Document:

ex10-2.htm

Exhibit 10.2

 

ORBITAL TRACKING CORP.

 

DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT

This Director and Officer Indemnification Agreement, dated as of __________________ (this “Agreement”), is made by and between ORBITAL TRACKING CORP., a Nevada corporation (the “Company”), and ______________ (the “Indemnitee”).

 

RECITALS:

 

A. Nevada state law provides that the business and affairs of a corporation shall be managed by or under the direction of its board of directors.

B. By virtue of the managerial prerogatives vested in the directors and officers of a Nevada corporation, directors and officers act as fiduciaries of the corporation and its stockholders.

C. Thus, it is critically important to the Company and its stockholders that the Company be able to attract and retain the most capable persons reasonably available to serve as directors and officers of the Company.

D. In recognition of the need for corporations to be able to induce capable and responsible persons to accept positions in corporate management, Nevada law authorizes (and in some instances requires) corporations to indemnify their directors and officers, and further authorizes corporations to purchase and maintain insurance for the benefit of their directors and officers.

E. The Nevada courts have recognized that indemnification by a corporation serves the dual policies of (1) allowing corporate officials to resist unjustified lawsuits, secure in the knowledge that, if vindicated, the corporation will bear the expense of litigation, and (2) encouraging capable women and men to serve as corporate directors and officers, secure in the knowledge that the corporation will absorb the costs of defending their honesty and integrity.

F. The number of lawsuits challenging the judgment and actions of directors and officers of Nevada corporations, the costs of defending those lawsuits and the threat to personal assets have all materially increased over the past several years, chilling the willingness of capable women and men to undertake the responsibilities imposed on corporate directors and officers.

G. Recent federal legislation and rules adopted by the Securities and Exchange Commission and the national securities exchanges have exposed such directors and officers to new and substantially broadened civil liabilities.

H. Under Nevada law, a director’s or officer’s right to be reimbursed for the costs of defense of criminal actions, whether such claims are asserted under state or federal law, does not depend upon the merits of the claims asserted against the director or officer and is separate and distinct from any right to indemnification the director may be able to establish.

 

  

  

  

 

I. Indemnitee is, or will be, a director and/or officer of the Company and his or her willingness to serve in such capacity is predicated, in substantial part, upon the Company’s willingness to indemnify him or her in accordance with the principles reflected above, to the fullest extent permitted by the laws of the State of Nevada, and upon the other undertakings set forth in this Agreement.

J. Therefore, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s continued service as a director and/or officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Company’s articles of incorporation or bylaws (collectively, the “Constituent Documents”), any change in the composition of the Company’s Board of Directors (the “Board”) or any change-in-control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification and advancement of Expenses to Indemnitee on the terms, and subject to the conditions, set forth in this Agreement.

K. In light of the considerations referred to in the preceding recitals, it is the Company’s intention and desire that the provisions of this Agreement be construed liberally, subject to their express terms, to maximize the protections to be provided to Indemnitee hereunder.

 

Signature Page to Director and Officer Indemnification Agreement

  

  

  

 

AGREEMENT:

NOW, THEREFORE, the parties hereby agree as follows:

1. Certain Definitions.  In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

 

“Change in Control” shall have occurred at such time, if any, as Incumbent Directors cease for any reason to constitute a majority of Directors. For purposes of this Section 1(a), “Incumbent Directors” means the individuals who, as of the date hereof, are Directors of the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Company’s stockholders, or appointment, was approved by a vote of at least a majority of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Securities Exchange Act of 1934, as amended) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

 

“Claim” means (i) any threatened, asserted, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other, and whether made pursuant to federal, state or other law; and (ii) any inquiry or investigation, whether made, instituted or conducted by the Company or any other Person, including, without limitation, any federal, state or other governmental entity, that Indemnitee reasonably determines might lead to the institution of any such claim, demand, action, suit or proceeding. For the avoidance of doubt, the Company intends indemnity to be provided hereunder in respect of acts or failure to act prior to, on or after the date hereof.

“Controlled Affiliate” means any corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise, whether or not for profit, that is directly or indirectly controlled by the Company. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity or enterprise, whether through the ownership of voting securities, through other voting rights, by contract or otherwise; provided that direct or indirect beneficial ownership of capital stock or other interests in an entity or enterprise entitling the holder to cast 15% or more of the total number of votes generally entitled to be cast in the election of directors (or persons performing comparable functions) of such entity or enterprise shall be deemed to constitute control for purposes of this definition.

“Disinterested Director” means a director of the Company who is not and was not a party to the Claim in respect of which indemnification is sought by Indemnitee.

“Expenses” means attorneys’ and experts’ fees and expenses and all other costs and expenses paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in (including on appeal), any Claim.

“Indemnifiable Claim” means any Claim based upon, arising out of or resulting from (i) any actual, alleged or suspected act or failure to act by Indemnitee in his or her capacity as a director, officer, employee or agent of the Company or as a director, officer, employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise, whether or not for profit, as to which Indemnitee is or was serving at the request of the Company, (ii) any actual, alleged or suspected act or failure to act by Indemnitee in respect of any business, transaction, communication, filing, disclosure or other activity of the Company or any other entity or enterprise referred to in clause (i) of this sentence, or (iii) Indemnitee’s status as a current or former director, officer, employee or agent of the Company or as a current or former director, officer, employee, member, manager, trustee or agent of the Company or any other entity or enterprise referred to in clause (i) of this sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connection with any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be deemed to be serving or to have served at the request of the Company as a director, officer, employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was serving as a director, officer, employee, member, manager, agent, trustee or other fiduciary of such entity or enterprise and (i) such entity or enterprise is or at the time of such service was a Controlled Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit plan (or related trust) sponsored or maintained by the Company or a Controlled Affiliate, or (iii) the Company or a Controlled Affiliate (by action of the Board, any committee thereof or the Company’s Chief Executive Officer (“CEO”) (other than as the CEO him or herself)) caused or authorized Indemnitee to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.

  

  

  

 

“Indemnifiable Losses” means any and all Losses relating to, arising out of or resulting from any Indemnifiable Claim; provided, however, that Indemnifiable Losses shall not include Losses incurred by Indemnitee in respect of any Indemnifiable Claim (or any matter or issue therein) as to which Indemnitee shall have been adjudged liable to the Company, unless and only to the extent that the Nevada Court of Chancery or the court in which such Indemnifiable Claim was brought shall have determined upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such Expenses as the court shall deem proper.

“Independent Counsel” means a nationally recognized law firm, or a member of a nationally recognized law firm, that is experienced in matters of Nevada corporate law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company (or any subsidiary) or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements) or (ii) any other named (or, as to a threatened matter, reasonably likely to be named) party to the Indemnifiable Claim giving rise to  a  claim  for  indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

“Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other) and amounts paid or payable in settlement, including, without limitation, all interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing.

 

“Person” means any individual, entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended.

 

“Standard of Conduct” means the standard for conduct by Indemnitee that is a condition precedent to indemnification of Indemnitee hereunder against Indemnifiable Losses relating to, arising out of or resulting from an Indemnifiable Claim. The Standard of Conduct is (i) good faith and a reasonable belief by Indemnitee that his action was in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, that Indemnitee had no reasonable cause to believe that his conduct was unlawful, or (ii) any other applicable standard of conduct that may hereafter be substituted under Section 145(a) or (b) of the Nevada General Corporation Law or any successor to such provision(s).

2. Indemnification Obligation. Subject only to Section 7 and to the proviso in this Section, the Company shall indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted or required by the laws of the State of Nevada in effect on the date hereof or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Indemnifiable Claims and Indemnifiable Losses; provided, however, that, except as provided in Section 5, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with (i) any Claim initiated by Indemnitee against the Company or any director or officer of the Company unless the Company has joined in or consented to the initiation of such Claim, or (ii) the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company acknowledges that the foregoing obligation may be broader than that now provided by applicable law and the Company’s Constituent Documents and intends that it be interpreted consistently with this Section and the recitals to this Agreement.

3. Advancement of Expenses. Indemnitee shall have the right to advancement by the Company prior to the final disposition of any Indemnifiable Claim of any and all actual and reasonable Expenses relating to, arising out of or resulting from any Indemnifiable Claim paid or incurred by Indemnitee. Without limiting the generality or effect of any other provision hereof, Indemnitee’s right to such advancement is not subject to the satisfaction of any Standard of Conduct. Without limiting the generality or effect of the foregoing, within five business days after any request by Indemnitee that is accompanied by supporting documentation for specific reasonable Expenses to be reimbursed or advanced, the Company shall, in accordance with such request (but without duplication), (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses; provided that Indemnitee shall repay, without interest, any amounts actually advanced to Indemnitee that, at the final disposition of the Indemnifiable Claim to which the advance related, were in excess of amounts paid or payable by Indemnitee in respect of Expenses relating to, arising out of or resulting from such Indemnifiable Claim. In connection with any such payment, advancement or reimbursement, at the request of the Company, Indemnitee shall execute and deliver to the Company an undertaking, which need not be secured and shall be accepted without reference to Indemnitee’s ability to repay the Expenses, by or on behalf of the Indemnitee, to repay any amounts paid, advanced or reimbursed by the Company in respect of Expenses relating to, arising out of or resulting from any Indemnifiable Claim in respect of which it shall have been determined, following the final disposition of such Indemnifiable Claim and in accordance with Section 7, that Indemnitee is not entitled to indemnification hereunder.

 

  

  

  

 

4. Indemnification for Additional Expenses. Without limiting the generality or effect of the foregoing, the Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request accompanied by supporting documentation for specific Expenses to be reimbursed or advanced, any and all actual and reasonable Expenses paid or incurred by Indemnitee in connection with any Claim made, instituted or conducted by Indemnitee for (a) indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company; provided, however, if it is ultimately determined that the Indemnitee is not entitled to such indemnification, reimbursement, advance or insurance recovery, as the case may be, then the Indemnitee shall be obligated to repay any such Expenses to the Company; provided further, that, regardless in each case of whether Indemnitee ultimately is determined to be entitled to such indemnification, reimbursement, advance or insurance recovery, as the case may be, Indemnitee shall return, without interest, any such advance of Expenses (or portion thereof) which remains unspent at the final disposition of the Claim to which the advance related.

 

5. Partial Indemnity.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Indemnifiable Loss but not for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

6. Procedure for Notification. To obtain indemnification under this Agreement in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit to the Company a written request therefore, including a brief description (based upon information then available to Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of such request, the Company has directors’ and officers’ liability insurance in effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss is potentially available, the Company shall give prompt written notice of such Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in accordance with the procedures set forth in the applicable policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all Indemnifiable Claims and Indemnifiable Losses in accordance with the terms of such policies. The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, substantially concurrently with the delivery thereof by the Company. The failure by Indemnitee to timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any liability hereunder unless, and only to the extent that, the Company did not otherwise learn  of  such Indemnifiable Claim or Indemnifiable Loss and to the extent that such failure results in forfeiture by the Company of substantial defenses, rights or insurance coverage.

7.   Determination of Right to Indemnification.

To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Indemnifiable Claim or any portion thereof or in defense of any issue or matter therein, including, without limitation, dismissal without prejudice, Indemnitee shall be indemnified against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct Determination (as defined in Section 7(b)) shall be required.

To the extent that the provisions of Section 7(a) are inapplicable to an Indemnifiable Claim that shall have been finally disposed of, any determination of whether Indemnitee has satisfied the applicable Standard of Conduct (a “Standard of Conduct Determination”) shall be made as follows: (i) if a Change in Control shall not have occurred, or if a Change in Control shall have occurred but Indemnitee shall have requested that the Standard of Conduct Determination be made pursuant to this clause (i), (A) by a majority vote of the Disinterested Directors, even if less than a quorum of the Board, (B) if such Disinterested Directors so direct, by a majority vote of a committee of Disinterested Directors designated by a majority vote of all Disinterested Directors, or (C) if there are no such Disinterested Directors, or if a majority of the Disinterested Directors so direct, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee shall not have requested that the Standard of Conduct Determination be made pursuant to clause (i) above, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.

 

  

  

  

 

If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable Losses pursuant to Section 7(a),

 

(ii) no determination of whether Indemnitee has satisfied any applicable standard of conduct under Nevada law is a legally required condition precedent to indemnification of Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has been determined or deemed pursuant to Section 7(b) to have satisfied the applicable Standard of Conduct, then the Company shall pay to Indemnitee, within five business days after the later of (x) the Notification Date in respect of the Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are related, out of which such Indemnifiable Losses arose or from which such Indemnifiable Losses resulted, and (y) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) above shall have been satisfied, an amount equal to the amount of such Indemnifiable Losses. Nothing herein is intended to mean or imply that the Company is intending to use Section 145(f) of the Nevada General Corporation Law to dispense with a requirement that Indemnitee meet the applicable Standard of Conduct where it is otherwise required by such statute.

If a Standard of Conduct Determination is required to be, but has not been, made by Independent Counsel pursuant to Section 7(b)(i), the Independent Counsel shall be selected by the Board or a committee of the Board, and the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected. If a Standard of Conduct Determination is required to be, or to have been, made by Independent Counsel pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either case, Indemnitee or the Company, as applicable, may, within five business days after receiving written notice of selection from the other, deliver to the other a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria set forth in the definition of “Independent Counsel” in Section 1(h), and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. If such written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit and (ii) the non-objecting party may, at its option, select an alternative Independent Counsel and give written notice to the other party advising such other party of the identity of the alternative Independent Counsel so selected, in which case the provisions of the two immediately preceding sentences and clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately preceding sentence shall apply to successive alternative selections.  If no Independent Counsel that is permitted under the foregoing provisions of this Section 7(d) to make the Standard of Conduct Determination shall have been selected within 30 calendar days after the Company gives its initial notice pursuant to the first sentence of this Section 7(d) or Indemnitee gives its initial notice pursuant to the second sentence of this Section 7(d), as the case may be, either the Company or Indemnitee may petition the Court of Chancery of the State of Nevada for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person or firm selected by the Court or by such other person as the Court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the actual and reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 7(b).

8. Cooperation. Indemnitee shall cooperate with reasonable requests of the Company in connection with any Indemnifiable Claim and any individual or firm making such Standard of Conduct Determination, including providing to such Person documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to defend the Indemnifiable Claim or make any Standard of Conduct Determination without incurring any unreimbursed cost in connection therewith. The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of such request accompanied by supporting documentation for specific costs and expenses to be reimbursed or advanced, any and all costs and expenses (including attorneys’ and experts’ fees and expenses) actually and reasonably incurred by Indemnitee in so cooperating with the Person defending the Indemnifiable Claim or making such Standard of Conduct Determination.

9. Presumption of Entitlement. Notwithstanding any other provision hereof, in making any Standard of Conduct Determination, the Person making such determination shall presume that Indemnitee has satisfied the applicable Standard of Conduct.

 

  

  

  

 

10. No Other Presumption. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not meet any applicable Standard of Conduct or that indemnification hereunder is otherwise not permitted.

11. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents, or the substantive laws of the Company’s jurisdiction of incorporation, any other contract or otherwise (collectively, “Other Indemnity Provisions”) ; provided, however, that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will without further action be deemed to have such greater right hereunder, and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. The Company may not, without the consent of Indemnitee, adopt any amendment to any of the Constituent Documents the effect of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this Agreement.

12. Liability Insurance and Funding.  For the duration of Indemnitee’s service as a director and/or officer of the Company and for a reasonable period of time thereafter, which such period shall be determined by the Company in its sole discretion, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect policies of directors’ and officers’ liability insurance providing coverage for directors and/or officers of the Company, and, if applicable, that is substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance.   Upon reasonable request, the Company shall provide Indemnitee or his or her counsel with a copy of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials.  In all policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Company’s directors and officers most favorably insured by such policy.  Notwithstanding the foregoing, (i) the Company may, but shall not be required to, create a trust fund, grant a  security interest or use other means, including, without limitation, a letter of credit, to ensure the payment of such amounts as may be necessary to satisfy its obligations to indemnify and advance expenses pursuant to this Agreement and (ii) in renewing or seeking to renew any insurance hereunder, the Company will not be required to expend more than 2.0 times the premium amount of the immediately preceding policy period (equitably adjusted if necessary to reflect differences in policy periods).

13. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee against other Persons (other than Indemnitee’s successors), including any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f). Indemnitee shall execute all papers reasonably required to evidence such rights (all of Indemnitee’s reasonable Expenses, including attorneys’ fees and charges, related thereto to be reimbursed by or, at the option of Indemnitee, advanced by the Company).

14. No Duplication of Payments . The Company shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee has otherwise already actually received payment (net of Expenses incurred in connection therewith) under any insurance policy, the Constituent Documents and Other Indemnity Provisions or otherwise (including from any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f)) in respect of such Indemnifiable Losses otherwise indemnifiable hereunder.

  

  

  

 

15. Defense of Claims.   Subject to the provisions of applicable policies of directors’ and officers’ liability insurance, if any, the Company shall be entitled to participate in the defense of any Indemnifiable Claim or to assume or lead the defense thereof with counsel reasonably satisfactory to the Indemnitee; provided that if Indemnitee determines, after consultation with counsel selected by Indemnitee, that

 

(a) the use of counsel chosen by the Company to represent Indemnitee would present such counsel with an actual or potential conflict, (b) the named parties in any such Indemnifiable Claim (including any impleaded parties) include both the Company and Indemnitee and Indemnitee shall conclude that there may be one or more legal defenses available to him or her that are different from or in addition to those available to the Company, (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, or (d) Indemnitee has interests in the claim or underlying subject matter that are different from or in addition to those of other Persons against whom the Claim has been made or might reasonably be expected to be made, then Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim for all indemnitees in Indemnitee’s circumstances) at the Company’s expense. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Indemnifiable Claim effected without the Company’s prior written consent. The Company shall not, without the prior written consent of the Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim which the Indemnitee is or could have been a party unless such settlement solely involves the payment of money and includes a complete and unconditional release of the Indemnitee from all liability on any claims that are the subject matter of such Indemnifiable Claim. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold consent to any settlement that does not provide a complete and unconditional release of Indemnitee.

 

16. Mutual Acknowledgment. Both the Company and the Indemnitee acknowledge that in certain instances, Federal law or applicable public policy  may prohibit  the Company  from indemnifying  its directors  and officers  under this Agreement  or otherwise. Indemnitee understands and acknowledges that the Company may be required in the future to undertake to the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee and, in that event, the Indemnitee’s rights and the Company’s obligations hereunder shall be subject to that determination.

17.  Successors and Binding Agreement.

This Agreement shall be binding  upon  and inure  to  the benefit of the  Company  and any  successor  to the  Company, including, without limitation, any Person acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the “Company” for purposes of this Agreement), but shall not otherwise be assignable or delegatable by the Company.

This Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s personal or legal representatives, executors, administrators, heirs, distributees, legatees and other successors.

This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 17(a) and 17(b). Without limiting the generality or effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by the Indemnitee’s will or by the laws of descent and distribution, and, in the event of any attempted assignment or transfer contrary to this Section 17(c), the Company shall have no liability to pay any amount so attempted to be assigned or transferred.

18. Notices. For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder must be in writing and shall be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or one business day after having been sent for next-day delivery by a nationally recognized overnight courier service, addressed to the Company (to the attention of the Secretary of the Company) and to Indemnitee at the applicable address shown on the signature page hereto, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

  

  

  

 

19. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Nevada, without giving effect to the principles of conflict of laws of such State. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the Chancery Court of the State of Nevada for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement, waive all procedural objections to suit in that jurisdiction, including, without limitation, objections as to venue or inconvenience, agree that service in any such action may be made by notice given in accordance with Section 18 and also agree that any action instituted under this Agreement shall be brought only in the Chancery Court of the State of Nevada.

20. Validity. If any provision of this Agreement or the application of any provision hereof to any Person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other Person or circumstance shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent, and only to the extent, necessary to make it enforceable, valid or legal. In the event that any court or other adjudicative body shall decline to reform any provision of this Agreement held to be invalid, unenforceable or otherwise illegal as contemplated by the immediately preceding sentence, the parties thereto shall take all such action as may be necessary or appropriate to replace the provision so held to be invalid, unenforceable or otherwise illegal with one or more alternative provisions that effectuate the purpose and intent of the original provisions of this Agreement as fully as possible without being invalid, unenforceable or otherwise illegal.

21. Miscellaneous. No provision of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in writing signed by Indemnitee and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

22. Certain Interpretive Matters. Unless the context of this Agreement otherwise requires, (1) “it” or “its” or words of any gender include each other gender, (2) words using the singular or plural number also include the plural or singular number, respectively, (3) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (4) the terms “Article,” “Section,” “Annex” or “Exhibit” refer to the specified Article, Section, Annex or Exhibit of or to this Agreement, (5) the terms “include,” “includes” and “including” will be deemed to be followed by the words “without limitation” (whether or not so expressed), and (6) the word “or” is disjunctive but not exclusive. Whenever this Agreement refers to a number of days, such number will refer to calendar days unless business days are specified and whenever action must be taken (including the giving of notice or the delivery of documents) under this Agreement during a certain period of time or by a particular date that ends or occurs on a non-business day, then such period or date will be extended until the immediately following business day.  As used herein, “business day” means any day other than Saturday, Sunday or a United States federal holiday.

23. Entire Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter of this Agreement. Any prior agreements or understandings between the parties hereto with respect to indemnification are hereby terminated and of no further force or effect. This Agreement is not the exclusive means of securing indemnification rights of Indemnitee and is in addition to any rights Indemnitee may have under any Constituent Documents.

24. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together shall constitute one and the same agreement.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

  

  

  

 

IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized representative to execute this Agreement as of the date first above written.

 

ORBITAL TRACKING CORP.

 

By:                                                         

Name:

Title:

Date:

INDEMNITEE:

 

 

 

Name:

 

Address:

 

Date:White Mountain Titanium Corporation: Exhibit 4.1 - Filed by newsfilecorp.com

WHITE MOUNTAIN TITANIUM CORPORATION 

2015 STOCK INCENTIVE PLAN 

THE 2015 STOCK INCENTIVE PLAN (the “Plan”) of White
Mountain Titanium Corporation, a Nevada corporation, is hereby adopted by its
Board of Directors as of June 12, 2015 (the “Effective Date”). 

ARTICLE 1. 
PURPOSES OF THE PLAN 

Section 1.01      Purposes. The purposes of the
Plan are (a) to enhance the Company’s ability to attract and retain the services
of qualified employees, officers, directors, consultants, and other service
providers upon whose judgment, initiative and efforts the successful conduct and
development of the Company’s business largely depends, and (b) to provide
additional incentives to such persons or entities to devote their utmost effort
and skill to the advancement and betterment of the Company, by providing them an
opportunity to participate in the ownership of the Company and thereby have an
interest in the success and increased value of the Company. 

ARTICLE 2. 
DEFINITIONS 

For purposes of this Plan, terms not otherwise defined herein
shall have the meanings indicated below: 

Section 2.01
       Administrator. “Administrator” means the Board or, if the Board
  delegates responsibility for any matter to the Committee, the term Administrator
  shall mean the Committee. 

Section 2.02      Affiliated Company.
“Affiliated Company” means:

a)      with respect to Incentive Options, any “parent corporation”
or “subsidiary corporation” of the Company, whether now existing or hereafter
created or acquired, as those terms are defined in Sections 424(e) and 424(f) of
the Code, respectively; and

 b)      with respect to Nonqualified Options, Restricted Stock
Units, Stock Appreciation Rights, and Restricted Stock Grants any entity
described in paragraph (a) of this Section 2.02 above, plus any other
corporation, limited liability company (“LLC”), partnership or joint
venture, whether now existing or hereafter created or acquired, with respect to
which the Company beneficially owns more than fifty percent (50%) of: (1) the
total combined voting power of all outstanding voting securities, or (2) the
capital or profits interests of an LLC, partnership or joint venture. 

Section 2.03      Base Price. “Base Price”
means the price per share of Common Stock for purposes of computing the amount
payable to a Participant who holds a Stock Appreciation Right upon exercise
thereof. 

Section 2.04      Board. “Board” means the
Board of Directors of the Company. 

Section 2.05      Change in Control. Except as
set forth below, “Change in Control” means: 

a)      The acquisition, directly or indirectly, in one transaction
or a series of related transactions, by any person or group (within the meaning
of Section 13(d)(3) of the Exchange Act) of the beneficial ownership of
securities of the Company possessing more than fifty percent (50%) of the total
combined voting power of all outstanding securities of the Company; 

b)      A merger
  or consolidation in which the Company is not the surviving entity, except for a
  transaction in which the holders of the outstanding voting securities of the
  Company immediately prior to such merger or consolidation hold as a result of
  holding the Company securities prior to such transaction, in the aggregate,
  securities possessing more than fifty percent (50%) of the total combined voting
  power of all outstanding voting securities of the surviving entity (or the
  parent of the surviving entity) immediately after such merger or consolidation;  

c)      A reverse merger in which the Company is the surviving entity but in which
  the holders of the outstanding voting securities of the Company immediately
  prior to such merger hold, in the aggregate, securities possessing less than
  fifty percent (50%) of the total combined voting power of all outstanding voting
  securities of the Company or of the acquiring entity immediately after such
  merger; or 

d)      The sale, transfer or other disposition (in one transaction or a
  series of related transactions) of all or substantially all of the assets of the
  Company, except for a transaction in which the holders of the outstanding voting
  securities of the Company immediately prior to such transaction(s) receive as a
  distribution with respect to securities of the Company, in the aggregate,
  securities possessing more than fifty percent (50%) of the total combined voting
  power of all outstanding voting securities of the acquiring entity immediately
  after such transaction(s).

 e)      In addition, a Change in Control will be deemed to
  have occurred if, at any time during any period of twelve (12) consecutive months during the term of any Option, as stated in the Option Exercise
  Documents, Restricted Stock Award Agreement, Restricted Stock Unit Agreement or
  Stock Appreciation Right Agreement under this Plan, individuals who at the
  beginning of such period constituted the entire Board do not for any reason
  constitute a majority of the Board, unless the election, or the nomination for
  election by the Company’s stockholders, of each new director was approved by a
  vote of at least a majority of the directors then still in office who were
  directors at the beginning of the period (but not including any new director
  whose election or nomination is in connection with an actual or threatened proxy
  contest relating to the election of directors of the Company). 

Notwithstanding the foregoing, a transaction will not be deemed
a Change in Control unless the transaction qualifies as a change in control
event within the meaning of Section 409A of the Code. 

Section 2.06      Code. “Code” means the
Internal Revenue Code of 1986, as amended from time to time. 

Section 2.07      Committee. “Committee” means
a committee of two or more members of the Board appointed to administer the
Plan, as set forth in Section 9.01. 

Section 2.08      Common Stock. “Common Stock”
means the Common Stock of the Company, subject to adjustment pursuant to Section
4.02. 

Section 2.09      Company. “Company” means
White Mountain Titanium Corporation, a Nevada corporation, or any entity that is
a successor to the Company. Except where the context otherwise requires, the
term “Company” shall include any of the Company’s present or future
parent or subsidiary corporations. 

2 

Section 2.10      Disability. “Disability”
means permanent and total disability as defined in Section 22(e)(3) of the Code.
The Administrator’s determination of a Disability or the absence thereof shall
be conclusive and binding on all interested parties. 

Section 2.11      Effective Date. “Effective
Date” means the date on which the Plan was originally adopted by the Board, as
set forth on the first page hereof. 

Section 2.12      Exchange Act. “Exchange Act”
means the Securities and Exchange Act of 1934, as amended. 

Section 2.13      Exercise Price. “Exercise
Price” means the purchase price per share of Common Stock payable by the
Optionee to the Company upon exercise of an Option. 

Section 2.14      Fair Market Value. “Fair
Market Value” on any given date means the value of one share of Common Stock,
determined as follows: (i) the last sale before or the first sale after the
grant date; (ii) the closing price on the trading day before or on the grant
date; (iii) the arithmetic mean (average) of the high and low prices on the
trading day before or the trading day of the grant; (iv) an average of the stock
price (determined either based on the arithmetic mean or the average of such
selling price, weighted based on the volume of trading on each trading day
during the period) over a fixed period occurring within 30 days before or after
the grant; or (v) any other reasonable valuation method using actual
transactions. If there is no public trading market for the Common Stock, the
Administrator may determine the fair market value in good faith using any
reasonable method of evaluation in a manner consistent with the valuation
principles under Section 409A of the Code, which determination shall be
conclusive and binding on all interested parties. 

Section 2.15      FINRA Dealer. “FINRA Dealer”
means a broker-dealer that is a member of the Financial Industry Regulatory
Authority. 

Section 2.16      Grant Form. “Grant Form”
means the Grant of Stock Option form signed by both parties with respect to
either an Incentive Option or a Nonqualified Option, the form of which is set
forth in Attachment 1 to this Plan. 

Section 2.17      Incentive Option. “Incentive
Option” means any Option designated and qualified as an “incentive stock option”
as defined in Section 422 of the Code. 

Section 2.18      Nonqualified Option.
“Nonqualified Option” means any Option that is not an Incentive Option. To the
extent that any Option designated as an Incentive Option fails in whole or in
part to qualify as an Incentive Option, including, without limitation, for
failure to meet the limitations applicable to a 10% Stockholder or because it
exceeds the annual limit provided for in Section 5.07 below, it shall to that
extent constitute a Nonqualified Option. 

Section 2.19      Option. “Option” means any
option to purchase Common Stock granted pursuant to this Plan. 

Section 2.20      Option Exercise Documents.
“Option Exercise Documents” means and includes the Option Exercise Form, the
Grant Form, the forms of which are set forth in Attachments 2 to this Plan, and
any other agreements the Optionee is required to enter into to exercise options.

Section 2.21      Option Exercise Form. “Option
Exercise Form” means the form identified as Exhibit A to the Grant Form. 

3 

Section 2.22      Optionee. “Optionee” means
any Participant who holds an Option. 

Section 2.23      Participant. “Participant”
means an individual or entity that holds Options, Restricted Stock Units, Stock
Appreciation Rights, or Restricted Stock Awards under this Plan. 

Section 2.24      Performance Criteria.
“Performance Criteria” means one or more of the following as established by the
Administrator, which may be stated as a target percentage or dollar amount, a
percentage increase over a base period percentage or dollar amount or the
occurrence of a specific event or events: 

a)      Revenue; 

b)      Gross profit; 

c)      Operating income; 

d)      Pre-tax
  income;

 e)      Earnings before interest, taxes, depreciation and amortization
  (“EBITDA”); 

f)      Earnings per common share on a fully diluted basis
  (“EPS”);

 g)      Consolidated net income of the Company divided by the average
  consolidated common stockholders’ equity (“ROE”);

 h)      Cash and cash
  equivalents derived from either 

(i)      net cash flow from operations, or (ii) net
  cash flow from operations, financings and investing activities (“Cash
  Flow”); i) Adjusted operating cash flow return on income;

 j)      Cost
  containment or reduction; 

k)      The percentage increase in the market price of the
  Company’s common stock over a stated period; and

 l)      Individual business
objectives. 

Section 2.25      Restricted Stock Award.
“Restricted Stock Award” means shares issued pursuant to the Restricted Stock
Award Program in Article 8. 

Section 2.26      Restricted Stock Award
Agreement. “Restricted Stock Award Agreement” means the written agreement
entered into between the Company and a Participant evidencing the grant of
Restricted Stock Awards under the Plan, the form of which is set forth in
Attachment 3 to this Plan. 

Section 2.27      Restricted Stock Award
Program. “Restricted Stock Award Program” means the program to issue
restricted shares pursuant to Article 8. 

Section 2.28      Restricted Stock Unit.
“Restricted Stock Unit” means a right to receive an amount equal to the Fair
Market Value of one share of Common Stock, issued pursuant to Article 6, subject
to any restrictions and conditions as are established pursuant to Article 6.

Section 2.29      Restricted Stock Unit
Agreement. “Restricted Stock Unit Agreement” means the written agreement
entered into between the Company and a Participant evidencing the grant of
Restricted Stock Units under the Plan, the form of which is set forth in
Attachment 4 to this Plan. 

Section 2.30      Service. “Service” means the
provision of services to the Company or any Affiliated Company by a person in
the capacity of an employee, a non-employee member of the board of directors,
officer, or a Service Provider, except to the extent otherwise specifically
provided in the documents evidencing the grant of an award under this Plan. 

Section 2.31      Service Provider. “Service
Provider” means a consultant or other person or entity the Administrator
authorizes to become a Participant in the Plan and who provides services to (i)
the Company, (ii) an Affiliated Company, or (iii) any other
business venture designated by the Administrator in which the Company or an
Affiliated Company has a significant ownership interest. 

4 

Section 2.32      Stock Appreciation Right.
“Stock Appreciation Right” means a right issued pursuant to Article 7, subject
to any restrictions and conditions as are established pursuant to Article 7 that
is designated as a Stock Appreciation Right. 

Section 2.33      Stock Appreciation Right
Agreement. “Stock Appreciation Right Agreement” means the written agreement
entered into between the Company and a Participant evidencing the grant of Stock
Appreciation Rights under the Plan, the form of which is set forth in Attachment
6 to this Plan. 

Section 2.34      10% Stockholder. “10%
Stockholder” means a person who, as of a relevant date, owns or is deemed to own
(by reason of the attribution rules applicable under Section 424(d) of the Code)
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of an Affiliated Company. 

ARTICLE 3. 
ELIGIBILITY 

Section 3.01      Incentive Options. Only
employees of the Company or of an Affiliated Company (including members of the
Board if they are employees of the Company or of an Affiliated Company) are
eligible to receive Incentive Options under the Plan. 

Section 3.02      Nonqualified Options; Restricted
Stock Units and Stock Appreciation Rights. Employees and officers of the
Company or of an Affiliated Company, members of the Board (whether or not
employed by the Company or an Affiliated Company), and Service Providers are
eligible to receive Nonqualified Options, Restricted Stock Units, and Stock
Appreciation Rights under the Plan. 

Section 3.03      Section 162(m) Limitation.
Subject to adjustment as to the number and kind of shares pursuant to Section
4.02, in no event shall any Participant be granted in any one calendar year any
award that does not qualify as “performance-based compensation” under Section
162(m) of the Code. In granting awards which are intended to qualify under
Section 162(m) of the Code, the Administrator shall follow any procedures
determined by it from time to time to be necessary or appropriate to ensure
qualification of the award under Section 162(m) of the Code (e.g., in
determining the Performance Criteria), provided that no action by the Company or
the Administrator shall be deemed to be a promise that any such award will be
“performance-based compensation” under such section. 

ARTICLE 4. 
PLAN SHARES 

Section 4.01      Shares Subject to the Plan.
The number of shares of Common Stock that may be issued under this Plan shall be
4,641,040, subject to adjustment as to the number and kind of shares pursuant to
Section 4.02. For purposes of this limitation, in the event that (a) all or any
portion of any Options or Stock Appreciation Rights granted under the Plan can
no longer under any circumstances be exercised, (b) any shares of Common Stock
are reacquired by the Company pursuant to the Option Exercise Documents, or (c)
all or any portion of any Restricted Stock Units or Restricted Stock Awards
granted under the Plan are forfeited or can no longer under any circumstances
vest, the shares of Common Stock allocable to or covered by the unexercised or
unvested portion of such Options, Stock Appreciation Rights, Restricted Stock
Units, or Restricted Stock Awards, or the shares of Common Stock so reacquired
shall again be available for grant or issuance under the Plan. The following
shares of Common Stock may not again be made available for issuance as awards
under the Plan: (i) shares of Common Stock not issued or delivered as a result of the net settlement of
outstanding Stock Appreciation Rights or Options, (ii) shares of Common Stock
used to pay the Exercise Price related to outstanding Options, (iii) shares of
Common Stock used to pay withholding taxes related to outstanding Options, Stock
Appreciation Rights, Restricted Stock Units, or Restricted Stock Awards, or (iv)
shares of Common Stock repurchased on the open market with the proceeds of the
Option Exercise Price. Notwithstanding the foregoing, the number of shares of
Common Stock available for issuance under the Plan shall automatically increase
by an amount such that on the first trading day of January each calendar year
during the term of the Plan, beginning with calendar year 2016, the number of
shares of Common Stock reserved and available for issuance under the Plan shall
represent ten percent (10%) of the total number of shares of Common Stock
outstanding on the last trading day in December of the immediately preceding
calendar year less 3,949,500 shares. 

5 

Section 4.02      Changes in Capital Structure.
In the event that the outstanding shares of Common Stock are hereafter increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of a recapitalization, stock
split, reverse stock split, reclassification, stock dividend, or other change in
the capital structure of the Company, then appropriate adjustments shall be made
by the Administrator to the aggregate number and kind of shares subject to this
Plan, the number and kind of shares and the price per share subject to or
covered by outstanding Option Exercise Documents, Restricted Stock Award
Agreement, Restricted Stock Unit Agreement or Stock Appreciation Right Agreement
and the limit on the number of shares under Section 3.03, all in order to
preserve, as nearly as practical, but not to increase, the benefits to
Participants. 

ARTICLE 5. 
OPTIONS 

Section 5.01      Grant of Stock Options. The
Administrator shall have the right to grant pursuant to this Plan, Options
subject to such terms, restrictions, and conditions as the Administrator may
determine at the time of grant. Such conditions may include, but are not limited
to, continued provision of Service or the achievement of specified performance
goals or objectives established by the Administrator with respect to one or more
Performance Criteria, which require the Administrator to certify in writing
whether and the extent to which such Performance Criteria were achieved.

Section 5.02      Option Exercise Documents.
Each Option granted pursuant to this Plan shall be evidenced by Option Exercise
Documents which shall specify the number of shares subject thereto, vesting
provisions relating to such Option, the Exercise Price per share, and whether
the Option is an Incentive Option or Nonqualified Option. As soon as is
practical following the grant of an Option, Option Exercise Documents shall be
duly executed and delivered by or on behalf of the Company to the Optionee to
whom such Option was granted. Each Option Exercise Document shall be in such
form and contain such additional terms and conditions, not inconsistent with the
provisions of this Plan, as the Administrator shall, from time to time, deem
desirable. 

Section 5.03      Exercise Price. The Exercise
Price per share of Common Stock covered by each Option shall be determined by
the Administrator, subject to the following: (a) the Exercise Price of an
Incentive Option shall not be less than 100% of Fair Market Value on the date
the Incentive Option is granted, (b) the Exercise Price of a Nonqualified Option
shall not be less than 100% of Fair Market Value on the date the Nonqualified
Option is granted, and (c) if the person to whom an Incentive Option is granted
is a 10% Stockholder on the date of grant, the Exercise Price shall not be less
than 110% of Fair Market Value on the date the Incentive Option is granted.
However, an Option may be granted with an Exercise Price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Sections 409A and 424 of the Code. 

6 

Section 5.04      Payment of Exercise Price.
Payment of the Exercise Price shall be made upon exercise of an Option and may
be made, in the discretion of the Administrator, subject to any legal
restrictions, by: (a) cash; (b) check; (c) the surrender of shares of Common
Stock owned by the Optionee (provided that shares acquired pursuant to the
exercise of options granted by the Company must have been held by the Optionee
for the requisite period necessary to avoid a charge to the Company’s earnings
for financial reporting purposes), which surrendered shares shall be valued at
Fair Market Value as of the date of such exercise; (d) the cancellation of
indebtedness of the Company to the Optionee; (e) the waiver of compensation due
or accrued to the Optionee for services rendered; (f) provided that a public
market for the Common Stock exists, a “same day sale” commitment from the
Optionee and a FINRA Dealer whereby the Optionee irrevocably elects to exercise
the Option and to sell a portion of the shares so purchased to pay for the
Exercise Price and whereby the FINRA Dealer irrevocably commits upon receipt of
such shares to forward the Exercise Price directly to the Company; (g) provided
that a public market for the Common Stock exists, a “margin” commitment from the
Optionee and a FINRA Dealer whereby the Optionee irrevocably elects to exercise
the Option and to pledge the shares so purchased to the FINRA Dealer in a margin
account as security for a loan from the FINRA Dealer in the amount of the
Exercise Price, and whereby the FINRA Dealer irrevocably commits upon receipt of
such shares to forward the Exercise Price directly to the Company; or (h) any
combination of the foregoing methods of payment or any other consideration or
method of payment as shall be permitted by applicable law and approved by the
Administrator. 

Section 5.05      Term and Termination of
Options. The term and provisions for termination of each Option shall be as
fixed by the Administrator, but no Option may be exercisable more than ten (10)
years after the date it is granted. An Incentive Option granted to a person who
is a 10% Stockholder on the date of grant shall not be exercisable more than
five (5) years after the date it is granted. 

Section 5.06      Vesting and Exercise of
Options. Each Option shall vest and become exercisable in one or more
installments at such time or times and subject to such conditions, including
without limitation the achievement of specified performance goals or objectives
established with respect to one or more Performance Criteria, as shall be
determined by the Administrator.

Section 5.07      Annual Limit on Incentive
Options. To the extent required for “incentive stock option” treatment under
Section 422 of the Code, the aggregate Fair Market Value (determined as of the
time of grant) of the Common Stock with respect to which Incentive Options
granted under this Plan and any other plan of the Company or any Affiliated
Company become exercisable for the first time by an Optionee during any calendar
year shall not exceed $100,000. 

Section 5.08      Restrictions. Options may not
be sold, pledged or otherwise encumbered or disposed of and shall not be
assignable or transferable except by will, the laws of descent and distribution
or pursuant to a domestic relations order entered by a court in settlement of
marital property rights, except as specifically provided in the Stock Option
Agreement or as authorized by the Administrator, and subject to Section 13.01 of
this Plan. 

Section 5.09      Effect of Termination of Service,
Death, or Disability. 

a)      Unless otherwise provided by the Administrator, any unvested
Options held by the Optionee at the time of termination of Service, Disability
or death, will expire immediately upon the occurrence of any such event. 

b)      The
  following provisions shall govern the exercise of any vested Options held by the
  Optionee at the time of termination of Service, Disability, or death: 

7 

(1)      Should the Optionee’s Service be terminated for cause, then
the Options shall terminate on the date Service is terminated. 

(2)      Should the Optionee’s Service be terminated for Disability,
then the Optionee shall have a period of six (6) months following the date of
such termination during which to exercise each outstanding Option held by such
Optionee at the time of Disability. 

(3)      If the Optionee dies while holding an outstanding Option,
then the personal representative of his or her estate or the person or persons
to whom the Option is transferred pursuant to the Optionee’s will or the laws of
inheritance shall have six (6) months following the date of the Optionee’s death
to exercise such Option. 

(4)      Should Optionee’s Service be terminated by reason other
than for cause, Disability, or death, then the Optionee shall have a period of
thirty (30) days following the date of such termination during which to exercise
each outstanding Option held by such Optionee. 

(5)      Under no circumstances, however, shall any such Option be
exercisable after the specified expiration of the Option term. 

(6)      During the applicable post-Service exercise period, the
Option may not be exercised in the aggregate for more than the number of vested
shares for which the Option is exercisable on the date of the Optionee’s
termination of Service. Upon the expiration of the applicable exercise period or
(if earlier) upon the expiration of the Option term, the Option shall terminate
and cease to be outstanding for any Option which has not been exercised. 

c)      The Administrator shall have the discretion, exercisable
either at the time an Option is granted or at any time while the Option remains
outstanding, to provide either or both of the following, in whole or in part as
to any Options: 

(1)      extend the period of time for which the Option is to remain
exercisable following Optionee’s termination of Service or death from the
limited period otherwise in effect for that Option to such greater period of
time as the Administrator shall deem appropriate, but in no event beyond the
expiration of the Option term;

 (2)      permit the Option to be exercised, during the
  applicable post-termination exercise period, not only with respect to the number
  of vested shares of Common Stock for which such Option is exercisable at the
  time of the Optionee’s termination of Service but also with respect to one or
  more additional installments in which the Optionee would have vested under the
  Option had the Optionee continued Service. 

Section 5.10      Rights as a Stockholder. An
Optionee or permitted transferee of an Option shall have no rights or privileges
as a stockholder with respect to any shares covered by an Option until such
Option has been duly exercised and certificates representing shares purchased
upon such exercise have been issued to such person. 

8 

ARTICLE 6. 
RESTRICTED STOCK UNITS 

Section 6.01      Grants of Restricted Stock
Units. The Administrator shall have the right to grant pursuant to this Plan
Restricted Stock Units subject to such terms, restrictions, and conditions as
the Administrator may determine at the time of grant. Such conditions may
include, but are not limited to, continued employment or the achievement of
specified performance goals or objectives established by the Administrator with
respect to one or more Performance Criteria, which require the Administrator to
certify in writing whether and the extent to which such Performance Criteria
were achieved. 

Section 6.02      Restricted Stock Unit
Agreements. A Participant shall have no rights with respect to the
Restricted Stock Units covered by a Restricted Stock Unit Agreement until the
Participant has executed and delivered to the Company the applicable Restricted
Stock Unit Agreement. Each Restricted Stock Unit Agreement shall be in such
form, and shall set forth such other terms, conditions, and restrictions of the
Restricted Stock Unit Agreement, not inconsistent with the provisions of this
Plan, as the Administrator shall, from time to time, deem desirable. Each such
Restricted Stock Unit Agreement may be different from each other Restricted
Stock Unit Agreement. 

Section 6.03      Vesting of Restricted Stock
Units. The Restricted Stock Unit Agreement shall specify the date or dates,
the performance goals, if any, established by the Administrator with respect to
one or more Performance Criteria that must be achieved, and any other conditions
on which the Restricted Stock Units may vest. Except as otherwise provided by
the Administrator, should the Participant cease to remain in Service while
holding one or more unvested Restricted Stock Units, should the performance
objectives not be attained with respect to one or more such unvested Restricted
Stock Units, or in the event of the death or Disability of the Participant, then
those Restricted Stock Units shall be immediately surrendered to the Company for
cancellation, and the Participant shall have no further shareholder rights with
respect to those Restricted Stock Units.

Section 6.04      Form and Timing of
Settlement. Settlement in respect of vested Restricted Stock Units will be
automatic upon vesting thereof. Payment in respect thereof will be made no later
than thirty (30) days thereafter and may, in the discretion of the
Administrator, be in cash, shares of Common Stock of equivalent Fair Market
Value as of the date of exercise, or a combination of both, except as
specifically provided in the Restricted Stock Unit Agreement. 

Section 6.05      Rights as a Stockholder.
Holders of Restricted Stock Units shall have no rights or privileges as a
stockholder with respect to any shares of Common Stock covered thereby unless
and until they become owners of shares of Common Stock following settlement in
respect of such Restricted Stock Units, in whole or in part, in shares of Common
Stock pursuant to their respective Restricted Stock Unit Agreements and the
terms and conditions of the Plan. 

Section 6.06      Restrictions. Restricted
Stock Units may not be sold, pledged or otherwise encumbered or disposed of and
shall not be assignable or transferable except by will, the laws of descent and
distribution or pursuant to a domestic relations order entered by a court in
settlement of marital property rights, except as specifically provided in the
Restricted Stock Unit Agreement or as authorized by the Administrator, and
subject to Section 13.01 of this Plan.

ARTICLE 7. 
STOCK APPRECIATION RIGHTS 

Section 7.01      Grants of Stock Appreciation
Rights. The Administrator shall have the right to grant pursuant to this
Plan, Stock Appreciation Rights subject to such terms, restrictions and
conditions as the Administrator may determine at the time of grant. Such
conditions may include, but are not limited to, continued employment or the
achievement of specified performance goals or objectives established by the
Administrator with respect to one or more Performance Criteria, which require
the Administrator to certify in writing whether and the extent to which such
Performance Criteria were achieved. 

9 

Section 7.02      Stock Appreciation Right
Agreements. A Participant shall have no rights with respect to the Stock
Appreciation Rights covered by a Stock Appreciation Right Agreement until the
Participant has executed and delivered to the Company the applicable Stock
Appreciation Right Agreement. Each Stock Appreciation Right Agreement shall be
in such form, and shall set forth the Base Price and such other terms,
conditions and restrictions of the Stock Appreciation Right Agreement, not
inconsistent with the provisions of this Plan, as the Administrator shall, from
time to time, deem desirable. Each such Stock Appreciation Right Agreement may
be different from each other Stock Appreciation Right Agreement. 

Section 7.03      Base Price. The Base Price
per share of Common Stock covered by each Stock Appreciation Right shall be
determined by the Administrator and will be not less than 100% of Fair Market
Value on the date the Stock Appreciation Right is granted. However, a Stock
Appreciation Right may be granted with a Base Price lower than that set forth in
the preceding sentence if such Stock Appreciation Right is granted pursuant to
an assumption or substitution for another stock appreciation right in a manner
satisfying the provisions of Section 409A of the Code. 

Section 7.04      Term and Termination of Stock
Appreciation Rights. The term and provisions for termination of each Stock
Appreciation Right shall be as fixed by the Administrator, but no Stock
Appreciation Right may be exercisable more than ten (10) years after the date it
is granted. 

Section 7.05 Vesting and Exercise of Stock
Appreciation Rights. Each Stock Appreciation Right shall vest and become
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives established with respect to one or more
Performance Criteria, as shall be determined by the Administrator.

Section 7.06      Effect of Termination of Service,
Death, or Disability. 

a)      Unless otherwise provided by the Administrator, any unvested
Stock Appreciation Right held by the Participant at the time of termination of
Service, Disability or death, will expire immediately upon the occurrence of any
such event.

b)      The following provisions shall govern the exercise of any vested
  Stock Appreciation Right held by the Participant at the time of termination of
  Service, Disability, or death: 

(1)      Should the Participant’s Service be terminated for cause,
then the Stock Appreciation Rights shall terminate on the date Service is
terminated. 

(2)      Should the Participant’s Service be terminated for
Disability, then the Participant shall have a period of six (6) months following
the date of such termination during which to exercise each outstanding Stock
Appreciation Right held by such Participant at the time of Disability. 

(3)      If the Participant dies while holding an outstanding Stock
Appreciation Right, then the personal representative of his or her estate or the
person or persons to whom the Stock Appreciation Right is transferred pursuant
to the Participant’s will or the laws of inheritance shall have six (6) months following the
date of the Participant’s death to exercise such Stock Appreciation Right. 

10 

(4)      Should Participant’s Service be terminated by reason other
than for cause, Disability, or death, then the Participant shall have a period
of thirty (30) days following the date of such termination during which to
exercise each outstanding Stock Appreciation Right held by such Participant.

(5)      Under no circumstances, however, shall any such Stock
Appreciation Right be exercisable after the specified expiration of the Stock
Appreciation Right term. 

c)      The Administrator shall have the discretion, exercisable
either at the time a Stock Appreciation Right is granted or at any time while
the Stock Appreciation Right remains outstanding, to extend the period of time
for which the Stock Appreciation Right is to remain exercisable following
Participant’s termination of Service or death from the limited period otherwise
in effect for that Stock Appreciation Right to such greater period of time as
the Administrator shall deem appropriate, but in no event beyond the expiration
of the Stock Appreciation Right term; 

Section 7.07      Amount, Form and Timing of
Settlement. Upon exercise of a Stock Appreciation Right, the Participant who
holds such Stock Appreciation Right will be entitled to receive payment from the
Company in an amount equal to the product of (a) the difference between the Fair
Market Value of a share of Common Stock on the date of exercise over the Base
Price per share of Common Stock covered by such Stock Appreciation Right and (b)
the number of shares of Common Stock with respect to which such Stock
Appreciation Right is being exercised. Payment in respect thereof will be made
no later than thirty (30) days after such exercise, provided that such payment
will be made in a manner such that no amount of compensation will be treated as
deferred under Treasury Regulation Section 1.409A -1(b)(5)(i)(D). Such payment
may, in the discretion of the Administrator, be in cash, shares of Common Stock
of equivalent Fair Market Value as of the date of exercise, or a combination of
both, except as specifically provided in the Stock Appreciation Right Agreement.

Section 7.08      Rights as a Stockholder.
Holders of Stock Appreciation Rights shall have no rights or privileges as a
stockholder with respect to any shares of Common Stock covered thereby unless
and until they become owners of shares of Common Stock following settlement in
respect of such Stock Appreciation Rights, in whole or in part, in shares of
Common Stock pursuant to their respective Stock Appreciation Right Agreements
and the terms and conditions of the Plan. 

Section 7.09      Restrictions. Stock
Appreciation Rights may not be sold, pledged or otherwise encumbered or disposed
of and shall not be assignable or transferable except by will, the laws of
descent and distribution or pursuant to a domestic relations order entered by a
court in settlement of marital property rights, except as specifically provided
in the Stock Appreciation Right Agreement or as authorized by the Administrator,
and subject to Section 13.01 of this Plan.

ARTICLE 8. 
RESTRICTED STOCK AWARDS PROGRAM

Section 8.01      Restricted Stock Award Terms.
Shares of Common Stock may be issued under the Restricted Stock Awards Program
through direct and immediate issuances of Restricted Stock Awards without any
intervening option grants. Each such stock grant shall be evidenced by a
Restricted Stock Awards Agreement which complies with the terms specified below.

11 

Section 8.02      Cost of Shares. Grants
of Restricted Stock Awards under the Restricted Stock Awards Program shall be
made at such cost as the Administrator shall determine and may be issued for no
monetary consideration, subject to applicable state law. 

Section 8.03      Vesting Provisions. 

a)      Each Restricted Stock Award shall vest and become
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives established with respect to one or more
Performance Criteria, as shall be determined by the Administrator. 

a)      Any new,
  substituted or additional securities or other property (including money paid
  other than as a regular cash dividend) which the Participant may have the right
  to receive with respect to the Participant’s unvested Restricted Stock Awards by
  reason of any stock dividend, stock split, recapitalization, combination of
  shares, exchange of shares or other change affecting the outstanding Common
  Stock as a class without the Company’s receipt of consideration shall be issued
  subject to (i) the same vesting requirements applicable to the Participant’s
  unvested Restricted Stock Awards and (ii) such escrow arrangements as the
  Administrator shall deem appropriate. 

b)      Unless specified otherwise in the
  Restricted Stock Awards Agreement, the Participant shall have full shareholder
  rights with respect to any Restricted Stock Awards issued to the Participant
  under the Restricted Stock Awards Program, whether or not the Participant’s
  interest in those shares is vested, and accordingly, the Participant shall have
  the right to vote such shares and to receive any regular cash dividends paid on
  such shares. 

c)      Should the Participant cease to remain in Service while holding
  one or more unvested Restricted Stock Awards issued under the Restricted Stock
  Awards Program or should the performance objectives not be attained with respect
  to one or more such unvested Restricted Stock Awards, then those shares shall be
  immediately surrendered to the Company for cancellation, and the Participant
  shall have no further shareholder rights with respect to those shares. To the
  extent the surrendered shares were previously issued to the Participant for
  consideration paid in cash or cash equivalent (including the Participant’s
  purchase-money indebtedness), the Company shall repay to the Participant the
  cash consideration paid for the surrendered shares and shall cancel the unpaid
  principal balance of any outstanding purchase-money note of the Participant
  attributable to such surrendered shares.

 d)      The Administrator may in its
  discretion waive the surrender and cancellation of one or more unvested
  Restricted Stock Awards (or other assets attributable thereto) which would
  otherwise occur upon the non-completion of the vesting schedule applicable to
  such shares. Such waiver shall result in the immediate vesting of the
  Participant’s interest in the Restricted Stock Awards as to which the waiver
  applies. Such waiver may be effected at any time, whether before or after the
  Participant’s cessation of Service or the attainment or non-attainment of the
  applicable performance objectives. 

Section 8.04      Restrictions. Unvested
Restricted Stock Awards may not be sold, pledged or otherwise encumbered or
disposed of and shall not be assignable or transferable except by will, the laws
of descent and distribution or pursuant to a domestic relations order entered by
a court in settlement of marital property rights, except as specifically
provided in the Restricted Stock Award Agreement or as authorized by the
Administrator, and subject to Section 13.01 of this Plan.

12 

Section 8.05      Share Escrow/Legends. Stock
certificates evidencing any unvested Restricted Stock Awards may, in the
Administrator’s discretion, be held in escrow by the Company until the
Participant’s interest in such shares vests or may be issued directly to the
Participant with restrictive legends on the certificates evidencing those
unvested shares. 

ARTICLE 9. 
ADMINISTRATION OF THE PLAN 

Section 9.01      Administrator. Authority to
control and manage the operation and administration of the Plan shall be vested
in the Board, which may delegate such responsibilities in whole or in part to a
committee consisting of two (2) or more members of the Board (the
“Committee”), each of whom shall meet the independence requirements under
the then applicable rules, regulations or listing requirements of the principal
exchange on which the Company’s shares of Common Stock are then listed or
admitted to trading or as otherwise determined by the Board. Members of the
Committee may be appointed from time to time by, and shall serve at the pleasure
of, the Board. The Board may limit the composition of the Committee to those
persons necessary to comply with the requirements of Section 162(m) of the Code
and Section 16 of the Exchange Act. As used herein, the term “Administrator”
means the Board or, with respect to any matter as to which responsibility has
been delegated to the Committee, the term Administrator shall mean the
Committee. 

Section 9.02      Powers of the Administrator.
In addition to any other powers or authority conferred upon the Administrator
elsewhere in this Plan or by law, the Administrator shall have full power and
authority: (a) to determine the persons to whom, and the time or times at which,
Incentive Options, Nonqualified Options, Restricted Stock Units, Stock
Appreciation Rights, or Restricted Stock Awards shall be granted, the number of
shares to be represented by Option Exercise Documents, and the Exercise Price of
such Options and the Base Price of such Stock Appreciation Rights; (b) to
interpret the Plan; (c) to create, amend or rescind rules and regulations
relating to the Plan; (d) to determine the terms, conditions and restrictions
contained in, and the form of, Option Exercise Documents, Restricted Stock
Awards Agreement, Restricted Stock Unit Agreement, or Stock Appreciation Right
Agreement; (e) to determine the identity or capacity of any persons who may be
entitled to exercise a Participant’s rights under any Option Exercise Documents,
Restricted Stock Awards Agreement, Restricted Stock Unit Agreement, or Stock
Appreciation Right Agreement under the Plan; (f) to correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any Option
Exercise Documents, Restricted Stock Awards Agreement, Restricted Stock Unit
Agreement, or Stock Appreciation Right Agreement; (g) to accelerate the vesting
of any Option, Restricted Stock Unit, Stock Appreciation Right, or Restricted
Stock Award; (h) to extend the expiration date of any Option Exercise Documents,
Restricted Stock Awards Agreement, Restricted Stock Unit Agreement, or Stock
Appreciation Right Agreement; (i) subject to Section 9.03, to amend outstanding
Option Exercise Documents, Restricted Stock Awards Agreement, Restricted Stock
Unit Agreement, or Stock Appreciation Right Agreement to provide for, among
other things, any change or modification which the Administrator could have
included in the original agreement or in furtherance of the powers provided for
herein; and (j) to make all other determinations necessary or advisable for the
administration of this Plan, but only to the extent not contrary to the express
provisions of this Plan. Any action, decision, interpretation or determination
made in good faith by the Administrator in the exercise of its authority
conferred upon it under this Plan shall be final and binding on the Company and
all Participants. Notwithstanding any term or provision in this Plan, the
Administrator shall not have the power or authority, by amendment or otherwise
to extend the expiration date of an Option, Restricted Stock Unit or Stock
Appreciation Right beyond the tenth (10th) anniversary of the date such Option
or Stock Appreciation Right was granted. 

Section 9.03      Repricing Prohibited. Subject
to Section 4.02, and except in connection with a corporate transaction involving
the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spinoff, combination, or
exchange of shares), neither the Committee nor the Board shall amend the terms
of outstanding awards to reduce the Exercise Price of outstanding Options or the
Base Price of outstanding Stock Appreciation Rights or cancel outstanding
Options, Stock Appreciation Rights, or Restricted Stock Awards in exchange for
cash, other awards or Options with an Exercise Price that is less than the
Exercise Price of the original Options or Stock Appreciation Rights with a Base
Price that is less than the Base Price of the original Stock Appreciation
Rights, without approval of the Company’s stockholders, evidenced by a majority
of votes cast.

13 

Section 9.04      Limitation on Liability;
Indemnification. No employee of the Company or member of the Board or
Committee shall be subject to any liability with respect to duties under the
Plan unless the person acts fraudulently or in bad faith. To the extent
permitted by law, the Company shall indemnify each member of the Board or
Committee, and any employee of the Company with duties under the Plan, who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person’s conduct in the performance of duties
under the Plan. 

ARTICLE 10. 
CHANGE IN CONTROL 

Section 10.01      Options and Stock Appreciation
Rights. Vesting of all outstanding Options or Stock Appreciation Rights
shall accelerate automatically effective as of immediately prior to the
consummation of the Change in Control. In connection with such acceleration, the
Administrator in its discretion may provide, in connection with the Change in
Control transaction, for the purchase or exchange of each Option or Stock
Appreciation Right for an amount of cash or other property having a value equal
to (i) with respect to each Option, the amount (or “spread”) by which, (x) the
value of the cash or other property that the Optionee would have received
pursuant to the Change in Control transaction in exchange for the shares
issuable upon exercise of the Option had the Option been exercised immediately
prior to the Change in Control, exceeds (y) the Exercise Price of the Option,
and (ii) with respect to each Stock Appreciation Right, the value of the cash or
other property that the Participant would have received had the Stock
Appreciation Right been exercised immediately prior to the Change in Control.
The Administrator shall have the discretion to provide in each Option Exercise
Document other terms and conditions that relate to vesting of such Option or
Stock Appreciation Right in the event of a Change in Control. The aforementioned
terms and conditions may vary in each Option Exercise Document and may be
different from and have precedence over the provisions set forth in this Section
10.01. 

Section 10.02      Restricted Stock Units and
Restricted Stock Awards. All Restricted Stock Units and unvested Restricted
Stock Awards shall vest in full effective as of immediately prior to the
consummation of the Change in Control. In connection with such acceleration, the
Administrator in its discretion may provide, in connection with the Change in
Control transaction, for the purchase or exchange of each Restricted Stock Unit
or Restricted Share for an amount of cash or other property having a value equal
to the value of the cash or other property that the Participant would have
received had the Restricted Stock Unit or Restricted Share vested immediately
prior to the Change in Control. The Administrator shall have the discretion to
provide in each agreement other terms and conditions that relate to vesting of
such Restricted Stock Units and Restricted Stock Awards in the event of a Change
in Control. The aforementioned terms and conditions may vary in each agreement,
and may be different from and have precedence over the provisions set forth in
this Section 10.02. 

14 

ARTICLE 11. 
AMENDMENT AND TERMINATION OF THE PLAN

Section 11.01      Amendments. The Board may
from time to time alter, amend, suspend or terminate this Plan in such respects
as the Board may deem advisable. No such alteration, amendment, suspension or
termination shall be made which shall substantially affect or impair the rights
of any Participant under an outstanding Option Exercise Documents, Restricted
Stock Awards Agreement, Restricted Stock Unit Agreement, and Stock Appreciation
Right Agreement without such Participant’s consent. The Board may alter or amend
the Plan to comply with requirements under the Code relating to Incentive
Options or other types of options which gives Optionees more favorable tax
treatment than that applicable to Options granted under this Plan as of the date
of its adoption. Upon any such alteration or amendment, any outstanding Option
granted hereunder may, if the Administrator so determines and if permitted by
applicable law, be subject to the more favorable tax treatment afforded to an
Optionee pursuant to such terms and conditions. The Plan Administrator may
revise or amend the grant forms attached to this Plan. 

Section 11.02      Plan Termination. Unless
this Plan shall theretofore have been terminated, the Plan shall terminate on
the tenth (10th) anniversary of the Effective Date and no Options, Restricted
Stock Units, Stock Appreciation Rights, or Restricted Stock Awards may be
granted under the Plan thereafter, but Option Exercise Documents, Restricted
Stock Awards Agreement, Restricted Stock Unit Agreements, and Stock Appreciation
Right Agreements then outstanding shall continue in effect in accordance with
their respective terms. 

ARTICLE 12. 
TAXES 

Section 12.01      Withholding. The Company
shall have the power to withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy any applicable Federal, state, and
local tax withholding requirements with respect to any Options, Restricted Stock
Units, Stock Appreciation Rights, or Restricted Stock Awards. To the extent
permissible under applicable tax, securities and other laws, the Administrator
may, in its sole discretion and upon such terms and conditions as it may deem
appropriate, permit a Participant to satisfy his or her obligation to pay any
such tax, in whole or in part, up to an amount determined on the basis of the
highest marginal tax rate applicable to such Participant, by (a) directing the
Company to apply shares of Common Stock to which the Participant is entitled as
a result of the exercise of an Option or Stock Appreciation Right or vesting of
a Restricted Stock Unit or Restricted Share, or (b) delivering to the Company
shares of Common Stock owned by the Participant. The shares of Common Stock so
applied or delivered in satisfaction of the Participant’s tax withholding
obligation shall be valued at their Fair Market Value as of the date of
measurement of the amount of income subject to withholding. 

Section 12.02      Compliance with Section 409A of
the Code. Options, Restricted Stock Units, Stock Appreciation Rights, and
Restricted Stock Awards will be designed and operated in such a manner that they
are either exempt from the application of, or comply with, the requirements of
Section 409A of the Code such that the grant, payment, settlement or deferral
will not be subject to the additional tax or interest applicable under Section
409A of the Code, except as otherwise determined in the sole discretion of the
Administrator. The Plan and each Option Exercise Document, Restricted Stock
Awards Agreement, Restricted Stock Unit Agreement, and Stock Appreciation Right
Agreement is intended to meet the requirements of Section 409A of the Code and
will be construed and interpreted in accordance with such intent, except as
otherwise determined in the sole discretion of the Administrator. To the extent
that an Option, Restricted Stock Unit, Stock Appreciation Right, or Restricted
Stock Award, or grant, payment, settlement or deferral thereof is subject to
Section 409A of the Code such Option, Restricted Stock Unit, Stock Appreciation Right, or Restricted Share will
be granted, paid, settled or deferred in a manner that will meet the
requirements of Section 409A of the Code, such that the grant, payment,
settlement or deferral thereof will not be subject to the additional tax or
interest applicable under Section 409A of the Code. 

15 

ARTICLE 13. 
MISCELLANEOUS 

Section 13.01      Involuntary Transfer. In the
event of any transfer by operation of law or other involuntary transfer
(including divorce or death) of all or a portion of any awards or shares granted
pursuant to this Plan, whether vested or unvested, held by the record holder
thereof, the Company shall have the right to purchase all of the awards or
shares transferred at the greater of the purchase price paid by purchaser or the
Fair Market Value of the awards or shares (as determined by the Board of
Directors) on the date of transfer. Upon such a transfer, the person acquiring
the awards or shares shall promptly notify the Secretary of the Company of such
transfer. The right to purchase such awards or shares shall be provided to the
Company for a period of thirty (30) days following receipt by the Company of
written notice by the person acquiring the awards or shares. Within thirty (30)
days of receiving notice of the transfer or proposed transfer, the Company shall
notify the purchaser/acquirer or his or her executor of the price. If the
purchaser/acquirer does not agree with the Company’s valuation, the
purchaser/acquirer may have the valuation determined by an independent appraiser
to be mutually agreed upon and paid for by the purchaser/acquirer and the
Company. 

Section 13.02      Shareholder Approval of the
Plan. The Plan shall be approved by a majority of the outstanding securities
entitled to vote at a duly called meeting or by majority written consent by the
later of (i) within twelve (12) months before or after the date the Plan is
adopted, or (ii) prior to or within twelve (12) months of the granting of any
Incentive Options or Nonqualified Options, or the issuance of any Restricted
Stock Units, Stock Appreciation Rights, or Restricted Stock Awards. If any
Incentive Options or Nonqualified Options is exercised, or any Restricted Stock
Units, Stock Appreciation Rights, or Restricted Stock Awards is issued before
security holder approval is obtained shall be rescinded if security holder
approval is not obtained in the manner described in the preceding sentence. 

Section 13.03      Excess Awards. Awards may be
granted under the Plan which are in each instance in excess of the number of
shares of Common Stock then available for issuance under the Plan, provided any
excess shares actually issued under those programs shall be held in escrow until
there is obtained shareholder approval of an amendment or increase pursuant to
Section 4.01 sufficiently increasing the number of shares of Common Stock
available for issuance under the Plan. If such shareholder approval is not
obtained within twelve (12) months after the date the first such excess
issuances are made, then (i) any unexercised options granted on the basis of
such excess shares shall terminate and cease to be outstanding and (ii) the
Company shall promptly refund to the Participants the exercise or purchase price
paid for any excess shares issued under the Plan and held in escrow, together
with interest (at the applicable Short Term Federal Rate) for the period the
shares were held in escrow, and such shares shall thereupon be automatically
canceled and cease to be outstanding.

Section 13.04      Benefits Not Alienable.
Other than as provided above, benefits under this Plan may not be assigned or
alienated, whether voluntarily or involuntarily. Any unauthorized attempt at
assignment, transfer, pledge or other disposition shall be without effect. 

Section 13.05      No Enlargement of Employee
Rights. This Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the Company and
any Participant to be consideration for, or an inducement to, or a condition of,
the employment of any Participant. Nothing contained in the Plan
shall be deemed to give the right to any Participant to be retained as an
employee of the Company or any Affiliated Company or to interfere with the right
of the Company or any Affiliated Company to discharge any Participant at any
time. 

16 

Section 13.06      Application of Funds. The
proceeds received by the Company from the sale of Common Stock pursuant to
Option Exercise Documents, except as otherwise provided herein, will be used for
general corporate purposes. 

Section 13.07      Annual Reports. During the
term of this Plan, the Company will furnish to each Participant who does not
otherwise receive such materials, copies of all reports, proxy statements and
other communications that the Company distributes generally to its stockholders,
including, but not limited to, financial statements. 

Section 13.08      Choice of Law and Venue. The
Plan and all related documents shall be governed by, and construed in accordance
with, the laws of the State of Nevada. Acceptance of an award shall be deemed to
constitute consent to the jurisdiction and venue of the courts located in the
State of Nevada for all purposes in connection with any suit, action or other
proceeding relating to such award, including the enforcement of any rights under
the Plan or any agreement or other document, and shall be deemed to constitute
consent to any process or notice of motion in connection with such proceeding
being served by certified or registered mail or personal service within or
without the State of Nevada, provided a reasonable time for appearance is
allowed. 

Section 13.09      Rule 16b-3. With respect to
Participants subject to Rule 16b-3 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable provisions of Rule 16b-3. To the
extent any provision of the Plan or action by the Plan Administrator fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Plan Administrator. 

Section 13.10      Relationship to Other Plans.
Nothing in this Plan shall prevent the Company or any Affiliated Company from
adopting or continuing other or additional compensation arrangements, including
without limitation plans providing for the granting of options, restricted stock
units, stock appreciation rights, restricted stock awards, or other equity
awards. Grants under the Plan may form a part of or otherwise be related to such
other or additional compensation arrangements. 

Attachments: 

	1. 	
      Grant of Stock Option form

	2. 	
      Option Exercise Form and the Grant Form

	3. 	
      Restricted Stock Award Agreement form

	4. 	
      Restricted Stock Unit Agreement
form

17

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