Document:

Exhibit 10.1

 

NATIONAL STORM MANAGEMENT, INC.

 

2005 EQUITY INCENTIVE PLAN

 

1.                                       Purpose of the Plan

 

The
National Storm Management, Inc. 2005 Equity Incentive Plan (hereinafter
referred to as the “Plan”) is intended to provide a means whereby selected
individuals providing services to National Storm Management, Inc. and its
Related Corporations (hereinafter referred to as the “Company”) may sustain
a sense of proprietorship and personal involvement in the continued development
and financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the
interests of the Company and its shareholders. Accordingly, the Company may permit
selected individuals to acquire common stock of the Company (hereinafter
referred to as “Common Stock” or “Shares”) or otherwise participate in the
financial success of the Company, on the terms and conditions established
herein.

 

2.                                       Definitions

 

The
following terms shall be defined as set forth below:

 

a.                                       Board.             Shall mean the
Board of Directors of the Company.

 

b.                                      Cause.            Shall have the meaning
provided under an employment agreement between a Participant and the Company,
or if there is no such agreement, the meaning provided under the Participant’s
award agreement under the Plan, or if not defined therein, shall mean the
commitment of fraud, the misappropriation of or intentional material damage to
the property or business of the Company or the conviction of a felony.

 

c.                                       Broker Exercise
Notice. Shall mean a written notice from a Participant to the Company at its
principal executive office (Attention: President), made on a form and in
the manner as the Committee may from time to time determine, pursuant to
which the Participant irrevocably elects to exercise all or any portion of an
option and irrevocably directs the Company to deliver the Participant’s stock
certificates to be issued to such Participant upon such option exercise
directly to a broker or dealer. A Broker Exercise Notice must be accompanied by
or contain irrevocable instructions to the broker or dealer (i) to
promptly sell a sufficient number of Shares or to loan the Participant a
sufficient amount of money to pay the exercise price for the options and, if
not otherwise satisfied by the Participant, to fund any related employment and
withholding tax obligations due upon such exercise, and (ii) to promptly
remit such sums to the Company upon the broker’s or dealer’s receipt of the
stock certificates.

 

d.                                      Code. Shall mean
the Internal Revenue Code of 1986, and any amendments
thereto.

 

e.                                       Committee. Shall mean
the Committee appointed pursuant to Section 3 hereof.

 

f.                                         Compete. Shall have
the meaning provided under an employment or other agreement between a
Participant and the Company, or if there is no such agreement, the meaning
provided under the Participant’s award agreement under the Plan, or if not
defined therein, shall mean within a period of one (1) year after the
termination of service, the direct or indirect solicitation of customers or competition
with the business of the Company, including, but not by way of limitation, the
direct or indirect owning, managing, operating, controlling, financing or
serving as an officer, employee, director or consultant to,

 

 

or by soliciting, or inducing,
or attempting to solicit or induce, any employee, dealer or agent of the
Company to terminate employment or service and become employed by or provide
services for any person, firm, partnership, corporation, trust or other entity
which owns or operates a business similar to the business of the Company,
except with the express prior written consent of the Company.

 

g.                                      Disability. Shall have
the meaning provided under: (i) an employment agreement between a
Participant and the Company; (ii) a Participant’s award agreement under
the Plan; (iii) the long-term disability plan maintained by the Company;
or (iv) if no such agreements or plan exist, permanent and total
disability within the meaning of Section 22(e)(3) of the Code.

 

h.                                      ERISA. Shall mean
the Employee Retirement Income Security Act of 1974,
and any amendment thereto.

 

i.                                          Fair Market
Value. “Fair Market Value” means, with respect to the Common Stock, the
following:

 

(i)                                     If the Common
Stock is listed or admitted to unlisted trading privileges on any national
securities exchange (which for purposes hereof shall include the National
Market System and Small Cap Market maintained by NASDAQ), the mean between the
reported high and low sale prices of the Common Stock on such exchange or by
the NASDAQ National Market System as of such date (or, if no shares were traded
on such day, as of the next preceding day on which there was such a trade).

 

(ii)                                  If the Common
Stock is not so listed or admitted to unlisted trading privileges or reported
on the NASDAQ National Market System, and bid and asked prices therefore in the
over-the-counter market are reported by the NASDAQ National Market System or
the National Quotation Bureau, Inc. (or any comparable reporting service),
the mean of the closing bid and asked prices as of such date, as so reported by
the NASDAQ National Market System, or, if not so reported thereon, as reported
by the National Quotation Bureau, Inc. (or such comparable reporting
service).

 

(iii)                               If the Common
Stock is not so listed or admitted to unlisted trading privileges, or reported
on the NASDAQ National Market System, and such bid and asked prices are not so
reported, such price as the Committee determines in good faith in the exercise
of its reasonable discretion.

 

j.                                          Incentive Stock
Option. Shall mean an award under the Plan that satisfies the general
requirements of Code Section 422, namely: (i) grantees must be
employees; (ii) the exercise price may not be less than the Fair
Market Value of the underlying Shares at the date of grant; (iii) no more
than $100,000 worth of Shares may become exercisable in any year; (iv) the
maximum duration of an award may be ten (10) years; (v) awards
must be exercised within three (3) months after termination of employment;
and (vi) Shares received upon exercise must be retained for the greater of
two (2) years from the date of grant and one (1) year from the date
of exercise.

 

k.                                       Net Issuance. Shall mean a
process under which the Company will issue to the optionee the lesser of (i) that
number of Shares requested to be issued by the optionee or (ii) the
maximum number of vested option Shares which may be purchased with the “Net
Equity” of vested options. “Net Equity” of an option means the then current
Fair Market Value of the underlying Shares minus the exercise price.

 

 

Upon any such Net Issuance,
the Company shall cancel all options exercised and all options the Net Equity
of which were utilized as payment of the Exercise Price, and the Company shall
promptly issue to the optionee an amended Stock Option Agreement representing
the remaining number of Shares purchasable thereunder.

 

l.                                          Nonqualified
Option. Shall mean an award under the Plan that is not an
Incentive Stock Option.

 

m.                                    Option. Shall mean an award under the Plan that is an Incentive Stock
Option or a Nonqualified Option.

 

n.                                      Participant. Shall
mean a director, officer or employee, selected by the Committee to receive
awards under the Plan.

 

o.                                      Registration. Shall mean that the Shares shall have been registered under the ‘33
Act and approved for listing on a national securities exchange.

 

p.                                      Related
Corporation. Shall mean a corporation which
would be a parent or subsidiary corporation with respect to the Company as
defined in Section 424(e) or (t),
respectively, of the Code.

 

q.                                      Retirement. Shall mean
retirement pursuant to and in accordance with the regular or, if approved by
the Board for purposes of the Plan, any early retirement plan or practice of
the Company.

 

r.                                         Securities Act. Shall mean
the Securities Act of 1933, and any amendments
thereto.

 

3.                                       Administration of the Plan

 

The
Plan shall be administered by the Committee which shall be comprised of at
least two (2) directors appointed by the Board, or if none, by the whole
Board. The Committee shall have sole authority to:

 

(i)                                     select the Participants
from among those eligible to whom Shares shall be sold under the Plan;

 

(ii)                                  establish the
number of such Shares for each Participant, the option price, option vesting,
option term and the time when certificates for such Shares shall be issued;

 

(iii)                               interpret the Plan; and

 

(iv)                              adopt such rules,
regulations, forms and agreements, not inconsistent with the provisions of the
Plan, as it may deem advisable to carry out the Plan.

 

All
decisions made by the Committee in administering the Plan shall be conclusive
and binding for all purposes under the Plan

 

4.                                       Shares Subject to the Plan

 

The
aggregate number of Shares that may be available for acquisition by
Participants under the Plan shall be 20,000,000 Shares. Any Shares that remain
unissued at the termination of the Plan shall cease to be subject to the Plan,
but until termination of the Plan, the Company shall at all times make
available sufficient Shares to meet the requirements of the Plan.

 

 

5.                                       Stock Options

 

a.                                       Type of Options. The Company may issue
options that constitute Incentive Stock Options to employees, and Nonqualified
Options to Participants under the Plan. The grant of each option shall be
confirmed by a stock option agreement that shall be executed by the Company and
the optionee as soon as practicable after such grant. The stock option
agreement shall expressly state or incorporate by reference the provisions of
the Plan and state whether the option is an Incentive Option or a Nonqualified
Option.

 

b.                                      Terms of
Options. Except as provided in Subsections (c) and (d) below, each
option granted under the Plan shall be subject to the terms and conditions set
forth by the Committee in the stock option agreement including, but not limited
to, price, vesting and term. Unless provided otherwise in the stock option
agreement, an option shall vest one-third (113) on each anniversary of the
grant thereof until fully vested provided he or she continues to provide
service to the Company or Related Corporation.

 

c.                                       Additional
Terms Applicable to All Options. Each option shall be
subject to the following terms and conditions:

 

(i)                                     Written Notice. An option may be
exercised only by giving written notice to the Company specifying the number of
Shares to be purchased.

 

(ii)                                  Method of
Exercise. The aggregate option price may be paid in
anyone or a combination of cash, personal check, Shares already owned for at
least six (6) months, a Broker Exercise Notice, or a Net Issuance, as
determined by the Committee.

 

(iii)                               Term of Option. No option may be
exercised more than ten (10) years after the date of grant. Unless
otherwise provided by the Committee, no option may be exercised more than
three (3) months after the optionee’s service with the Company terminates.

 

(iv)                              Transferability. No option may be
transferred, assigned or encumbered by an optionee, except: (A) by will or
the laws of descent and distribution; (B) by gifting for the benefit of
descendants for estate planning purposes; or (C) pursuant to a certified
domestic relations order.

 

d.                                      Additional
Terms Applicable to Incentive Stock Options. Each Incentive Stock
Option shall be subject to the following terms and conditions:

 

(i)                                     Option Price. The option
price per Share shall be 100% of the Fair Market Value of such Share on the
date the option is granted. Notwithstanding the preceding sentence, the option
price per Share granted to an individual (hereinafter referred to as a “10%
Shareholder”) who, at the time such option is granted, owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company shall not be less than 110% of the Fair Market Value of such Share on
the date the option is granted.

 

(ii)                                  Term of Option. No Incentive
Stock Option granted to a 10% Shareholder may be exercised more than five (5) years
after the date of

 

 

grant. Notwithstanding any other provisions hereof, no
option may be exercised more than three (3) months after the optionee
terminates employment with the Company, except in the event of Disability or
death as provided in Subsection (d)(iii) below.

 

(iii)                               Disability or
Death of Optionee. If an optionee terminates employment due to
Disability or death prior to exercise in full of any options, he or she or his
or her beneficiary, executor, administrator or personal representative shall
have the right to exercise the options within a period of twelve (12) months
after the date of such termination to the extent that the right was exercisable
at the date of such termination as provided in the stock option agreement, or
subject to such other terms as may be determined by the Committee.

 

(iv)                              Annual Exercise
Limit. The aggregate Fair Market Value of Shares which become
exercisable during any calendar year shall not exceed $100,000. For purposes of
the preceding sentence, the Fair Market Value of each Share shall be determined
on the date the option with respect to such Share is granted.

 

(v)                                 Transferability. No option may be
transferred, assigned or encumbered by an optionee, except by will or the laws
of descent and distribution and during the optionee’s lifetime and option may only
be exercised by him or her.

 

6.                                       Securities Law Restrictions

 

a.                                       Share Issuances. Notwithstanding
any other provision of the Plan or any agreements entered into pursuant hereto,
the Company will not be required to issue or deliver any certificate for Shares
under this Plan, and an option will not be considered to be exercised
notwithstanding the tender by the optionee of any consideration therefor,
unless and until each of the following conditions has been fulfilled:

 

(i)                                     There is in
effect with respect to such shares a registration statement under the
Securities Act and any applicable state securities laws if the Committee or
Board, in their sole discretion, has determined to file, cause to become
effective and maintain the effectiveness of such registration statement; or

 

(ii)                                  if the
Committee or Board has determined not to so register the shares of Common Stock
to be issued under the Plan, (A) exemptions from registration under the
Securities Act and applicable state securities laws are available for such
issuance (as determined by counsel to the Company) and (B) there has been
received from the Participant (or, in the event of death or disability, the
Participant’s heir(s) or legal representative(s» any representations or
agreements requested by the Company in order to permit such issuance to be made
pursuant to such exemptions; and

 

(iii)                               There has been
obtained any other consent, approval or permit from any state or federal
governmental agency which the Committee or Board, in

 

 

their sole discretion upon the advice of counsel, deems
necessary or advisable.

 

b.                                      Share Transfers. Shares issued
pursuant to Options granted under the Plan may not be sold, assigned,
transferred, pledged, encumbered or otherwise disposed of, whether voluntarily
or involuntarily, directly or indirectly, by operation of law or otherwise,
except pursuant to registration under the Securities Act and applicable state
securities laws or pursuant to exemptions from such registrations. The Company may condition
the sale, assignment, transfer, pledge, encumbrance or other disposition of
such shares not issued pursuant to an effective and current registration
statement under the Securities Act and all applicable state securities laws on
the receipt from the party to whom the Shares are to be so transferred to any
representations or agreements requested by the Company in order to permit such
transfer to be made pursuant to exemptions from registration under the
Securities Act and applicable state securities laws.

 

c.                                       Legends. Unless a
registration statement under the Securities Act and applicable state securities
laws is in effect with respect to the issuance or transfer of Shares under the
Plan, each certificate representing any such Shares may be endorsed with
such legend as the Board or the Committee may, in the exercise of their sole
discretion, deem appropriate.

 

7.                                       Amendment or Termination of the Plan

 

The
Board may amend, suspend or terminate the Plan or any portion thereof at
any time, but (except as provided in Section 11 hereof) no amendment shall
be made without approval of the stockholders of the Company which shall: (i) materially
increase the aggregate number of Shares with respect to which awards may be
made under the Plan; (ii) materially increase the aggregate number of
Shares which may be subject to awards to individuals who are not employees
or directors; or (iii) change the class of persons eligible to
participate in the Plan; provided, however, that no such amendment, suspension
or termination shall impair the rights of any individual, without his or her
consent, in any award theretofore made pursuant to the Plan.

 

8.                                       Term of Plan

 

The
Plan shall be effective upon the date of its adoption by the Board; provided
that, Incentive Stock Options may be granted only if the Plan is approved
by the shareholders within twelve (12) months before or after the date of
adoption. Unless sooner terminated under the provisions of Section 6,
Shares shall not be granted under the Plan after the expiration of ten (10) years
from the effective date of the Plan. However, awards may be exercisable
after the end of the term of the Plan.

 

9.                                       Rights as Shareholder

 

Upon
delivery of any Share to a Participant, such Participant shall have all of the
rights of a shareholder of the Company with respect to such Share, including
the right to vote such Share and to receive all dividends or other
distributions paid with respect to such Share. Notwithstanding anything to the
contrary contained in the Plan, the Committee may require that, as a
condition to the Company’s issuance and delivery of Shares under the Plan, the
Participant must execute and deliver a shareholder agreement or a stock
restriction agreement with respect to the Shares in the form prescribed by
the Board.

 

10.                                 Merger, Consolidation or Sale

 

In
the event the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or substantially all of the
Company common stock or assets are sold, the surviving corporation or purchaser
may agree to exchange options issued under this Plan for options (with the
same aggregate option price) to acquire and participate in that number of
shares in the surviving corporation that

 

 

have a fair market value
equal to the Fair Market Value (determined on the date of such merger or
consolidation) of Shares that the grantee is entitled to acquire and
participate in under this Plan on the date of such merger, consolidation or
sale, and if so, the grantees will be required to exchange options issued under
this Plan for options issued by such surviving corporation. Otherwise, the
Company or purchaser may, within sixty (60) days of such merger, consolidation
or sale, terminate awards under the Plan and pay the Fair Market Value, as
determined under this section, less any exercise price for each award Share.

 

11.                                 Changes in Capital and Corporate Structure

 

The
aggregate number of Shares awarded and which may be awarded under the Plan
shall be adjusted to reflect a change in the outstanding capital of the Company
by reason of a stock split, reverse stock split, combination of shares, stock
dividend or similar transaction. The aggregate number of Shares and interests
awarded and which may be awarded under the Plan may be adjusted to
reflect a change in the outstanding capital of the Company by reason of a
recapitalization, reclassification or reorganization, at the discretion of the
Committee. Any adjustment shall be made in an equitable manner, which will
cause the awards to remain unchanged as a result of the applicable transaction.

 

12.                                 Service

 

A
Participant shall be considered to be in the service of the Company or Related
Corporation as long as he or she continues to provide service to the Company or
Related Corporation. Nothing herein shall confer on any Participant the right
to continued service with the Company or Related Corporation or affect the
right of the Company or Related Corporation to terminate such service.

 

13.                                 Withholding of Tax

 

To
the extent the award, issuance or exercise of Shares results in the receipt of
compensation by a Participant, the Company is authorized to withhold from any
other cash compensation then or thereafter payable to such Participant any tax
required to be withheld by reason of the receipt of the compensation.
Alternatively, the Participant may tender a personal check or authorize
the withholding of Shares in the amount of tax required to be withheld.

 

14.                                 Delivery and Registration of Stock

 

The
Company’s obligation to deliver Shares with respect to an award shall, if the
Committee so requests, be conditioned upon the receipt of a representation as
to the investment intention of the individual to whom such Shares are to be
delivered, in such form as the Committee shall determine to be necessary
or advisable to comply with the provisions of the Securities Act or any other
federal, state or local securities legislation or regulation. It may be
provided that any representation requirement shall become inoperative upon a
Registration or other action eliminating the necessity of such representation
under securities legislation.

 

15.                                 Governing Law

 

The
Plan and awards hereunder shall be governed by, construed and enforced in
accordance with the laws of the State of Illinois without regard to its
conflicts of law doctrine, except to the extent they are superseded by the laws
of the United States.Exhibit 10.2

 

NATIONAL
STORM MANAGEMENT, INC.

 

2005
EQUITY INCENTIVE PLAN

 

INCENTIVE STOCK OPTION AWARD AGREEMENT

 

1.             An Option to acquire
2,499,999 shares of Common Stock of National Storm Management, Inc.
(hereinafter referred to as the “Company”) is hereby granted to DONALD HUMPHREY (hereinafter referred to as
the “Optionee”), subject in all respects to the terms and conditions of the
National Storm Management, Inc. 2005 Equity Incentive Plan (hereinafter
referred to as the “Plan”) and such other terms and conditions as are set forth
herein. Capitalized terms which are not defined herein shall have the meaning
provided under the Plan.

 

2.             The Option is
intended to constitute an Incentive Stock Option under Section 422 of the
Internal Revenue Code of 1986.

 

3.             The Option price as
determined by the Committee is twelve cents ($.12) per Share. The Option price
may be paid in any one or a combination of cash, personal check, Shares already
owned for at least six (6) months, Broker Exercise Notice or Net Issuance.

 

4.             a.             The Option shall vest
with respect to 833,333 Shares immediately upon grant hereof, with respect to
an additional 833,333 Shares on January 1, 2006, and with respect to the final
833,333 Shares on January 1, 2007, provided that the Option shall not further
vest after the employment or service of the Optionee is terminated. Vested
options shall be immediately exercisable provided that Optionee has repaid any
outstanding loans or advances received from the Company.

 

b.             In the event the
Optionee should be terminated for Cause, or shall Compete: (i) unexercised
Options shall be immediately forfeited; and (ii) at the Company’s discretion,
any Shares, or Share sale proceeds, received pursuant to this Option Agreement
shall be returned to the Company and the Option price shall be repaid to the
Optionee.

 

5.             Share issuances shall
at all times be subject to the Securities Law restrictions of Section 6 of the
Plan. The Option may not be exercised if the issuance of Shares upon such
exercise would constitute a violation of any applicable federal or state
securities law, or any other valid law or regulation. Without limitation, as a
condition to the exercise of the Option, the Optionee shall represent to the
Company that the Shares being acquired under the Option are for investment and
not with a present view for distribution or resale, unless counsel for the
Company is then of the opinion that such a representation is not required under
any applicable law, regulation or rule of any governmental agency.

 

6.             The
Option may not be transferred in any manner except as provided under the Plan,
and generally may be exercised during the lifetime of the Optionee only by him.
The terms of this Option shall be binding upon the Optionee’s executors,
administrators, heirs, assigns and successors.

 

 

7.             The Optionee hereby
agrees that in the event of a Registration, the Optionee shall not offer, sell,
contract to sell, pledge, hypothecate, grant any option to purchase or make any
short sale of, or otherwise dispose of any shares of stock of the Company or
any rights to acquire stock of the Company for such period of time from and
after the effective date of such registration statement as may be established
by the underwriter for such public offering; provided, however, that such
period of time shall not exceed one hundred eighty (180) days from the
effective date of the registration statement to be filed in connection with
such public offering. The Optionee shall be subject to this provision provided
and only if other Plan Participants are also subject to similar arrangements.

 

8.             Vested Options may
not be exercised more than ten (10) years after the date indicated below and
may be exercised at any time during the two (2) years following termination of
service. If the Option is not exercised within three (3) months after
termination of service, it shall no longer be treated as an Incentive Stock
Option if it was originally intended to be treated as such. The exercise of the
Option shall otherwise be made in accordance with the terms and conditions set
forth in the Plan.

 

9.             The Committee shall
make all determinations concerning rights to benefits under the Plan.

 

	
  Dated: May 1, 2005

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  STORM MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Terry Kiefer

  	
   

  
	
   

  	
  Committee

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
					

 

The Optionee acknowledges that he has
received a copy of the Plan and is familiar with the terms and conditions set
forth therein. The Optionee agrees to accept as binding, conclusive, and final
all decisions and interpretations of the Committee. As a condition of this
Agreement, the Optionee authorizes the Company to withhold from any regular
cash compensation payable by the Company any taxes required to be withheld
under any federal, state or local law as a result of exercising this Option.

 

	
  Dated: May
  1, 2005

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald Humphrey

  	
   

  
	
   

  	
   

  	
  Donald Humphrey

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