Document:

Exhibit
10.1

       

      AMENDED
RBC 2005 LONG-TERM EQUITY INCENTIVE PLAN

       

      Amended
and Restated as of September 8, 2010  (“Effective Date”)

       

      
        	
              	
                1. 

              	
                Purpose.

              

      

       

      This plan
shall be known as the RBC 2005 Long-Term Equity Incentive Plan (the
“Plan”).  The purpose of the Plan shall be to promote the long-term
growth and profitability of RBC Bearings Incorporated (the “Company”) and its
Subsidiaries by (i) providing certain directors, officers and employees of,
and certain other individuals who perform services for, or to whom an offer of
employment has been extended by, the Company and its Subsidiaries with
incentives to maximize stockholder value and otherwise contribute to the success
of the Company and (ii) enabling the Company to attract, retain and reward
the best available persons for positions of responsibility.  Grants
(“Grants”) of
incentive or non-qualified stock options, stock appreciation rights (“SARs”), either alone
or in tandem with options, restricted stock, performance awards or any
combination of the foregoing may be made under the Plan.  This Plan
supercedes any prior plans, and any Grant hereunder supercedes any prior written
agreement pursuant to which such Grant is made.

       

      
        	
              	
                2. 

              	
                Definitions.

              

      

       

      (a)           “Award Agreement”
means any written agreement between the Company and any person pursuant to which
the Company makes any Grant under the Plan.

       

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

       

      (c)           “Cause” means, unless
otherwise defined in any Award Agreement, the occurrence of one or more of the
following events:

       

      (i)           conviction
of a felony or any crime or offense lesser than a felony involving the property
of the Company or a Subsidiary or commission of an act involving fraud or
dishonesty; or, in the case of any of the foregoing, a plea of nolo contendere with respect
thereto;

       

      (ii)          conduct
that has caused demonstrable and serious injury to the Company or a Subsidiary,
reputational, monetary or otherwise;

       

      (iii)         willful
refusal to perform or substantial disregard of duties properly assigned, as
determined by the Company;

       

      (iv)         willful
misrepresentation or material non-disclosure to the Board;

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      (v)          engaging
willfully in misconduct in connection with the performance of any of one’s
duties, including, without limitation, the misappropriation of funds or securing
or attempting to secure personally any profit in connection with any transaction
entered into on behalf of the Company or its Subsidiaries or
affiliates;

       

      (vi)         willful
breach of duty of loyalty to the Company or, if applicable, a Subsidiary or any
other active disloyalty to the Company or, if applicable, any Subsidiary,
including, without limitation, willfully aiding a competitor or, without
duplication of clause (vii), improperly disclosing confidential
information;

       

      (vii)        willful
breach of any confidentiality or non-disclosure agreement with the Company or
any Subsidiary; or

       

      (viii)    
  material violation of any code or standard of behavior generally
applicable to employees (or executive employees, in the case of an executive of
the Company or any Subsidiary) of the Company or any Subsidiary.

       

      (d)           “Change in Control”
means, unless otherwise defined in any Award Agreement,

       

      (i)           if
any "person" or "group" as those terms are used in Sections 13(d) and 14(d) of
the Exchange Act or any successors thereto, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act or any successor thereto),
directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities, provided, that the
acquisition of additional securities by any person or group that owns 50% or
more of the voting power prior to such acquisition of additional securities
shall not be a Change in Control; or

       

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

       

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

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (iv)        
the stockholders of the Company approve an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets and such sale or
disposition is consummated.

       

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

       

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

       

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

       

      (h)           “Disability” means a
disability that would entitle an eligible participant to payment of monthly
disability payments under any Company disability plan or as otherwise determined
by the Committee; provided that in any instance where a grant to a participant
is treated as “deferred compensation” within the meaning of Section 409A of the
Code, “Disability” shall be interpreted consistently with the meaning of Section
409A of the Code and guidance issued thereunder.

       

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

       

      (j)           “Fair Market Value” of
a share of Common Stock of the Company means, as of the date in question, the
officially-quoted closing selling price of the stock (or if no selling price is
quoted, the bid price) on the principal securities exchange or market on which
the Common Stock is then listed for trading (including, for this purpose, the
New York Stock Exchange or the Nasdaq National Market) (the “Market”) for the
applicable trading day or, if the Common Stock is not then listed or quoted in
the Market, the Fair Market Value shall be the fair value of the Common Stock
determined in good faith by the Board using any reasonable method; provided,
however, that when shares received upon exercise of an option are immediately
sold in the open market, the net sale price received may be used to determine
the Fair Market Value of any shares used to pay the exercise price or applicable withholding
taxes and to compute the withholding taxes.

       

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

       

      (l)           “Initial Public
Offering” means an underwritten initial public offering and sale of any
shares of Common Stock pursuant to an effective registration statement under the
Securities Act.

       

      (m)           “Non-Employee
Director” has the meaning given to such term in Rule 16b-3 under the
Exchange Act and/or any successor thereto.

       

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

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

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

       

      (p)           “Retirement” means
retirement as defined under any Company pension plan or retirement program or
termination of one’s employment on retirement with the approval of the
Committee; provided that in any instance where a grant to a participant is
treated as “deferred compensation” within the meaning of Section 409A of the
Code, “Retirement” shall be interpreted consistently with the meaning of Section
409A(a)(2)(A)(i) of the Code and guidance issued thereunder.

       

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

       

      
        	
              	
                3. 

              	
                Administration.

              

      

       

      The Plan
shall be administered by the Committee; provided that the Board may, in its
discretion, at any time and from time to time, resolve to administer the Plan,
in which case the term “Committee” shall be deemed to mean the Board for all
purposes herein.  Subject to the provisions of the Plan, the Committee
shall be authorized to (i) select persons to participate in the Plan,
(ii) determine the form and substance of Grants made under the Plan to each
participant, and the conditions and restrictions, if any, subject to which such
Grants will be made, (iii) certify that the conditions and restrictions
applicable to any Grant have been met, (iv) modify the terms of Grants made
under the Plan in accordance with the provisions of Sections 16 and 17 hereof,
(v) interpret the Plan and Grants made thereunder, (vi) make any adjustments
necessary or desirable in connection with Grants made under the Plan to eligible
participants located outside the United States and (vii) adopt, amend, or
rescind such rules and regulations, and make such other determinations, for
carrying out the Plan as it may deem appropriate.  Decisions of the
Committee on all matters relating to the Plan shall be in the Committee’s sole
discretion and shall be conclusive and binding on all parties.  The
validity, construction, and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with applicable federal
and state laws and rules and regulations promulgated pursuant
thereto.  No member of the Committee and no officer of the Company
shall be liable for any action taken or omitted to be taken by such member, by
any other member of the Committee or by any officer of the Company in connection
with the performance of duties under the Plan, except for such person’s own
willful misconduct or as expressly provided by statute.

       

      The
expenses of the Plan shall be borne by the Company.  The Company shall
not be required to establish any special or separate fund or make any other
segregation of assets to assume the obligations pursuant to any Grant made under
the Plan, and rights to any payment in connection with such Grants shall be no
greater than the rights of the Company’s general creditors.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      
        	
              	
                4. 

              	
                Shares Available for
      the Plan.

              

      

       

      Subject to adjustments as
provided in Section 15, an aggregate of  2,939,170 shares of Common
Stock, which represents the number of shares equal to
approximately thirteen and one-half percent ( 13.5%) of the number of
shares of Common Stock outstanding as of the Effective Date (the "Shares"), may be issued pursuant
to the Plan.  Such Shares may be in whole or in part authorized and
unissued or held by the Company as treasury shares.  If any Grant
under the Plan expires or terminates unexercised, becomes unexercisable or is
forfeited as to any Shares, or is tendered or withheld as to any Shares in
payment of the exercise price of the Grant or taxes payable with respect to the
Grant or the vesting or exercise thereof, then such unpurchased, forfeited,
tendered or withheld Shares may thereafter be available for further Grants under
the Plan as the Committee shall determine.

       

      Without
limiting the generality of the foregoing provisions of this Section 4 or the
generality of the provisions of Sections 3, 6 or 17 or any other section of this
Plan, the Committee may, at any time or from time to time, and on such terms and
conditions (that are consistent with and not in contravention of the other
provisions of this Plan) as the Committee may, in its sole discretion,
determine, enter into agreements (or take other actions with respect to the
Grants) for new Grants containing terms (including exercise prices) more (or
less) favorable than the outstanding Grants.

       

      
        	
              	
                5. 

              	
                Participation.

              

      

       

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

       

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

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      
        	
              	
                6. 

              	
                Incentive and
      Non-qualified Options and
SARs.

              

      

       

      The
Committee may from time to time grant to eligible participants Incentive Stock
Options, Non-qualified Stock Options, or any combination thereof; provided that
the Committee may grant Incentive Stock Options only to eligible employees of
the Company or its subsidiaries (as defined for this purpose in Section 424(f)
of the Code or any successor thereto).  In any one calendar year, the
Committee shall not grant to any one participant options or SARs to purchase or
receive the economic equivalent of a number of shares of Common Stock in excess
of 10% of the total number of Shares authorized under the Plan pursuant to
Section 4; provided, however,
that the Committee shall be permitted to grant to Dr. Michael J. Hartnett up to
60% of the total number of Shares authorized under the plan at any
time.  The options granted shall take such form as the Committee shall
determine, subject to the following terms and conditions.

       

      It is the
Company’s intent that Non-qualified Stock Options granted under the Plan not be
classified as Incentive Stock Options, that Incentive Stock Options be
consistent with and contain or be deemed to contain all provisions required
under Section 422 of the Code or any successor thereto, that neither any
Non-qualified Stock Option nor any Incentive Stock Option be treated as a
payment of deferred compensation for the purposes of Section 409A of the Code
and any successor thereto, and that any ambiguities in construction be
interpreted in order to effectuate such intent.  If an Incentive Stock
Option granted under the Plan does not qualify as such for any reason, then to
the extent of such non-qualification, the stock option represented thereby shall
be regarded as a Non-qualified Stock Option duly granted under the Plan,
provided that such stock option otherwise meets the Plan’s requirements for
Non-qualified Stock Options.

       

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

       

      (b)           Payment.  Options
may be exercised, in whole or in part, upon payment of the exercise price of the
Shares to be acquired. Unless otherwise determined by the Committee, payment
shall be made (i) in cash (including check, bank draft, money order or wire
transfer of immediately available funds), (ii) by delivery of outstanding shares
of Common Stock with a Fair Market Value on the date of exercise equal to the
aggregate exercise price payable with respect to the options' exercise, (iii) by
simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal
Reserve Board, (iv) by authorizing the Company to withhold from issuance a
number of Shares issuable upon exercise of the options which, when multiplied by
the Fair Market Value of a share of Common Stock on the date of exercise, is
equal to the aggregate exercise price payable with respect to the options so
exercised or (v) by any combination of the foregoing.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

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

       

      In the
event a grantee elects to pay the exercise price payable with respect to an
option pursuant to clause (iv) above, only a whole number of Shares (and not
fractional Shares) may be withheld in payment.  When payment of the
exercise price is made by withholding of Shares, the difference, if any, between
the aggregate exercise price payable with respect to the option being exercised
and the Fair Market Value of the Shares withheld in payment (plus any applicable
taxes) shall be paid in cash.  No grantee may authorize the
withholding of Shares having a Fair Market Value exceeding the aggregate
exercise price payable with respect to the option being exercised (plus any
applicable taxes).  Any withheld Shares shall no longer be issuable
under such option.

       

      (c)           Terms of Options;
Vesting.  The term during which each option may be exercised
shall be determined by the Committee, but if required by the Code and except as
otherwise provided herein, no option shall be exercisable in whole or in part
more than ten years from the date it is granted, and no Incentive Stock Option
granted to an employee who at the time of the Grant owns more than 10% of the
total combined voting power of all classes of stock of the Company or any of its
Subsidiaries shall be exercisable more than five years from the date it is
granted.  All rights to purchase Shares pursuant to an option shall,
unless sooner terminated, expire at the date designated by the
Committee.  The Committee shall determine the date on which each
option shall become exercisable and may provide that an option shall become
exercisable in installments.  The Shares constituting each installment
may be purchased in whole or in part at any time after such installment becomes
exercisable, subject to such minimum exercise requirements as may be designated
by the Committee.  Prior to the exercise of an option and delivery of
the Shares represented thereby, the optionee shall have no rights as a
stockholder with respect to any Shares covered by such outstanding option
(including any dividend or voting rights).

       

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

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      
        	
              	
                (e) 

              	
                Termination;
      Forfeiture.

              

      

       

      (i)           Death or
Disability.  Unless otherwise provided in any Award Agreement,
if a participant ceases to be a director, officer or employee of, or to perform
other services for, the Company and any Subsidiary due to death or Disability,
(A) all of the participant’s options and SARs that were exercisable on the
date of death or Disability shall remain exercisable for, and shall otherwise
terminate at the end of, a period of one year after the date of death or
Disability, but in no event after the expiration date of the options and SARs
and (B) all of the participant’s options and SARs that were not exercisable
on the date of death or Disability shall be forfeited immediately upon such
death or Disability; provided, however, that the Committee may determine to
additionally vest such options and SARs, in whole or in part, in its
discretion.  Notwithstanding the foregoing, if the Disability giving
rise to the termination of employment is not within the meaning of Section
22(e)(3) of the Code or any successor thereto, Incentive Stock Options not
exercised by such participant within one year after the date of termination of
employment will cease to qualify as Incentive Stock Options and will be treated
as Non-qualified Stock Options under the Plan if required to be so treated under
the Code.

       

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

       

      (iii)           Discharge for
Cause.  Unless determined by the Committee, if a participant
ceases to be a director, officer or employee of, or to perform other services
for, the Company or a Subsidiary due to Cause, or if a participant does not
become a director, officer or employee of, or does not begin performing other
services for, the Company or a Subsidiary for any reason, all of the
participant’s options and SARs shall expire and be forfeited immediately upon
such cessation or non-commencement, whether or not then
exercisable.

       

      (iv)           Other
Termination.  If a participant ceases to be a director, officer
or employee of, or to otherwise perform services for, the Company or a
Subsidiary for any reason other than death, Disability, Retirement or Cause,
(A) all of the participant’s options and SARs that were exercisable on the
date of such cessation shall remain exercisable for, and shall otherwise
terminate at the end of, a period of 30 days after the date of such cessation,
but in no event after the expiration date of the options or SARs; provided that
the participant does not engage in Competition during such 30-day period unless
he or she receives written consent to do so from the Board or the Committee, and
(B) all of the participant’s options and SARs that were not exercisable on
the date of such cessation shall be forfeited immediately upon such
cessation.

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      
        	
              	
                7. 

              	
                Stock Appreciation
      Rights.

              

      

       

      Provided
that the Company’s stock is traded on an established securities market, the
Committee shall have the authority to grant SARs under this Plan, subject to
such terms and conditions specified in this paragraph 7 and any additional terms
and conditions as the Committee may specify.

       

      No SAR
may be issued unless (a) the exercise price of the SAR may never be less than
the Fair Market Value of the underlying Shares on the date of grant and (b) the
SAR does not include any feature for the deferral of compensation income other
than the deferral of recognition of income until the exercise of the
SAR.

       

      No SAR
may be exercised unless the Fair Market Value of a share of Common Stock of the
Company on the date of exercise exceeds the exercise price of the
SAR.  Prior to the exercise of the SAR and delivery of the Shares
represented thereby, the participant shall have no rights as a stockholder with
respect to Shares covered by such outstanding SAR (including any dividend or
voting rights).

       

      Upon the
exercise of an SAR, the participant shall be entitled to a distribution in an
amount equal to the difference between the Fair Market Value of a share of
Common Stock on the date of exercise and the exercise price of the SAR,
multiplied by the number of Shares as to which the SAR is
exercised.  Such distribution shall be made in Shares having a Fair
Market Value equal to such amount.

       

      All SARs
will be exercised automatically on the last day prior to the expiration date of
the SAR so long as the Fair Market Value of a share of Common Stock on that date
exceeds the exercise price of the SAR or any related option, as
applicable.

       

      The
provisions of Subsections 6(c) shall apply to all SARs except to the extent that
the Award Agreement pursuant to which such Grant is made expressly provides
otherwise.

       

      It is the
Company’s intent that no SAR shall be treated as a payment of deferred
compensation for purposes of Section 409A of the Code and that any ambiguities
in construction be interpreted in order to effectuate such intent.

       

      
        	
              	
                8. 

              	
                Restricted
      Stock.

              

      

       

      The
Committee may at any time and from time to time grant Shares of restricted stock
under the Plan to such participants and in such amounts as it
determines.  Each Grant of restricted stock shall specify the
applicable restrictions on such Shares, the duration of such restrictions, and
the time or times at which such restrictions shall lapse with respect to all or
a specified number of Shares that are part of the Grant.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      The
participant will be required to pay the Company the aggregate par value of any
Shares of restricted stock (or such larger amount as the Board may determine to
constitute capital under Section 154 of the Delaware General Corporation Law, as
amended, or any successor thereto) within 15 days of the date of
Grant, unless such Shares of restricted stock are treasury
shares.  Unless otherwise determined by the Committee, certificates
representing Shares of restricted stock granted under the Plan will be held in
escrow by the Company on the participant’s behalf during any period of
restriction thereon and will bear an appropriate legend specifying the
applicable restrictions thereon, and the participant will be required to execute
a blank stock power therefor.  Except as otherwise provided by the
Committee, during such period of restriction the participant shall have all of
the rights of a holder of Common Stock, including but not limited to the rights
to receive dividends and to vote, and any stock or other securities received as
a distribution with respect to such participant’s restricted stock shall be
subject to the same restrictions as then in effect for the restricted
stock.

       

      Unless
otherwise provided in any Award Agreement, at such time as a participant ceases
to be a director, officer or employee of, or to otherwise perform services for,
the Company and its Subsidiaries due to death, Disability or Retirement during
any period of restriction, all Shares of restricted stock granted to such
participant on which the restrictions have not lapsed shall be immediately
forfeited to the Company.    At such time as a participant
ceases to be, or in the event a participant does not become, a director, officer
or employee of, or otherwise perform services for, the Company or its
Subsidiaries for any other reason, all Shares of restricted stock granted to
such participant on which the restrictions have not lapsed shall be immediately
forfeited to the Company.  The provisions of Subsections 6(c) and (e)
shall apply to Restricted Stock except to the extent that the Award Agreement in
relation thereto expressly provides otherwise.

       

      It is the
Company’s intent that Restricted Stock shall not be treated as a payment of
deferred compensation for purposes of Section 409A of the Code and that any
ambiguities in construction be interpreted in order to effectuate such
intent.

       

      
        	
              	
                9. 

              	
                Performance
      Awards.

              

      

       

      Performance
awards may be granted to participants at any time and from time to time as
determined by the Committee.  The Committee shall have complete
discretion in determining the size and composition of performance awards granted
to a participant.  The period over which performance is to be measured
(a “performance cycle”) shall commence on the date specified by the Committee
and shall end on the last day of a fiscal year specified by the
Committee.  A performance award shall be paid no later than the
fifteenth day of the third month following the completion of a performance cycle
(or following the elapsed portion of the performance cycle, in the circumstances
described in the last paragraph of this Section 9).  Performance
awards may include (i) specific dollar-value target awards
(ii) performance units, the value of each such unit being determined by the
Committee at the time of issuance, and/or (iii) performance Shares, the
value of each such Share being equal to the Fair Market Value of a share of
Common Stock.  In any one calendar year, the Committee shall not grant
to any one participant performance awards in excess of 10% of the total number
of Shares authorized under the Plan pursuant to Section 4; provided, however,
that the Committee shall be permitted to grant to Dr. Michael J. Hartnett up to
60% of the total number of Shares authorized under the plan at any
time.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      The value
of each performance award may be fixed or it may be permitted to fluctuate based
on a performance factor (e.g., return on equity) selected by the
Committee.  It is the Company’s intent that no performance award be
treated as the payment of deferred compensation for purposes of Section 409A of
the Code and that any ambiguities in construction be interpreted in order to
effectuate such intent.

       

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

       

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

       

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

       

      
        	
              	
                10. 

              	
                Withholding
      Taxes.

              

      

       

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

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

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

       

      
        	
              	
                11. 

              	
                Written
      Agreement.

              

      

       

      Each
employee to whom a Grant is made under the Plan shall enter into an Award
Agreement with the Company that shall contain such provisions consistent with
the provisions of the Plan, as may be approved by the Committee. If there is a
Change in Control of the Company the Committee may, in its discretion, provide a
provision in participant’s Award Agreement for the vesting of a participant’s
Grant under the Plan if the participant ceases to be a director, officer
employee or individual performing services for the Company because his or her
relationship with the Company is terminated without Cause within 18 months
following a Change in Control, with such vesting to occur on the date of
termination.

      

      
        	
              	
                12. 

              	
                Transferability.

              

      

       

      Unless
the Committee determines otherwise, no option, SAR, performance award or
restricted stock granted under the Plan shall be transferable by a participant
other than by will or the laws of descent and distribution; provided that, in
the case of Shares of restricted stock granted under the Plan, such Shares of
restricted stock shall be freely transferable following the time at which such
restrictions shall have lapsed with respect to such Shares.  Unless
the Committee determines otherwise, an option, SAR or performance award may be
exercised only by the optionee or grantee thereof; by his or her executor or
administrator, the executor or administrator of the estate of any of the
foregoing, or any person to whom the option, SAR or performance award is
transferred by will or the laws of descent and distribution; or by his or her
guardian or legal representative; or the guardian or legal representative of any
of the foregoing; provided that Incentive Stock Options may be exercised by any
guardian or legal representative only if permitted by the Code and any
regulations thereunder.  All provisions of this Plan and any Award
Agreement referred to in Section 11 shall in any event continue to apply to any
option, SAR, performance award or restricted stock granted under the Plan and
transferred as permitted by this Section 12, and any transferee of any such
option, SAR, performance award or restricted stock shall be bound by all
provisions of this Plan and any agreement referred to in Section 11 as and to
the same extent as the applicable original grantee.

       

      
        	
              	
                13. 

              	
                Listing, Registration
      and Qualification.

              

      

       

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

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      
        	
              	
                14. 

              	
                Transfer of
      Employee.

              

      

       

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

       

      
        	
              	
                15. 

              	
                Adjustments.

              

      

       

      In the
event of a reorganization, recapitalization, spin-off or other extraordinary
distribution, stock split, stock dividend, combination of shares, merger,
consolidation, distribution of assets, spin-off or other extraordinary
distribution, or any other change in the corporate structure or shares of the
Company, the Committee shall make such adjustment as it deems appropriate in the
number and kind of Shares or other property available for issuance under the
Plan (including, without limitation, the total number of Shares available for
issuance under the Plan pursuant to Section 4), in the number and kind of
options, SARs, Shares or other property covered by Grants previously made under
the Plan, and in the exercise price of outstanding options and
SARs.  Any such adjustment shall be final, conclusive and binding for
all purposes of the Plan.  In the event of any merger, consolidation
or other reorganization in which the Company is not the surviving or continuing
corporation or in which a Change in Control is to occur, all of the Company’s
obligations regarding options, SARs, performance awards, and restricted stock
that were granted hereunder and that are outstanding on the date of such event
shall, on such terms as may be approved by the Committee prior to such event, be
(a) assumed by the surviving or continuing corporation; or (b) canceled in
exchange for cash, securities of the acquiror or other property; provided that,
in the case of clause (b), (i) such merger, consolidation, other reorganization
or Change in Control constitutes a “change in ownership or control” of the
Company or a “change in the ownership of a substantial portion” of the Company’s
assets within the meaning of Section 409A(a)(2)(A)(v) of the Code and the
guidance issued thereunder or (ii) the payment of cash, securities or other
property is not treated as a payment of "deferred compensation" under Section
409A of the Code.

       

      Without
limitation of the foregoing, in connection with any transaction described in of
the last sentence of the preceding paragraph, the Committee may, in its
discretion, (i) cancel any or all outstanding options under the Plan in
consideration for payment to the holders thereof of an amount equal to the
portion of the consideration that would have been payable to such holders
pursuant to such transaction if their options had been fully exercised
immediately prior to such transaction, less the aggregate exercise price that
would have been payable therefor, or (ii) if the amount that would have been
payable to the option holders pursuant to such transaction if their options had
been fully exercised immediately prior thereto would be equal to or less than
the aggregate exercise price that would have been payable therefor, cancel any
or all such options for no consideration or payment of any
kind.  Payment of any amount payable pursuant to the preceding
sentence may be made in cash or, in the event that the consideration to be
received in such transaction includes securities or other property, in cash,
securities of the acquiror or other property in the Committee’s
discretion.

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      
        	
              	
                16. 

              	
                Amendment and
      Termination of the Plan.

              

      

       

      Except as
otherwise provided in an Award Agreement, the Board of Directors, without
approval of the stockholders, may amend or terminate the Plan, except that no
amendment shall become effective without prior approval of the stockholders of
the Company if stockholder approval would be required by applicable law or
regulations, including if required for continued compliance with the
performance-based compensation exception of Section 162(m) of the Code or
any successor thereto, under the provisions of Section 409A of the Code or any
successor thereto, under the provisions of Section 422 of the Code or any
successor thereto, or by any listing requirement of the principal stock exchange
on which the Common Stock is then listed.

       

      
        	
              	
                17. 

              	
                Amendment or
      Substitution of Grants under the
Plan.

              

      

       

      The terms
of any outstanding Grant under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate including,
but not limited to, acceleration of the date of exercise of any Grant and/or
payments thereunder or of the date of lapse of restrictions on Shares (but, in
the case of a Grant that is or would be treated as “deferred compensation” for
purposes of Section 409A of the Code, only to the extent permitted by guidance
issued under Section 409A of the Code); provided that, except as otherwise
provided in Section 16 or in an Award Agreement, no such amendment shall
adversely affect in a material manner any right of a participant under the Grant
without his or her written consent, and further provided that the Committee
shall not reduce the exercise price of any options or SARs awarded under the
Plan.  The Committee may, in its discretion, permit holders of Grants
under the Plan to surrender outstanding Grants in order to exercise or realize
rights under other Grants, or in exchange for new Grants, or require holders of
Grants to surrender outstanding Grants as a condition precedent to the receipt
of new Grants under the Plan, but only if such surrender, exercise, realization,
exchange or Grant (a) is not treated as a payment of, and does not cause a Grant
to be treated as, deferred compensation for the purposes of Section 409A of the
Code or (b) is permitted under guidance issued pursuant to Section 409A of the
Code. Notwithstanding anything contained in this Section 17 to the contrary, no
surrender, exercise, realization, exchange or Grant in substitution for,
assumption of, or as an alternative to or replacement of, an existing Grant
pursuant to this Section 17 shall be effected in order to reduce or change the
exercise price of any outstanding options or SARs awarded under the Plan or
otherwise implement a re-pricing of any outstanding options or SARs awarded
under the Plan including by means of cancellation and re-grant.

       

      
        	
              	
                18. 

              	
                Commencement Date;
      Termination Date.

              

      

       

      The date
of commencement of the Plan shall be August 9, 2005, subject to approval by the
shareholders of the Company.  If required by the Code, the Plan will
also be subject to reapproval by the shareholders of the Company prior to August
9, 2010.

       

      Unless
previously terminated upon the adoption of a resolution of the Board terminating
the Plan, the Plan shall terminate at the close of business on August 8,
2015.  Subject to the provisions of an Award Agreement, which may be
more restrictive, no termination of the Plan shall materially and adversely
affect any of the rights or obligations of any person, without his or her
written consent, under any Grant of options or other incentives theretofore
granted under the Plan.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

      
        	
              	
                19. 

              	
                Severability.

              

      

       

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

       

      
        	
              	
                20. 

              	
                Governing
      Law.

              

      

       

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

       

      
        	
              	
                21. 

              	
                Compliance
      Amendments.

              

      

       

      Except as
otherwise provided in an Award Agreement, notwithstanding any of the foregoing
provisions of the Plan, and in addition to the powers of amendment set forth in
Sections 16 and 17 hereof, the provisions hereof and the provisions of any award
made hereunder may be amended unilaterally by the Company from time to time to
the extent necessary (and only to the extent necessary) to prevent the
implementation, application or existence (as the case may be) of any such
provision from (i) requiring the inclusion of any compensation deferred pursuant
to the provisions of the Plan (or an award thereunder) in a participant's gross
income pursuant to Section 409A of the Code, and the regulations issued
thereunder from time to time and/or (ii) inadvertently causing any award
hereunder to be treated as providing for the deferral of compensation pursuant
to such Code section and regulations.

      
        
           

        

        
          15EXHIBIT 10.1

GOLD HORSE INTERNATIONAL, INC.
AUDIT COMMITTEE CHARTER

ADOPTED AS OF JULY 14, 2010

PURPOSE AND ROLE

The Audit  Committee (the  "Committee")  of the Board of Directors (the `Board")
assists the Board in its oversight of the quality and integrity of the financial
reporting  practices of Gold Horse  International,  Inc.  (the  "Company").  The
primary purposes of the Committee are to oversee on behalf of the Board:

     *    the Company's accounting and financial reporting processes and the
          integrity of its financial statements;

     *    the audits of the Company's financial statements and the appointment,
          compensation, qualifications, independence and performance of the
          Company's independent auditors;

     *    the Company's compliance with legal and regulatory requirements;

     *    the qualitative aspects of financial reports to shareholders; and

     *    the performance of the Company's internal audit function and internal
          control over financial reporting. The Committee also has the purpose
          of preparing the Audit Committee report that the U.S. Securities and
          Exchange Commission ("SEC") rules require the Company to include in
          its annual proxy statement.

The  Committee's  function  is  one of  oversight  only  and  does  not  relieve
management of its  responsibilities  for  preparing  financial  statements  that
accurately and fairly present the Company's financial results and condition, nor
the  independent  auditors  of their  responsibilities  relating to the audit or
review of financial statements.  In meeting its responsibilities,  the Committee
is expected to provide an open channel of  communication  with  management,  the
internal auditors, the independent auditor and the Board.

ORGANIZATION AND MEMBERS

NUMBER OF MEMBERS.

The Committee must consist of at least three directors.  The Board may designate
a Committee member as the chairperson of the Committee, or if the Board does not
do so, the Committee members will appoint a Committee member as chairperson by a
majority vote of the authorized number of Committee members.

INDEPENDENCE.

All Committee  members must have been determined by the Board to be independent,
as  defined  and to the extent  required  in the  applicable  SEC rules and NYSE
listing  standards,  as they may be  amended  from  time to time  (the  "Listing
Standards"),  and as  interpreted  by the Board in its  business  judgment,  for
purposes of Committee membership.

FINANCIAL LITERACY.

Each member of the Committee  must be financially  literate upon  appointment to
the Committee, as determined in the judgment of the Board in accordance with the
Listing  Standards.  At all  times,  there  should be at least one member of the
Committee,  who,  as  determined  by the  Board,  shall be an  "audit  committee
financial expert" as defined in the SEC rules.
<PAGE>
APPOINTMENT.

Subject to any requirements of the Listing Standards,  the Board may appoint and
remove  Committee  members in accordance  with the Company's  bylaws.  Committee
members  will serve for such terms as the Board may fix,  and in any case at the
Board's will,  whether or not a specific term is fixed. The Board may remove any
member from the  Committee at any time with or without  cause.  Any such removal
from the Committee shall not affect the member's role as a member of the Board.

OVERALL AUTHORITY.

The  Committee  has  the  sole  authority  and  direct  responsibility  for  the
appointment,  compensation,  retention, termination, evaluation and oversight of
the work of the independent  auditors  engaged by the Company for the purpose of
preparing or issuing an audit report or related work or performing  other audit,
review or attest  services  for the Company.  The  independent  auditors  report
directly to the Committee.  The  Committee's  authority  includes  resolution of
disagreements  between management and the auditors regarding financial reporting
and the receipt of  communications  from the  auditors as may be required  under
professional standards applicable to the auditors.

In  addition,  the  Committee's  annual  review  of  the  independent  auditors'
qualifications  must also include the review and  evaluation of the lead partner
of the independent  auditors for the Company's  account,  and evaluation of such
other matters as the Committee  may consider  relevant to the  engagement of the
auditors,  including views of Company management and internal finance employees,
and whether the lead partner or auditing firm itself should be rotated.

The Committee further has authority to conduct or authorize  investigations into
any matters within its scope of responsibility.  Such authority includes, but is
not limited to:

     *    Retain outside counsel, accountants, outside advisors, consultants or
          others to assist in the conduct of an investigation or as it
          determines appropriate to advise or assist in the performance of its
          functions, the funding for which shall be provided by the Company;
     *    Seek any information it requires from employees, or external parties.
          Employees and external parties will be directed to cooperate and
          comply with the Committee's request;
     *    Address complaints relating to accounting; and
     *    Meet with Company officers, independent auditor or outside counsel as
          necessary.

DUTIES AND RESPONSIBILITIES

ANNUAL FINANCIAL REPORTING

As often and to the extent the Committee deems necessary or appropriate,  but at
least  annually in  connection  with the audit of each fiscal  year's  financial
statements, the Committee will:

1.   DISCUSS FINANCIAL  STATEMENTS AND INTERNAL CONTROL REPORTS WITH MANAGEMENT.
     Review  and  discuss  with  the  appropriate  members  of  management,  the
     independent auditors, and if appropriate, internal auditors:

     *    the audited financial statements;
     *    related accounting and auditing principles and practices; and
     *    management's  assessment of internal control over financial  reporting
          and the  related  report and  attestation  on internal  controls  over
          financial  reporting to be included in the Company's  annual report on
          Form 10K (as and when these reports are required under SEC rules).

2.   CRITICAL  ACCOUNTING  POLICY  REPORT.  Timely  request and receive from the
     independent  auditors (before the filing of any audit report) the report or
     update required pursuant to applicable SEC rules, concerning:

     *    all critical accounting policies and practices to be used;

                                       2
<PAGE>
     *    all  alternative   treatments  within  generally  accepted  accounting
          principles for policies and practices  relating to material items that
          have been discussed with Company management,  including  ramifications
          of the use of such  alternative  disclosures  and  treatments  and the
          treatment preferred by the independent auditors; and
     *    other material written communications between the independent auditors
          and Company  management,  such as any management letter or schedule of
          unadjusted differences.

3.   STATEMENT  OF  AUDITING  STANDARDS  (SAS) NO. 61 REVIEW.  Discuss  with the
     independent  auditors the matters  required to be discussed by Statement on
     Auditing Standards No. 61, including such matters as:

     *    the quality and acceptability of the accounting  principles applied in
          the financial statements;
     *    new or  changed  accounting  policies,  the effect of  regulatory  and
          accounting   initiatives,   and  significant   estimates,   judgments,
          uncertainties or unusual transactions;
     *    the selection, application and effects of critical accounting policies
          and estimates applied by the Company;
     *    issues raised by any  "management"  or "internal  control" letter from
          the  auditors,  problems  or  difficulties  encountered  in the  audit
          (including any  restrictions  on the scope of the work or on access to
          requested  information) and management's  response to such problems or
          difficulties,  significant  disagreements  with  management,  or other
          significant aspects of the audit; and
     *    any  off-balance  sheet  transactions,   and  relationships  with  any
          unconsolidated  entities  or  any  other  persons,  which  may  have a
          material  current  or future  effect  on the  financial  condition  or
          results of the  Company  and are  required  to be  reported  under SEC
          rules.

4.   MD&A.  Review and discuss with  appropriate  members of management  and the
     independent  auditors the specific intended disclosures under "Management's
     Discussion  and Analysis of Financial  Condition and Results of Operations"
     to be included in the Company's annual report on Form 10-K.

5.   ISB 1 DISCLOSURE.  Receive from the  independent  auditors a formal written
     statement  of all  relationships  between  the  auditors  and  the  Company
     consistent with Independence Standards Board Standard No. 1.

6.   AUDITOR  INDEPENDENCE.  Actively discuss with the independent  auditors any
     disclosed  relationships or services that may impact their  objectivity and
     independence,  and take any  other  appropriate  action  to  oversee  their
     independence.

     Further,  the Committee  shall annually report to the Board the independent
     auditor to be retained and pre-approve all audit and non-audit services and
     fees. The Committee  will review the scope of any non-audit  services to be
     performed  by the  independent  auditor  and  determine  its  impact on the
     independent auditor's independence.

     The independent  auditor may not perform the following  non-audit services:
     (i) bookkeeping related to accounting records or financial statements; (ii)
     financial  information  systems design and implementation  services;  (iii)
     appraisal or valuation services involving fairness opinions; (iv) actuarial
     services; (v) internal audit outsourcing services; (vi) management or human
     resource functions;  (vii) broker, dealer, investment adviser or investment
     banker services;  (viii) legal serves and expert services  unrelated to the
     audit;  and (ix) any other  services that the Public  Accounting  Oversight
     Board  determines  impermissible.  All other  non-auditing  services  to be
     provided by the independent director including tax compliance, tax planning
     and tax advice shall be approved in advance by the Committee.

7.   MATERIAL   ISSUES.   To  the  extent  the  Committee   deems  necessary  or
     appropriate, discuss with the independent auditors material issues on which
     the Company's  audit team  consulted  the  independent  auditors'  national
     office.

                                       3
<PAGE>
8.   RECOMMEND FILING OF AUDITED  FINANCIAL  STATEMENTS.  Recommend to the Board
     whether the  Company's  annual report on Form 10-K to be filed with the SEC
     should include the audited financial statements.

QUARTERLY FINANCIAL REPORTING

     The Committee's quarterly review will normally include:

1.   QUARTERLY  REVIEW.  Meet to review  and  discuss  the  quarterly  financial
     statements  of the  Company and the  results of the  independent  auditors'
     review of these financial statements with appropriate members of management
     and the independent auditors.

2.   DISCUSSION OF SIGNIFICANT MATTERS WITH MANAGEMENT.  Review and discuss with
     Company   management  and,  if  appropriate,   the  independent   auditors,
     significant matters relating to:

     *    the quality and acceptability of the accounting  principles applied in
          the financial statements;
     *    new  or  changed  accounting  policies,   and  significant  estimates,
          judgments, uncertainties or unusual transactions;
     *    the selection, application and effects of critical accounting policies
          and estimates applied by the Company; and
     *    any  off-balance  sheet   transactions  and  relationships   with  any
          unconsolidated  entities or any other persons that may have a material
          current or future effect on the financial  condition or results of the
          Company and are required to be reported under SEC rules.

3.   MD&A.  Review and discuss with  appropriate  members of management  and the
     independent  auditors the specific intended disclosures under "Management's
     Discussion  and Analysis of Financial  Condition and Results of Operations"
     to be included in the Company's quarterly report on Form 10-Q.

OTHER DUTIES AND RESPONSIBILITIES

ANNUAL REVIEW OF THIS AUDIT  COMMITTEE  CHARTER.  The Committee  will review and
assess the adequacy of this Audit Committee  Charter  annually and recommend any
proposed changes to the full Board.

ANNUAL REVIEW OF PERFORMANCE. The Committee will evaluate its performance as the
Audit Committee on an annual basis.

EARNINGS RELEASES AND OTHER FINANCIAL GUIDANCE.  The Committee will discuss with
management earnings press releases and other published financial  information or
guidance  provided  to  analysts  and  rating  agencies.  This may be  conducted
generally as to types of  information  and  presentations,  and need not include
advance review of each release, other information or guidance.

COMPLIANCE. The Committee, to the extent it deems necessary or appropriate, will
periodically  review with  management  the  Company's  disclosure  controls  and
procedures, internal control over financial reporting and systems and procedures
to promote compliance with laws.

RISK ASSESSMENT. The Committee will periodically:

     *    discuss with management,  the members of the internal audit department
          and the  independent  auditors the Company's  major financial risks or
          exposures;
     *    discuss the steps  management  has taken to monitor  and control  such
          exposures; and

                                       4
<PAGE>
     *    discuss  guidelines  and policies with respect to risk  assessment and
          risk management.

CONDUCT CODES:

The  Committee  oversees and  assesses the  Company's  policies,  practices  and
compliance with its Code of Ethics, including,  when necessary,  following up in
connection with any matters reported to the Committee thereunder pursuant to the
Company's  whistle  blowing policy then in effect.  Further,  The Committee will
conduct any activities  relating to the Company's  code(s) of conduct and ethics
as may be delegated from time to time to the Committee by the Board.

COMPLAINTS AND ANONYMOUS SUBMISSIONS.  The Committee will establish and maintain
procedures for:

     *    the receipt,  retention and  treatment of  complaints  received by the
          Company regarding accounting, internal accounting controls or auditing
          matters; and
     *    the confidential,  anonymous submission by employees of the Company of
          concerns regarding questionable accounting or auditing matters.

If the Committee or the Board so determines,  the submission procedures may also
include a method for interested parties to communicate directly with the Board's
presiding director or with the non-management directors as a group.

INTERNAL  AUDIT.  The  Committee  will  monitor  that the Company  maintains  an
internal  audit  function  (which  may be  outsourced  to a firm  other than the
Company's  independent  auditors).  The  Committee  will  oversee  the  internal
auditors (or other personnel  responsible for the internal audit function),  who
will report directly to the Committee.

INTERNAL  CONTROL OVER  FINANCIAL  REPORTING.  The Committee  will  periodically
discuss and review, as appropriate,  with the internal  auditor,  management and
the independent auditors:

     *    the design and  effectiveness  of the Company's  internal control over
          financial reporting; and
     *    any significant  deficiencies or material  weaknesses in that internal
          control,  any change that has  materially  affected  or is  reasonably
          likely to materially affect that internal control  (including  special
          steps  adopted in light of such a  deficiency  or  weakness),  and any
          fraud  (whether or not  material)  that  involves  management or other
          employees who have a significant role in that internal  control,  that
          have been reported to the Committee.

REPORTS  FROM LEGAL  COUNSEL.  The  Committee  will review and take  appropriate
action with respect to any reports to the  Committee  from legal counsel for the
Company  concerning  any  material  violation  of  securities  law or  breach of
fiduciary  duty or similar  violation by the Company,  its  subsidiaries  or any
person acting on their behalf.

OTHER REVIEWS AND FUNCTIONS

MEETINGS AND REPORTS

Meetings.  The Committee  will meet as often as it determines is necessary,  but
not less than quarterly. The Committee may also act by unanimous written consent
in lieu of a meeting.  The  Committee  will meet with the internal  auditors (or
other personnel responsible for the internal audit function) at least once every
quarter.  The Committee will meet  separately and  periodically  with management
(including  the chief  financial  officer  and  chief  accounting  officer)  and
independent   auditors.   To  the  extent  the  Committee   deems  necessary  or
appropriate,  it will also discuss with the Company's  general counsel any legal
matters that may materially impact the Company's financial statements,  internal
control  over  financial  reporting or  compliance  policies.  In addition,  the
Committee  may meet  from  time to time  with  any  other  persons,  as it deems
necessary or appropriate.

                                       5
<PAGE>
Procedures.  The  Committee  may  establish  its own  procedures,  including the
formation  and  delegation  of  authority  to  sub-committees,  in a manner  not
inconsistent  with this  Audit  Committee  Charter,  the  bylaws or the  listing
standards and SEC rules. The chairperson or a majority of the Committee  members
may call  meetings  of the  Committee.  A majority of the  authorized  number of
Committee  members  constitutes  a  quorum  for  the  transaction  of  Committee
business,  and the vote of a  majority  of the  Committee  members  present at a
meeting at which a quorum is present will be the act of the Committee, unless in
either case a greater number is required by this Audit  Committee  Charter,  the
bylaws or the listing standards.  The Committee will keep written minutes of its
meetings  and  deliver  copies of the  minutes to the  corporate  secretary  for
inclusion in the corporate records.

Reports.  The Committee will timely prepare the Audit Committee  report required
to be included in the Company's  annual meeting proxy  statement,  and report to
the Board on the other matters  relating to the  Committee or its  purposes,  as
required by the listing  standards or SEC rules.  The Committee will also report
to  the  Board  annually  the  overall  results  of  its  annual  review  of the
independent  auditors'  qualifications,  performance  and  independence  and the
annual review by the Committee of its own  performance.  The Committee also will
report  to the  Board  on the  major  items  covered  by the  Committee  at each
Committee meeting,  and provide additional reports to the Board as the Committee
may  determine to be  appropriate,  including  review with the full Board of any
issues that arise from time to time with  respect to the quality or integrity of
the  Company's  financial  statements,  the Company's  compliance  with legal or
regulatory  requirements,  the performance  and  independence of the independent
auditors or the performance of the internal audit function.

Miscellaneous.  The Committee may perform any other  activities  consistent with
its Charter, the Company's Articles of Incorporation,  as amended,  By-laws, and
governing  law, as the  Committee or the Board deems  necessary or  appropriate.
While the Committee has the  responsibilities and powers set forth in this Audit
Committee Charter, it is not the duty of the Committee to plan or conduct audits
or to  determine  that het  Company's  financial  statements  are  complete  and
accurate and are in accordance with generally acceptable accounting  principles.
These are the responsibilities of management and the independent auditor.

                                       6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]