Document:

Exhibit 10.15

 

VERIFONE HOLDINGS, INC.

2005 EMPLOYEE EQUITY INCENTIVE PLAN

 

1.                                       Purpose.

 

This plan shall be known as the VeriFone
Holdings, Inc. 2005 Employee Equity Incentive Plan (the “Plan”).  The purpose of the Plan shall be to advance
the best interests of VeriFone Holdings, Inc. (the “Company”) and its
Subsidiaries by (i) providing certain officers and employees of, and
certain other individuals who perform services for, the Company and its
Subsidiaries with incentives to maximize stockholder value and otherwise
contribute to the success of the Company and (ii) enabling the Company to
attract, retain and reward the best available persons for positions of
responsibility.  Grants of incentive or
non-qualified stock options, stock appreciation rights, restricted stock,
restricted stock units, performance shares and share units and other
stock-based awards may be made under the Plan.

 

2.                                       Definitions

 

(a) “Board of Directors” and “Board” mean the
board of directors of the Company.

 

(b) “California Blue Sky Law” means the
California Corporate Securities Law of 1968 and the regulations promulgated
thereunder, as amended.

 

(c) “Cause” shall have the meaning specified
in a holder’s written agreement or if not specified therein shall mean the
occurrence of one or more of the following events as reasonably determined by
the Committee:

 

(i)                                     Conviction of a
felony or any crime or offense lesser than a felony involving dishonesty,
disloyalty or fraud with respect to the company or any Subsidiary or any of
their respective properties or assets; or

 

(ii)                                  Gross negligence or
willful misconduct that has caused demonstrable and serious injury to the
Company or a Subsidiary, monetary or otherwise; or

 

(iii)                               Willful refusal to
perform or substantial disregard of duties properly assigned, as determined by
the Company or a Subsidiary, as the case may be; or

 

(iv)                              Breach of duty of loyalty
to the Company or a Subsidiary or other act of fraud or dishonesty with respect
to the Company or a Subsidiary.

 

(d)                                 “Change in Control”
means the occurrence of one of the following events:

 

(i)                                     if any “person” or
“group” as those terms are used in Sections 13(d) and 14(d) of the
Exchange Act or any successors thereto, other than an Exempt Person, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act or any successor thereto), directly or indirectly, of securities
of the

 

 

Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities; or

 

(ii)                                  during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board and any new directors whose election by the Board or
nomination for election by the Company’s stockholders was approved by at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election was previously so approved, cease
for any reason to constitute a majority thereof; or

 

(iii)                               consummation of a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation (A) which would result in all or a portion of the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (B) by which the
corporate existence of the Company is not affected and following which the
Company’s chief executive officer and directors retain their positions with the
Company (and constitute at least a majority of the Board); or

 

(iv)                              consummation of a plan of
complete liquidation of the Company or a sale or disposition by the Company of
all or substantially all the Company’s assets, other than a sale to an Exempt
Person.

 

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

 

(f) “Committee” means the Compensation
Committee of the Board, which shall consist solely of two or more members of
the Board.

 

(g) “Common Stock” means the Common Stock,
par value $0.01 per share, of the Company, and any other shares into which such
stock may be changed by reason of a recapitalization, reorganization, merger,
consolidation or any other change in the corporate structure or capital stock
of the Company.

 

(h) “Competition” is deemed to occur if a
person whose employment with the Company or its Subsidiaries has terminated
obtains a position as a full-time or part-time employee of, as a member of the
board of directors of, or as a consultant or advisor with or to, or acquires an
ownership interest in excess of 5% of, a corporation, partnership, firm or
other entity that engages in any of the businesses of the Company or any
Subsidiary with which the person was involved in a management role at any time
during his or her last five years of employment with or other service for the
Company or any Subsidiaries.

 

(i) “Disability” means a disability that
would entitle an eligible participant to payment of monthly disability payments
under any Company disability plan or as otherwise determined by the Committee.

 

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(j) “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

(k) “Exempt Person” means (i) GTCR
Golder Rauner, L.L.C., GTCR Golder Rauner II, L.L.C., or any of their
affiliates, (ii) any person, entity or group under the control of any
party included in clause (i), (iii) any employee benefit plan of the
Company or a trustee or other administrator or fiduciary holding securities
under an employee benefit plan of the Company, or (iv) Douglas G.
Bergeron.

 

(l) “Family Member” has the meaning given to
such term in General Instructions A.1(a)(5) to Form S-8 under the
Securities Act of 1933, as amended, and any successor thereto.

 

(m) “Fair Market Value” of a share of Common
Stock of the Company means, as of the date in question, the last sale price of
the stock during normal trading hours (or if no selling price is quoted, the
bid price) on the New York Stock Exchange, Inc. or if not listed thereon,
the principal securities exchange on which the Common Stock is then listed for
trading (including for this purpose the Nasdaq National Market) (the “Market”)
for the applicable trading day or, if the Common Stock is not then listed or
quoted in the Market, the Fair Market Value shall be the fair value of the
Common Stock determined in good faith by the Board; provided, however, that for
purposes of options granted at the pricing of the Company’s initial public
offering, the Fair Market Value shall, if the Committee so determines in its
discretion, be the initial public offering price; provided further, however,
that when shares received upon exercise of an option are immediately sold in
the open market, the net sale price received may be used to determine the Fair
Market Value of any shares used to pay the exercise price or applicable
withholding taxes and to compute the withholding taxes.

 

(n) “Incentive Stock Option” means an option
conforming to the requirements of Section 422 of the Code and any
successor thereto.

 

(o) “Non-qualified Stock Option” means any
stock option other than an Incentive Stock Option.

 

(p) “Other Company Securities” mean
securities of the Company other than Common Stock, which may include, without
limitation, unbundled stock units or components thereof, debentures, preferred
stock, warrants and securities convertible into or exchangeable for Common
Stock or other property.

 

(q) “Retirement” means retirement as defined
under any Company pension plan or retirement program or termination of one’s
employment on retirement with the approval of the Committee.

 

(r) “Stock Options” means the Incentive Stock
Options and Non-qualified Stock Options.

 

(s) “Subsidiary” means a corporation or other
entity of which outstanding shares or ownership interests representing 50% or
more of the combined voting power of such corporation or other entity entitled
to elect the management thereof, or such lesser percentage as may be approved
by the Committee, are owned directly or indirectly by the Company.

 

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3.                                       Administration.

 

The Plan shall be administered by the
Committee; provided that the Board may, in its discretion, at any time and from
time to time, resolve to administer the Plan, in which case the term “Committee”
shall be deemed to mean the Board for all purposes herein.  Subject to the provisions of the Plan, the
Committee shall be authorized to (i) select persons to participate in the
Plan, (ii) determine the form and substance of grants made under the Plan
to each participant, and the conditions and restrictions, if any, subject to
which such grants will be made, (iii) certify that the conditions and restrictions
applicable to any grant have been met, (iv) modify the terms of grants
made under the Plan, (v) interpret the Plan and grants made thereunder, (vi) make
any adjustments necessary or desirable in connection with grants made under the
Plan to eligible participants located outside the United States and (vii) adopt,
amend, or rescind such rules and regulations, and make such other
determinations, for carrying out the Plan as it may deem appropriate.  Decisions of the Committee on all matters
relating to the Plan shall be in the Committee’s sole discretion and shall be
conclusive and binding on all parties. 
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with applicable
federal and state laws and rules and regulations promulgated pursuant
thereto and the rules and regulations of the principal securities exchange
on which the Common Stock is then listed for trading.  No member of the Committee and no officer of
the Company shall be liable for any action taken or omitted to be taken by such
member, by any other member of the Committee or by any officer of the Company
in connection with the performance of duties under the Plan, except for such
person’s own willful misconduct or as expressly provided by statute.

 

The expenses of the Plan shall be borne by
the Company.  The Plan shall not be
required to establish any special or separate fund or make any other
segregation of assets to assume the payment of any award under the Plan, and
rights to the payment of such awards shall be no greater than the rights of the
Company’s general creditors.

 

4.                                       Shares
Available for the Plan.

 

Subject to adjustments as provided in Section 15
hereof, an aggregate of 3,100,000 shares of Common Stock (the “Shares”) may be
issued pursuant to the Plan.  Such Shares
may be in whole or in part authorized and unissued or held by the Company as
treasury shares.  If any grant under the
Plan expires or terminates unexercised, becomes unexercisable or is forfeited
as to any Shares, or is tendered or withheld as to any shares in payment of the
exercise price of the grant or the taxes payable with respect to the exercise,
then such unpurchased, forfeited, tendered or withheld Shares shall thereafter
be available for further grants under the Plan.

 

Without limiting the generality of the
foregoing provisions of this Section 4 or the generality of the provisions
of Sections 3, 6 or 17 or any other section of this Plan, the Committee
may, at any time or from time to time, and on such terms and conditions (that
are consistent with and not in contravention of the other provisions of this
Plan) as the Committee may, in its sole discretion, determine, enter into
agreements (or take other actions with respect to

 

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the options) for new options
containing terms (including exercise prices) more (or less) favorable than the
outstanding options.

 

5.                                       Participation.

 

Participation in the Plan shall be limited to
those officers (including non-employee officers) and employees of, and other
individuals performing services for, the Company and its Subsidiaries selected
by the Committee (including participants located outside the United
States).  Nothing in the Plan or in any
grant thereunder shall confer any right on a participant to continue in the
service or employ as an officer of or in the performance of services for the
Company or a Subsidiary or shall interfere in any way with the right of the
Company or a Subsidiary to terminate the employment or performance of services
or to reduce the compensation or responsibilities of a participant at any
time.  By accepting any award under the
Plan, each participant and each person claiming under or through him or her
shall be conclusively deemed to have indicated his or her acceptance and
ratification of, and consent to, any action taken under the Plan by the
Company, the Board or the Committee.

 

Incentive Stock Options or Non-qualified
Stock Options, stock appreciation rights, restricted stock, restricted stock
units, performance shares and share units and other stock-based awards may be
granted to such persons and for such number of Shares as the Committee shall
determine (such individuals to whom grants are made being sometimes herein
called “optionees” or “grantees,” as the case may be).  Determinations made by the Committee under
the Plan need not be uniform and may be made selectively among eligible
individuals under the Plan, whether or not such individuals are similarly situated.  A grant of any type made hereunder in any one
year to an eligible participant shall neither guarantee nor preclude a further
grant of that or any other type to such participant in that year or subsequent
years.

 

6.                                       Incentive
and Non-qualified Stock Options.

 

The Committee may from time to time grant to
eligible participants Incentive Stock Options, Non-qualified Stock Options, or
any combination thereof; provided that the Committee may grant Incentive Stock
Options only to eligible employees of the Company or its subsidiaries (as
defined for this purpose in Section 424(f) of the Code or any
successor thereto).  In any one calendar
year, the Committee shall not grant to any one participant options to purchase
a number of shares of Common Stock in excess of 100,000 (as adjusted pursuant
to Section 15 hereof).  The options
granted shall take such form as the Committee shall determine, subject to the
following terms and conditions.

 

It is the Company’s intent that Non-qualified
Stock Options granted under the Plan not be classified as Incentive Stock
Options, that Incentive Stock Options be consistent with and contain or be
deemed to contain all provisions required under Section 422 of the Code
and any successor thereto, and that any ambiguities in construction be
interpreted in order to effectuate such intent. 
If an Incentive Stock Option granted under the Plan does not qualify as
such for any reason, then to the extent of such non-qualification, the stock
option represented thereby shall be regarded as a Non-qualified Stock Option
duly granted under the Plan, provided that such stock option otherwise meets
the Plan’s requirements for Non-qualified Stock Options.

 

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(a) Price.  The price per Share deliverable upon the
exercise of each option (“exercise price”) may not be less than 100% of the
Fair Market Value of a share of Common Stock as of the date of grant of the
option, and in the case of the grant of any Incentive Stock Option to an
employee who, at the time of the grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the exercise price may not be less than 110% of the Fair Market
Value of a share of Common Stock as of the date of grant of the option, in each
case unless otherwise permitted by Section 422 of the Code or any
successor thereto.

 

(b) Payment.  Options may be exercised, in whole or in
part, upon payment of the exercise price of the Shares to be acquired. Unless
otherwise determined by the Committee, payment shall be made (i) in cash
(including check, bank draft, money order or wire transfer of immediately
available funds), (ii) if approved by the Committee in connection with a
Change in Control, by delivery of a demand promissory note made by the
participant in favor of the Company, (iii) by delivery of outstanding
shares of Common Stock with a Fair Market Value on the date of exercise equal
to the aggregate exercise price payable with respect to the options’ exercise, (iv) by
simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal
Reserve Board or (v) by any combination of the foregoing.

 

In the event a grantee elects to pay the exercise
price payable with respect to an option pursuant to clause (iii) above, (A) only
a whole number of share(s) of Common Stock (and not fractional shares of Common
Stock) may be tendered in payment, (B) such grantee must present evidence
acceptable to the Company that he or she has owned any such shares of Common
Stock tendered in payment of the exercise price (and that such tendered shares
of Common Stock have not been subject to any substantial risk of forfeiture)
for at least six months prior to the date of exercise, and (C) Common
Stock must be delivered to the Company. 
Delivery for this purpose may, at the election of the grantee, be made
either by (1) physical delivery of the certificate(s) for all such shares
of Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (2) direction
to the grantee’s broker to transfer, by book entry, such shares of Common Stock
from a brokerage account of the grantee to a brokerage account specified by the
Company.  When payment of the exercise
price is made by delivery of Common Stock, the difference, if any, between the
aggregate exercise price payable with respect to the option being exercised and
the Fair Market Value of the shares of Common Stock tendered in payment (plus
any applicable taxes) shall be paid in cash. 
No grantee may tender shares of Common Stock having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being
exercised (plus any applicable taxes).

 

(c) Terms of Options.  The term during which each option may be
exercised shall be determined by the Committee, but if required by the Code and
except as otherwise provided herein, no option shall be exercisable in whole or
in part more than seven years from the date it is granted, and no Incentive
Stock Option granted to an employee who at the time of the grant owns more than
10% of the total combined voting power of all classes of stock of the Company
or any of its Subsidiaries shall be exercisable more than five years from the
date it is granted.  All rights to
purchase Shares pursuant to an option shall, unless sooner terminated, expire
at the date

 

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designated by the Committee.  The Committee shall determine the date on
which each option shall become exercisable and may provide that an option shall
become exercisable in installments.  The
Shares constituting each installment may be purchased in whole or in part at
any time after such installment becomes exercisable, subject to such minimum
exercise requirements as may be designated by the Committee.  Prior to the exercise of an option and
delivery of the Shares represented thereby, the optionee shall have no rights
as a stockholder with respect to any Shares covered by such outstanding option
(including any dividend or voting rights).

 

(d) Limitations on Grants.  If required by the Code, the aggregate Fair
Market Value (determined as of the grant date) of Shares for which an Incentive
Stock Option is exercisable for the first time during any calendar year under
all equity incentive plans of the Company and its Subsidiaries (as defined in Section 422
of the Code or any successor thereto) may not exceed $100,000.

 

(e) Termination.

 

(i)                                                                                     Death
or Disability.  If a participant
ceases to be an officer or employee of, or to perform other services for, the
Company or any Subsidiary due to death or Disability, (A) all of the
participant’s options that were vested and exercisable on the date of his or
her death or Disability shall remain exercisable for, and shall otherwise
terminate at the end of, a period of 365 days from the date of such death or
Disability, but in no event after the expiration date of the options; provided
that the participant does not engage in Competition during such 365-day period
unless he or she received written consent to do so from the Board or the
Committee; and (B) all of the participant’s options that were not vested
and exercisable on the date of his or her death or Disability shall be
forfeited immediately.  Notwithstanding
the foregoing, if the Disability giving rise to the termination of employment
is not within the meaning of Section 22(e)(3) of the Code or any
successor thereto, Incentive Stock Options not exercised by such participant
within 90 days after the date of termination of employment will cease to
qualify as Incentive Stock Options and will be treated as Non-qualified Stock
Options under the Plan if required to be so treated under the Code.

 

(ii)                                                                                  Retirement.  If a participant ceases to be an officer or
employee of, or to perform other services for, the Company or any Subsidiary
upon the occurrence of his or her Retirement, (A) all of the participant’s
options that were vested and exercisable on the date of Retirement shall remain
exercisable for, and shall otherwise terminate at the end of, a period of 180
days after the date of Retirement, but in no event after the expiration date of
the options; provided that the participant does not engage in Competition
during such 180 day period unless he or she receives written consent to do so
from the Board or the Committee; and (B) all of the participant’s options
that were not vested and exercisable on the date of Retirement shall be
forfeited immediately.  Notwithstanding
the foregoing, Incentive Stock Options not exercised by such participant within
90 days after Retirement will cease to qualify as Incentive Stock Options and
will be treated as

 

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Non-qualified Stock Options under the Plan if
required to be so treated under the Code.

 

(iii)                                                                               Discharge
for Cause.  If a participant ceases
to be an officer or employee of, or to perform other services for, the Company
or a Subsidiary due to Cause, all of the participant’s options shall expire and
be forfeited immediately upon such cessation, whether or not then vested and
exercisable.

 

(iv)                                                                              Change
in Control.  In the event of a Change
in Control, the Committee may cancel and terminate all or any portion of any
option not exercised in connection therewith.

 

(v)                                                                                 Other
Termination.  Unless otherwise
determined by the Committee, if a participant ceases to be an officer or
employee of, or to otherwise perform services for, the Company or a Subsidiary
for any reason other than death, Disability, Retirement or Cause, (A) all
of the participant’s options that were vested and exercisable on the date of
such cessation shall remain exercisable for, and shall otherwise terminate at
the end of, a period of 90 days after the date of such cessation, but in no
event after the expiration date of the options; provided that the participant
does not engage in Competition during such 90-day period unless he or she
receives written consent to do so from the Board or the Committee; and (B) all
of the participant’s options that were not vested and exercisable on the date
of such cessation shall be forfeited immediately upon such cessation.

 

7.                                       Restricted
Stock.

 

The Committee may at any time and from time
to time grant Shares of restricted stock under the Plan to such participants
and in such amounts as it determines. 
Each grant of Shares of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall be
at least six months except as otherwise determined by the Committee or provided
in the third paragraph of this Section 7), and the time or times at which
such restrictions shall lapse with respect to all or a specified number of
Shares that are part of the grant.

 

The participant will be required to pay the
Company the aggregate par value of any Shares of restricted stock (or such
larger amount as the Board may determine to constitute capital under Section 154
of the Delaware General Corporation Law, as amended, or any successor thereto)
within ten days of the date of grant, unless such Shares of restricted stock
are treasury shares.  Unless otherwise
determined by the Committee, certificates representing Shares of restricted
stock granted under the Plan will be held in escrow by the Company on the
participant’s behalf during any period of restriction thereon and will bear an
appropriate legend specifying the applicable restrictions thereon, and the
participant will be required to execute a blank stock power therefor.  Except as otherwise provided by the
Committee, during such period of restriction the participant shall have all of
the rights of a holder of Common Stock, including but not limited to the rights
to receive dividends and to vote, and any stock or other securities

 

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received as a distribution with
respect to such participant’s restricted stock shall be subject to the same
restrictions as then in effect for the restricted stock.

 

Except as otherwise provided by the
Committee, if a participant ceases to be an officer or employee of, or to
otherwise perform services for, the Company and its Subsidiaries due to death,
Disability or Retirement during any period of restriction, all restrictions on
Shares of restricted stock granted to such participant shall lapse.  At such time as a participant ceases to be an
officer or employee of, or otherwise performing services for, the Company or
its Subsidiaries for any other reason, all Shares of restricted stock granted
to such participant on which the restrictions have not lapsed shall be
immediately forfeited to the Company.

 

8.                                       Restricted
Stock Units; Deferred Stock Units.

 

The Committee may at any time and from time
to time grant restricted stock units under the Plan to such participants and in
such amounts as it determines.  Each
grant of restricted stock units shall specify the applicable restrictions on
such units, the duration of such restrictions (which shall be at least six
months except as otherwise determined by the Committee or provided in the third
paragraph of this Section 8), and the time or times at which such
restrictions shall lapse with respect to all or a specified number of units
that are part of the grant.

 

Each restricted stock unit shall be
equivalent in value to one share of Common Stock and shall entitle the
participant to receive from the Company at the end of the vesting period (the “Vesting
Period”) applicable to such unit one Share, unless the participant elects in a
timely fashion to defer the receipt of such Shares, as provided below.  Restricted stock units may be granted without
payment of cash or consideration to the Company; provided that participants
shall be required to pay to the Company the aggregate par value of the Shares
received from the Company within ten days of the issuance of such Shares unless
such Shares are treasury shares.

 

Except as otherwise provided by the
Committee, during the restriction period the participant shall not have any
rights as a shareholder of the Company; provided that the participant shall
have the right to receive accumulated dividends or distributions with respect
to the corresponding number of shares of Common Stock underlying each
restricted stock unit at the end of the Vesting Period, unless such restricted
stock units are converted into deferred stock units, in which case such
accumulated dividends or distributions shall be paid by the Company to the
participant at such time as the deferred stock units are converted into Shares.

 

Except as otherwise provided by the
Committee, if a participant ceases to be an officer or employee of, or to
otherwise perform services for, the Company or any Subsidiary due to death,
Disability or Retirement during any period of restriction, all restrictions on
restricted stock units granted to such participant shall lapse.  At such time as a participant ceases to be an
officer or employee of, or otherwise performing services for, the Company or
any Subsidiary for any other reason, all restricted stock units granted to such
participant on which the restrictions have not lapsed shall be immediately
forfeited to the Company.

 

A participant may elect by written notice to
the Company, which notice must be made before the later of (i) the close
of the tax year preceding the year in which the restricted

 

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stock units are granted or (ii) 30
days of first becoming eligible to participate in the Plan (or, if earlier, the
last day of the tax year in which the participant first becomes eligible to
participate in the plan) and on or prior to the date the restricted stock units
are granted, to defer the receipt of all or a portion of the Shares due with
respect to the vesting of such restricted stock units; provided that the
Committee may impose such additional restrictions with respect to the time at
which a participant may elect to defer receipt of Shares subject to the
deferral election, and any other terms with respect to a grant of restricted
stock units to the extent the Committee deems necessary to enable the participant
to defer recognition of income with respect to such units until the Shares
underlying such units are issued or distributed to the participant.  Upon such deferral, the restricted stock
units so deferred shall be converted into deferred stock units.  Except as provided below, delivery of Shares
with respect to deferred stock units shall be made at the end of the deferral
period set forth in the participant’s deferral election notice (the “Deferral
Period”).  Deferral Periods shall be no
less than one year after the vesting date of the applicable restricted stock
units.

 

Except as otherwise provided by the
Committee, during such Deferral Period the participant shall not have any
rights as a shareholder of the Company; provided that, the participant shall
have the right to receive accumulated dividends or distributions with respect
to the corresponding number of shares of Common Stock underlying each deferred
stock unit at the end of the Deferral Period when such deferred stock units are
converted into Shares.

 

Except as otherwise provided by the
Committee, if a Participant ceases to be an officer or employee of, or to
otherwise perform services for, the Company or any Subsidiary upon his or her
death prior to the end of the Deferral Period, the participant shall receive
payment in Shares in respect of such participant’s deferred stock units which
would have matured or been earned at the end of such Deferral Period as if the
applicable Deferral Period had ended as of the date of such participant’s
death.

 

Except as otherwise provided by the
Committee, if a participant ceases to be an officer or employee of, or to
otherwise perform services for, the Company or any Subsidiary upon becoming
disabled (as defined under Section 409A(a)(2)(C) of the Code) or Retirement
or for any other reason except termination for Cause prior to the end of the
Deferral Period, the participant shall receive payment in Shares in respect of
such participant’s deferred stock units at the end of the applicable Deferral
Period or on such accelerated basis as the Committee may determine, to the
extent permitted by regulations issued under Section 409A(a)(3) of
the Code.

 

Except as otherwise provided by the
Committee, if a participant ceases to be an officer or employee of, or to
otherwise perform services for, the Company or any Subsidiary due to
termination for Cause such participant shall immediately forfeit any deferred
stock units which would have matured or been earned at the end of the
applicable Deferral Period.

 

Except as otherwise provided by the
Committee, in the event of a Change in Control that also constitutes a “change
in the ownership or effective control of” the Company, or a change in the
ownership of a substantial portion of the Company’s assets (in each case as
determined under regulations issued pursuant to Section 409A(a)(2)(A)(v) of
the Code), a participant shall receive payment in Shares in respect of such
participant’s deferred stock units

 

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which would have matured or
been earned at the end of the applicable Deferral Period as if such Deferral
Period had ended immediately prior to the Change in Control; provided, however,
that if an event that constitutes a Change in Control hereunder does not
constitute a “change in control” under Section 409A of the Code (or the
regulations promulgated thereunder), no payments with respect to the deferred
stock units shall be made under this paragraph to the extent such payments
would constitute an impermissible acceleration under Section 409A of the
Code.

 

9.                                       Performance
Awards.

 

Performance awards may be granted to
participants at any time and from time to time as determined by the
Committee.  The Committee shall have
complete discretion in determining the size and composition of performance
awards granted to a participant.  The
period over which performance is to be measured (a “performance cycle”) shall
commence on the date specified by the Committee and shall end on the last day
of a fiscal year specified by the Committee. 
A performance award shall be paid no later than the 15th day
of the third month following the completion of a performance cycle.  Performance awards may include (i) specific
dollar-value target awards (ii) performance units, the value of each such
unit being determined by the Committee at the time of issuance, and/or (iii) performance
Shares, the value of each such Share being equal to the Fair Market Value of a
share of Common Stock.

 

The value of each performance award may be
fixed or it may be permitted to fluctuate based on a performance factor (e.g.,
return on equity) selected by the Committee.

 

The Committee shall establish performance
goals and objectives for each performance cycle on the basis of such criteria
and objectives as the Committee may select from time to time, including,
without limitation, the performance of the participant, the Company, one or
more of its Subsidiaries or divisions or any combination of the foregoing.  During any performance cycle, the Committee
shall have the authority to adjust the performance goals and objectives for
such cycle for such reasons as it deems equitable.

 

The Committee shall determine the portion of
each performance award that is earned by a participant on the basis of the
Company’s performance over the performance cycle in relation to the performance
goals for such cycle. The earned portion of a performance award may be paid out
in Shares, cash, Other Company Securities, or any combination thereof, as the
Committee may determine.

 

A participant must be an officer or employee
of, or otherwise perform services for, the Company or its Subsidiaries at the
end of the performance cycle in order to be entitled to payment of a
performance award issued in respect of such cycle; provided, however, that
except as otherwise determined by the Committee, if a participant ceases to be
an officer or employee of, or to otherwise perform services for, the Company
and its Subsidiaries upon his or her death, Retirement, or Disability prior to
the end of the performance cycle, the participant shall earn a proportionate
portion of the performance award based upon the elapsed portion of the
performance cycle and the Company’s performance over that portion of such
cycle.

 

11

 

In the event of a Change in Control, a
participant shall earn no less than the portion of the performance award that
the participant would have earned if the applicable performance cycle(s) had
terminated as of the date of the Change in Control.

 

10.                                 Withholding
Taxes.

 

(a) Participant Election.  Unless otherwise determined by the Committee,
a participant may elect to deliver shares of Common Stock (or have the Company
withhold shares acquired upon exercise of an option) to satisfy, in whole or in
part, the amount the Company is required to withhold for taxes in connection
with the exercise of an option.  Such
election must be made on or before the date the amount of tax to be withheld is
determined.  Once made, the election
shall be irrevocable.  The fair market
value of the shares to be withheld or delivered will be the Fair Market Value
as of the date the amount of tax to be withheld is determined. In the event a
participant elects to deliver or have the Company withhold shares of Common
Stock pursuant to this Section 10(a), such delivery or withholding must be
made subject to the conditions and pursuant to the procedures set forth in Section 6(b) with
respect to the delivery or withholding of Common Stock in payment of the
exercise price of options.

 

(b) Company Requirement.  The Company may require, as a condition to
any grant or exercise under the Plan or to the delivery of certificates for
Shares issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 10(a) or this Section 10(b),
of federal, state or local taxes of any kind required by law to be withheld
with respect to any grant or delivery of Shares.  The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind (including
salary or bonus) otherwise due to a grantee, an amount equal to any federal,
state or local taxes of any kind required by law to be withheld with respect to
any grant or delivery of Shares under the Plan.

 

11.                                 Written
Agreement; Vesting.

 

Unless the Committee determines otherwise,
each employee to whom a grant is made under the Plan shall enter into a written
agreement with the Company that shall contain such provisions, including
without limitation vesting requirements, consistent with the provisions of the
Plan, as may be approved by the Committee. 
Unless the Committee determines otherwise and except as otherwise
provided in Sections 6, 7, 8 and 9 in connection with certain occurrences of
termination, no grant under this Plan may be exercised, and no restrictions
relating thereto may lapse, within six months of the date such grant is made.

 

12.                                 Transferability.

 

Unless the Committee determines otherwise, no
option granted under the Plan shall be transferable by a participant other than
by will or the laws of descent and distribution or to a participant’s Family
Member by gift or a qualified domestic relations order as defined by the
Code.  Unless the Committee determines
otherwise, an option may be exercised only by the optionee or grantee thereof;
by his or her Family Member if such person has acquired the option by gift or
qualified domestic relations order; by the executor or administrator of the
estate of any of the foregoing or any person to whom the option is transferred
by will or the laws of descent

 

12

 

and distribution; or by the
guardian or legal representative of any of the foregoing; provided that
Incentive Stock Options may be exercised by any Family Member, guardian or
legal representative only if permitted by the Code and any regulations
thereunder.  All provisions of this Plan
shall in any event continue to apply to any option granted under the Plan and
transferred as permitted by this Section 12, and any transferee of any
such option shall be bound by all provisions of this Plan as and to the same
extent as the applicable original grantee.

 

13.                                 Listing,
Registration and Qualification.

 

If the Committee determines that the listing,
registration or qualification upon any securities exchange or under any law of
Shares subject to any option is necessary or desirable as a condition of, or in
connection with, the granting of same or the issue or purchase of Shares
thereunder, no such option may be exercised in whole or in part, no such performance
award may be paid out, and no Shares may be issued, unless such listing,
registration or qualification is effected free of any conditions not acceptable
to the Committee.

 

14.                                 Transfer
of Employee.

 

The transfer of an employee from the Company
to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to
another shall not be considered a termination of employment; nor shall it be
considered a termination of employment if an employee is placed on military or
sick leave or such other leave of absence which is considered by the Committee
as continuing intact the employment relationship.

 

15.                                 Adjustments.

 

In the event of a reorganization,
recapitalization, stock dividend, stock split or reverse stock split,
combination or other reclassification affecting the Shares or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company or to reflect any distributions
to holders of Common Stock other than regular cash dividends, the Committee
shall make such adjustment as it deems appropriate in the number and kind of
Shares, Options or other property available for issuance or granting under the
Plan (including, without limitation, the total number of Options available for
granting under the Plan pursuant to Section 4), in the number and kind of
Options, stock appreciation rights, restricted stock, restricted stock units,
performance shares and share units and other stock-based awards, and in the
exercise price of outstanding Options provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  Any
such adjustment shall be final, conclusive and binding for all purposes of the
Plan.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to any option.  After any adjustment made pursuant to this
paragraph, the number of shares subject to each outstanding option shall be
rounded to the nearest whole number.

 

13

 

Unless the options held by a participant are
terminated in accordance with Section 6(e)(iv) above, after the
consummation of any “Corporate Transaction” (as defined in Treasury Regulation
§1.424-1(a)(3))), if the requirements of Treasury Regulation §1.424-1 would be
met with respect to the substitution or assumption of such option assuming the
option were an incentive stock option as described in Code §422, the
corporation that is the employer of the participant after such Corporate
Transaction or a related corporation (within the meaning of Treasury Regulation
§1.421-1(i)(2)) shall, by reason of the Corporate Transaction, (i) substitute
a new option for such options or (ii) assume such options. If the
requirements of Treasury Regulation §1.424-1 cannot be satisfied even assuming
the option were an incentive stock option as described in Code §422, then such
options shall automatically be terminated.

 

16.                                 Amendment
and Termination of the Plan.

 

The Board of Directors or the Committee,
without approval of the stockholders, may amend or terminate the Plan, except
that if stockholder approval would be required by applicable law or regulations
or by any listing requirement of the principal stock exchange on which the
Common Stock is then listed no amendment shall become effective until prior
approval of the stockholders of the Company has been obtained.

 

17.                                 Amendment
or Substitution of Awards under the Plan.

 

The terms of any outstanding award under the
Plan may be amended from time to time by the Committee in its discretion in any
manner that it deems appropriate, including, but not limited to, acceleration
of the date of exercise of any award and/or payments thereunder or of the date
of lapse of restrictions on Shares (but only to the extent permitted by regulations
issued under Section 409A(a)(3) of the Code); provided that, except
as otherwise provided in Section 15, no such amendment shall adversely
affect in a material manner any right of a participant under the award without
his or her written consent, and provided further that the Committee shall not
reduce the exercise price of any options awarded under the Plan without
approval of the stockholders of the Company. 
The Committee may, in its discretion, permit holders of awards under the
Plan to surrender outstanding awards in order to exercise or realize rights
under other awards, or in exchange for the grant of new awards, or require
holders of awards to surrender outstanding awards as a condition precedent to
the grant of new awards under the Plan, but only if such surrender, exercise,
realization, exchange, or grant (a) would not constitute a distribution of
deferred compensation for purposes of Section 409A(a)(3) of the Code
or (b) constitutes a distribution of deferred compensation that is
permitted under regulations issued pursuant to Section 409A(a)(3) of
the Code.

 

18.                                 Commencement
Date; Termination Date.

 

The date of commencement of the Plan shall be
April 15, 2005, subject to approval by the shareholders of the Company.

 

Unless previously terminated upon the
adoption of a resolution of the Board terminating the Plan, the Plan shall
terminate at the close of business on April 15, 2012.  No termination of the Plan shall materially
and adversely affect any of the rights or obligations of

 

14

 

any person, without his or her
written consent, under any grant of options or other incentives theretofore
granted under the Plan.

 

19.                                 Severability.

 

Whenever possible, each provision of the Plan
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Plan is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
the Plan.

 

20.                                 Governing
Law.

 

The Plan shall be governed by the corporate
laws of the State of Delaware, without giving effect to any choice of law
provisions that might otherwise refer construction or interpretation of the
Plan to the substantive law of another jurisdiction.

 

21.                                 Information.

 

With respect to periods in which the
requirements set forth in Section 25100(o) of the California Blue Sky Law,
to the extent applicable and as modified from time to time (relating to
securities listed on a national exchange), are not satisfied, the Company each
year shall furnish to optionees, grantees and stockholders who have received
Common Stock under the Plan its balance sheet and income statement, unless such
optionees, grantees or stockholders are key employees whose duties with the
Company assure them access to equivalent information.  Such balance sheet and income statement need
not be audited.

 

Adopted by the Board of Directors on [          ],
2005 and approved by the shareholders of the Company on [          ],
2005.

 

15Filed by Automated Filing Services Inc. (604) 609-0244 - Fairchild International Corporation - Exhibit 10.1

 EXHIBIT 10.1

ASSUMPTION OF DEBT 

THIS ASSUMPTION AGREEMENT is dated April 15, 2005. 

BETWEEN: 

  
    
      
         FAIRCHILD INTERNATIONAL CORPORATION, a company incorporated
          pursuant to the laws of the State of Nevada, having an office address
          at Suite 600, 595 Hornby Street, Vancouver, British Columbia, V6B 2W5
        

         (“Fairchild”) 

      

    

  

AND: 

  
    
      
         PATCH INTERNATIONAL INC., a company incorporated pursuant to
          the laws of the State of Nevada, having an office address at Suite 1220,
          666 Burrard Street, Vancouver, British Columbia V6C 2X8

         (“Patch”) 

      

    

  

AND: 

  
    
      
         DAVID STADNYK, executive, of Suite 1220, 666 Burrard Street,
          Vancouver, British Columbia V6C 2X8

         (“Stadnyk”) 

      

    

  

WHEREAS:

 A.              Fairchild
  is indebted to Stadnyk in the amount of CAD$14,316.62 (the “Debt”)
  and Patch has agreed to assume the Debt in partial consideration of the relinquishment
  of certain interests in oil and gas properties by Fairchild to Patch, as detailed
  below; and

 B.              Stadnyk
  has agreed to accept Patch as debtor in the place of Fairchild. 

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the parties hereto covenant and agree as follows:

Assumption of Debt 

 1.                           Patch
  hereby absolutely and unconditionally assumes and accepts responsibility for
  the payment of the Debt and agrees to indemnify and hold harmless Fairchild
  in respect thereof. 

 - 2 - 

Acceptance of Patch 

 2.                           Stadnyk
  hereby absolutely and unconditionally accepts Patch as debtor in substitution
  for Fairchild and releases Fairchild from any and all liability in respect of
  the Debt. 

Conveyance 

 3.                           Fairchild
  hereby conveys any and all of its interests in the Kerrobert oil field located
  in Saskatchewan, Canada and all of its interests in the Manahuilla Creek oil
  field in Goliad County, Texas, previously acquired from Patch, back to Patch.

Enurement 

 4.                           This
  Assignment will enure to the benefit of and be binding upon the parties and
  their respective heirs, successors and permitted assigns. 

Governing Law 

 5.                           This
  Assignment will be governed by and construed in accordance with the laws of
  the Province of British Columbia. 

Counterparts 

 6.                           This
  Assignment may be executed by the parties in separate counterparts and by facsimile,
  each of which when so executed and delivered shall be an original, but all counterparts
  shall together constitute one and the same instrument. 

IN WITNESS WHEREOF this Assignment has been duly executed by the parties on the date first mentioned above. 

	 FAIRCHILD INTERNATIONAL  	 	 PATCH INTERNATIONAL INC.  
	 CORPORATION  	 	  	  
	  	 	 	 	 
	  	  	 	 Per:  	 /s/ David Stadnyk  
	 Per:  	 /s/ Anish Somani  	 	  	 Authorized Signatory  
	  	 Authorized Signatory  	 	  	  
	  	 	 	 	 
	  	 	 	 	 
	  	 	 	 	 
	  	 	 	 	 
	 /s/ David Stadnyk  	 	  	  
	 David Stadnyk

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