<HTML><HEAD><TITLE>caspians80817041</TITLE><!-- Licensed to: Masterlist International Inc.--><!-- Document Created using EDGARIZER HTML --><!-- Copy Right 2003 EDGARfilings, Ltd., an IEC company.--><!-- All rights reserved EDGARfilings.com -->
<META content="MSHTML 6.00.2743.600" name=GENERATOR></HEAD>
<BODY>
<DIV><BR></DIV>
<DIV></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><B><FONT size=4>UNANIMOUS CONSENT IN LIEU OF SPECIAL MEETING</FONT></B></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><B>OF THE</B></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><B>BOARD OF DIRECTORS</B></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><B>OF</B></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><B><FONT size=5>CASPIAN ENERGY INTERNATIONAL, INC.</FONT></B></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>The undersigned, constituting all of the directors of Caspian Energy International, Inc., a Nevada corporation (the &#147;Company&#148;), hereby consent to and do adopt the resolutions set forth below, to-wit:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>The Board of Directors has been investigating ways to attract various professionals and qualified consultants to assist the Company in general business matters and in investigating potential business opportunities. As the Company is limited financially with what it can presently pay for the aforementioned services, the Board of Directors believes it would be appropriate to adopt an option plan which would allow the Company to provide common stock compensation to those that provide services to the Company. The board of Directors proposes to set aside 21,000,000 shares of common stock to issue under such an option plan. Accordingly, the director hereby unanimously agree and consent to the following, to-wit:</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2><B>RESOLVED</B></FONT><FONT size=2>, that the company adopt a Non-Qualified Stock option Plan in substantially similar form to the one attached hereto (the &#147;Plan&#148;), which Plan allows for the Company to issue options to purchase up to 21,000,000 shared of the Company&#146;s common stock;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2><B>FURTHER RESOLVED</B></FONT><FONT size=2>, that 21,000,000 shares of the Company&#146;s common stock be and hereby is reserved for issuance under the Plan, which shares may be issued at the discretion of the Board of Directors;</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2><B>FURTHER RESOLVED, </B></FONT><FONT size=2>that the proper officers of the Company be and berehy are authorized and directed to prepare and file a registration statement o nForm S-8 with the Securities and Exchange Commission to register the shares of common stock issuable on exercise of the options under the Plan; and</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2><B>FURTHER RESOLVED, </B></FONT><FONT size=2>that the proper officers of the Company be and hereby are authorized, empowered, and directed, on behalf of the Company, to execute all such documents, instruments, and certificates and take all such further and other action in connection with the resoultuions herein adopted that they may deem desireable, necessary, or proper to effectuate the intent and purpose of these resolutions.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><B><U>Filing of Consent</U></B></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2><B><U></B></U></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2><B>RESOLVED, </B></FONT><FONT size=2>that the consent shall be placed into the minute book of Company with the proceedings of the board of directors and that this cnsent shall have the same force and effect as if a meeting of the directors were held,</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2><B>IN WITNESS WHEREOF, </B></FONT><FONT size=2>the undersigned has executed this consent this 27</FONT><FONT size=-1><SUP>th</SUP></FONT><FONT size=2> day of July, 2004.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>/s/Larry W. Wise</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>___________________________________</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Larry W. Wise, Director</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>/s/Richard F. Porterfield</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>___________________________________</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Richard F. Porterfield, Director</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>/s/Kevin J. Walker</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>___________________________________</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Kevin J. Walker, Director</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>/s/Betty L. Crum</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>___________________________________</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Betty L. Crum, Director</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 360pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt" align=left>&nbsp;</DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT size=3><B>CASPIAN ENERGY INTERNATIONAL, INC.</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><FONT size=4><B>2004 NON-QUALIFIED STOCK OPTION PLAN</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=center><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Caspian Energy International, Inc., a Nevada corporation, (the &#147;Company&#148;), hereby adopts this 2004 Non-Qualified Stock Option Plan (the &#147;Plan&#148;) this 27</FONT><FONT size=-1><SUP>th</SUP></FONT><FONT size=2> day of July 2004, under which options to acquire stock of the Company may be granted from time to time to employees and consultants of the Company or its subsidiaries, if any. In addition, at the discretion, of the board of directors, options to acquire stock of the Company may from time to time be granted under this Plan to other individuals who contribute to the success of the Company or its subsidiaries, if any, and are not employees of the Company, all on the terms and conditions set forth herein.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>1.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;<STRONG>&nbsp;</STRONG></FONT><STRONG>&nbsp;PURPOSE OF THE PLAN.</STRONG> </FONT><FONT size=2>The Plan is intended to aid the company in maintaining and developing a management team, attracting qualified officers and employees capable of assisting in the future success of the Company, and rewarding those individuals who have contributed to the success of the Company. It is designed to aid the Company in retaining the services of executives and employees and in attracting new personnel when needed for future operations and growth and to provide such personnel with an incentive to remain employees of the Company, to use their best efforts to promote the success of the company&#146;s business, and to provide them with an opportunity to obtain or increase a proprietary interest in the Company. It is also designed to permit the Company to reward those individuals who are not employees of the Company but who are perceived by management as having contributed to the success of the Company or who are important to the continued business and operations of the Company. The above aims will be effectuated through the granting of options (&#147;Options&#148;) to purchase shares of common stock of the Company, par value $.001 per share (the &#147;Stock&#148;), subject to the terms and conditions of this plan.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>2.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>EFFECTIVE DATE. </B>The Plan shall become effective immediately on adoption by the board of directors of the Company (the &#147;Board&#148;).</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>3.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>ADMINSTRATION OF THE PLAN.</B> Administration of the Plan shall be by the Board. Subject to the compliance with applicable provisions of the governing law, the board may delegate administration of the Plan or specific administrative duties with respect to the Plan, on such terms and to such committees of the Board as it deems proper; provided however, that if less than the entire Board is administering the Plan or grants under the Plan, action may be taken only by a committee of two or more &#147;disinterested directors&#148; as that term is defined in Rule 16b-3, and the regulations and releases there under all as promulgated by the Securities and Exchange Commission under the authority of the Securities Exchange Act of 1934, as amended. Any option approved by the Board shall be approved by a majority vote of those members of the Board in attendance at a meeting at which a quorum is present. Any option approved by a committee designated by the Board shall be approved as specified by the Board at the time of delegation. The interpretation and construction of the terms of the Plan by the </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Board or a duly authorized committee shall be final and binding on all participants in the Plan absent a showing of demonstrable error. No member of the Board or duly authorized committee shall be liable for any action taken or determination made in good faith with respect to the Plan.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>4.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</FONT><FONT size=2><B>SHARES OF STOCK SUBJECT TO THE PLAN.</B> A total of twenty-one million (21,000,000) shares of Stock may be subject to, or issued pursuant to, Options granted under the terms of this Plan. Any shares subject to an Option under the Plan, which Option for any reason expires or is forfeited, terminated, or surrendered unexercised as to such shares, shall be added back to the total number of shares reserves for issuance under the terms of this Plan, and if any right to acquire Stock granted under the Plan is exercised by the delivery of shares of Stock or the relinquishment of rights to shares of Stock, only the net shares of Stock issued (the shares of Stock issued less the shares of Stock surrendered) shall count against the total number of shares reserved for issuance under the terms of this Plan.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>5.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>RESERVATION OF STOCK ON GRANTING OF OPTION. </B>At the time of granting any Option under the terms of this Plan, there will be reserved for issuance on the exercise of the Option the number of shares of Stock of the Company subject to such Option. The Company may reserve either authorized but unissed shares or issued shares that have been reacquired by the Company.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>6.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>ELIGIBILITY.</B> </FONT><FONT id=TAB1 style="LETTER-SPACING: 9pt">&nbsp; &nbsp;</FONT><FONT size=2>Options under the Plan may be granted to employees, including officers and directors of the Company (as and if allowed under applicable law and regulation) or its subsidiaries, as may be existing from time to time, and other individuals who are not employees of the Company, but who have performed bona fide services to the Company, as may be deemed in the best interest of the Company by the Board or a duly authorized committee. Such Options shall be in the amounts, and shall have the rights and be subject to the restrictions, as may be determined by the Board or a duly authorized committee, all as may be within the general provisions of this Plan and as allowed by applicable law or governmental regulation.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>7.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>TERM OF OPTIONS AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE.</B></FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>(a.)<STRONG><FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</STRONG>Each Option shall have the term established by the Board or duly authorized committee at the time the Option is granted but in no event may an Option have a term in excess of five (5) years.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>(b.)<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;The term of the Option, once it is granted, may be reduced only as provided for in this Plan and under the written provisions of the Option.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>(c.)<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;Unless otherwise specifically provided by the written provisions of the Option, no holder or his or her legal representative, legatee, or distribute will be, or shall be deemed to be, a holder of any shares subject to an Option unless and until the holder exercises his or her right to acquire all or a portion of the Stock subject to the </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>2&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Option and delivers the required consideration to the Company in accordance with the terms of this Plan and then only to the extent of the number of shares of Stock acquired. Except as specifically provided in this Plan or is otherwise specifically provided by the written provisions of the Option, no adjustment to the exercise price or the number of shares of Stock subject to the Option shall be made for dividends or other rights for which the record date is prior to the date the Stock subject to the Option is acquired by the holder</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>(d.)<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;Option under the Plan shall vest and become exercisable at such time and times and on such terms as the Board or a duly authorized committee may determine at the time of the grant of the Option.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>(e.)<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;Options granted under the Plan shall contain such other provisions, including, without limitation, further restrictions on the vesting and exercise of the Option, as the Board or a duly authorized committee shall deem advisable.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>(f.)<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;In no event may an Option be exercised after the expiration of its term.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 63pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>8.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>EXERCISE PRICE.</B> The exercise price (if any established) of each Option issued under the Plan shall be determined by the Board or a duly authorized committee on the date of grant.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>9.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>PAYMENT OF EXERCISE PRICE. </B>The exercise of any Option shall be contingent on receipt by the Company of cash, certified bank check to it order, or other consideration acceptable to the Company; provided, that at the discretion of the Board or a duly authorized committee, the written provisions of the Option may provide that payment can be made in whole or in part in shares of Stock of the Company, which Stock shall be valued at its then fair market value as determined by the Board or a duly authorized committee, or by the surrender or cancellation of other rights to Stock of the Company. Any consideration approved by the Board or a duly authorized committee, that calls for the payment of the exercise price over a period of more than one (1) year shall provide for interest, which shall not be included as part of the exercise price, that is equal to or exceeds the imputed interest provided for in section 483 of the Code or any amendment or successor section of like tenor.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>10.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>WITHHOLDING. </B>If the grant or exercise of an Option pursuant to this Plan is subject to withholding or other trust fund payment requirements of the Code or applicable state or local laws, such requirements may, at the discretion of the Board or a duly authorized committee and to the extent permitted by the terms of the Option and the then governing provisions of the Code and the Exchange Act, be met (i) by the holder of the Option either delivering shares of Stock or canceling Options or other rights to acquire Stock with a fair market value equal to such requirements; (ii) by the Company withholding shares of Stock subject to the Option with a fair market value equal to such requirements; or (iii) by the Company making such withholding or other trust fund </FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>3&nbsp; </FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>payment and the Option holder reimbursing the Company such amount paid within 10 (10) days after written demand therefore from the Company.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>11.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>DILUTION OR OTHER ADJUSTMENT.</B> In the event that the number of shares of Stock of the Company from time to time issued and outstanding is increased pursuant to a stock split or a stock dividend, the number of shares of Stock then covered by each outstanding Option granted hereunder shall be increased proportionately, with no increase in the total purchase price of the shares then so covered, and the number of shares of Stock subject to the Plan shall be increased by the same proportion. In the event that the number of shares of Stock of the Company from time to time issued and outstanding is reduced by a combination or consolidation of shares, the number of shares of Stock then covered by each outstanding Option granted hereunder shall be reduced by the same proportion. In the event that the Company should transfer assets to another corporation and distribute the stock of such distribution is not taxable as a dividend and no gain or loss is recognized by reason of section 355 of the Code or any amendment or successor statute of like tenor, then the total purchase price of the Stock then covered by each outstanding Option shall be reduced by an amount that bears the same ratio to the total purchase price then in effect as the market value of the stock distributed in respect of a share of the Stock of the Company, immediately following the distribution, bares to the aggregate of the market value at such time of a share of the Stock of the Company plus the stock distributed in respect thereof. In the event that the Company distributes the stock of a subsidiary to the shareholders, makes a distribution of a major portion of its assets, or otherwise distributes significant portion of the value of its issued and outstanding Stock to its shareholders, the number of shares then subject to each outstanding Option and the Plan, or the exercise price of each outstanding Option, may be adjusted in the reasonable discretion of the Board or a duly authorized committee. All such adjustments shall be made by the Board or duly authorized committee, whose determination upon the same, absent demonstrable error, shall be final and binding on all participants under the Plan. No fractional shares shall be issued, and any fractional shares resulting from the computations pursuant to this section shall be eliminated from the respective Option. No adjustment shall be made for cash dividends, for the issuance of additional shares of Stock of consideration approved by the Board, or for the issuance to stockholders of rights to subscribe for additional Stock or other securities.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>12.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>OPTIONS TO FOREIGN NATIONALS.</B> The Board or a duly authorized committee may, in order to fulfill the purposes of this Plan and without amending the Plan, grant Options to foreign nationals or individuals residing in foreign countries that contain provisions, restrictions, and limitations different from those set forth in this Plan and the Options made to United States residents in order to recognize differences among the countries in law, tax policy, and custom. Such grants shall be made in an attempt to provide such individuals with essentially the same benefits as contemplated by a grant to United States residents under the terms of this Plan.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>4&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>13.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>ASSIGNMENT. </B>No Option granted under this Plan shall be transferable other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code. Except as permitted by the foregoing, each Option granted under the Plan and the rights and privileges thereby conferred shall not be transferred, assigned, pledged, or hypothecated in any way (whether by operation or law or otherwise), and shall not be subject to execution, attachment, or similar process. On any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of the Option, or of any right or privilege conferred thereby, contrary to the provisions thereof, or on the levy of any attachment or similar process on such rights and privileges, the Option and such rights and privileges shall immediately become null and void.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>14.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>EFFECT OF TERMINATION OF EMPLOYMENT.</B> In the event that any holder is terminated or resigns from his or her position with the Company or a subsidiary within six (6) months of the grant or an award, any unexercised portion of such Option shall immediately become null and void and such holder shall have no further rights thereunder. In the event that any officer or employee of the Company or a subsidiary is terminated at any time for, in the determination for the Board or a duly authorized committee, gross negligence in the performance of his or her duties, substantial failure to meet written standards established by the Company for the performance of his or her duties, criminal misconduct, or willful or gross misconduct in the performance of his or her duties, the Board or a duly authorized committee may cancel any and all rights such individual may have in the unexercised portion of any Option held at the time of termination. The Board or a duly authorized committee, may, at the time of the grant of the Option, establish any other restrictions on the exercise of such Option subsequent to the termination or resignation of any individual that it deems appropriate. The foregoing paragraph shall not apply to consultants who are issued options.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>15.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>LISTING AND REGISTRATION OF SHARES. </B>Each Option shall be subject to the requirement that if any time the Board shall determine, in its sole discretion, that it is necessary or desirable to list, register, or qualify the shares covered thereby on any securities exchange or under any state or federal law, or obtain the consent or approval of any governmental agency or regulatory body as a condition of, or in connection with, the granting of such Option or the issuance or purchase of shares thereunder, such Option may not be exercised in whole or in part unless and until such listing, registration, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Board.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>16.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>EXPIRATION AND TERMINATION OF THE PLAN. </B>The Plan may be abandoned or terminated at any time by the Board or a duly authorized committee except with respect to any Options then outstanding under the Plan. The Plan shall otherwise terminate on the ea4rlier of the date that is: (1) seven (7) years after the date the Plan is adopted by the Board; or (ii) seven (7) years after the date the Plan is approved by the shareholders of the Company.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>5&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>17.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>FORM OF OPTIONS. </B>Options granted under the Plan shall be represented by a written agreement which shall be executed by the Company and the holder and which shall contain such terms and conditions as may be determined by the Board or a duly authorized committee and permitted under the terms of this Plan.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>18.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>NO RIGHT OF EMPLOYMENT.</B> Nothing contained in this Plan or any Option awarded pursuant to this Plan shall be construed as conferring on a director, officer, or employee any right to continue or remain as a director, officer, or employee of the Company or its subsidiaries.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>19.<FONT id=TAB2 style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<B>AMENDMENT OF THE PLAN.</B> This Plan may not be amended more than once during any six (6) month period, other than to comport with changes in the Code or the Employee Retirement Income Security Act or the rules and regulations promulgated hereunder or as is required to comply with any and all applicable laws or regulations. Subject to the foregoing and the aforementioned limitations, the Board or a duly authorized committee may modify and amend the Plan in any respect.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>The foregoing Plan was duly adopted by the Board of Directors on the 27</FONT><FONT size=-1><SUP>th</SUP></FONT><FONT size=2> day of July, 2004.</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 333pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=left><FONT size=2>/s/Richard F. Porterfield</FONT><BR><FONT size=2>________________________________________</FONT><BR></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 333pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2>Richard F. Porterfield, Secretary</FONT></DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 423pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV>
<TABLE id=PGBRK cellSpacing=0 cellPadding=0 width="100%" align=center border=0>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR>
<TR>
<TD align=left width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=middle width="33%"><FONT size=1>&nbsp;</FONT></TD>
<TD align=right width="34%"><FONT size=1>6&nbsp;</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3><FONT size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=top>
<TD width="100%" colSpan=3>&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV></BODY></HTML>
[{"type": "S-8", "sequence": "1", "filename": "caspians80817041.htm", "description": "CASPIANS80817041", "secsgml_size_bytes": 43141}]
{"company-data": {"conformed-name": "CASPIAN ENERGY INTERNATIONAL INC /TX", "cik": "0001053688", "assigned-sic": "1382", "irs-number": "841412888", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-118337", "film-number": "04984423"}, "business-address": {"street1": "5430 LBJ FREEWAY", "street2": "1600 THREE LINCOLN CENTER", "city": "DALLAS", "state": "TX", "zip": "75240", "phone": "9724900200"}, "mail-address": {"street1": "5430 LBJ FREEWAY", "street2": "1600 THREE LINCOLN CENTER", "city": "DALLAS", "state": "TX", "zip": "75240"}}
caspians80817041
UNANIMOUS CONSENT IN LIEU OF SPECIAL MEETING
OF THE
BOARD OF DIRECTORS
OF
CASPIAN ENERGY INTERNATIONAL, INC.
The undersigned, constituting all of the directors of Caspian Energy International, Inc., a Nevada corporation (the "Company"), hereby consent to and do adopt the resolutions set forth below, to-wit:
The Board of Directors has been investigating ways to attract various professionals and qualified consultants to assist the Company in general business matters and in investigating potential business opportunities. As the Company is limited financially with what it can presently pay for the aforementioned services, the Board of Directors believes it would be appropriate to adopt an option plan which would allow the Company to provide common stock compensation to those that provide services to the Company. The board of Directors proposes to set aside 21,000,000 shares of common stock to issue under such an option plan. Accordingly, the director hereby unanimously agree and consent to the following, to-wit:
RESOLVED
, that the company adopt a Non-Qualified Stock option Plan in substantially similar form to the one attached hereto (the "Plan"), which Plan allows for the Company to issue options to purchase up to 21,000,000 shared of the Company's common stock;
FURTHER RESOLVED
, that 21,000,000 shares of the Company's common stock be and hereby is reserved for issuance under the Plan, which shares may be issued at the discretion of the Board of Directors;
FURTHER RESOLVED,
that the proper officers of the Company be and berehy are authorized and directed to prepare and file a registration statement o nForm S-8 with the Securities and Exchange Commission to register the shares of common stock issuable on exercise of the options under the Plan; and
FURTHER RESOLVED,
that the proper officers of the Company be and hereby are authorized, empowered, and directed, on behalf of the Company, to execute all such documents, instruments, and certificates and take all such further and other action in connection with the resoultuions herein adopted that they may deem desireable, necessary, or proper to effectuate the intent and purpose of these resolutions.
Filing of Consent
RESOLVED,
that the consent shall be placed into the minute book of Company with the proceedings of the board of directors and that this cnsent shall have the same force and effect as if a meeting of the directors were held,
IN WITNESS WHEREOF,
the undersigned has executed this consent this 27
th
day of July, 2004.
/s/Larry W. Wise
___________________________________
Larry W. Wise, Director
/s/Richard F. Porterfield
___________________________________
Richard F. Porterfield, Director
/s/Kevin J. Walker
___________________________________
Kevin J. Walker, Director
/s/Betty L. Crum
___________________________________
Betty L. Crum, Director
CASPIAN ENERGY INTERNATIONAL, INC.
2004 NON-QUALIFIED STOCK OPTION PLAN
Caspian Energy International, Inc., a Nevada corporation, (the "Company"), hereby adopts this 2004 Non-Qualified Stock Option Plan (the "Plan") this 27
th
day of July 2004, under which options to acquire stock of the Company may be granted from time to time to employees and consultants of the Company or its subsidiaries, if any. In addition, at the discretion, of the board of directors, options to acquire stock of the Company may from time to time be granted under this Plan to other individuals who contribute to the success of the Company or its subsidiaries, if any, and are not employees of the Company, all on the terms and conditions set forth herein.
1.
PURPOSE OF THE PLAN.
The Plan is intended to aid the company in maintaining and developing a management team, attracting qualified officers and employees capable of assisting in the future success of the Company, and rewarding those individuals who have contributed to the success of the Company. It is designed to aid the Company in retaining the services of executives and employees and in attracting new personnel when needed for future operations and growth and to provide such personnel with an incentive to remain employees of the Company, to use their best efforts to promote the success of the company's business, and to provide them with an opportunity to obtain or increase a proprietary interest in the Company. It is also designed to permit the Company to reward those individuals who are not employees of the Company but who are perceived by management as having contributed to the success of the Company or who are important to the continued business and operations of the Company. The above aims will be effectuated through the granting of options ("Options") to purchase shares of common stock of the Company, par value $.001 per share (the "Stock"), subject to the terms and conditions of this plan.
2.
EFFECTIVE DATE.
The Plan shall become effective immediately on adoption by the board of directors of the Company (the "Board").
3.
ADMINSTRATION OF THE PLAN.
Administration of the Plan shall be by the Board. Subject to the compliance with applicable provisions of the governing law, the board may delegate administration of the Plan or specific administrative duties with respect to the Plan, on such terms and to such committees of the Board as it deems proper; provided however, that if less than the entire Board is administering the Plan or grants under the Plan, action may be taken only by a committee of two or more "disinterested directors" as that term is defined in Rule 16b-3, and the regulations and releases there under all as promulgated by the Securities and Exchange Commission under the authority of the Securities Exchange Act of 1934, as amended. Any option approved by the Board shall be approved by a majority vote of those members of the Board in attendance at a meeting at which a quorum is present. Any option approved by a committee designated by the Board shall be approved as specified by the Board at the time of delegation. The interpretation and construction of the terms of the Plan by the
Board or a duly authorized committee shall be final and binding on all participants in the Plan absent a showing of demonstrable error. No member of the Board or duly authorized committee shall be liable for any action taken or determination made in good faith with respect to the Plan.
4.
SHARES OF STOCK SUBJECT TO THE PLAN.
A total of twenty-one million (21,000,000) shares of Stock may be subject to, or issued pursuant to, Options granted under the terms of this Plan. Any shares subject to an Option under the Plan, which Option for any reason expires or is forfeited, terminated, or surrendered unexercised as to such shares, shall be added back to the total number of shares reserves for issuance under the terms of this Plan, and if any right to acquire Stock granted under the Plan is exercised by the delivery of shares of Stock or the relinquishment of rights to shares of Stock, only the net shares of Stock issued (the shares of Stock issued less the shares of Stock surrendered) shall count against the total number of shares reserved for issuance under the terms of this Plan.
5.
RESERVATION OF STOCK ON GRANTING OF OPTION.
At the time of granting any Option under the terms of this Plan, there will be reserved for issuance on the exercise of the Option the number of shares of Stock of the Company subject to such Option. The Company may reserve either authorized but unissed shares or issued shares that have been reacquired by the Company.
6.
ELIGIBILITY.
Options under the Plan may be granted to employees, including officers and directors of the Company (as and if allowed under applicable law and regulation) or its subsidiaries, as may be existing from time to time, and other individuals who are not employees of the Company, but who have performed bona fide services to the Company, as may be deemed in the best interest of the Company by the Board or a duly authorized committee. Such Options shall be in the amounts, and shall have the rights and be subject to the restrictions, as may be determined by the Board or a duly authorized committee, all as may be within the general provisions of this Plan and as allowed by applicable law or governmental regulation.
7.
TERM OF OPTIONS AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE.
(a.)
Each Option shall have the term established by the Board or duly authorized committee at the time the Option is granted but in no event may an Option have a term in excess of five (5) years.
(b.)
The term of the Option, once it is granted, may be reduced only as provided for in this Plan and under the written provisions of the Option.
(c.)
Unless otherwise specifically provided by the written provisions of the Option, no holder or his or her legal representative, legatee, or distribute will be, or shall be deemed to be, a holder of any shares subject to an Option unless and until the holder exercises his or her right to acquire all or a portion of the Stock subject to the
2
Option and delivers the required consideration to the Company in accordance with the terms of this Plan and then only to the extent of the number of shares of Stock acquired. Except as specifically provided in this Plan or is otherwise specifically provided by the written provisions of the Option, no adjustment to the exercise price or the number of shares of Stock subject to the Option shall be made for dividends or other rights for which the record date is prior to the date the Stock subject to the Option is acquired by the holder
(d.)
Option under the Plan shall vest and become exercisable at such time and times and on such terms as the Board or a duly authorized committee may determine at the time of the grant of the Option.
(e.)
Options granted under the Plan shall contain such other provisions, including, without limitation, further restrictions on the vesting and exercise of the Option, as the Board or a duly authorized committee shall deem advisable.
(f.)
In no event may an Option be exercised after the expiration of its term.
8.
EXERCISE PRICE.
The exercise price (if any established) of each Option issued under the Plan shall be determined by the Board or a duly authorized committee on the date of grant.
9.
PAYMENT OF EXERCISE PRICE.
The exercise of any Option shall be contingent on receipt by the Company of cash, certified bank check to it order, or other consideration acceptable to the Company; provided, that at the discretion of the Board or a duly authorized committee, the written provisions of the Option may provide that payment can be made in whole or in part in shares of Stock of the Company, which Stock shall be valued at its then fair market value as determined by the Board or a duly authorized committee, or by the surrender or cancellation of other rights to Stock of the Company. Any consideration approved by the Board or a duly authorized committee, that calls for the payment of the exercise price over a period of more than one (1) year shall provide for interest, which shall not be included as part of the exercise price, that is equal to or exceeds the imputed interest provided for in section 483 of the Code or any amendment or successor section of like tenor.
10.
WITHHOLDING.
If the grant or exercise of an Option pursuant to this Plan is subject to withholding or other trust fund payment requirements of the Code or applicable state or local laws, such requirements may, at the discretion of the Board or a duly authorized committee and to the extent permitted by the terms of the Option and the then governing provisions of the Code and the Exchange Act, be met (i) by the holder of the Option either delivering shares of Stock or canceling Options or other rights to acquire Stock with a fair market value equal to such requirements; (ii) by the Company withholding shares of Stock subject to the Option with a fair market value equal to such requirements; or (iii) by the Company making such withholding or other trust fund
3
payment and the Option holder reimbursing the Company such amount paid within 10 (10) days after written demand therefore from the Company.
11.
DILUTION OR OTHER ADJUSTMENT.
In the event that the number of shares of Stock of the Company from time to time issued and outstanding is increased pursuant to a stock split or a stock dividend, the number of shares of Stock then covered by each outstanding Option granted hereunder shall be increased proportionately, with no increase in the total purchase price of the shares then so covered, and the number of shares of Stock subject to the Plan shall be increased by the same proportion. In the event that the number of shares of Stock of the Company from time to time issued and outstanding is reduced by a combination or consolidation of shares, the number of shares of Stock then covered by each outstanding Option granted hereunder shall be reduced by the same proportion. In the event that the Company should transfer assets to another corporation and distribute the stock of such distribution is not taxable as a dividend and no gain or loss is recognized by reason of section 355 of the Code or any amendment or successor statute of like tenor, then the total purchase price of the Stock then covered by each outstanding Option shall be reduced by an amount that bears the same ratio to the total purchase price then in effect as the market value of the stock distributed in respect of a share of the Stock of the Company, immediately following the distribution, bares to the aggregate of the market value at such time of a share of the Stock of the Company plus the stock distributed in respect thereof. In the event that the Company distributes the stock of a subsidiary to the shareholders, makes a distribution of a major portion of its assets, or otherwise distributes significant portion of the value of its issued and outstanding Stock to its shareholders, the number of shares then subject to each outstanding Option and the Plan, or the exercise price of each outstanding Option, may be adjusted in the reasonable discretion of the Board or a duly authorized committee. All such adjustments shall be made by the Board or duly authorized committee, whose determination upon the same, absent demonstrable error, shall be final and binding on all participants under the Plan. No fractional shares shall be issued, and any fractional shares resulting from the computations pursuant to this section shall be eliminated from the respective Option. No adjustment shall be made for cash dividends, for the issuance of additional shares of Stock of consideration approved by the Board, or for the issuance to stockholders of rights to subscribe for additional Stock or other securities.
12.
OPTIONS TO FOREIGN NATIONALS.
The Board or a duly authorized committee may, in order to fulfill the purposes of this Plan and without amending the Plan, grant Options to foreign nationals or individuals residing in foreign countries that contain provisions, restrictions, and limitations different from those set forth in this Plan and the Options made to United States residents in order to recognize differences among the countries in law, tax policy, and custom. Such grants shall be made in an attempt to provide such individuals with essentially the same benefits as contemplated by a grant to United States residents under the terms of this Plan.
4
13.
ASSIGNMENT.
No Option granted under this Plan shall be transferable other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code. Except as permitted by the foregoing, each Option granted under the Plan and the rights and privileges thereby conferred shall not be transferred, assigned, pledged, or hypothecated in any way (whether by operation or law or otherwise), and shall not be subject to execution, attachment, or similar process. On any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of the Option, or of any right or privilege conferred thereby, contrary to the provisions thereof, or on the levy of any attachment or similar process on such rights and privileges, the Option and such rights and privileges shall immediately become null and void.
14.
EFFECT OF TERMINATION OF EMPLOYMENT.
In the event that any holder is terminated or resigns from his or her position with the Company or a subsidiary within six (6) months of the grant or an award, any unexercised portion of such Option shall immediately become null and void and such holder shall have no further rights thereunder. In the event that any officer or employee of the Company or a subsidiary is terminated at any time for, in the determination for the Board or a duly authorized committee, gross negligence in the performance of his or her duties, substantial failure to meet written standards established by the Company for the performance of his or her duties, criminal misconduct, or willful or gross misconduct in the performance of his or her duties, the Board or a duly authorized committee may cancel any and all rights such individual may have in the unexercised portion of any Option held at the time of termination. The Board or a duly authorized committee, may, at the time of the grant of the Option, establish any other restrictions on the exercise of such Option subsequent to the termination or resignation of any individual that it deems appropriate. The foregoing paragraph shall not apply to consultants who are issued options.
15.
LISTING AND REGISTRATION OF SHARES.
Each Option shall be subject to the requirement that if any time the Board shall determine, in its sole discretion, that it is necessary or desirable to list, register, or qualify the shares covered thereby on any securities exchange or under any state or federal law, or obtain the consent or approval of any governmental agency or regulatory body as a condition of, or in connection with, the granting of such Option or the issuance or purchase of shares thereunder, such Option may not be exercised in whole or in part unless and until such listing, registration, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Board.
16.
EXPIRATION AND TERMINATION OF THE PLAN.
The Plan may be abandoned or terminated at any time by the Board or a duly authorized committee except with respect to any Options then outstanding under the Plan. The Plan shall otherwise terminate on the ea4rlier of the date that is: (1) seven (7) years after the date the Plan is adopted by the Board; or (ii) seven (7) years after the date the Plan is approved by the shareholders of the Company.
5
17.
FORM OF OPTIONS.
Options granted under the Plan shall be represented by a written agreement which shall be executed by the Company and the holder and which shall contain such terms and conditions as may be determined by the Board or a duly authorized committee and permitted under the terms of this Plan.
18.
NO RIGHT OF EMPLOYMENT.
Nothing contained in this Plan or any Option awarded pursuant to this Plan shall be construed as conferring on a director, officer, or employee any right to continue or remain as a director, officer, or employee of the Company or its subsidiaries.
19.
AMENDMENT OF THE PLAN.
This Plan may not be amended more than once during any six (6) month period, other than to comport with changes in the Code or the Employee Retirement Income Security Act or the rules and regulations promulgated hereunder or as is required to comply with any and all applicable laws or regulations. Subject to the foregoing and the aforementioned limitations, the Board or a duly authorized committee may modify and amend the Plan in any respect.
The foregoing Plan was duly adopted by the Board of Directors on the 27
th
day of July, 2004.
/s/Richard F. Porterfield
________________________________________
Richard F. Porterfield, Secretary
6