
        REGISTRATION IS NOT REQUIRED.”

      

      (b) California
        Legend.
        If
        required by the California Commissioner of Corporations, each document or
        certificate representing the Options or Shares issuable under this Plan shall
        be
        endorsed thereon with a legend substantially as follows:

      
 

      S

      “IT
        IS
        UNLAWFUL TO CONSUMMATE A SALE OR

      TRANSFER
        OF THIS OPTION AND THE SECURITIES

      WHICH
        MAY
        BE PURCHASED UPON EXERCISE OF THIS

      OPTION,
        OR ANY INTEREST THEREIN, OR TO RECEIVE

      ANY
        CONSIDERATION THEREFOR, WITHOUT THE PRIOR

      WRITTEN
        CONSENT OF THE COMMISSIONER OF

      CORPORATIONS
        OF THE STATE OF CALIFORNIA, EXCEPT

      AS
        PERMITtED IN THE COMMISSIONER’S RULES.”

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (c) Additional
        Legends.
        Each
        document or certificate representing the Options or Shares issuable under
        this
        Plan shall also contain the legends as may be required under California law
        or
        other applicable state or federal securities laws or by any Stock Purchase
        Agreement or other agreement the execution of which is a condition to the
        exercise of an Option under this Plan including a legend substantially as
        follows:

      

      ‘THIS
        OPTION AND THE SECURITIES WHICH MAY BE

      PURCHASED
        UPON EXERCISE OF THIS OPTION, OR ANY

      INTEREST
        THEREIN, ARE SUBJECT TO CERTAIN

      RESTRICTIONS,
        INCLUDING A RIGHT OF FIRST REFUSAL

      OF
        THE
        COMPANY, AND MAY BE TRANSFERRED ONLY

      IN
        ACCORDANCE WITH THE TERMS OF AN AGREEMENT

      BETWEEN
        THE COMPANY AND THE SHAREHOLDER, A

      COPY
        OF
        WHICH IS ON FILE WITH THE SECRETARY OF  THE
        COMPANY.”

      

      24.
        Availability of Plan.
        A copy
        of this Plan shall be delivered to the Secretary of the Company and shall
        be
        shown by him to any eligible person making reasonable inquiry concerning
        it.

      

      25.
        Compliance
        with Exchange Act Rule 16b-3.
        With
        respect to persons subject to Section 16 of the Exchange Act, transactions
        under
        this Plan are intended to comply with all applicable conditions of Rule 16b-3,
        promulgated pursuant to the Exchange Act, or its successors. To the extent
        any
        provision of this Plan or action by the Board or any Committee fails so to
        comply, it shall be deemed null and void to the extent permitted by law and
        deemed advisable by the Board or any Committee.

      

      26.
        Invalid
        Provisions.
        In the
        event that any provision of this Plan is found to be invalid or otherwise
        unenforceable under any applicable law, such invalidity or unenforceability
        shall not be construed as rendering any other provisions contained herein
        as
        invalid or unenforceable, and all such other provisions shall be given full
        force and effect to the same extent as though the invalid or unenforceable
        provision was not contained herein.

      

      27.
        Applicable
        Law.
        This
        Plan shall be governed by and construed in accordance with the laws of The
        State
        of Nevada.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      As
        adopted by the Board of Directors on September 1, 2004.

       

      
        	 	
                Signed:
                  

              	
                /s/Philip
                  Pesin

              	 
	 	
                Name:

              	
                Philip
                  S. Pesin

              
	 	
                Title:

              	
                Chairman
                  of the Board

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