Document:

TEKOIL
      & GAS CORPORATION

    OMNIBUS
      EQUITY PLAN

     

     

    1.  Purpose
      of the Plan.

     

    The
      purpose of this Plan is to encourage ownership in the Company by key personnel
      whose long-term employment is considered essential to the Company’s continued
      progress and, thereby motivate, retain and encourage such personnel to act
      in
      the shareholders’ interest and share in the Company’s success. The Plan is also
      intended to assist the Company in the recruitment of new employees, directors,
      contractors, and consultants.

     

    2.  Definitions.

     

    As
      used
      herein, the following definitions shall apply:

     

    (a)   “Administrator”
      means
      the Board, any Committee or such delegates as shall be administering the Plan
      in
      accordance with Section 4 of the Plan.

     

    (b)  “Affiliate”
      means
      any Subsidiary or other entity that is directly or indirectly controlled by
      the
      Company or any entity in which the Company has a significant ownership interest
      as determined by the Administrator. The Administrator shall, in its sole
      discretion, determine which entities are classified as Affiliates and designated
      as eligible to participate in this Plan.

     

    (c)  “Applicable
      Law”
      means
      the requirements relating to the administration of stock option plans under
      U.S.
      federal and state laws, any stock exchange or quotation system on which the
      Company has listed or submitted for quotation the Common Shares to the extent
      provided under the terms of the Company’s agreement with such exchange or
      quotation system and, with respect to Awards subject to the laws of any foreign
      jurisdiction where Awards are, or will be, granted under the Plan, the laws
      of
      such jurisdiction.

     

    (d)  “Award”
      means a
      Cash Award, Stock Award, Option, Stock Appreciation Right or Other Stock-Based
      Award granted in accordance with the terms of the Plan.

     

    (e)  “Awardee”
      means a
      Member who has been granted an Award under the Plan.

     

    (f)  “Award
      Agreement”
      means a
      Cash Award Agreement, Stock Award Agreement, Option Agreement, Stock
      Appreciation Right Agreement and/or Other Stock-Based Award Agreement, which
      may
      be in written or electronic format, in such form and with such terms as may
      be
      specified by the Administrator, evidencing the terms and conditions of an
      individual Award. Each Award Agreement is subject to the terms and conditions
      of
      the Plan.

     

    (g)  “Board”
      means
      the Board of Directors of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)  “Cash
      Award”
      means a
      bonus opportunity awarded under Section 13 of the Plan pursuant to which a
      Participant may become entitled to receive an amount based on the satisfaction
      of such performance criteria as are specified in the agreement or, if no
      agreement is entered into with respect to the Cash Award, other documents
      evidencing the Award (the “Cash Award Agreement”).

     

    (i)  “Change
      of Control”
      means
      any of the following:

     

    (i)  
      The
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership
      (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
      thirty-five percent (35%) or more of the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the
      election of Directors (the “Outstanding Company Voting Securities”) or of such
      other amount that, together with Common Shares already held by such Person,
      constitutes more than fifty percent (50%) of either (x) the Outstanding Company
      Voting Securities, or (y) the then outstanding Common Shares of the Company
      (the
“Outstanding Company Common Shares”). However, for purposes of this subsection
      (i), the following acquisitions shall not constitute a Change of Control: (A)
      any acquisition directly from the Company or any corporation controlled by
      the
      Company; (B) any acquisition by the Company or any corporation controlled by
      the
      Company; (C) any acquisition by any employee benefit plan (or related
      trust) sponsored or maintained by the Company or any corporation controlled
      by
      the Company; or (D) any acquisition by any corporation that is a Non-Control
      Acquisition (as defined in subsection (iii) of this Section 2(i));
      or

     

    (ii)  
      Individuals who, as of the effective date of this Plan, constitute the Board
      of
      the Company (the “Incumbent Board”) cease for any reason to constitute at least
      a majority of the Board of the Company within a twelve (12) month period;
      provided, however, that any individual becoming a Director subsequent to the
      effective date whose election, or nomination for election by the Company’s
      shareholders, was approved by a vote of at least a majority of the Directors
      then comprising the Incumbent Board shall be considered as though such
      individual were a member of the Incumbent Board; or

     

    (iii)  
      Consummation of a reorganization, merger, consolidation, or sale or other
      disposition of all or a substantial portion of the assets of the Company, or
      the
      acquisition by the Company of assets or shares of another corporation (a
“Business Combination”), unless, such Business Combination is a Non-Control
      Acquisition. For the purpose of this provision, “substantial portion of the
      assets of the Company” is defined as assets having a gross fair market value,
      determined without regard to any liabilities associated with such assets, of
      forty percent (40%) or more of the total assets of the Company. A “Non-Control
      Acquisition” shall mean a Business Combination where: (x) all or substantially
      all of the individuals and entities who were the beneficial owners,
      respectively, of the Outstanding Company Common Shares and Outstanding Company
      Voting Securities immediately prior to such Business Combination beneficially
      own, directly or indirectly, at least fifty percent (50%) of, respectively,
      the
      then outstanding shares of common stock and the combined voting power of the
      then outstanding voting securities entitled to vote generally in the election
      of
      directors, as the case may be, of the corporation resulting from such Business
      Combination (including, without limitation, a corporation which, as a result
      of
      such transaction, owns the Company or all or substantially all of the Company’s
      assets either directly or through one or more subsidiaries) in substantially
      the
      same proportions as their ownership immediately prior to such Business
      Combination of the Outstanding Company Common Shares and Outstanding Company
      Voting Securities, as the case may be; or (y) a transfer of a substantial
      portion of the assets of the Company is made to a Person beneficially owning,
      directly or indirectly, fifty percent (50%) or more of, respectively, the
      Outstanding Company Common Shares or Outstanding Company Voting Securities
      (“Control Person”), as the case may be, or to another entity in which either
      such Control Person or the Company beneficially owns fifty percent (50%) or
      more
      of the total value or voting power of such entity’s outstanding voting
      securities; or

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (iv)  
      Approval
      by the shareholders of the Company of a complete liquidation or dissolution
      of
      the Company.

     

    Notwithstanding
      the foregoing, to the extent any payment or distribution event applicable to
      an
      Award is subject to the requirements of Section 409A(a)(2)(A) of the Code,
      Change of Control shall mean:.

     

    (v)  
      Any one
      person, or “more than one person acting as a group” (as determined under Code
      Section 409A), acquires ownership of stock of the Company that, together with
      stock held by such person or group, constitutes more than fifty percent (50%)
      of
      the total Fair Market Value or total voting power of the stock of the
      Company;

     

    (vi)  
      Any one
      person, or more than one person acting as a group, acquires (or has acquired
      during the twelve (12) month period ending on the date of the most recent
      acquisition by such person or persons) ownership of stock of the Company
      possessing thirty percent (30%) or more of the total voting power of the stock
      of the Company;

     

    (vii)  
      A
      majority of members of the Company’s Board is replaced during any twelve (12)
      month period by Directors whose appointments or elections are not endorsed
      by a
      majority of the members of the Company’s Board immediately prior to the date of
      the appointment or election; or

     

    (viii)  
      Any one
      person, or more than one person acting as a group, acquires (or has acquired
      during the twelve (12) month period ending on the date of the most recent
      acquisition by such person or persons) assets from the Company that have a
      total
      Gross Fair Market Value equal to or more than forty percent (40%) of the total
      Gross Fair Market Value of all assets of the Company immediately prior to such
      acquisition or acquisitions. For this purpose, “Gross
      Fair Market Value”
means
      the value of the assets of the Company, or the value of the assets being
      disposed of, determined without regard to any liabilities associated with such
      assets.

     

    (j)  “Code”
      means
      the United States Internal Revenue Code of 1986, as amended.

     

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

     

    (l)  “Common
      Shares (or Shares)”
      means
      all of the shares of the Company’s common stock, $0.000001 par
      value.

     

    (m)  “Company”
      means
      Tekoil & Gas Corporation, a Delaware corporation, or, except as utilized in
      the definition of Change of Control, its successor.

     

    (n)  “Conversion
      Award”
      has the
      meaning set forth in Section 4(b)(xii) of the Plan.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (o)  “Director”
      means a
      member of the Board.

     

    (p)  “Disability”
      or “Disabled,”
      as
      appropriate, means:

     

    (i)  
      The
      Participant is unable to engage in any substantial gainful activity by reason
      of
      any medically determinable physical or mental impairment which can be expected
      to result in death or can be expected to last for a continuous period of not
      less than twelve (12) months; or

     

    (ii)  
      The
      Participant is, by reason of any medically determinable physical or mental
      impairment which can be expected to result in death or can be expected to last
      for a continuous period of not less than twelve (12) months, receiving income
      replacement benefits for a period of not less than three (3) months under an
      accident or health plan covering the Company’s employees.

     

    Notwithstanding
      the above, a Participant will be deemed to be “Disabled” if he is determined to
      be totally disabled by the Social Security Administration or the Railroad
      Retirement Board. In addition, a Participant will be deemed to be “Disabled” if
      he is determined to be disabled in accordance with a disability insurance
      program maintained by the Company, provided that the definition of “Disability”
applied under such disability insurance program complies with the requirements
      of (i) or (ii), above.

     

    (q)  “Disaffiliation”
      means an
      Affiliate’s ceasing to be an Affiliate for any reason (including, without
      limitation, as a result of a public offering, or a spin-off or sale by the
      Company, of the stock of the Affiliate) or a sale of a division of the Company
      and/or its Affiliates.

     

    (r)  “Employee”
      means a
      regular, active employee of the Company or any Affiliate, including an Officer
      and/or Director who is also a regular, active employee of the Company or any
      Affiliate. Unless otherwise determined by the Administrator in its sole
      discretion, for purposes of the Plan, an Employee shall be considered to have
      terminated employment and to have ceased to be an Employee if his employer
      ceases to be an Affiliate, even if he continues to be employed by such
      employer.

     

    (s)  “Exchange
      Act”
      means
      the United States Securities Exchange Act of 1934, as amended.

     

    (t)  “Fair
      Market Value”
      means:

     

    (i)  
      if the
      Common Shares are not readily tradable on an established securities market,
      within the meaning of Code Section 409A and the treasury regulations and other
      guidance issued thereunder (not regularly quoted by brokers or dealers making
      a
      market in such Shares), the value on the relevant date as determined by the
      Board utilizing the reasonable application of a reasonable valuation method
      in
      accordance with Code Section 409A and the applicable treasury regulations and
      other guidance issued thereunder. The valuation method utilized to determine
      the
      Fair Market Value of the Common Shares on the date of an applicable Award shall
      be set forth in resolutions or other action taken by the Board; and

     

    (ii)  
      if the
      Common Shares are readily tradable on an established securities market, within
      the meaning of Code Section 409A and the treasury regulations and other guidance
      issued thereunder, the closing price for the Common Shares reported on a
      consolidated basis on any stock exchange or quotation system on which the
      Company was listed on the relevant date(s) or, if there were no sales on such
      date(s), the closing price on the nearest preceding date on which sales
      occurred.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (u)  “Grant
      Date”
      means,
      with respect to each Award, the date upon which the Award is granted to an
      Awardee pursuant to this Plan, which may be a designated future date as of
      which
      such Award will be effective.

     

    (v)  “Incentive
      Stock Option”
      means an
      Option that is identified in the Option Agreement as intended to qualify as
      an
      incentive stock option within the meaning of Section 422 of the Code and the
      regulations promulgated thereunder, and that actually does so
      qualify.

     

    (w)  “Member”
      means an
      Employee, Director of the Company or any Affiliate who is not a regular, active
      employee of the Company or Affiliate, and any person hired by the Company or
      an
      Affiliate as an independent contractor, leased employee, consultant, or other
      person who is designated by the Administrator, the Company or an Affiliate
      at
      the time of hire or thereafter as eligible to participate in or receive benefits
      under the Plan. Unless otherwise determined by the Administrator in its sole
      discretion, for purposes of the Plan, an individual shall cease to be a Member
      if the entity for whom he or she is performing services ceases to be an
      Affiliate, even if he or she continues to provide services to such
      entity.

     

    (x)  “Nonqualified
      Stock Option”
      means an
      Option that is not an Incentive Stock Option.

     

    (y)  “Officer”
      means a
      person who is an officer of the Company within the meaning of Section 16 of
      the
      Exchange Act and the rules and regulations promulgated thereunder.

     

    (z)  “Option”
      means a
      right granted under Section 8 of the Plan to purchase a number of Shares or
      Stock Units at such exercise price, at such times, and on such other terms
      and
      conditions as are specified in the agreement or other documents evidencing
      the
      Award (the “Option Agreement”). Both Incentive Stock Options and Nonqualified
      Stock Options may be granted under the Plan.

     

    (aa)  “Other
      Stock-Based Award”
      means an
      Award granted pursuant to Section 12 of the Plan on such terms and conditions
      as
      are specified in the agreement or other documents evidencing the Award (the
      “Other Stock-Based Award Agreement”).

     

    (bb)  “Participant”
      means
      the Awardee or any person (including any estate) to whom an Award has been
      assigned or transferred as permitted hereunder.

     

    (cc)  “Plan”
      means
      the Tekoil & Gas Corporation Omnibus Equity Plan.

     

    (dd)  “Qualifying
      Performance Criteria”
      shall
      have the meaning set forth in Section 14(b) of the Plan.

     

    (ee)  “Retirement”
      means,
      unless the Administrator determines otherwise, voluntary Termination of
      Employment by a Participant from the Company and its Affiliates after attaining
      age sixty-five (65) and having at least ten (10) years of continuous full time
      employment from the Member’s initial date of hire or appointment with the
      Company and its Affiliates, including service with an Affiliate of the Company
      prior to the time that such Affiliate became an Affiliate of the
      Company.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (ff)  “Securities
      Act”
      means
      the United States Securities Act of 1933, as amended.

     

    (gg)  “Share”
      means a
      Common Share, as adjusted in accordance with Section 16 of the
      Plan.

     

    (hh)  “Stock
      Appreciation Right”
      means a
      right granted under Section 10 of the Plan on such terms and conditions as
      are
      specified in the agreement or other documents evidencing the Award (the “Stock
      Appreciation Right Agreement”).

     

    (ii)  “Stock
      Award”
      means an
      award or issuance of Shares or Stock Units made under Section 11 of the Plan,
      the grant, issuance, retention, vesting and/or transferability of which is
      subject during specified periods of time to such conditions (including, without
      limitation, continued employment or performance conditions) and terms as are
      expressed in the agreement or other documents evidencing the Award (the “Stock
      Award Agreement”).

     

    (jj)  “Stock
      Unit”
      means a
      bookkeeping entry representing an amount equivalent to the Fair Market Value
      of
      one Share, payable in cash, property or Shares. Stock Units represent an
      unfunded and unsecured obligation of the Company, except as otherwise provided
      for by the Administrator.

     

    (kk)  “Subsidiary”
      means
      any company (other than the Company) in an unbroken chain of companies beginning
      with the Company, provided each company in the unbroken chain (other than the
      Company) owns, at the time of determination, stock possessing fifty percent
      (50%) or more of the total combined voting power of all classes of stock in
      one
      of the other companies in such chain.

     

    (ll)  “Termination
      for Cause” means,
      unless otherwise provided in an Award Agreement, Termination of Employment
      on
      account of any act of fraud or intentional misrepresentation or embezzlement,
      misappropriation or conversion of assets of the Company or any Affiliate, or
      the
      intentional and repeated violation of the written policies or procedures of
      the
      Company, provided that, for a Member who is party to an individual severance,
      employment, or consulting agreement defining Cause, “Cause” shall have the
      meaning set forth in such agreement except as may be otherwise provided in
      such
      agreement. For purposes of this Plan, a Participant’s Termination of Employment
      shall be deemed to be a Termination for Cause if, after the Participant’s
      employment has terminated, facts and circumstances are discovered that would
      have justified, in the opinion of the Administrator, a Termination for
Cause.

     

    (mm)  “Termination
      of Employment”
      means
      for purposes of this Plan, unless otherwise determined by the Administrator,
      ceasing to be an Employee (as determined in accordance with Section 3401(c)
      of
      the Code and the regulations promulgated thereunder) or Director of, or other
      Member with respect to, the Company or one of its Affiliates. However, except
      for purposes of Incentive Stock Options, unless otherwise determined by the
      Administrator, for purposes of this Plan, an Employee-Participant will not
      be
      deemed to have had a Termination of Employment if such Participant continues
      to
      be or becomes a non-Employee Member (e.g., a non-Employee Director, independent
      contractor, leased employee or consultant of the Company or an Affiliate).
      In
      addition, Termination of Employment shall mean a “separation from service” as
      defined in regulations issued under Code Section 409A whenever necessary to
      ensure compliance therewith for any payment or settlement of a benefit conferred
      under this Plan that is subject to such Code section.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    3.  Stock
      Subject to the Plan.

     

    (a)   Aggregate
      Limit.
      Subject
      to the provisions of Section 16(a) of the Plan, the maximum aggregate number
      of
      Shares which may be subject to or delivered under Awards granted under the
      Plan
      is 10,000,000 Shares. Shares subject to or delivered under Conversion Awards
      shall not reduce the aggregate number of Shares which may be subject to or
      delivered under Awards granted under this Plan. The Shares issued under the
      Plan
      may be either Shares reacquired by the Company, including Shares purchased
      in
      the open market, or authorized but unissued Shares.

     

    (b)  
      Code
      Section 162(m) and 422 Limits.
      Subject
      to the provisions of Section 16(a) of the Plan, the aggregate number of Shares
      subject to Awards granted under this Plan during any fiscal year to any one
      Awardee shall not exceed the Aggregate Limit. Subject to the provisions of
      Section 16(a) of the Plan, the aggregate number of Shares that may be subject
      to
      all Incentive Stock Options granted under the Plan shall not exceed the
      Aggregate Limit. Notwithstanding anything to the contrary in the Plan, the
      limitations set forth in this Section 3(b) shall be subject to adjustment under
      Section 16(a) of the Plan only to the extent that such adjustment will not
      affect the status of any Award intended to qualify as “performance-based
      compensation” under Section 162(m) of the Code.

     

    (c)   Share
      Counting Rules.

     

    (i)  
      For
      purposes of this Section 3 of the Plan, Shares subject to Awards that have
      been
      canceled, expired, settled in cash, or not issued or forfeited for any reason
      shall not reduce the aggregate number of Shares which may be subject to or
      delivered under Awards granted under this Plan and shall be available for future
      Awards granted under this Plan.

     

    (ii)  
      The
      following Shares shall not become available for Awards under this Plan: (A)
      Shares subject to Awards that have been retained by the Company in payment
      or
      satisfaction of the purchase price of an Award or the tax withholding obligation
      of an Awardee; (B) Shares that have been delivered (either actually or
      constructively by attestation) to the Company in payment or satisfaction of
      the
      purchase price of an Award or the tax withholding obligation of an Awardee;
      or
      (C) Shares reserved for issuance upon a grant of Stock Appreciation Rights
      which
      are exercised and settled in Shares, but only to the extent the number of
      reserved Shares does not exceed the number of Shares actually issued upon the
      exercise of the Stock Appreciation Right.

     

    4.  Administration
      of the Plan.

     

    (a)   Procedure.

     

    (i)  
      Multiple Administrative Bodies. The
      Plan
      shall be administered by the Board, a Committee designated by the Board to
      so
      administer this Plan and/or their respective delegates.

     

    (ii)  
      Section 162(m).
      To the
      extent that the Administrator determines it to be desirable to qualify Awards
      granted hereunder as “performance-based compensation” within the meaning of Code
      Section 162(m), Awards to “covered employees” (within the meaning of Code
      Section 162(m)) or to Employees that the Committee determines may be “covered
      employees” in the future shall be made by a Committee of two or more “outside
      directors” within the meaning of Section 162(m) of the Code. References herein
      to the Administrator in connection with Awards intended to qualify as
“performance-based compensation” shall mean a Committee meeting the “outside
      director” requirements of Code Section 162(m). Notwithstanding any other
      provision of the Plan, the Administrator shall not have any discretion or
      authority to make changes to any Award that is intended to qualify as
“performance-based compensation” to the extent that the existence of such
      discretion or authority would cause such Award not to so qualify.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (iii)  
      Rule
      16b-3.
      To the
      extent desirable to qualify transactions hereunder as exempt under Rule 16b-3
      promulgated under the Exchange Act (“Rule 16b-3”), Awards to Officers and
      Directors shall be made by the entire Board or a Committee of two or more
“non-employee directors” within the meaning of Rule 16b-3.

     

    (iv)  
      Other Administration. Except
      to
      the extent prohibited by Applicable Law, the Board or a Committee may delegate
      to a Committee of one or more Directors or to authorized officers of the Company
      the power to approve Awards to persons eligible to receive Awards under the
      Plan
      who are not (A) subject to Section 16 of the Exchange Act or (B) at the time
      of
      such approval, “covered employees” under Section 162(m) of the
      Code.

     

    (v)  
      Delegation of Authority for the Day-to-Day Administration of the Plan.
Except
      to
      the extent prohibited by Applicable Law, the Administrator may delegate to
      one
      or more individuals the day-to-day administration of the Plan and any of the
      functions assigned to it in this Plan. Such delegation may be revoked at any
      time.

     

    (b)  
      Powers of the Administrator.
      Subject
      to the provisions of the Plan and, in the case of a Committee or delegates
      acting as the Administrator, subject to the specific duties delegated to such
      Committee or delegates, the Administrator shall have the authority, in its
      discretion:

     

    (i)  
      to
      select the Members to whom Awards are to be granted hereunder;

     

    (ii)  
      to
      determine Cash Award targets and the number of Common Shares to be covered
      by
      each Award granted hereunder;

     

    (iii)  
      to
      determine the type of Award to be granted to the selected Members;

     

    (iv)  
      to
      determine the Fair Market Value of Shares under Section 2(v)(ii); 

     

    (v)  
      to
      approve forms of Award Agreements;

     

    (vi)  
      to
      determine the terms and conditions, not inconsistent with the terms of the
      Plan,
      of any Award granted hereunder. Such terms and conditions include, but are
      not
      limited to, the exercise and/or purchase price, the time or times when an Award
      may be exercised (which may or may not be based on performance criteria), the
      vesting schedule, any vesting and/or exercisability provisions, terms regarding
      acceleration of Awards or waiver of forfeiture restrictions, the acceptable
      forms of consideration for payment for an Award, the term, and any restriction
      or limitation regarding any Award or the Shares relating thereto, based in
      each
      case on such factors as the Administrator, in its sole discretion, shall
      determine and may be established at the time an Award is granted or
      thereafter;

     

    (vii)  
      to
      correct administrative errors;

     

    (viii)  
      to
      construe and interpret the terms of the Plan (including sub-plans and Plan
      addenda) and Awards granted pursuant to the Plan;

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (ix)  
      to adopt
      rules and procedures relating to the operation and administration of the Plan
      to
      accommodate the specific requirements of local laws and procedures. Without
      limiting the generality of the foregoing, the Administrator is specifically
      authorized (A) to adopt rules and procedures regarding the conversion of local
      currency, the shift of tax liability from employer to employee (where legally
      permitted) and withholding procedures and handling of stock certificates which
      vary with local requirements, and (B) to adopt sub-plans and Plan addenda as
      the
      Administrator deems desirable, to accommodate foreign laws, regulations and
      practice;

     

    (x)  
      to
      prescribe, amend and rescind rules and regulations relating to the Plan,
      including rules and regulations relating to sub-plans and Plan
      addenda;

     

    (xi)  
      to
      modify or amend each Award, including, but not limited to, the acceleration
      of
      vesting and/or exercisability, provided, however, that any such modification
      or
      amendment (A) is subject to the minimum vesting provisions set forth in Sections
      8(e), 11(a) and 12(a) of the Plan and the plan amendment provisions set forth
      in
      Section 17 of the Plan, and (B) may not impair any outstanding Award unless
      agreed to in writing by the Participant, except that such agreement shall not
      be
      required if the Administrator determines in its sole discretion that such
      modification or amendment either (Y) is required or advisable in order for
      the
      Company, the Plan or the Award to satisfy any Applicable Law or to meet the
      requirements of any accounting standard, or (Z) is not reasonably likely to
      significantly diminish the benefits provided under such Award, or that adequate
      compensation has been provided for any such diminishment, except following
      a
      Change of Control;

     

    (xii)  
      to allow
      or require Participants to satisfy withholding tax amounts by electing to have
      the Company withhold from the Shares to be issued upon exercise of a
      Nonqualified Stock Option or vesting of a Stock Award that number of Shares
      having a Fair Market Value equal to the amount required to be withheld. The
      Fair
      Market Value of the Shares to be withheld shall be determined in such manner
      and
      on such date that the Administrator shall determine or, in the absence of
      provision otherwise, on the date that the amount of tax to be withheld is to
      be
      determined. All elections by a Participant to have Shares withheld for this
      purpose shall be made in such form and under such conditions as the
      Administrator may provide;

     

    (xiii)  
      to
      authorize conversion or substitution under the Plan of any or all stock options,
      stock appreciation rights or other stock awards held by awardees of an entity
      acquired by the Company (the “Conversion Awards”). Any conversion or
      substitution shall be effective as of the close of the merger or acquisition.
      The Conversion Awards may be Nonqualified Stock Options or Incentive Stock
      Options, as determined by the Administrator, with respect to options granted
      by
      the acquired entity;

     

    (xiv)  
      to
      authorize any person to execute on behalf of the Company any instrument required
      to effect the grant of an Award previously granted by the
      Administrator;

     

    (xv)  
      to
      impose such restrictions, conditions or limitations as it determines appropriate
      as to the timing and manner of any resale by a Participant or of other
      subsequent transfers by the Participant of any Shares issued as a result of
      or
      under an Award or upon the exercise of an Award, including without limitation,
      (A) restrictions under an insider trading policy, (B) restrictions as to the
      use
      of a specified brokerage firm for such resale or other transfers, and (C)
      institution of “blackout” periods on exercises of Awards;

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (xvi)  
      to
      provide, either at the time an Award is granted or by subsequent action, that
      an
      Award shall contain as a term thereof, a right, either in tandem with the other
      rights under the Award or as an alternative thereto, of the Participant to
      receive, without payment to the Company, a number of Shares, cash or a
      combination thereof, the amount of which is determined by reference to the
      value
      of the Award; and

     

    (xvii)  
      to make
      all other determinations deemed necessary or advisable for administering the
      Plan and any Award granted hereunder.

     

    (c)  
      Effect of Administrator’s Decision. All
      questions arising under the Plan or under any Award shall be decided by the
      Administrator in its total and absolute discretion. All decisions,
      determinations and interpretations by the Administrator regarding the Plan,
      any
      rules and regulations under the Plan and the terms and conditions of any Award
      granted hereunder, shall be final and binding on all Participants. The
      Administrator shall consider such factors as it deems relevant, in its sole
      and
      absolute discretion, to making such decisions, determinations and
      interpretations, including, without limitation, the recommendations or advice
      of
      any officer or other employee of the Company and such attorneys, consultants
      and
      accountants as it may select.

     

    5.  Eligibility.

     

    Awards
      may be granted only to Members.

     

    6.  Term
      of Plan.

     

    The
      Plan
      shall become effective upon its adoption by the Board. However, the shareholders
      of the Company must approve the Plan within twelve (12) months before or after
      the date the Plan is adopted by the Board. If the Plan is not approved by the
      shareholders of the Company within such twenty-four (24) month period, any
      Award
      under the Plan shall become null and void. The Plan shall continue in effect
      for
      a term of ten (10) years from the date the Plan is adopted by the Board or
      the
      date the Plan is approved by the shareholders of the Company, whichever is
      earlier, unless terminated earlier under Section 17 of the Plan.

     

    7.  Term
      of Award.

     

    Subject
      to the provisions of the Plan, the term of each Award shall be determined by
      the
      Administrator and stated in the Award Agreement. In the case of an Option,
      the
      term shall be ten (10) years from the Grant Date or such shorter term as may
      be
      provided in the Award Agreement. However, in the case of an Incentive Stock
      Option granted to an individual who, immediately before the Incentive Stock
      Option is granted, owns (or is treated as owning) stock possessing more than
      10%
      of the total combined voting power of all classes of stock of the Company or
      Affiliate employing the Awardee or of any related corporation (a “10% Owner”),
      the term shall be five (5) years from the Grant Date or such shorter term as
      may
      be provided in the Award Agreement.

     

    8.  Options.

     

    The
      Administrator may grant an Option or provide for the grant of an Option, either
      from time to time in the discretion of the Administrator or automatically upon
      the occurrence of specified events, including, without limitation, the
      achievement of performance goals or the satisfaction of an event or condition
      within the control of the Awardee or within the control of others.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (a)  
      Option Agreement. Each
      Option Agreement shall contain provisions regarding (i) the number of Shares
      that may be issued upon exercise of the Option, (ii) the type of Option, (iii)
      the exercise price of the Option and the means of payment of such exercise
      price, (iv) the term of the Option, (v) such terms and conditions regarding
      the
      vesting and/or exercisability of an Option as may be determined from time to
      time by the Administrator, (vi) restrictions on the transfer of the Option
      and
      forfeiture provisions, and (vii) such further terms and conditions, in each
      case
      not inconsistent with this Plan, as may be determined from time to time by
      the
      Administrator.

     

    (b)  
      Exercise Price.
      The per
      share exercise price for the Shares to be issued upon exercise of an Incentive
      Stock Option shall be determined by the Administrator, except that the per
      Share
      exercise price shall be no less than 100% of the Fair Market Value per Share
      on
      the Grant Date or 110% of the Fair Market Value per Share on the Grant Date
      if
      the Incentive Stock Option is granted to a 10% Owner. The per share exercise
      price for the Shares to be issued upon exercise of a Nonqualified Stock Option
      shall be determined by the Administrator, provided that, if the per Share
      exercise price is less than 100% of the Fair Market Value per Share on the
      Grant
      Date, the Option Agreement under which the Nonqualified Stock Option is granted
      shall designate the exercise date and comply with all other applicable
      requirements of Code Section 409A.

     

    (c)  
      Vesting Period and Exercise Dates. Options
      granted under this Plan shall vest and/or be exercisable at such time and in
      such installments during the period prior to the expiration of the Option’s term
      as determined by the Administrator. The Administrator shall have the right
      to
      make the timing of the ability to exercise any Option granted under this Plan
      subject to continued active employment, the passage of time and/or such
      performance requirements as deemed appropriate by the Administrator. At any
      time
      after the grant of an Option, the Administrator may reduce or eliminate any
      restrictions surrounding any Participant’s right to exercise all or part of the
      Option.

     

    (d)  
      Form
      of Consideration. The
      Administrator shall determine the acceptable form of consideration for
      exercising an Option, including the method of payment, either through the terms
      of the Option Agreement or at the time of exercise of an Option. Acceptable
      forms of consideration may include:

     

    (i)  
      cash;

     

    (ii)  
      check or
      wire transfer (denominated in U.S. Dollars);

     

    (iii)  
      subject
      to any conditions or limitations established by the Administrator, other
      Shares;

     

    (iv)  
      subject
      to any conditions or limitations established by the Administrator, the Company
      withholding Shares otherwise issuable upon exercise of an Option;

     

    (v)  
      consideration received by the Company under a broker-assisted sale and
      remittance program acceptable to the Administrator;

     

    (vi)  
      such
      other consideration and method of payment for the issuance of Shares deemed
      appropriate by the Administrator; or

     

    (vii)  
      any
      combination of the foregoing methods of payment.

     

    (e)  
      Procedure for Exercise; Rights as a Shareholder.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (i)  
      Any
      Option granted hereunder shall be exercisable according to the terms of the
      Plan
      and at such times and under such conditions as determined by the Administrator
      and set forth in the applicable Option Agreement.

     

    (ii)  
      An
      Option shall be deemed exercised when (A) the Company receives (1) written
      or
      electronic notice of exercise (in accordance with the Option Agreement or
      procedures established by the Administrator) from the person entitled to
      exercise the Option and (2) full payment for the Shares with respect to which
      the related Option is exercised, and (B) with respect to Nonqualified Stock
      Options, provisions acceptable to the Administrator have been made for payment
      of all applicable withholding taxes.

     

    (iii)  
      Unless
      provided otherwise by the Administrator or pursuant to this Plan, until the
      Shares are issued (as evidenced by the appropriate entry on the books of the
      Company or of a duly authorized transfer agent of the Company), no right to
      vote
      or receive dividends or any other rights as a shareholder shall exist with
      respect to the Shares subject to an Option, notwithstanding the exercise of
      the
      Option.

     

    (iv)  
      The
      Company shall issue (or cause to be issued) such Shares as soon as
      administratively practicable after the Option is exercised. An Option may not
      be
      exercised for a fraction of a Share.

     

    (f)  
      Termination of Employment. The
      Administrator shall determine as of the Grant Date (subject to modification
      subsequent to the Grant Date) the effect a Termination of Employment due to
      (i)
      Disability, (ii) Retirement, (iii) death, or (iv) otherwise (including
      Termination for Cause) shall have on any Option. 

     

    9.  Incentive
      Stock Option Limitations/Terms.

     

    (a)  
      Eligibility. Only
      Employees (as determined in accordance with Section 3401(c) of the Code and
      the
      regulations promulgated thereunder) of the Company or any of its Subsidiaries
      may be granted Incentive Stock Options.

     

    (b)  
      $100,000 Limitation. Notwithstanding
      the designation “Incentive Stock Option” in an Option Agreement, if and to the
      extent that the aggregate Fair Market Value of the Shares with respect to which
      Incentive Stock Options are exercisable for the first time by the Awardee during
      any calendar year (under all plans of the Company and any of its Subsidiaries)
      exceeds U.S. $100,000, such Options shall be treated as Nonqualified Stock
      Options. For purposes of this Section 9(b) of the Plan, Incentive Stock Options
      shall be taken into account in the order in which they were granted. The Fair
      Market Value of the Shares shall be determined as of the Grant
      Date.

     

    (c)  
      Transferability. The
      Option Agreement must provide that an Incentive Stock Option is not transferable
      by the Awardee otherwise than by will or the laws of descent and distribution,
      and, during the lifetime of such Awardee, must not be exercisable by any other
      person. If the terms of an Incentive Stock Option are amended to permit
      transferability, the Option will be treated for tax purposes as a Nonqualified
      Stock Option.

     

    (d)  
      Exercise Price. The
      per
      Share exercise price of an Incentive Stock Option shall in no event be
      inconsistent with the requirements for qualification of the Incentive Stock
      Option under Section 422 of the Code.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (e)  
      Other Terms. Option
      Agreements evidencing Incentive Stock Options shall contain such other terms
      and
      conditions as may be necessary to qualify, to the extent determined desirable
      by
      the Administrator, with the applicable provisions of Section 422 of the
      Code.

     

    10.  Stock
      Appreciation Rights.

     

    A
“Stock
      Appreciation Right” is a right that entitles the Awardee to receive, in cash or
      Shares (as determined by the Administrator), value equal to or otherwise based
      on the excess of (i) the Fair Market Value of a specified number of Shares
      at
      the time of exercise over (ii) the aggregate exercise price of the right, as
      established by the Administrator on the Grant Date. Stock Appreciation Rights
      may be granted to Awardees either alone (“freestanding”) or in addition to or in
      tandem with other Awards granted under the Plan and may, but need not, relate
      to
      a specific Option granted under Section 8 of the Plan. Any Stock Appreciation
      Right granted in tandem with an Option may be granted at the same time such
      Option is granted or at any time thereafter before exercise or expiration of
      such Option. All Stock Appreciation Rights under the Plan shall be granted
      subject to the same terms and conditions applicable to Options as set forth
      in
      Section 8 of the Plan. Subject to the provisions of Section 8 of the Plan,
      the
      Administrator may impose such other conditions or restrictions on any Stock
      Appreciation Right as it shall deem appropriate. Stock Appreciation Rights
      may
      be settled in Shares or cash as determined by the Administrator.

     

    11.  Stock
      Awards.

     

    (a)  
      Stock Award Agreement. Each
      Stock Award Agreement shall contain provisions regarding (i) the number of
      Shares subject to such Stock Award or a formula for determining such number,
      (ii) the purchase price of the Shares, if any, and the means of payment for
      the
      Shares, (iii) the performance criteria, if any, and level of achievement, if
      any, versus these criteria that shall determine the number of Shares granted,
      issued, retainable and/or vested, (iv) such terms and conditions on the grant,
      issuance, vesting and/or forfeiture of the Shares as may be determined from
      time
      to time by the Administrator, (v) restrictions on the transferability of the
      Stock Award, and (vi) such further terms and conditions, in each case not
      inconsistent with this Plan, as may be determined from time to time by the
      Administrator.

     

    (b)  
      Restrictions and Performance Criteria. The
      grant, issuance, retention and/or vesting of each Stock Award may be subject
      to
      such performance criteria and level of achievement versus these criteria as
      the
      Administrator shall determine, which criteria may be based on financial
      performance, personal performance evaluations and/or completion of service
      by
      the Awardee. Notwithstanding anything to the contrary herein, the performance
      criteria for any Stock Award that is intended to satisfy the requirements for
      “performance-based compensation” under Section 162(m) of the Code shall be
      established by the Administrator based on one or more Qualifying Performance
      Criteria selected by the Administrator and specified in writing not later than
      ninety (90) days after the commencement of the period of service (or, if
      earlier, the elapse of twenty-five percent (25%) of such period) to which the
      performance goals relate or otherwise within the time period required by the
      Code or the applicable Treasury Regulations, provided that the outcome is
      substantially uncertain at that time.

     

    (c)  
      Termination of Employment. The
      Administrator shall determine as of the Grant Date (subject to modification
      subsequent to the Grant Date) the effect a Termination of Employment due to
      (i)
      Disability, (ii) Retirement, (iii) death, or (iv) otherwise (including
      Termination for Cause) shall have on any Stock Award. 

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (d)  
      Rights as a Shareholder. Unless
      otherwise provided for by the Administrator, the Participant shall have the
      rights equivalent to those of a shareholder and shall be a shareholder only
      after Shares are issued (as evidenced by the appropriate entry on the books
      of
      the Company or of a duly authorized transfer agent of the Company) to the
      Participant.

     

    12.  Other
      Stock-Based Awards.

     

    (a)  
      Other Stock-Based Awards.
      An
“Other Stock-Based Award” means any other type of equity-based or equity-related
      Award not otherwise described by the terms of this Plan (including the grant
      or
      offer for sale of unrestricted Shares) in such amount and subject to such terms
      and conditions as the Administrator shall determine. Such Awards may involve
      the
      transfer of actual Shares to Participants, or payment in cash or otherwise
      of
      amounts based on the value of Shares. Each Other Stock-Based Award will be
      evidenced by an Award Agreement containing such terms and conditions as may
      be
      determined by the Administrator. 

     

    (b)  
      Value of Other Stock-Based Awards. Each
      Other Stock-Based Award shall be expressed in terms of Shares or units based
      on
      Shares, as determined by the Administrator. The Administrator may establish
      performance goals in its discretion. If the Administrator exercises its
      discretion to establish performance goals, the number and/or value of Other
      Stock-Based Awards that will be paid out to the Participant will depend on
      the
      extent to which the performance goals are met. Notwithstanding anything to
      the
      contrary herein, the performance criteria for any Other Stock-Based Award that
      is intended to satisfy the requirements for “performance-based compensation”
under Section 162(m) of the Code shall be established by the Administrator
      based
      on one or more Qualifying Performance Criteria selected by the Administrator
      and
      specified in writing not later than ninety (90) days after the commencement
      of
      the period of service (or, if earlier, the elapse of twenty-five percent (25%)
      of such period) to which the performance goals relate and otherwise within
      the
      time period required by the Code and the applicable Treasury Regulations,
      provided that the outcome is substantially uncertain at that time.

     

    (c)  
      Payment of Other Stock-Based Awards.
      Payment, if any, with respect to Other Stock-Based Awards shall be made in
      accordance with the terms of the Award, in cash or Shares as the Administrator
      determines.

     

    (d)  
      Termination of Employment. The
      Administrator shall determine as of the Grant Date (subject to modification
      subsequent to the Grant Date) the effect a Termination of Employment due to
      (i) Disability, (ii) Retirement, (iii) death, or (iv) otherwise (including
      Termination for Cause) shall have on any Other Stock-Based Award. 

     

    13.  Cash
      Awards.

     

    Each
      Cash
      Award will confer upon the Participant the opportunity to earn a future payment
      tied to the level of achievement with respect to one or more performance
      criteria established for a performance period.

     

    (a)  
      Cash
      Award. Each
      Cash
      Award may contain provisions regarding (i) the amounts potentially payable
      to
      the Participant as a Cash Award, (ii) the performance criteria and level of
      achievement versus these criteria which shall determine the amount of such
      payment, (iii) the period as to which performance shall be measured for
      establishing the amount of any payment, (iv) the timing of any payment earned
      by
      virtue of performance, (v) restrictions on the alienation or transfer of the
      Cash Award prior to actual payment, (vi) forfeiture provisions, and (vii) such
      further terms and conditions, in each case not inconsistent with the Plan,
      as
      may be determined from time to time by the Administrator.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (b)  
      Performance Criteria. The
      Administrator shall establish the performance criteria and level of achievement
      versus these criteria which shall determine the amounts payable under a Cash
      Award, which criteria may be based on financial performance and/or personal
      performance evaluations. The Administrator may specify the percentage of the
      target Cash Award that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code.
      Notwithstanding anything to the contrary herein, the performance criteria for
      any portion of a Cash Award that is intended to satisfy the requirements for
      “performance-based compensation” under Section 162(m) of the Code shall be a
      measure established by the Administrator based on one or more Qualifying
      Performance Criteria selected by the Administrator and specified in writing
      not
      later than ninety (90) days after the commencement of the period of service
      (or,
      if earlier, the elapse of twenty-five percent (25%) of such period) to which
      the
      performance goals relate and otherwise within the time period required by the
      Code and the applicable Treasury Regulations, provided that the outcome is
      substantially uncertain at that time.

     

    (c)  
      Timing and Form of Payment. The
      Administrator shall determine the time of payment of any Cash Award. The
      Administrator may provide for or, subject to such terms and conditions as the
      Administrator may specify, may permit an Awardee to elect for the payment of
      any
      Cash Award to be deferred to a specified date or event. The Administrator may
      specify the form of payment of Cash Awards, which may be cash or other property,
      including Shares, or may provide for an Awardee to have the option for his
      or
      her Cash Award, or such portion thereof as the Administrator may specify, to
      be
      paid in whole or in part in cash or other property, including Shares. To the
      extent that a Cash Award is in the form of cash, the Administrator may determine
      whether a payment is in U.S. dollars or foreign currency.

     

    (d)  
      Termination of Employment. The
      Administrator shall determine as of the Grant Date (subject to modification
      subsequent to the Grant Date) the effect a Termination of Employment due to
      (i)
      Disability, (ii) Retirement, (iii) death, or (iv) otherwise (including
      Termination for Cause) shall have on any Cash Award. 

     

    14.  Other
      Provisions
      Applicable to Awards.

     

    (a)  
      Non-Transferability of Awards. Unless
      determined otherwise by the Administrator, an Award may not be sold, pledged,
      assigned, hypothecated, transferred or disposed of in any manner other than
      by
      beneficiary designation, will or by the laws of descent or distribution. The
      Administrator may make an Award transferable to an Awardee’s family member or
      any other person or entity. If the Administrator makes an Award transferable,
      either as of the Grant Date or thereafter, such Award shall contain such
      additional terms and conditions as the Administrator deems appropriate, and
      any
      transferee shall be deemed to be bound by such terms upon acceptance of such
      transfer.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (b)  
      Qualifying Performance Criteria. For
      purposes of this Plan, the term “Qualifying Performance Criteria” shall mean any
      one or more of the following performance criteria, either individually,
      alternatively or in any combination, applied to either the Company as a whole
      or
      to a business unit, Affiliate or business segment, either individually,
      alternatively or in any combination, and measured either annually or
      cumulatively over a period of years, on an absolute basis or relative to a
      pre-established target, to previous years’ results or to a designated comparison
      group, in each case as specified by the Committee in the Award: (i) sales;
      (ii)
      cash flow; (iii) earnings (including gross margin, earnings before or after
      interest and taxes, earnings before taxes, and net earnings); (iv) basic or
      diluted earnings per share; (v) growth in earnings or earnings per share; (vi)
      stock price; (vii) return on equity or average shareholders’ equity; (viii)
      total shareholder return; (ix) return on capital; (x) return on assets or net
      assets; (xi) return on investment; (xii) revenue or gross profits;
      (xiii) income before or after interest, taxes, depreciation and
      amortization, or net income; (xiv) pretax income before allocation of corporate
      overhead and bonus; (xv) operating income or net operating income; (xvi)
      operating profit or net operating profit (whether before or after taxes); (xvii)
      operating margin; (xviii) return on operating revenue; (xix) working capital;
      (xx) market share; (xxi) contract awards or backlog; (xxii) overhead or
      other expense or cost reduction; (xxiii) growth in shareholder value relative
      to
      the moving average of the S&P 500 Index or a peer group index; (xxiv) credit
      rating; (xxv) strategic plan development and implementation; (xxvi)
      improvement in workforce diversity; (xxvii) customer satisfaction; (xxviii)
      employee satisfaction; (xxix) management succession plan development and
      implementation; and (xxx) employee retention. With respect to any Award that
      is
      intended to satisfy the requirements for “performance-based compensation” under
      Section 162(m) of the Code, the performance criteria must be Qualifying
      Performance Criteria, and the Administrator will (within the first quarter
      of
      the performance period, but in no event more than ninety (90) days into that
      period) establish the specific performance targets (including thresholds and
      whether to exclude certain extraordinary, non-recurring, or similar items)
      and
      award amounts (subject to the right of the Administrator to exercise discretion
      to reduce payment amounts following the conclusion of the performance
      period).

     

    (c)  
      Certification. Prior
      to
      the payment of any compensation under an Award intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, the
      Administrator shall certify in writing the extent to which any Qualifying
      Performance Criteria and any other material terms under such Award have been
      satisfied (other than in cases where such criteria relate solely to the increase
      in the value of the Common Shares).

     

    (d)  
      Discretionary Adjustments Pursuant to Section 162(m). Notwithstanding
      satisfaction or completion of any Qualifying Performance Criteria, to the extent
      specified as of the Grant Date, the number of Shares, Options or other benefits
      granted, issued, retainable and/or vested under an Award on account of
      satisfaction of such Qualifying Performance Criteria may be reduced by the
      Administrator on the basis of such further considerations as the Administrator
      in its sole discretion shall determine.

     

    15.  Dividends
      and Dividend Equivalents.

     

    Any
      Award
      may provide the Awardee with the right to receive dividend payments or dividend
      equivalent payments on the Shares subject to the Award, whether or not such
      Award has been exercised or is vested. Such payments may be made in cash, Shares
      or Stock Units or may be credited as cash or Stock Units to an Awardee’s account
      and later settled in cash or Shares or a combination thereof, as determined
      by
      the Administrator. Such payments and credits may be subject to such conditions
      and contingencies as the Administrator may establish.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    16.  Adjustments
      upon Changes in Capitalization, Organic Change or Change of
      Control.

     

    (a)  
      Adjustment Clause. Except
      as
      otherwise provided in Section 16(c), in
      the
      event of (i) a stock dividend, stock split, reverse stock split, share
      combination, or recapitalization or similar event affecting the capital
      structure of the Company (each, a “Share Change”), or (ii) a merger,
      consolidation, acquisition of property or shares, separation, spin-off,
      reorganization, stock rights offering, liquidation, Disaffiliation, or similar
      event affecting the Company or any of its Subsidiaries (each, an “Organic
      Change”), the Administrator or the Board may in its discretion make such
      substitutions or adjustments as it deems appropriate and equitable to (i) the
      Share limitations set forth in Sections 3, 11(a) and 12(a) of the Plan, (ii)
      the
      number and kind of Shares covered by each outstanding Award, and (iii) the
      price
      per Share subject to each such outstanding Award. In the case of Organic
      Changes, such adjustments may include, without limitation, (x) the cancellation
      of outstanding Awards in exchange for payments of cash, property or a
      combination thereof having an aggregate value equal to the value of such Awards,
      as determined by the Administrator or the Board in its sole discretion (it
      being
      understood that in the case of an Organic Change with respect to which
      shareholders receive consideration other than publicly traded equity securities
      of the ultimate surviving entity, any such determination by the Administrator
      that the value of an Option or Stock Appreciation Right shall for this purpose
      be deemed to equal the excess, if any, of the value of the consideration being
      paid for each Share pursuant to such Organic Change over the exercise price
      of
      such Option or Stock Appreciation Right shall conclusively be deemed valid);
      (y)
      the substitution of other property (including, without limitation, cash or
      other
      securities of the Company and securities of entities other than the Company)
      for
      the Shares subject to outstanding Awards; and (z) in connection with any
      Disaffiliation, arranging for the assumption of Awards, or replacement of Awards
      with new awards based on other property or other securities (including, without
      limitation, other securities of the Company and securities of entities other
      than the Company), by the affected Affiliate or division or by the entity that
      controls such Affiliate or division following such Disaffiliation (as well
      as
      any corresponding adjustments to Awards that remain based upon Company
      securities).

     

    (b)  
      Change of Control. Except
      as
      otherwise provided in Section 16(c), in the event of a Change of Control, unless
      otherwise determined by the Administrator as of the Grant Date of a particular
      Award (or subsequent to the Grant Date), the following acceleration,
      exercisability and valuation provisions shall apply:

     

    (i)  
      On the
      date that such Change of Control occurs, any or all Options and Stock
      Appreciation Rights awarded under this Plan not previously exercisable and
      vested shall become fully exercisable and vested. 

     

    (ii)  
      Except
      as may be provided in an individual severance or employment agreement (or
      severance plan) to which an Awardee is a party, in the event of an Awardee’s
      Termination of Employment within two (2) years after a Change of Control for
      any
      reason other than because of the Awardee’s death, Retirement, Disability or
      Termination for Cause, each Option and Stock Appreciation Right held by the
      Awardee (or a transferee) that is vested following such Termination of
      Employment shall remain exercisable until the earlier of the third
      (3rd)
      anniversary of such Termination of Employment (or any later date until which
      it
      would remain exercisable under such circumstances by its terms) or the
      expiration of its original term. In the event of an Awardee’s Termination of
      Employment more than two (2) years after a Change of Control, or within two
      (2)
      years after a Change of Control because of the Awardee’s death, Retirement,
      Disability or Termination for Cause, the provisions of Sections 8(f) and 10
      of
      the Plan shall govern (as applicable).

     

    (iii)  
      On the
      date that such Change of Control occurs, the restrictions and conditions
      applicable to any or all Stock Awards, Other Stock-Based Awards and Cash Awards
      shall lapse and such Awards shall be fully vested. Unless otherwise provided
      in
      an Award at the Grant Date, upon the occurrence of a Change of Control, any
      performance based Award shall be deemed fully earned at the target amount as
      of
      the date on which the Change of Control occurs. So long as the Change of Control
      satisfies the requirements of Section 2(i)(v), (vi), (vii) or (viii), all Stock
      Awards, Other Stock-Based Awards and Cash Awards shall be settled or paid within
      thirty (30) days of vesting hereunder. If the Change in Control Notwithstanding
      the foregoing, if the Change of Control does not satisfy the requirements of
      Section 2(i)(v), (vi), (vii) or (viii), the Awardee shall be entitled to receive
      the Award from the Company on the date that would have applied absent this
      provision, with interest in the case of Cash Awards from the vesting date to
      the
      payment date at the applicable federal mid-term rate under
      Section 7872 of the Code in effect for the month in which the Change of Control
      occurred.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (c)  
      Section 409A.
      Notwithstanding the foregoing: (i) any adjustments made pursuant to Section
      16(a) of the Plan to Awards that are considered “deferred compensation” within
      the meaning of Section 409A of the Code shall be made in compliance with the
      requirements of Section 409A of the Code; (ii) any adjustments made pursuant
      to
      Section 16(a) of the Plan to Awards that are not considered “deferred
      compensation” subject to Section 409A of the Code shall be made in such a manner
      as to ensure that after such adjustment, the Awards either continue not to
      be
      subject to Section 409A of the Code, or comply with the requirements of Section
      409A of the Code; (iii) the Administrator shall not have the authority to make
      any adjustments pursuant to Section 16(a) of the Plan to the extent that the
      existence of such authority would cause an Award that is not intended to be
      subject to Section 409A of the Code to be subject thereto; and (iv) if any
      Award
      is subject to Section 409A of the Code, Section 16(b) of the Plan shall be
      applicable only to the extent specifically provided in the Award Agreement
      and
      permitted pursuant to Section 25 of the Plan in order to ensure that such Award
      complies with Code Section 409A.

     

    17.  Amendment
      and Termination of the Plan.

     

    (a)  
      Amendment and Termination. The
      Administrator may amend, alter or discontinue the Plan or any Award Agreement,
      but any such amendment shall be subject to approval of the shareholders of
      the
      Company in the manner and to the extent required by Applicable Law. In addition,
      without limiting the foregoing, unless approved by the shareholders of the
      Company and subject to Section 16(a), no such amendment shall be made that
      would
      increase the maximum aggregate number of Shares which may be subject to Awards
      granted under the Plan.

     

    (b)  
      Effect of Amendment or Termination. Subject
      in all respects to the provisions of Section 16 hereof, no amendment, suspension
      or termination of the Plan shall impair the rights of any Participant with
      respect to an outstanding Award, unless mutually agreed otherwise between the
      Participant and the Administrator, which agreement must be in writing and signed
      by the Participant and the Company, except that no such agreement shall be
      required if the Administrator determines in its sole discretion that such
      amendment either (i) is required or advisable in order for the Company, the
      Plan
      or the Award to satisfy any Applicable Law or to meet the requirements of any
      accounting standard, or (ii) is not reasonably likely to significantly diminish
      the benefits provided under such Award, or that any such diminishment has been
      adequately compensated, except following a Change of Control. Termination of
      the
      Plan shall not affect the Administrator’s ability to exercise the powers granted
      to it hereunder with respect to Awards granted under the Plan prior to the
      date
      of such termination.

     

    (c)  
      Effect of the Plan on Other Arrangements. Neither
      the adoption of the Plan by the Board or a Committee nor the submission of
      the
      Plan to the shareholders of the Company for approval shall be construed as
      creating any limitations on the power of the Board or any Committee to adopt
      such other incentive arrangements as it or they may deem desirable, including
      without limitation, the granting of restricted shares or restricted share units
      or stock options otherwise than under the Plan, and such arrangements may be
      either generally applicable or applicable only in specific cases.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    18.  Designation
      of Beneficiary.

     

    (a)  
      An
      Awardee may file a written designation of a beneficiary who is to receive the
      Awardee’s rights pursuant to Awardee’s Award or the Awardee may include his or
      her Awards in an omnibus beneficiary designation for all benefits under the
      Plan. To the extent that Awardee has completed a designation of beneficiary
      while employed with Company, such beneficiary designation shall remain in effect
      with respect to any Award hereunder until changed by the Awardee to the extent
      enforceable under Applicable Law.

     

    (b)  
      Such
      designation of beneficiary may be changed by the Awardee at any time by written
      notice. In the event of the death of an Awardee and in the absence of a
      beneficiary validly designated under the Plan who is living at the time of
      such
      Awardee’s death, the Company shall allow the legal representative of the
      Awardee’s estate to exercise the Award.

     

    19.  No
      Right to Awards or to Employment.

     

    No
      person
      shall have any claim or right to be granted an Award and the grant of any Award
      shall not be construed as giving an Awardee the right to continue in the employ
      of the Company or its Affiliates. Further, the Company and its Affiliates
      expressly reserve the right, at any time, to dismiss any Member or Awardee
      at
      any time without liability or any claim under the Plan, except as provided
      herein or in any Award Agreement entered into hereunder.

     

    20.  Legal
      Compliance.

     

    Shares
      shall not be issued pursuant to an Option, Stock Appreciation Right, Stock
      Award
      or Other Stock-Based Award unless such Option, Stock Appreciation Right, Stock
      Award or Other Stock-Based Award and the issuance and delivery of such Shares
      shall comply with Applicable Law and shall be further subject to the approval
      of
      counsel for the Company with respect to such compliance. Unless the Awards
      and
      Shares covered by this Plan have been registered under the Securities Act or
      the
      Company has determined that such registration is unnecessary, each person
      receiving an Award and/or Shares pursuant to any Award may be required by the
      Company to give a representation in writing that such person is acquiring such
      Shares for his or her own account for investment and not with a view to, or
      for
      sale in connection with, the distribution of any part thereof.

     

    21.  Inability
      to Obtain Authority.

     

    To
      the
      extent the Company is unable to or the Administrator deems it unfeasible to
      obtain authority from any regulatory body having jurisdiction, which authority
      is deemed by the Company’s counsel to be advisable or necessary to the lawful
      issuance and sale of any Shares hereunder, the Company shall be relieved of
      any
      liability with respect to the failure to issue or sell such Shares as to which
      such requisite authority shall not have been obtained.

     

    22.  Reservation
      of Shares.

     

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

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    23.  Notice.

     

    Any
      written notice to the Company required by any provisions of this Plan shall
      be
      addressed to the Secretary of the Company and shall be effective when
      received.

     

    24.  Governing
      Law; Interpretation of Plan and Awards.

     

    (a)  
      This
      Plan and all determinations made and actions taken pursuant hereto shall be
      governed by the substantive laws, but not the choice of law rules, of the state
      of Delaware, except as to matters governed by U.S. federal law.

     

    (b)  
      In the
      event that any provision of the Plan or any Award granted under the Plan is
      declared to be illegal, invalid or otherwise unenforceable by a court of
      competent jurisdiction, such provision shall be reformed, if possible, to the
      extent necessary to render it legal, valid and enforceable, or otherwise
      deleted, and the remainder of the terms of the Plan and/or Award shall not
      be
      affected except to the extent necessary to reform or delete such illegal,
      invalid or unenforceable provision.

     

    (c)  
      The
      headings preceding the text of the sections hereof are inserted solely for
      convenience of reference, and shall not constitute a part of the Plan, nor
      shall
      they affect its meaning, construction or effect.

     

    (d)  
      The
      terms of the Plan and any Award shall inure to the benefit of and be binding
      upon the parties hereto and their respective permitted heirs, beneficiaries,
      successors and assigns. 

     

    25.  Section
      409A.

     

    It
      is the
      intention of the Company that no Award shall be “deferred compensation” subject
      to Section 409A of the Code, unless and to the extent that the Administrator
      concludes that an Award is subject to Section 409A of the Code, and the Plan
      and
      the terms and conditions of all Awards shall be interpreted accordingly. The
      terms and conditions governing any Awards that the Administrator determines
      will
      be subject to Section 409A of the Code, including any rules for elective or
      mandatory deferral of the delivery of cash or Shares pursuant thereto and any
      rules regarding treatment of such Awards in the event of a Change of Control,
      shall be set forth in the applicable Award Agreement.

     

    26.  Limitation
      on Liability.

     

    The
      Company and any Affiliate which is in existence or hereafter comes into
      existence shall not be liable to a Participant, a Member, an Awardee or any
      other persons as to:

     

    (a)  
      The
      Non-Issuance of Shares. The
      non-issuance or sale of Shares as to which the Company has been unable to obtain
      from any regulatory body having jurisdiction the authority deemed by the
      Company’s counsel to be necessary to the lawful issuance and sale of any shares
      hereunder; and

     

    (b)  
      Tax
      or Exchange Control Consequences. Any
      tax
      consequence expected, but not realized, or any exchange control obligation
      owed,
      by any Participant, Member, Awardee or other person due to the receipt, exercise
      or settlement of any Option or other Award granted hereunder.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    27.  Unfunded
      Plan.

     

    Insofar
      as it provides for Awards, the Plan shall be unfunded. Although bookkeeping
      accounts may be established with respect to Awardees who are granted Stock
      Awards or Other Stock-Based Awards under this Plan, any such accounts will
      be
      used merely as a bookkeeping convenience. The Company shall not be required
      to
      segregate any assets which may at any time be represented by Awards, nor shall
      this Plan be construed as providing for such segregation. Neither the Company
      nor the Administrator shall be deemed to be a trustee of stock or cash to be
      awarded under the Plan. Any liability of the Company to any Participant with
      respect to an Award shall be based solely upon any contractual obligations
      which
      may be created by the Plan; no such obligation of the Company shall be deemed
      to
      be secured by any pledge or other encumbrance on any property of the Company.
      Neither the Company nor the Administrator shall be required to give any security
      or bond for the performance of any obligation which may be created by this
      Plan.

     

    28.  Foreign
      Members.

     

    Awards
      may be granted hereunder to Members who are foreign nationals, who are located
      outside the United States or
      who
      are not compensated from a payroll maintained in the United States, or who
      are
      otherwise subject to (or could cause the Company to be subject to) legal or
      regulatory provisions of countries or jurisdictions outside the United States,
      on such terms and conditions different from those specified in the Plan as
      may,
      in the judgment of the Administrator, be necessary or desirable to foster and
      promote achievement of the purposes of the Plan, and, in furtherance of such
      purposes, the Administrator may make such modifications, amendments, procedures,
      or subplans as may be necessary or advisable to comply with such legal or
      regulatory provisions.

     

    29.  Tax
      Withholding.

     

    Each
      Participant shall pay to the Company, or make arrangements satisfactory to
      the
      Company regarding the payment of, any federal, state, local or foreign taxes
      of
      any kind required by law to be withheld with respect to any Award under the
      Plan
      no later than the date as of which any amount under such Award first becomes
      includible in the gross income of the Participant for any tax purposes with
      respect to which the Company has a tax withholding obligation. Unless otherwise
      determined by the Company, withholding obligations may be settled with Shares,
      including Shares that are part of the Award that gives rise to the withholding
      requirement; provided, however, that not more than the legally required minimum
      withholding may be settled with Shares. The obligations of the Company under
      the
      Plan shall be conditional on such payment or arrangements, and the Company
      and
      its Affiliates shall, to the extent permitted by law, have the right to deduct
      any such taxes from any vested Shares or any other payment due to the
      participant at that time or at any future time. The Administrator may establish
      such procedures as it deems appropriate, including making irrevocable elections,
      for the settlement of withholding obligations with Shares.

    
       

      101819324.1 

    

    
      
         

      

      
        21TEKOIL
      & GAS CORPORATION

    

    STOCK
      OPTION AGREEMENT

    

    

    Unless
      otherwise defined herein, the terms defined in the Tekoil & Gas Corporation
      2007 Omnibus Equity Plan (the “Plan”) shall have the same defined meanings in
      this Option Agreement.

    

    I.     NOTICE
      OF STOCK OPTION GRANT

    

    Mark
      S.
      Western

    5209
      Patricia Drive

    Orlando,
      FL 32819

    

    The
      undersigned Optionee has been granted an Option to purchase Common Shares of
      the
      Company, subject to the terms and conditions of the Plan and this Option
      Agreement, as follows:

     

    
      	Grant Number:	 	 _____1_____
	
            	 	
            
	Date of Grant:	 	August 15, 2007
	
            	 	
            
	Vesting Commencement Date:	 	August
              15, 2007
	
            	 	
            
	Exercise Price per Share: 	 	$1.00
	
            	 	
            
	Total Number of Shares Granted: 	 	2,000,000
	
            	 	
            
	Total Exercise Price:	 	$2,000,000
	
            	 	
            
	Type of Option: 	 	
              o Incentive
                Stock Option

            
	
            	 	
            
	
            	 	x Nonstatutory
              Stock Option
	
            	 	
            
	Term/Expiration Date: 	 	August 14, 2012
	
            	 	
            
	Vesting Schedule: 	 	Immediate

    

     

    This
      Option shall be exercisable, in whole or in part, according to the following
      vesting schedule:

    

    Termination
      Period:

    

    This
      Option shall be exercisable from the date hereof through the Term/Expiration
      Date as provided above.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    II.
       AGREEMENT

    

    1.
       Grant
      of Option.
      The
      Company hereby grants to the Optionee named in the Notice of Grant (the
      "Optionee"), an option (the "Option") to purchase the number of Shares set
      forth
      in the Notice of Grant, at the exercise price per Share set forth in the Notice
      of Grant (the "Exercise Price"), and subject to the terms and conditions of
      the
      Plan, which is incorporated herein by reference. The Exercise Price is equal
      to
      or greater than the Fair Market Value of the Shares on the Date of Grant. In
      the
      event of a conflict between the terms and conditions of the Plan and this Option
      Agreement, the terms and conditions of the Plan shall prevail.

     

    If
      designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this
      Option is intended to qualify as an Incentive Stock Option as defined in
      Section 422 of the Code. Nevertheless, to the extent that it exceeds the
      $100,000 rule of Code Section 422(d), this Option shall be treated as a
      Nonstatutory Stock Option ("NSO").

    

    2.  Exercise
      of Option.
      

    

     (a) Right
      to Exercise.
      This
      Option shall be exercisable during its term in accordance with the Vesting
      Schedule set out in the Notice of Grant and with the applicable provisions
      of
      the Plan and this Option Agreement.

     

     (b) Method
      of Exercise.
      This
      Option shall be exercisable by delivery of an exercise notice in the form
      attached as Exhibit A (the “Exercise Notice”) which shall state the election to
      exercise the Option, the number of Shares (the “Exercised Shares”) with respect
      to which the Option is being exercised, and such other representations and
      agreements as may be required by the Company. The Exercise Notice shall be
      accompanied by payment of the aggregate Exercise Price as to all Exercised
      Shares. This Option shall be deemed to be exercised upon receipt by the Company
      of such fully executed Exercise Notice accompanied by the aggregate Exercise
      Price.

     

    No
      Shares
      shall be issued pursuant to the exercise of an Option unless such issuance
      and
      such exercise complies with Applicable Laws. Assuming such compliance, for
      income tax purposes the Shares shall be considered transferred to the Optionee
      on the date on which the Option is exercised with respect to such
      Shares.

    

    3. Optionee's
      Representations.
      In the
      event the Shares have not been registered under the Securities Act of 1933,
      as
      amended, at the time this Option is exercised, the Optionee shall, if required
      by the Company, concurrently with the exercise of all or any portion of this
      Option, deliver to the Company his or her Investment Representation Statement
      in
      the form attached hereto as Exhibit B.

    

    4. Lock-Up
      Period.
      Optionee hereby agrees that, if so requested by the Company or any
      representative of the underwriters (the "Managing Underwriter") in connection
      with any registration of the offering of any securities of the Company under
      the
      Securities Act, Optionee shall not sell or otherwise transfer any Shares or
      other securities of the Company during the 180-day period (or such other period
      as may be requested in writing by the Managing Underwriter and agreed to in
      writing by the Company) (the "Market Standoff Period") following the effective
      date of a registration statement of the Company filed under the
      Securities Act. The Company may impose stop-transfer instructions with
      respect to securities subject to the foregoing restrictions until the end of
      such Market Standoff Period. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5. Method
      of Payment.
      Payment
      of the aggregate Exercise Price shall be by any of the following, or a
      combination thereof, at the election of the Optionee:

     

    (a) cash
      or
      check (denominated in U.S. Dollars); 

     

    (b)
       consideration
      received by the Company under a formal cashless exercise program adopted by
      the
      Company in connection with the Plan; or 

     

    (c) surrender
      of other Shares which, (i) in the case of Shares acquired from the Company
      (whether upon the exercise of an option or otherwise), have been owned by the
      Optionee for more than six (6) months on the date of surrender (unless this
      condition is waived by the Administrator), and (ii) have a Fair Market Value
      on
      the date of surrender equal to the aggregate Exercise Price of the Exercised
      Shares.

    

    6. Restrictions
      on Exercise.
      This
      Option may not be exercised until such time as the Plan has been approved by
      the
      shareholders of the Company, or if the issuance of such Shares upon such
      exercise or the method of payment of consideration for such Shares would
      constitute a violation of any Applicable Law. 

    

    7. Non-Transferability
      of Option.
      This
      Option may not be transferred in any manner otherwise than by will or by the
      laws of descent or distribution and may be exercised during the lifetime of
      Optionee only by Optionee. The terms of the Plan and this Option Agreement
      shall
      be binding upon the executors, administrators, heirs, successors and assigns
      of
      the Optionee.

    

    8. Term
      of Option.
      This
      Option may be exercised only within the term set out in the Notice of Grant,
      and
      may be exercised during such term only in accordance with the Plan and the
      terms
      of this Option.

    

    9. Entire
      Agreement; Governing Law.
      The
      Plan is incorporated herein by reference. The Plan and this Option Agreement
      constitute the entire agreement of the parties with respect to the subject
      matter hereof and supersede in their entirety all prior undertakings and
      agreements of the Company and Optionee with respect to the subject matter
      hereof, and may not be modified adversely to the Optionee's interest except
      by
      means of a writing signed by the Company and Optionee. This Agreement is
      governed by the internal substantive laws, but not the choice of law rules,
      of
      Florida.

    

    10. No
      Guarantee of Continued Service.
      OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
      VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
      AT
      THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
      THIS
      OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
      THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
      SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
      CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
      PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT
      OR
      THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER
      AT ANY TIME, WITH OR WITHOUT CAUSE.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    Optionee
      acknowledges receipt of a copy of the Plan and represents that he or she is
      familiar with the terms and provisions thereof, and hereby accepts this Option
      subject to all of the terms and provisions thereof. Optionee has reviewed the
      Plan and this Option in their entirety, has had an opportunity to obtain the
      advice of counsel prior to executing this Option and fully understands all
      provisions of the Option. Optionee hereby agrees to accept as binding,
      conclusive and final all decisions or interpretations of the Administrator
      upon
      any questions arising under the Plan or this Option. Optionee further agrees
      to
      notify the Company upon any change in the residence address indicated
      below.

     

    
      	OPTIONEE: 	 	 	TEKOIL & GAS CORPORATION
	 	 	 	 
	 	 	 	 
	/s/
              Mark S.
              Western	 	 	/s/
              Francis G. Clear
	
              
MARK
              S. WESTERN 	 	 	
              
By
	 	 	 	 
	
              5209 Patricia Drive

            	 	 	Vice President &
              COO
	
              Orlando, FL 32819

            	 	 	
              
  Title

    

       

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    TEKOIL
      & GAS CORPORATION

     

    OMNIBUS
      EQUITY PLAN

    

    

    EXERCISE
      NOTICE

    

    Tekoil
      & Gas Corporation

    5036
      Dr.
      Phillips Blvd.

    Suite
      232

    Orlando,
      FL 32819

    

    1. Exercise
      of Option.
      Effective as of today, ____________, 200__, the undersigned ("Optionee") hereby
      elects to exercise Optionee's option to purchase _________ shares of the Common
      Stock (the "Shares") of Tekoil & Gas Corporation (the "Company") under and
      pursuant to the Tekoil & Gas Corporation Omnibus Equity Plan (the "Plan")
      and the Stock Option Agreement dated August 15, 2007 (the "Option
      Agreement").

    

    2. Delivery
      of Payment.
      Purchaser herewith delivers to the Company the full purchase price of the
      Shares, as set forth in the Option Agreement.

    

    3. Representations
      of Optionee.
      Optionee acknowledges that Optionee has received, read and understood the Plan
      and the Option Agreement and agrees to abide by and be bound by their terms
      and
      conditions. 

    

    4. Rights
      as Shareholder.
      Until
      the issuance of the Shares (as evidenced by the appropriate entry on the books
      of the Company or of a duly authorized transfer agent of the Company), no right
      to vote or receive dividends or any other rights as a shareholder shall exist
      with respect to the Optioned Stock, notwithstanding the exercise of the Option.
      The Shares shall be issued to the Optionee as soon as practicable after the
      Option is exercised. No adjustment shall be made for a dividend or other right
      for which the record date is prior to the date of issuance.

    

    5. Company's
      Right of First Refusal.
      Before
      any Shares held by Optionee or any transferee (either being sometimes referred
      to herein as the "Holder") may be sold or otherwise transferred (including
      transfer by gift or operation of law), the Company or its assignee(s) shall
      have
      a right of first refusal to purchase the Shares on the terms and conditions
      set
      forth in this Section (the "Right of First Refusal").

    

    (a) Notice
      of Proposed Transfer.
      The
      Holder of the Shares shall deliver to the Company a written notice (the
      "Notice") stating: (i) the Holder's bona fide intention to sell or
      otherwise transfer such Shares; (ii) the name of each proposed purchaser or
      other transferee ("Proposed Transferee"); (iii) the number of Shares to be
      transferred to each Proposed Transferee; and (iv) the bona fide cash price
      or other consideration for which the Holder proposes to transfer the Shares
      (the
      "Offered Price"), and the Holder shall offer the Shares at the Offered Price
      to
      the Company or its assignee(s).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Exercise
      of Right of First Refusal.
      At any
      time within thirty (30) days after receipt of the Notice, the Company and/or
      its
      assignee(s) may, by giving written notice to the Holder, elect to purchase
      all,
      but not less than all, of the Shares proposed to be transferred to any one
      or
      more of the Proposed Transferees, at the purchase price determined in accordance
      with subsection (c) below.

    

    (c) Purchase
      Price.
      The
      purchase price ("Purchase Price") for the Shares purchased by the Company or
      its
      assignee(s) under this Section shall be the Offered Price. If the Offered Price
      includes consideration other than cash, the cash equivalent value of the
      non-cash consideration shall be determined by the Board of Directors of the
      Company in good faith.

    

    (d) Payment.
      Payment
      of the Purchase Price shall be made, at the option of the Company or its
      assignee(s), in cash (or by check), by cancellation of all or a portion of
      any
      outstanding indebtedness of the Holder to the Company (or, in the case of
      repurchase by an assignee, to the assignee), or by any combination thereof
      within 30 days after receipt of the Notice or in the manner and at the times
      set
      forth in the Notice.

    

    (e) Holder's
      Right to Transfer.
      If all
      of the Shares proposed in the Notice to be transferred to a given Proposed
      Trans-feree are not purchased by the Company and/or its assignee(s) as provided
      in this Section, then the Holder may sell or otherwise transfer such Shares
      to
      that Proposed Transferee at the Offered Price or at a higher price, provided
      that such sale or other transfer is consummated within 120 days after the date
      of the Notice, that any such sale or other transfer is effected in accordance
      with any applicable securities laws and that the Proposed Transferee agrees
      in
      writing that the provisions of this Section shall continue to apply to the
      Shares in the hands of such Pro-posed Transferee. If the Shares described in
      the
      Notice are not transferred to the Proposed Transferee within such period, a
      new
      Notice shall be given to the Company, and the Company and/or its assignees
      shall
      again be offered the Right of First Refusal before any Shares held by the Holder
      may be sold or otherwise transferred.

    

    (f) Exception
      for Certain Family Transfers.
      Anything to the contrary contained in this Section notwithstanding, the transfer
      of any or all of the Shares during the Optionee's lifetime or on the Optionee's
      death by will or intestacy to the Optionee's immediate family or a trust for
      the
      benefit of the Optionee's immediate family shall be exempt from the provisions
      of this Section. "Immediate Family" as used herein shall mean spouse, lineal
      descendant or antecedent, father, mother, brother or sister. In such case,
      the
      transferee or other recipient shall receive and hold the Shares so transferred
      subject to the provisions of this Section, and there shall be no further
      transfer of such Shares except in accordance with the terms of this
      Section.

    

    (g) Termination
      of Right of First Refusal.
      The
      Right of First Refusal shall terminate as to any Shares upon the first sale
      of
      Common Stock of the Company to the general public pursuant to a registration
      statement filed with and declared effective by the Securities and Exchange
      Commission under the Securities Act of 1933, as amended.

    

    6. Tax
      Consultation.
      Optionee understands that Optionee may suffer adverse tax consequences as a
      result of Optionee's purchase or disposition of the Shares. Optionee represents
      that Optionee has consulted with any tax consultants Optionee deems advisable
      in
      connection with the purchase or disposition of the Shares and that Optionee
      is
      not relying on the Company for any tax advice.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    7. Restrictive
      Legends and Stop-Transfer Orders.

    

    (a) Legends.
      Optionee understands and agrees that the Company shall cause the legends set
      forth below or legends substantially equivalent thereto, to be placed upon
      any
      certificate(s) evidencing ownership of the Shares together with any other
      legends that may be required by the Company or by state or federal securities
      laws:

    

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
      PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE
      OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
      SUCH
      OFFER, SALE OR TRANSFER, PLEDGE OR HYPO-THECATION IS IN COMPLIANCE
      THEREWITH.

    

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
      ON
      TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S)
      AS
      SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
      OF
      THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
      ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
      TRANSFEREES OF THESE SHARES.

    

    (b) Stop-Transfer
      Notices.
      Optionee agrees that, in order to ensure compliance with the restrictions
      referred to herein, the Company may issue appropriate "stop transfer"
      instructions to its transfer agent, if any, and that, if the Company transfers
      its own securities, it may make appropriate notations to the same effect in
      its own records.

    

    (c) Refusal
      to Transfer.
      The
      Company shall not be required (i) to transfer on its books any Shares that
      have been sold or otherwise transferred in violation of any of the provisions
      of
      this Agreement or (ii) to treat as owner of such Shares or to accord the
      right to vote or pay dividends to any purchaser or other transferee to whom
      such
      Shares shall have been so transferred.

    

    8. Successors
      and Assigns.
      The
      Company may assign any of its rights under this Agreement to single or multiple
      assignees, and this Agreement shall inure to the benefit of the successors
      and
      assigns of the Company. Subject to the restrictions on transfer herein set
      forth, this Agreement shall be binding upon Optionee and his or her heirs,
      executors, administrators, successors and assigns.

    

    9. Interpretation.
      Any
      dispute regarding the interpretation of this Agreement shall be submitted by
      Optionee or by the Company forthwith to the Administrator which shall review
      such dispute at its next regular meeting. The resolution of such a dispute
      by
      the Administrator shall be final and binding on all parties.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    10. Governing
      Law; Severability.
      This
      Agreement is governed by the internal substantive laws, but not the choice
      of
      law rules, of Florida.

    

    11. Entire
      Agreement.
      The
      Plan and Option Agreement are incorporated herein by reference. This Agreement,
      the Plan, the Option Agreement and the Investment Representation Statement
      constitute the entire agreement of the parties with respect to the subject
      matter hereof and supersede in their entirety all prior undertakings and
      agreements of the Company and Optionee with respect to the subject matter
      hereof, and may not be modified adversely to the Optionee's interest except
      by
      means of a writing signed by the Company and Optionee.

     

    
      	Submitted by: 	 	 	Accepted by:
	 	 	 	 
	OPTIONEE:	 	 	TEKOIL & GAS CORPORATION
	 	 	 	 
	__________________________________	 	 	 
	
              MARK S. WESTERN

            	 	 	By:______________________________
	 	 	 	 
	
              5209 Patricia Drive

              Orlando, FL 32819

            	 	 	Print
              Name________________________
	 	 	 	
            
	 	 	 	Title:_____________________________
	 	 	 	 
	 	 	 	Address:
	 	 	 	 
	 	 	 	
              5036
                Dr. Phillips Blvd.

              Suite
                232

              Orlando,
                FL 32819

            
	 	 	 	 
	 	 	 	Date Received:
              ____________________

    

    
       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

    

      EXHIBIT
      B

    

    INVESTMENT
      REPRESENTATION STATEMENT

    

    OPTIONEE:    MARK
      S.
      WESTERN

    

    COMPANY:   TEKOIL
      & GAS CORPORATION

    

    SECURITY:    COMMON
      STOCK

    

    AMOUNT:  

    

    DATE:   

    

    In
      connection with the purchase of the above-listed Securities, the undersigned
      Optionee represents to the Company the following:

    

    (a) Optionee
      is aware of the Company's business affairs and financial condition and has
      acquired sufficient information about the Company to reach an informed and
      knowledgeable decision to acquire the Securities. Optionee is acquiring these
      Securities for investment for Optionee's own account only and not with a view
      to, or for resale in connection with, any "distribution" thereof within the
      meaning of the Securities Act of 1933, as amended (the "Securities
      Act").

    

    (b) Optionee
      acknowledges and understands that the Securities constitute "restricted
      securities" under the Securities Act and have not been registered under the
      Securities Act in reliance upon a specific exemption therefrom, which exemption
      depends upon, among other things, the bona fide nature of Optionee's investment
      intent as expressed herein. In this connection, Optionee understands that,
      in
      the view of the Securities and Exchange Commission, the statutory basis for
      such
      exemption may be unavailable if Optionee's representation was predicated solely
      upon a present intention to hold these Securities for the minimum capital gains
      period specified under tax statutes, for a deferred sale, for or until an
      increase or decrease in the market price of the Securities, or for a period
      of
      one year or any other fixed period in the future. Optionee further understands
      that the Securities must be held indefinitely unless they are subsequently
      registered under the Securities Act or an exemption from such regis-tration
      is
      available. Optionee further acknowledges and understands that the Company is
      under no obligation to register the Securities. Optionee understands that the
      certificate evidencing the Securities will be imprinted with a legend which
      prohibits the transfer of the Securities unless they are registered or such
      registration is not required in the opinion of counsel satisfactory to the
      Company and any other legend required under applicable state securities
      laws.

    

    (c) Optionee
      is familiar with the provisions of Rule 701 and Rule 144, each
      promulgated under the Securities Act, which, in substance, permit limited public
      resale of "restricted securities" acquired, directly or indirectly from the
      issuer thereof, in a non-public offering subject to the satisfaction of certain
      conditions. Rule 701 provides that if the issuer qualifies under
      Rule 701 at the time of the grant of the Option to the Optionee, the
      exercise will be exempt from registration under the Securities Act. In the
      event
      the Company becomes subject to the reporting requirements of Section 13 or
      15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or
      such longer period as any market stand-off agreement may require) the Securities
      exempt under Rule 701 may be resold, subject to the satisfaction of certain
      of the conditions specified by Rule 144, including: (1) the resale
      being made through a broker in an unsolicited "broker's transaction" or in
      transactions directly with a market maker (as said term is defined under
      the Securities Exchange Act of 1934); and, in the case of an affiliate,
      (2) the availability of certain public information about the Company, (3)
      the amount of Securities being sold during any three-month period not exceeding
      the limitations specified in Rule 144(e), and (4) the timely filing of a
      Form 144, if applicable.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    In
      the
      event that the Company does not qualify under Rule 701 at the time of grant
      of the Option, then the Securities may be resold in certain limited
      circumstances subject to the provisions of Rule 144, which
      requires the resale to occur not less than two years after the later of the
      date the Securities were sold by the Company or the date the Securities were
      sold by an affiliate of the Company, within the meaning of Rule 144; and,
      in the case of acquisition of the Securities by an affiliate, or by a
      non-affiliate who subsequently holds the Securities less than three years,
      the
      satisfaction of the conditions set forth in sections (1), (2), (3) and (4)
      of
      the paragraph immediately above.

    

    (d) Optionee
      further understands that in the event all of the applicable requirements of
      Rule 701 or 144 are not satisfied, registration under the Securities Act,
      compliance with Regulation A, or some other registration exemption will be
      required; and that, notwithstanding the fact that Rules 144 and 701 are not
      exclusive, the Staff of the Securities and Exchange Commission has expressed
      its
      opinion that persons proposing to sell private placement securities other than
      in a registered offering and otherwise than pursuant to Rules 144 or 701 will
      have a substantial burden of proof in establishing that an exemption from
      registration is available for such offers or sales, and that such persons and
      their respective brokers who participate in such transactions do so at their
      own
      risk. Optionee understands that no assurances can be given that any such other
      registration exemption will be available in such event.

    

    Signature
      of Optionee:

     

    

    _________________________________

    MARK
      S.
      WESTERN

    

    Date:
      ____________, 200_

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

     

    
      
        
        

      

      
        3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]