Minnesota
Business
&
Nonprofit
Corporations
Amendment
to
Articles
of
Incorporation
Minnesota
Statutes,
Chapter 302A
or
317A
Read
the
instructions
before
completing
this
form.
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1.
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Corporate
Name:
(Required)
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Swordfish Financial, Inc.
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List the name of the
company prior to any desired name change
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2.
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This
amendment
is
effective
on
the
day
it
is
filed
with
the
Secretary
of
State,
unless
you
indicate
another
date,
no
later than
30
days
after
filing
with
the
Secretary
of
State.
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03/25/2014
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Format: (mm/dd/yyyy)
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3.
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The following amendment(s) to articles regulating the above corporation were adopted: (Insert full text of newly amended article(s)
indicating which article(s) is (are) being amended or added.) If the full text of the amendment will not fit in the space
provided, attach additional pages.
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ARTICLE
III
The total number of shares of common stock the company shall have the authority to issue is
5,000,000,000,par value $.0001. The total number of shares of preferred stock the company shall have the authority to issue
is 50,000,000, par value $.0001
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4.
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This
amendment
has
been
approved
pursuant
to
Minnesota
Statutes,
Chapter
302A
or
317A.
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5.
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I,
the
undersigned,
certify
that
I
am
signing
this
document
as
the
person
whose
signature
is
required,
or
as
agent
of
the
person(s)
whose
signature
would
be
required
who
has
authorized
me
to
sign
this
document
on
his/her
behalf,
or
in
both
capacities.
I
further
certify
that
I
have
completed
all
required
fields,
and
that
the
information
in
this
document
is
true
and
correct
and
in
compliance
with
the
applicable
chapter
of
Minnesota
Statutes.
I
understand
that
by
signing
this
document
|
I
am
subject
to
the
penalties
of
perjury
as
set
forth
in
Section
609.48
as
if
I
had
signed
this
document
under
oath.
/s/ Clark Ortiz
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04/17/2014
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Signature of Authorized Person or Authorized Agent
|
Date
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Email Address for Official Notices
Enter an email address to which the Secretary of State can forward official notices required
by law and other notices:
Check
here
to
have
your
email
address
excluded
from
requests
for
bulk
data,
to
the
extent
allowed
by
Minnesota
law.
List
a
name
and
daytime
phone
number
of
a
person
who
can
be
contacted
about
this
form:
Adam S. Tracy
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888-978-9901
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Contact
Name
|
|
Phone
Number
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Entities that own, lease, or have any
financial interest in agricultural land or land capable of being farmed must register with the MN Debt. of Agriculture's Corporate
Farm Program.
Does
this
entity
own,
lease,
or
have
any
financial
interest
in
agricultural
land
or
land
capable
of
being
farmed?
Yes
No XX
Work
Item 754060600021
Original
File Number W-164
STATE OF MINNESOTA OFFICE OF THE SECRETARY OF
STATE
FILED
04/17/2014 11:59 PM
Mark Ritchie Secretary of State
Adam S. Tracy
Securities Compliance Group, Ltd.
800 W. Fifth Ave. Suite 201a
Naperville, Il 60563
(888) 978.9901
www.IBankAttorneys.com
June 3, 2014
Via U.S. Mail
To the Board of Directors
Swordfish Financial, Inc.
6125 Airport Freeway
Haltom City, TX 76117
Re: Legal Opinion In Re: Registration Statement
on Form S-8
Ladies and Gentlemen:
I have acted as counsel to Swordfish Financial,
Inc., a Minnesota corporation (the "Company") in connection with the filing with the Securities and Exchange Commission
(the "Commission") of a Registration Statement on Form S-8 (the "Registration Statement") for the purpose of
registering under the Securities Act of 1933, as amended, (the "Act") 350,000,000 shares of its common stock, no par
value per share (the "Shares"), issuable under the Swordfish Financial, Inc. 2014 Incentive Stock Option and Restricted
Stock Plan (the "Plan"). This opinion is being furnished to the Company in connection with the requirements of Item 601(b)(5)
of Regulation S-K promulgated under the Act, and no opinions are expressed herein with regards to such matters, other than as expressly
stated herein.
I am a citizen of, and reside in, the United
States of American and am an attorney licensed to practice before the Supreme Court of Illinois, the United States Tax Court and
various United States District Courts. Accordingly, no attempt is made herein to provide an opinion with regards to the laws of
any jurisdiction other than the aforementioned, the State of Nevada and the laws of the United States of America. Moreover, I have
been not prohibited or otherwise enjoined from practicing before the Securities and Exchange Commission ("SEC") or any
other government of self-regulatory agency. The Company has retained me solely for the purpose of reviewing the current information
disclosed by its matter pertaining to the contents of the Registration Statement other than expressly stated herein with respect
to the Shares.
In connection with the opinion contained herein,
I have reviewed applicable federal laws, rules and regulations, including, specifically, the Securities Act of 1933 and Securities
Exchange Act of 1934 (the "Exchange Act"). Moreover, I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, certificates or records provided to me by Issuer as I have deemed necessary or appropriate
as bases for the opinion set forth herein; such documents, certificates and records being, to the best of my knowledge and belief,
reliable. This includes, specifically, but not limited to, the Company's (a) Registration Statement on Form S-4 filed with the
Commission July 28, 2004; (b) the Annual Report on Form 10-K file May 15, 2014 (c) Current Report on Form 8-K filed with the Commission
on April 25, 2014 and (d) 2014 Incentive Stock Option and Restricted Stock plan In my examination, I have assumed the legal capacity
of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies.
Based upon the foregoing, I am of the opinion
that, as of the date hereof, when the Shares shall have been duly registered on the books of the transfer agent and registrar thereof
in the name or on behalf of the holders and have been duly issued by the Company against payment thereof in the circumstances contemplated
by the Plan, assuming in each case that the individual issuances, grants or awards under the Plan are duly authorized by all necessary
corporate action and duly issued, granted or awarded and exercised within the requirements of prevailing law and the Plan (and
the agreements and awards duly adopted thereunder and in accordance therewith), the issue and sale of the Shares will have bee
duly authorized by all necessary corporate action of the Company and the Shares will be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion
as an exhibit to the Registration Statement. In giving this consent, I do not admit that I am in the category of persons who consent
is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Yours very truly,
/s/ Adam S. Tracy
Adam S. Tracy, Esq.
Consent of Independent Registration Accountant
We consent to the incorporation by reference
in the Registration Statement (Form S-8) pertaining to the Swordfish Financial, Inc. equity compensation plan filed with the Securities
and Exchange Commission on May 13, 2014 of our report dated May 13, 2014 made part of the registrants amended annual report on
Form 10-K/A with respect to the consolidated financial statements of Swordfish Financial, Inc. included in this Registration Statement
filed with the Securities and Exchange Commission.
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/s/ Patrick Heyn
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Dated: June 3, 2014
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By:___________________________
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For: Patrick Heyn, CPA
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Swordfish Financial, Inc.
2014 Stock Option and Restricted
Stock Plan
1.
Purposes
.
(a)
Background
.
This 2014 Stock Option and Restricted Stock Plan was adopted on March 21, 2014 by the Board of Directors, subject to
the approval of the Company's stockholders. Options granted under the Plan prior to the stockholders’ approval will be effective
as of their respective dates of grant upon approval of the stockholders.
(b)
Eligible
Award Recipients
.
The persons eligible to receive Awards are the Employees, Directors and Consultants of the Company
and its Affiliates.
(c)
Available
Awards
.
The purpose of the Plan is to provide a means by which eligible recipients may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of the following: (i) Incentive Stock Options, (ii) Nonqualified
Stock Options, (iii) rights to acquire restricted stock, and (iv) stock appreciation rights.
(d)
General
Purpose
.
The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to receive
Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
2.
Definitions
.
(a) "Affiliate"
means any entity that controls, is controlled by, or is under common control with the Company.
(b) "Award"
means any right granted under the Plan, including an Option, a right to acquire restricted Common Stock, and a stock
appreciation right.
(c) "Award
Agreement"
means a written agreement between the Company and a holder of an Award (other than an Option) evidencing
the terms and conditions of an individual Award grant.
(d) "Board"
means the board of directors of the Company.
(e) "Code"
means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(f) "Committee"
means a pre-existing or newly formed committee of members of the Board appointed by the Board in accordance with subsection
3(c).
(g) "Common
Stock"
means shares of the Company's common stock, no par value per share, and other rights with respect to such
shares.
(h) "Company"
means Swordfish Financial, Inc. a Minnesota corporation
(i) "Consultant"
means any person who is not an Employee or Director and who is retained by the Company or an Affiliate pursuant to
a consulting agreement.
(j) "Continuous
Service"
means that the Participant's service with the Company or an Affiliate, whether as an Employee, Director
or Consultant is not interrupted or terminated. Unless otherwise provided in an Award Agreement or Option Agreement, as applicable,
the Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the entity
for which the Participant renders such service,
provided
,
that
there is no interruption or termination of the Participant's
service to the Company or an Affiliate as an Employee, Director or Consultant. The Board, in its sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any leave of absence, including sick leave, military
leave or any other personal leave.
(k) "Covered
Employee"
means the Company's chief executive officer and the four (4) other highest compensated officers of the
Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes
of Section 162(m) of the Code.
(l) "Director"
means a member of the Board of Directors of the Company.
(m) "Disability"
means the Participant's inability, due to illness, accident, injury, physical or mental incapacity or other disability,
to carry out effectively the duties and obligations to the Company and its Affiliates performed by such person immediately prior
to such disability for a period of at least six (6) months, as determined in the good faith judgment of the Board.
(n) "Dollars"
or
"$"
means United States dollars.
(o) "Employee"
means any person employed by the Company or an Affiliate. Service as a Director or payment of a Director's fee by the
Company or an Affiliate alone shall not be sufficient to constitute "employment" by the Company or an Affiliate.
(p) "Exchange
Act"
means the Securities Exchange Act of 1934, as amended.
(q) "Fair
Market Value"
means, as of any date, the value of the Common Stock determined as follows:
(i)
If
the Common Stock is listed on any established stock exchange, or traded on the Nasdaq National Market, the Nasdaq SmallCap Market
or the Nasdaq OTC Bulletin Board, the Fair Market Value of the Common Stock shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in Common Stock if such stock is traded on more than one such exchange or market) on the last market trading
day prior to the day of determination, as reported by such exchange or market or such other source as the Board reasonably deems
reliable.
(ii)
In
the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board.
(r) "Incentive
Stock Option"
means an option designated as an incentive stock option in an Option Agreement and that is granted
in accordance with the requirements of, and that conforms to the applicable provisions of, Section 422 of the Code.
(s) "Independent
Director"
means (i) a Director who satisfies the definition of Independent Director or similar definition under
the applicable stock exchange or Nasdaq rules and regulations upon which the Common Stock is traded from time to time and (ii)
a Director who either (A) is not a current employee of the Company or an "affiliated corporation" (within the meaning
of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated
corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not
an officer of the Company or an "affiliated corporation" at any time and is not currently receiving direct or indirect
remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director or
(B) is otherwise considered an "outside director" for purposes of Section 162(m) of the Code.
(t) "Nonqualified
Stock Option"
means an option that is not designated in an Option Agreement as an Incentive Stock Option or was
not granted in accordance with the requirements of, and does not conform to the applicable provisions of, Section 422 of the Code.
(u) "Officer"
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder.
(v) "Option"
means an Incentive Stock Option or a Nonqualified Stock Option granted pursuant to the Plan.
(w) "Option
Agreement"
means a written agreement between the Company and an Optionholder evidencing the terms and conditions
of an individual Option grant.
(x) "Optionholder"
means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.
(y) "Participant"
means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Award.
(z) "Plan"
means this Ecology Coatings, Inc. 2007 Stock Option and Restricted Stock Plan.
(aa) "Rule
16b-3"
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time
to time.
(bb) "Securities
Act"
means the Securities Act of 1933, as amended.
(cc) "Ten
Percent Stockholder"
means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any parent
corporation or any subsidiary corporation, both as defined in Section 424 of the Code.
3.
Administration
.
(a)
Administration
by Board
.
The Board shall administer the Plan unless and until the Board delegates administration to a Committee,
as provided in subsection 3(c). The Board may, at any time and for any reason in its sole discretion, rescind some or all of such
delegation.
(b)
Powers
of Board
.
The Board shall have the power, subject to, and within the limitations of, the express provisions of
the Plan:
(i)
To
determine from time to time which of the persons eligible under the Plan shall be granted Awards; when and how each Award shall
be granted; what type or combination of types of Award shall be granted; the provisions of each Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to an Award; and
the number of shares of Common Stock with respect to which an Award shall be granted to each such person.
(ii)
To
construe and interpret the Plan, Awards granted under it, Option Agreements and Award Agreements, and to establish, amend and
revoke rules and regulations for their administration. The Board, in the exercise of this power, may correct any defect, omission
or inconsistency in the Plan or in any Option Agreement or Award Agreement, in a manner and to the extent it shall deem necessary
or expedient to make the Plan fully effective.
(iii)
To
amend the Plan, an Award, an Award Agreement or an Option Agreement as provided in Section 12,
provided
,
that
the Board shall not amend the exercise price of an option, the Fair Market Value of an Award or extend the
term of an Option or Award without obtaining the approval of the stockholders if required by the rules of any stock exchange upon
which the Common Stock is listed.
(iv)
Generally,
to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.
(c)
Delegation
to Committee
.
(i)
General
.
The Board may delegate administration of the Plan and its powers and duties thereunder to a Committee or Committees,
and the term "Committee" shall apply to any person or persons to whom such authority has been delegated. Upon such delegation,
the Committee shall have the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any
of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter
be deemed to include the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. In its absolute discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Committee under this Plan, except respecting matters under Rule 16b-3
of the Exchange Act or Section 162(m) of the Code, or any rules or regulations issued thereunder, which are required to be determined
in the sole discretion of the Committee.
(ii)
Committee
Composition
.
A Committee shall consist solely of two or more Directors. After the Company appoints or elects at
least two Independent Directors, the Committee shall consist solely of two or more Independent Directors. Within the scope of
its authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not Independent
Directors the authority to grant Awards to eligible persons who are either (a) not then Covered Employees and are not expected
to be Covered Employees at the time of recognition of income resulting from such Award or (b) not persons with respect to whom
the Company wishes to comply with Section 162(m) of the Code, and/or (2) delegate to a committee of one or more members of the
Board who are not Independent Directors or to the Company's Chief Executive Officer the authority to grant Awards to eligible
persons who are not then subject to Section 16 of the Exchange Act.
(d)
Effect
of Board's Decision; No Liability
.
All determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. No member of the
Board or the Committee or any person to whom duties hereunder have been delegated shall be liable for any action, interpretation
or determination made in good faith, and such persons shall be entitled to full indemnification and reimbursement consistent with
applicable law and in the manner provided in the Company's Articles of Incorporation and Bylaws, as the same may be amended from
time to time, or as otherwise provided in any agreement between any such member and the Company.
4.
Stock subject to the Plan
.
(a)
Stock
Reserve
.
Subject to the provisions of Section 11 relating to adjustments upon changes in Common Stock, the shares
of Common Stock that may be issued pursuant to Awards shall not exceed in the aggregate four million five hundred thousand (4,500,000)
shares of Common Stock.
(b)
Reversion
of Stock to the Stock Reserve
.
If any Award shall for any reason expire or otherwise terminate, in whole or in
part, without having been exercised in full, the shares of Common Stock not acquired under such Award shall revert to and again
become available for issuance under the Plan.
(c)
Source
of Stock
.
The Common Stock subject to the Plan may be unissued stock or reacquired stock, bought on the market
or otherwise.
5.
Eligibility
.
(a)
Eligibility
for Specific Awards
.
Incentive Stock Options may be granted only to Employees. Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.
(b)
Ten
Percent Stockholders
.
A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise
price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant
and the Option is not exercisable after the expiration of five (5) years from the date of grant.
6.
Option Provisions
.
Each Option Agreement
shall be subject to the terms and conditions of this Plan. Each Option and Option Agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options
or Nonqualified Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will
be issued for the shares of Common Stock purchased on exercise of each type of Option. The provisions of separate Options need
not be identical.
(a)
Provisions
Applicable to All Options
.
(i)
Consideration
.
The purchase price of the shares of Common Stock acquired pursuant to an Option shall be paid in (i) cash in Dollars
at the time the Option is exercised; (ii) withheld shares of Common Stock upon exercise of an Option having a Fair Market Value
at the time the Option is exercised equal to the purchase price (plus applicable withholding tax), with the prior approval of
the Company; (iii) shares of Common Stock owned by the Optionholder having a Fair Market Value at the time the Option is exercised
equal to the purchase price (plus the applicable withholding tax), with the prior approval of the Company; or (iv) any combination
of the foregoing with the prior approval of the Company.
(ii)
Vesting
Generally
.
An Option may (A) vest, and therefore become exercisable, in periodic installments that may, but need
not, be equal, or (B) be fully vested at the time of grant. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate.
The vesting provisions, if any, of individual Options may vary. The provisions of this subsection 6(a)(ii) are subject to any
Option Agreement provisions governing the minimum number of Common Stock as to which an Option may be exercised.
(iii)
Termination
of Continuous Service
.
Unless otherwise provided in the Option Agreement, in the event an Optionholder's Continuous
Service terminates (other than upon the Optionholder's death, Disability, retirement or as a result of a Change of Control), all
Options held by the Optionholder shall immediately terminate;
provided
,
however
,
that
an Option Agreement
may provide that if an Optionholder's Continuous Service is terminated for reasons other than for cause, all vested Options held
by such person shall continue to be exercisable until the earlier of the expiration date of such Option or ninety (90) days after
the date of such termination. All such vested Options not exercised within the period described in the preceding sentence shall
terminate.
(iv)
Disability
or Death of Optionholder.
Unless otherwise provided in the Option Agreement, in the event of an Optionholder's
Disability or death, all unvested Options shall immediately terminate, and all vested Options held by such person shall continue
to be exercisable for twelve (12) months after the date of such Disability or death. All such vested Options not exercised within
such twelve (12) month period shall terminate.
(v)
Retirement
.
Unless otherwise provided in the Option Agreement, in the event of the Optionholder's retirement, all unvested Options
shall automatically vest on the date of such retirement and all Options shall be exercisable for the earlier of twelve (12) months
after such retirement date or the expiration date of such Options. All such Options not exercised within the period described
in the preceding sentence shall terminate.
(b)
Provisions
Applicable to Incentive Stock Options
.
(i)
Term
.
Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years from the date it was granted. Further, no grant of an Incentive Stock Option
shall be made under this Plan more than ten (10) years after the date the Plan is approved by the stockholders of the Company.
(ii)
Exercise
Price of an Incentive Stock Option
.
Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders,
the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Option on the date the Option is granted.
(iii)
Transferability
of an Incentive Stock Option
.
An Incentive Stock Option shall not be transferable except by will or by the laws
of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder.
(iv)
Incentive
Stock Option $100,000 Limitation
.
Notwithstanding any other provision of the Plan or an Option Agreement, the aggregate
Fair Market Value of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Optionholder
in any calendar year, under the Plan or any other option plan of the Company or its Affiliates, shall not exceed One Hundred Thousand
Dollars ($100,000). For this purpose, the Fair Market Value of the Common Stock shall be determined as of the time an Option is
granted. The Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be
treated as Nonqualified Stock Options.
(c)
Provisions
Applicable to Nonqualified Stock Options
.
(i)
Exercise
Price of a Nonqualified Stock Option
.
The exercise price of each Nonqualified Stock Option shall be not less than
one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.
(ii)
Transferability
of a Nonqualified Stock Option
.
A Nonqualified Stock Option shall be transferable, if at all, to the extent provided
in the Option Agreement. If the Option Agreement does not provide for transferability, then the Nonqualified Stock Option shall
not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of
the Optionholder only by the Optionholder.
7.
Provisions of Awards other
than Options
.
(a)
Restricted
Stock Awards
.
Each restricted stock Award agreement shall be in such form and shall contain such restrictions,
terms and conditions, if any, as the Board shall deem appropriate and shall be subject to the terms and conditions of this Plan.
The terms and conditions of restricted stock Award Agreements may change from time to time, and the terms and conditions of separate
restricted stock Award Agreements need not be identical, but each restricted stock Award Agreement shall include (through incorporation
of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
(i)
Consideration
.
A restricted stock Award may be awarded in consideration for past services actually rendered, or for future services
to be rendered, to the Company or an Affiliate for its benefit.
(ii)
Vesting
.
Common Stock awarded under the restricted stock Award Agreement may (A) be subject to a vesting schedule to be determined
by the Board or (B) be fully vested at the time of grant.
(iii)
Termination
of Participant's Continuous Service
.
Unless otherwise provided in the restricted stock Award Agreement, in the
event a Participant's Continuous Service terminates prior to a vesting date set forth in the restricted stock Award Agreement,
any unvested restricted stock Award shall be forfeited and automatically transferred to and reacquired by the Company at no cost
to the Company, and neither the Participant nor his or her heirs, executors, administrators or successors shall have any right
or interest in the restricted stock Award. Notwithstanding the foregoing, unless otherwise provided in the restricted stock Award
agreement, in the event a Participant's Continuous Service terminates as a result of (A) being terminated by the Company
for reasons other than for cause, (B) death, (C) Disability, (D) retirement, or (E) a Change of Control (subject to the provisions
of Section 11(c) hereof), then any unvested restricted stock Award shall vest immediately upon such date.
(iv)
Transferability
.
Rights to acquire Common Stock under the restricted stock Award Agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the restricted stock Award Agreement, as the Board shall determine in
its discretion, so long as Common Stock awarded under the restricted stock Award Agreement remain subject to the terms of the
restricted stock Award Agreement.
(b)
Grant
of Stock Appreciation Rights
.
Stock appreciation rights to receive in shares of Common Stock the excess of the
Fair Market Value of Common Stock on the date the rights are surrendered over the Fair Market Value of Common Stock on the date
of grant may be granted to any Employee or Director selected by the Board. A stock appreciation right may be granted (i) in connection
and simultaneously with the grant of another Award, (ii) with respect to a previously granted Award, or (iii) independent
of another Award. A stock appreciation right shall be subject to such terms and conditions not inconsistent with this Plan as
the Board shall impose and shall be evidenced by a written stock appreciation right agreement, which shall be executed by the
Participant and an authorized officer of the Company. The Board, in its discretion, may determine whether a stock appreciation
right is to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code and stock appreciation
right agreements evidencing stock appreciation rights intended to so qualify shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the Code. The Board may, in its discretion and on such terms
as it deems appropriate, require as a condition of the grant of a stock appreciation right that the Participant surrender for
cancellation some or all of the Awards previously granted to such person under this Plan or otherwise. A stock appreciation right,
the grant of which is conditioned upon such surrender, may have an exercise price lower (or higher) than the exercise price of
the surrendered Award, may contain such other terms as the Board deems appropriate, and shall be exercisable in accordance with
its terms, without regard to the number of shares, price, exercise period or any other term or condition of such surrendered Award.
8.
Availability
of Stock
.
Subject to the restrictions
set forth in Section 4(a), during the terms of the Awards, the Company shall keep available at all times the number of shares of
Common Stock required to satisfy such Awards.
9.
Use of Proceeds from Stock
.
Proceeds from the
sale of Common Stock pursuant to Awards shall constitute general funds of the Company.
10.
Miscellaneous
.
(a)
Exercise
of Awards
.
Awards shall be exercisable at such times, or upon the occurrence of such event or events as the Board
shall determine at or subsequent to grant. Awards may be exercised in whole or in part. Common Stock purchased upon the exercise
of an Award shall be paid for in full at the time of such purchase.
(b)
Acceleration
of Exercisability and Vesting
.
The Board shall have the power to accelerate the time at which an Award may first
be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.
(c)
Stockholder
Rights.
(i)
Options
.
Unless otherwise provided in and upon the terms and conditions in the Option Agreement, no Participant shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to, any Common Stock subject to an Option unless and
until such Participant has satisfied all requirements for exercise of, and has exercised, the Option pursuant to its terms.
(ii)
Restricted
Stock
.
Unless otherwise provided in and upon the terms and conditions in the restricted stock Award Agreement,
a Participant shall have the right to receive all dividends and other distributions paid or made respecting such restricted stock,
provided
,
however
,
that
no unvested restricted stock shall have any voting rights of a stockholder respecting
such unvested restricted stock unless and until such unvested restricted stock become vested.
(d)
No
Employment or other Service Rights
.
Nothing in the Plan or any instrument executed or Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the
time the Award was granted, or any other capacity, or shall affect the right of the Company or an Affiliate to terminate with
or without notice and with or without cause (i) the employment of an Employee or an Affiliate or (ii) the service of a Director
of the Company or an Affiliate.
(e)
Withholding
Obligations
.
If the Company has or will have a legal obligation to withhold the taxes related to the grant, vesting
or exercise of the Award, such Award may not be granted, vested or exercised in whole or in part, unless such tax obligation is
first satisfied in a manner satisfactory to the Company. To the extent provided by the terms of an Award Agreement or Option Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of
Common Stock under an Award by any of the following means (in addition to the Company's right to withhold from any compensation
paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment in Dollars; (ii)
authorizing the Company to withhold Common Stock from the Common Stock otherwise issuable to the Participant as a result of the
exercise or acquisition of Common Stock under the Award,
provided
,
however
,
that
no shares of Common Stock
are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company
owned and unencumbered Common Stock.
(f)
Listing
and Qualification of Stock
.
This Plan and the grant and exercise of Awards hereunder, and the obligation of the
Company to sell and deliver Common Stock under such Awards, shall be subject to all applicable United States federal and state
laws, rules and regulations, and any other laws applicable to the Company, and to such approvals by any government or regulatory
agency as may be required. The Company, in its discretion, may postpone the issuance or delivery of Common Stock upon any exercise
of an Award until completion of any stock exchange listing, or the receipt of any required approval from any stock exchange or
other qualification of such Common Stock under any United States federal or state law rule or regulation as the Company may consider
appropriate, and may require any individual to whom an Award is granted, such individual's beneficiary or legal representative,
as applicable, to make such representations and furnish such information as the Board may consider necessary, desirable or advisable
in connection with the issuance or delivery of the Common Stock in compliance with applicable laws, rules and regulations.
(g)
Non-Uniform
Determinations
.
The Board's determinations under this Plan (including, without limitation, determinations of the
persons to receive Awards, the form, term, provisions, amount and timing of the grant of such Awards and of the agreements evidencing
the same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards
under this Plan, whether or not such persons are similarly situated.
11.
Adjustments upon changes
in stock
.
(a)
Capitalization
Adjustments
.
If any change is made in the Common Stock subject to the Plan, or subject to any Award, without the
receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating dividend, combination of stock, exchange of stock, change
in corporate structure or other transaction), the Plan will be appropriately adjusted in the class(es) and maximum number of securities
subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person pursuant to
subsection 5(c), and the outstanding Awards will be appropriately adjusted in the class(es) and number of securities and price
per stock of Common Stock subject to such outstanding Awards. The Board shall make such adjustments, and its determination shall
be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)
(b)
Dissolution
or Liquidation
.
In the event of a dissolution or liquidation of the Company, then all outstanding Awards shall
terminate immediately prior to such event.
(c)
Asset
Sale, Merger, Consolidation or Reverse Merger
.
In the event of a Change of Control (as defined below), any unvested
Awards shall vest immediately prior to the closing of the Change of Control, and the Board shall have the power and discretion
to provide for the Participant's election alternatives regarding the terms and conditions for the exercise of, or modification
of, any outstanding Awards granted hereunder,
provided
,
however
,
that
such alternatives shall not affect
the then current exercise provisions without such Participant's consent. The Board may provide that Awards granted hereunder must
be exercised in connection with the closing of such transaction, and that if not so exercised such Awards will expire. Any such
determinations by the Board may be made generally with respect to all Participants, or may be made on a case-by-case basis with
respect to particular Participants. For the purpose of this Plan, a "Change of Control" shall have occurred in the event
one or more persons acting individually or as a group (i) acquires sufficient additional stock to constitute more than fifty percent
(50%) of (A) the total Fair Market Value of all Common Stock issued and outstanding or (B) the total voting power of all shares
of capital stock authorized to vote for the election of directors; (ii) acquires, in a twelve (12) month period, thirty-five percent
(35%) or more of the voting power of all shares of capital stock authorized to vote for the election of directors, or alternatively
a majority of the members of the board is replaced during any twelve (12) month period by directors whose appointment was not
endorsed by a majority of the members of the board; or (iii) acquires, during a twelve (12) month period, more than forty percent
(40%) of the total gross fair market value of all of the Company's assets. Notwithstanding the foregoing, the provisions of this
Section 11(c) shall not apply to (i) any transaction involving any stockholder that individually or as a group owns more than
fifty percent (50%) of the outstanding Common Stock on the date this Plan is approved by the Company's stockholders, until such
time as such stockholder first owns less than forty percent (40%) of the total outstanding Common Stock, or (ii) any transaction
undertaken for the purpose of reincorporating the Company under the laws of another jurisdiction, if such transaction does not
materially affect the beneficial ownership of the Company's capital stock.
12.
Amendment of the Plan
and Awards
.
(a)
Amendment
of Plan
.
The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section
11 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of
the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any applicable Nasdaq or securities exchange listing requirements.
(b)
Stockholder
Approval
.
The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval,
including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the
regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c)
Contemplated
Amendments
.
It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary
or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock
Options granted under it into compliance therewith.
(d)
No
Impairment of Rights
.
Rights under any Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless the Participant consents in writing.
(e)
Amendment
of Awards
.
Subject to Section 3(b)(iii), the Board at any time, and from time to time, may amend the terms of any
one or more Awards;
provided
,
however
,
that
the rights under any Award shall not be impaired by any such
amendment unless the applicable Participant consents in writing.
13.
Termination or Suspension
of the Plan
.
(a)
Plan
Term
.
The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate
on the day before the tenth (10th) anniversary of the date the Plan is adopted by the stockholders of the Company. No Awards may
be granted under the Plan while the Plan is suspended or after it is terminated.
(b)
No
Impairment of Rights
.
Suspension or termination of the Plan shall not impair rights and obligations under any Award
granted while the Plan is in effect except with the written consent of the Participant.
(c)
Savings
Clause
.
This Plan is intended to comply in all aspects with applicable laws and regulations. In case any one more
of the provisions of this Plan shall be held invalid, illegal or unenforceable in any respect under applicable law or regulation,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and
the invalid, illegal or unenforceable provision shall be deemed null and void; however, to the extent permissible by law, any
provision which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Plan
to be construed in compliance with all applicable laws so as to foster the intent of this Plan.
14.
Effective Date of the
Plan
.
The Plan shall become
effective as determined by the Board, but no Award shall be exercised (or, in the case of a restricted stock Award, shall be granted)
unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.
15.
Choice of Law
.
The law of the state
of Minnesota shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.