|
·
|
Secured
Convertible Debentures
|
|
1)
|
JGB
entered into an assignment agreement with Crescent, pursuant
to which
Crescent purchased from JGB the June Debentures issued to
JGB. The face value of the June Debentures issued to JGB at the
time of the transaction was $333,333.33 and Crescent paid $250,000
to JGB
for the assignment;
|
|
2)
|
We
entered into a settlement agreement with JGB for the sum of
$83,333.33. We amended the terms of the Old Warrants held by
JGB to remove the ratchet and call provisions and JGB agreed
to release
any shares reserved for issuance of the Old Warrants and to not
exercise
such Old Warrants until we obtain an increase in the authorized
shares of
common stock. Upon obtaining the increase in authorized shares,
we agreed to issue JGB 500,000 shares of restricted common
stock;
|
|
3)
|
We
entered into a first amendment and waiver agreement with Palisades
for the
amendment of the Old Debentures issued to Palisades (the “Palisades
Amendment Agreement”); and
|
|
4)
|
We
entered into a first amendment and waiver agreement with Crescent
for the
amendment of the Old Debentures issued to JGB (and purchased
by Crescent)
and Crescent (the “Crescent Amendment Agreement” and together with the
Palisades Amendment Agreement, the “Restructuring
Amendments”).
|
|
Option
Awards
|
Stock
Awards
|
||||||||
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
|
|
George
Young
|
300,000
|
$0.80
|
October
3, 2015
|
||||||
|
Steven
Prince
|
300,000
|
$0.80
|
October
3, 2015
|
||||||
|
NAME
AND ADRESS
|
|
NUMBER
OF
|
PERCENTAGE
OF
|
|
OF
OWNER
|
TITLE
OF CLASS
|
SHARES
OWNED (1)
|
CLASS
(2)
|
|
George
S. Young
|
Common
Stock
|
3,800,000
(3)
|
3.8%
|
|
1942
Broadway St., Suite 320
|
|
|
|
|
Boulder,
CO 80302
|
|
|
|
|
|
|
|
|
|
Steven
L. Prince
|
Common
Stock
|
300,000
(4)
|
*
|
|
1942
Broadway St., Suite 320
|
|
|
|
|
Boulder,
CO 80302
|
|
|
|
|
All
Officers and Directors
|
Common
Stock
|
4,100,000 (3) (4)
|
4.1%
|
|
As a
Group (2 persons)
|
|
|
|
|
Name
& Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards($)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Pension Value and Non-Qualified Deferred Compensation Earnings
($)
|
All
Other Compensation ($)
|
Total
($)
|
|
George
S. Young, CEO, Principal Executive Officer
|
2006
|
$120,000
|
$2,000
|
$122,000
|
|||||
|
Steven
Prince, VP of Operations
|
2006
|
$108,000
|
$2,000
|
$110,000
|
|
1.
|
Definitions.
|
|
(a)
|
"Board"
- The Board of Directors of the
Company.
|
|
(b)
|
"Code"
- The Internal Revenue Code of 1986, as amended from time to
time.
|
|
(c)
|
"Committee"
- The Compensation Committee of the Company's Board, or such
other
committee of the Board that is designated by the Board to administer
the
Plan, composed of not less than two members of the Board whom
are
disinterested persons, as contemplated by Rule 16b-3 ("Rule
16b-3") promulgated under the Securities Exchange Act of
1934, as
amended (the "Exchange
Act").
|
|
(d)
|
"Company"
– FELLOWS ENERGY LTD. and its subsidiaries including subsidiaries
of
subsidiaries.
|
|
(e)
|
"Exchange Act"
- The Securities Exchange Act of 1934, as amended from time to
time.
|
|
(f)
|
"Fair
Market Value" - The fair market value of the Company's issued and
outstanding Stock as determined in good faith by the Board or
Committee.
|
|
(g)
|
"Grant"
- The grant of any form of stock option, stock award, or stock
purchase
offer, whether granted singly, in combination or in tandem, to
a
Participant pursuant to such terms, conditions and limitations
as the
Committee may establish in order to fulfill the objectives of
the
Plan.
|
|
(h)
|
"Grant
Agreement" - An agreement between the Company and a Participant
that sets forth the terms, conditions and limitations applicable
to a
Grant.
|
|
(i)
|
"Option"
- Either an Incentive Stock Option, in accordance with Section
422 of
Code, or a Nonstatutory Option, to purchase the Company's Stock
that may
be awarded to a Participant under the Plan. A Participant who
receives an
award of an Option shall be referred to as an
"Optionee."
|
|
(j)
|
"Participant"
- A director, officer, employee or consultant of the Company
to whom an
Award has been made under the Plan.
|
|
(k)
|
"Restricted
Stock Purchase Offer" - A Grant of the right to purchase a
specified number of shares of Stock pursuant to a written agreement
issued
under the Plan.
|
|
(l)
|
"Securities
Act" - The Securities Act of 1933, as amended from time
to
time.
|
|
(m)
|
"Stock"
- Authorized and issued or unissued shares of common stock of
the
Company.
|
|
(n)
|
"Stock
Award" - A Grant made under the Plan in stock or denominated
in
units of stock for which the Participant is not obligated to
pay
additional consideration.
|
|
2.
|
Eligibility.
|
|
(a)
|
General: The
persons who shall be eligible to receive Grants shall be directors,
officers, employees or consultants to the Company. The term consultant
shall mean any person, other than an employee, who is engaged
by the
Company to render services and is compensated for such services.
An
Optionee may hold more than one Option. Any issuance of a Grant
to an
officer or director of the Company subsequent to the first registration
of
any of the securities of the Company under the Exchange Act shall
comply
with the requirements of Rule
16b-3.
|
|
(b)
|
Incentive
Stock Options: Incentive Stock Options may only be issued
to employees of the Company. Incentive Stock Options may be granted
to
officers or directors, provided they are also employees of the
Company.
Payment of a director's fee shall not be sufficient to constitute
employment by the Company.
|
|
(c)
|
Nonstatutory
Option: The provisions of the foregoing Section 3(b) shall
not apply to any Option designated as a "Nonstatutory
Option" or which sets forth the intention of the parties that
the
Option be a Nonstatutory Option.
|
|
(d)
|
Stock
Awards and Restricted Stock Purchase Offers: The provisions
of this Section 3 shall not apply to any Stock Award or Restricted
Stock
Purchase Offer under the Plan.
|
|
3.
|
Stock.
|
|
(a)
|
Authorized
Stock: Stock subject to Grants may be either unissued or reacquired
Stock.
|
|
(b)
|
Number
of Shares: Subject to adjustment as provided in Section
5(i) of the Plan, the total number of shares of Stock which may
be
purchased or granted directly by Options, Stock Awards or Restricted
Stock
Purchase Offers, or purchased indirectly through exercise of
Options
granted under the Plan shall not exceed Ten Million
(10,000,000). If any Grant shall for any reason terminate or
expire, any shares allocated thereto but remaining unpurchased
upon such
expiration or termination shall again be available for Grants
with respect
thereto under the
|
|
(c)
|
Plan
as though no Grant had previously occurred with respect to such
shares.
Any shares of Stock issued pursuant to a Grant and repurchased
pursuant to
the terms thereof shall be available for future Grants as though
not
previously covered by a Grant.
|
|
(d)
|
Reservation
of Shares: The Company shall reserve and keep available at
all times during the term of the Plan such number of shares as
shall be
sufficient to satisfy the requirements of the Plan. If, after
reasonable
efforts, which efforts shall not include the registration of
the Plan or
Grants under the Securities Act, the Company is unable to obtain
authority
from any applicable regulatory body, which authorization is deemed
necessary by legal counsel for the Company for the lawful issuance
of
shares hereunder, the Company shall be relieved of any liability
with
respect to its failure to issue and sell the shares for which
such
requisite authority was so deemed necessary unless and until
such
authority is obtained.
|
|
(e)
|
Application
of
Funds: The
proceeds received by the Company from the sale of Stock pursuant
to the
exercise of Options or rights under Stock Purchase Agreements
will be used
for general corporate purposes.
|
|
(f)
|
No
Obligation to Exercise: The issuance of a Grant shall
impose no obligation upon the Participant to exercise any rights
under
such Grant.
|
|
4.
|
Terms
and Conditions of Options. Options granted hereunder shall be
evidenced by
agreements between the Company and the respective Optionees, in
such form
and substance as the Board or Committee shall from time to time
approve.
The form of Incentive Stock Option Agreement attached hereto
as Exhibit
A and the three forms of a Nonstatutory Stock Option Agreement
for
employees, for directors and for consultants, attached hereto
as
Exhibit B-1,Exhibit B-2 and Exhibit B-3,
respectively, shall be deemed to be approved by the Board. Option
agreements need not be identical, and in each case may include
such
provisions as the Board or Committee may determine, but all such
agreements shall be subject to and limited by the following terms
and
conditions:
|
|
(a)
|
Number
of Shares: Each Option shall state the number of shares to which it
pertains.
|
|
(b)
|
Exercise
Price: Each Option shall state the exercise price, which shall
be
determined as follows:
|
|
(i)
|
Any
Incentive Stock Option granted to a person who at the time the
Option is
granted 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 or value of all classes of stock of the Company ("Ten Percent
Holder") shall have an exercise price of no less than 110% of
the Fair
Market Value of the Stock as of the date of grant;
and
|
|
(ii)
|
Incentive
Stock Options granted to a person who at the time the Option
is granted is
not a Ten Percent Holder shall have an exercise price of no less
than 100%
of the Fair Market Value of the Stock as of the date of
grant.
|
|
(c)
|
Medium
and Time of Payment: The exercise price shall become
immediately due upon exercise of the Option and shall be paid
in cash or
check made payable to the Company. Should the Company's outstanding
Stock
be registered under Section 12(g) of the Exchange Act at the
time the
Option is exercised, then the exercise price may also be paid
as
follows:
|
|
(i)
|
in
shares of Stock held by the Optionee for the requisite period
necessary to
avoid a charge to the Company's earnings for financial reporting
purposes
and valued at Fair Market Value on the exercise date,
or
|
|
(d)
|
Term
and Exercise of Options: Any Option granted to an employee
of the Company shall become exercisable over a period of no longer
than
five (5) years. In no event shall any Option be exercisable after
the
expiration of ten (10) years from the date it is granted, and
no Incentive
Stock Option granted to a Ten Percent Holder shall, by its terms,
be
exercisable after the expiration of five (5) years from the date
of the
Option. Unless otherwise specified by the Board or the Committee
in the
resolution authorizing such Option, the date of grant of an Option
shall
be deemed to be the date upon which the Board or the Committee
authorizes
the granting of such Option.
|
|
(e)
|
Termination
of Status as Employee, Consultant or Director: If
Optionee's status as an employee shall terminate for any reason
other than
Optionee's disability or death, then Optionee (or if the Optionee
shall
die after such termination, but prior to exercise, Optionee's
personal
representative or the person entitled to succeed to the Option)
shall have
the right to exercise the portions of any of Optionee's Incentive
Stock
Options which were exercisable as of the date of such termination,
in
whole or in part, within 30 days after such termination (or,
in the event
of "termination for good cause" as that term is defined in Nevada
case law related thereto, or by the terms of the Plan or the
Option
Agreement or an employment agreement, the Option shall automatically
terminate as of the termination of employment as to all shares
covered by
the Option).
|
|
(f)
|
Disability
of Optionee: If an Optionee is disabled (within the meaning
of Section 22(e)(3) of the Code) at the time of termination,
the three (3)
month period set forth in Section 5(e) shall be a period, as
determined by
the Board and set forth in the Option, of not less than six months
nor
more than one year after such
termination.
|
|
(g)
|
Death
of Optionee: If an Optionee dies while employed by, engaged
as a consultant to, or serving as a Director of the Company,
the portion
of such Optionee's Option which was exercisable at the date of
death may
be exercised, in whole or in part, by the estate of the decedent
or by a
person succeeding to the right to exercise such Option
at
|
|
(h)
|
any
time within (i) a period, as determined by the Board and set
forth in the
Option, of not less than six (6) months nor more than one (1)
year after
Optionee's death, which period shall not be more, in the case
of a
Nonstatutory Option, than the period for exercise following termination
of
employment or services, or (ii) during the remaining term of
the Option,
whichever is the lesser. The Option may be so exercised only
with respect
to installments exercisable at the time of Optionee's death and
not
previously exercised by the
Optionee.
|
|
(i)
|
Nontransferability
of Option: No Option shall be transferable by the Optionee,
except by will or by the laws of descent and
distribution.
|
|
(j)
|
Recapitalization: Subject
to any required action of shareholders, the number of shares
of Stock
covered by each outstanding Option, and the exercise price per
share
thereof set forth in each such Option, shall be proportionately
adjusted
for any increase or decrease in the number of issued shares of
Stock of
the Company resulting from a stock split, stock dividend, combination,
subdivision or reclassification of shares, or the payment of
a stock
dividend, or any other increase or decrease in the number of
such shares
affected without receipt of consideration by the Company; provided,
however, the conversion of any convertible securities of the
Company shall
not be deemed to have been "effected without receipt of
consideration" by the Company.
|
|
(k)
|
Modification,
Acceleration, Extension, and Renewal of Options: Subject to
the terms and conditions and within the limitations of the Plan,
the Board
may modify an Option, or, once an Option is exercisable, accelerate
the
rate at which it may be exercised, and may extend or renew outstanding
Options granted under the Plan or accept the surrender of outstanding
Options (to the extent not theretofore exercised) and authorize
the
granting of new Options in substitution for such Options, provided
such
action is permissible under Section 422 of the Code and applicable
state
securities laws. Notwithstanding the provisions of this Section
5(k),
however, no modification of an Option shall, without the consent
of the
Optionee, alter to the Optionee's detriment or impair any rights
or
obligations under any Option theretofore granted under the
Plan.
|
|
(l)
|
Exercise
Before Exercise Date: At the discretion of the Board, the
Option may, but need not, include a provision whereby the Optionee
may
elect to exercise all or any portion of the Option prior to the
stated
exercise date of the Option or any installment thereof. Any shares
so
purchased prior to the stated exercise date shall be subject
to repurchase
by the Company upon termination of Optionee's employment as contemplated
by Section 5(n) hereof prior to the exercise date stated in the
Option and
such other restrictions and conditions as the Board or Committee
may deem
advisable.
|
|
(m)
|
Other
Provisions: The Option agreements authorized under the Plan
shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the Options, as the Board or
the
Committee shall deem advisable. Shares shall not be issued pursuant
to the
exercise of an Option, if the exercise of such Option or the
issuance of
shares thereunder would violate, in the opinion of legal counsel
for the
Company, the provisions of any applicable law or the rules or
regulations
of any applicable governmental or administrative agency or body,
such as
the Code, the Securities Act, the Exchange Act, applicable state
securities laws, Nevada corporation law, and the rules promulgated
under
the foregoing or the rules and regulations of any exchange upon
which the
shares of the Company are listed. Without limiting the generality
of the
foregoing, the exercise of each Option shall be subject to the
condition
that if at any time the Company shall determine that (i) the
satisfaction
of withholding tax or other similar liabilities, or (ii) the
listing,
registration or qualification of any shares covered by such exercise
upon
any securities exchange or under any state or federal law, or
(iii) the
consent or approval of any regulatory body, or (iv) the perfection
of any
exemption from any such withholding, listing, registration, qualification,
consent or approval is necessary or desirable in connection with
such
exercise or the issuance of shares thereunder, then in any such
event,
such exercise shall not be effective unless such withholding,
listing
registration, qualification, consent, approval or exemption shall
have
been effected, obtained or perfected free of any conditions not
acceptable
to the Company.
|
|
(n)
|
Repurchase
Agreement: The Board may, in its discretion, require as a
condition to the Grant of an Option hereunder, that an Optionee
execute an
agreement with the Company, in form and substance satisfactory
to the
Board in its discretion ("Repurchase Agreement"), (i)
restricting the Optionee's right to transfer shares purchased
under such
Option without first offering such shares to the Company or another
shareholder of the Company upon the same terms and conditions
as provided
therein; and (ii) providing that upon termination of Optionee's
employment
with the Company, for any reason, the Company (or another shareholder
of
the Company, as provided in the Repurchase Agreement) shall have
the right
at its discretion (or the discretion of such other shareholders)
to
purchase and/or redeem all such shares owned by the Optionee
on the date
of termination of his or her employment at a price equal to:
(A) the fair
value of such shares as of such date of termination; or (B) if
such
repurchase right lapses at 20% of the number of shares per year,
the
original purchase price of such shares, and upon terms of payment
permissible under the applicable state securities laws; provided
that in
the case of Options or Stock Awards granted to officers, directors,
consultants or affiliates of the Company, such repurchase provisions
may
be subject to additional or greater restrictions as determined
by the
Board or Committee.
|
|
5.
|
Stock
Awards and Restricted Stock Purchase
Offers.
|
|
(a)
|
Types
of Grants.
|
|
(i)
|
Stock
Award. All or part of any Stock Award under the Plan may be
subject to conditions established by the Board or the Committee,
and set
forth in the Stock Award Agreement, which may include, but are
not limited
to, continuous service with the Company, achievement of specific
business
objectives, increases in specified indices, attaining growth
rates and
other comparable measurements of Company performance. Such Awards
may be
based on Fair Market Value or other specified valuation. All
Stock Awards
will be made pursuant to the execution of a Stock Award Agreement
substantially in the form attached hereto as Exhibit
C.
|
|
(ii)
|
Restricted
Stock Purchase Offer. A Grant of a Restricted Stock
Purchase Offer under the Plan shall be subject to such (i) vesting
contingencies related to the Participant's continued association
with the
Company for a specified time and (ii) other specified conditions
as the
Board or Committee shall determine, in their sole discretion,
consistent
with the provisions of the Plan. All Restricted Stock Purchase
Offers
shall be made pursuant to a Restricted Stock Purchase Offer substantially
in the form attached hereto as Exhibit
D.
|
|
(b)
|
Conditions
and Restrictions. Shares of Stock which Participants may
receive as a Stock Award under a Stock Award Agreement or Restricted
Stock
Purchase Offer under a Restricted Stock Purchase Offer may include
such
restrictions as the Board or Committee, as applicable, shall
determine,
including restrictions on transfer, repurchase rights, right
of first
refusal, and forfeiture provisions. When transfer of Stock is
so
restricted or subject to forfeiture provisions it is referred
to as
"Restricted Stock". Further, with Board or Committee
approval, Stock Awards or Restricted Stock Purchase Offers may
be
deferred, either in the form of installments or a future lump
sum
distribution. The Board or Committee may permit selected Participants
to
elect to defer distributions of Stock Awards or Restricted Stock
Purchase
Offers in accordance with procedures established by the Board
or Committee
to assure that such deferrals comply with applicable requirements
of the
Code including, at the choice of Participants, the capability
to make
further deferrals for distribution after retirement. Any deferred
distribution, whether elected by the Participant or specified
by the Stock
Award Agreement, Restricted Stock Purchase Offers or by the Board
or
Committee, may require the payment be forfeited in accordance
with the
provisions of Section 6(c). Dividends or dividend equivalent
rights may be
extended to and made part of any Stock Award or Restricted Stock
Purchase
Offers denominated in Stock or units of Stock, subject to such
terms,
conditions and restrictions as the Board or Committee may
establish.
|
|
(c)
|
Cancellation
and Rescission of Grants. Unless the Stock Award Agreement
or Restricted Stock Purchase Offer specifies otherwise, the Board
or
Committee, as applicable, may cancel any unexpired, unpaid, or
deferred
Grants at any time if the Participant is not in compliance with
all other
applicable provisions of the Stock Award Agreement or Restricted
Stock
Purchase Offer, the Plan and with the following
conditions:
|
|
(i)
|
A
Participant shall not render services for any organization or
engage
directly or indirectly in any business which, in the judgment
of the chief
executive officer of the Company or other senior officer designated
by the
Board or Committee, is or becomes competitive with the Company,
or which
organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial
to or in
conflict with the interests of the Company. For Participants
whose
employment has terminated, the judgment of the chief executive
officer
shall be based on the Participant's position and responsibilities
while
employed by the Company, the Participant's post-employment
responsibilities and position with the other organization or
business, the
extent of past, current and potential competition or conflict
between the
Company and the other organization or business, the effect on
the
Company's customers, suppliers and competitors and such other
considerations as are deemed relevant given the applicable facts
and
circumstances. A Participant who has retired shall be free,
however, to purchase as an investment or otherwise, stock or
other
securities of such organization or business so long as they are
listed
upon a recognized securities exchange or traded over-the-counter,
and such
investment does not represent a substantial investment to the
Participant
or a greater than ten percent (10%) equity interest in the organization
or
business.
|
|
(ii)
|
A
Participant, pursuant to the Company's Proprietary Information
and
Invention Agreement, shall disclose promptly and assign to the
Company all
right, title and interest in any invention or idea, patentable
or not,
made or conceived by the Participant during employment by the
Company,
relating in any manner to the actual or anticipated business,
research or
development work of the Company and shall do anything reasonably
necessary
to enable the Company to secure a patent where appropriate in
the United
States and in foreign countries.
|
|
(iii)
|
Upon
exercise, payment or delivery pursuant to a Grant, the Participant
shall
certify on a form acceptable to the Committee that he or she
is in
compliance with the terms and conditions of the Plan. Failure
to comply
with all of the provisions of this Section 6(c) prior to, or
during the
six months after, any exercise, payment or delivery pursuant
to a Grant
shall cause such exercise, payment or delivery to be rescinded.
The
Company shall notify the Participant in writing of any such rescission
within two years after such exercise, payment or delivery. Within
ten days
after receiving such a notice from the Company, the Participant
shall pay
to the Company the amount of any gain realized or payment received
as a
result of the rescinded exercise, payment or delivery pursuant
to a Grant.
Such payment shall be made either in cash or by returning to
the Company
the number of shares of Stock that the Participant received in
connection
with the rescinded exercise, payment or
delivery.
|
|
(d)
|
Nonassignability.
|
|
(i)
|
Except
pursuant to Section 6(e)(iii) and except as set forth in Section
6(d)(ii),
no Grant or any other benefit under the Plan shall be assignable
or
transferable, or payable to or exercisable by, anyone other than
the
Participant to whom it was granted.
|
|
(ii)
|
Where
a Participant terminates employment and retains a Grant pursuant
to
Section 6(e)(ii) in order to assume a position with a governmental,
charitable or educational institution, the Board or Committee,
in its
discretion and to the extent permitted by law, may authorize
a third party
(including but not limited to the trustee of a "blind" trust),
acceptable
to the applicable governmental or institutional authorities,
the
Participant and the Board or Committee, to act on behalf of the
Participant with regard to such
Awards.
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(e)
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Termination
of Employment. If the employment or service to the Company
of a Participant terminates, other than pursuant to any of the
following
provisions under this Section 6(e), all unexercised, deferred
and unpaid
Stock Awards or Restricted Stock Purchase Offers shall be cancelled
immediately, unless the Stock Award Agreement or Restricted Stock
Purchase
Offer provides otherwise:
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(i)
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Retirement
Under a Company Retirement Plan. When a Participant's
employment terminates as a result of retirement in accordance
with the
terms of a Company retirement plan, the Board or Committee may
permit
Stock Awards or Restricted Stock Purchase Offers to continue
in effect
beyond the date of retirement in accordance with the applicable
Grant
Agreement and the exercisability and vesting of any such Grants
may be
accelerated.
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(ii)
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Rights
in the Best Interests of the Company. When a Participant
resigns from the Company and, in the judgment of the Board or
Committee,
the acceleration and/or continuation of outstanding Stock Awards
or
Restricted Stock Purchase Offers would be in the best interests
of the
Company, the Board or Committee may (i) authorize, where appropriate,
the
acceleration and/or continuation of all or any part of Grants
issued prior
to such termination and (ii) permit the exercise, vesting and
payment of
such Grants for such period as may be set forth in the applicable
Grant
Agreement, subject to earlier cancellation pursuant to Section
9 or at
such time as
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(iii)
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the
Board or Committee shall deem the continuation of all or any
part of the
Participant's Grants are not in the Company's best
interest.
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(iv)
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Death
or Disability of a Participant.
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(1)
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In
the event of a Participant's death, the Participant's estate
or
beneficiaries shall have a period up to the expiration date specified
in
the Grant Agreement within which to receive or exercise any outstanding
Grant held by the Participant under such terms as may be specified
in the
applicable Grant Agreement. Rights to any such outstanding Grants
shall
pass by will or the laws of descent and distribution in the following
order: (a) to beneficiaries so designated by the Participant;
if none,
then (b) to a legal representative of the Participant; if none,
then (c)
to the persons entitled thereto as determined by a court of competent
jurisdiction. Grants so passing shall be made at such times and
in such
manner as if the Participant were
living.
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(2)
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In
the event a Participant is deemed by the Board or Committee to
be unable
to perform his or her usual duties by reason of mental disorder
or medical
condition which does not result from facts which would be grounds
for
termination for cause, Grants and rights to any such Grants may
be paid to
or exercised by the Participant, if legally competent, or a committee
or
other legally designated guardian or representative if the Participant
is
legally incompetent by virtue of such
disability.
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(3)
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After
the death or disability of a Participant, the Board or Committee
may in
its sole discretion at any time (1) terminate restrictions in
Grant
Agreements; (2) accelerate any or all installments and rights;
and (3)
instruct the Company to pay the total of any accelerated payments
in a
lump sum to the Participant, the Participant's estate, beneficiaries
or
representative; notwithstanding that, in the absence of such
termination
of restrictions or acceleration of payments, any or all of the
payments
due under the Grant might ultimately have become payable to other
beneficiaries.
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(4)
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In
the event of uncertainty as to interpretation of or controversies
concerning this Section 6, the determinations of the Board or
Committee,
as applicable, shall be binding and
conclusive.
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6.
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Investment
Intent. All Grants under the Plan are intended to be exempt
from registration under the Securities Act provided by Rule 701
thereunder. Unless and until the granting of Options or sale
and issuance
of Stock subject to the Plan are registered under the Securities
Act or
shall be exempt pursuant to the rules promulgated thereunder,
each Grant
under the Plan shall provide that the purchases or other acquisitions
of
Stock thereunder shall be for investment purposes and not with
a view to,
or for resale in connection with, any distribution thereof. Further,
unless the issuance and sale of the Stock have been registered
under the
Securities Act, each Grant shall provide that no shares shall
be purchased
upon the exercise of the rights under such Grant unless and until
(i) all
then applicable requirements of state and federal laws and regulatory
agencies shall have been fully complied with to the satisfaction
of the
Company and its counsel, and (ii) if requested to do so by the
Company,
the person exercising the rights under the Grant shall (i) give
written
assurances as to knowledge and experience of such person (or
a
representative employed by such person) in financial and business
matters
and the ability of such person (or representative) to evaluate
the merits
and risks of exercising the Option, and (ii) execute and deliver
to the
Company a letter of investment intent and/or such other form
related to
applicable exemptions from registration, all in such form and
substance as
the Company may require. If shares are issued upon exercise of
any rights
under a Grant without registration under the Securities Act,
subsequent
registration of such shares shall relieve the purchaser thereof
of any
investment restrictions or representations made upon the exercise
of such
rights.
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7.
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Amendment,
Modification, Suspension or Discontinuance of the Plan. The
Board may, insofar as permitted by law, from time to time, with
respect to
any shares at the time not subject to outstanding Grants, suspend
or
terminate the Plan or revise or amend it in any respect whatsoever,
except
that without the approval of the shareholders of the Company,
no such
revision or amendment shall (i) increase the number of shares
subject to
the Plan, (ii) decrease the price at which Grants may be granted,
(iii)
materially increase the benefits to Participants, or (iv) change
the class
of persons eligible to receive Grants under the Plan; provided,
however,
no such action shall alter or impair the rights and obligations
under any
Option, or Stock Award, or Restricted Stock Purchase Offer outstanding
as
of the date thereof
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8.
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without
the written consent of the Participant thereunder. No Grant may
be issued
while the Plan is suspended or after it is terminated, but the
rights and
obligations under any Grant issued while the Plan is in effect
shall not
be impaired by suspension or termination of the
Plan.
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9.
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Tax
Withholding. The Company shall have the right to deduct applicable
taxes
from any Grant payment and withhold, at the time of delivery
or exercise
of Options, Stock Awards or Restricted Stock Purchase Offers
or vesting of
shares under such Grants, an appropriate number of shares for
payment of
taxes required by law or to take such other action as may be
necessary in
the opinion of the Company to satisfy all obligations for withholding
of
such taxes. If Stock is used to satisfy tax withholding, such
stock shall
be valued based on the Fair Market Value when the tax withholding
is
required to be made.
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10.
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Availability
of Information. During the term of the Plan and any additional
period
during which a Grant granted pursuant to the Plan shall be exercisable,
the Company shall make available, not later than one hundred
and twenty
(120) days following the close of each of its fiscal years, such
financial
and other information regarding the Company as is required by
the bylaws
of the Company and applicable law to be furnished in an annual
report to
the shareholders of the Company.
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11.
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Notice.
Any written notice to the Company required by any of the provisions
of the
Plan shall be addressed to the chief personnel officer or to
the chief
executive officer of the Company, and shall become effective
when it is
received by the office of the chief personnel officer or the
chief
executive officer.
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12.
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Indemnification
of Board. In addition to such other rights or indemnifications
as they may
have as directors or otherwise, and to the extent allowed by
applicable
law, the members of the Board and the Committee shall be indemnified
by
the Company against the reasonable expenses, including attorneys'
fees,
actually and necessarily incurred in connection with the defense
of any
claim, action, suit or proceeding, or in connection with any
appeal
thereof, to which they or any of them may be a party by reason
of any
action taken, or failure to act, under or in connection with
the Plan or
any Grant granted thereunder, and against all amounts paid by
them in
settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction
of
a judgment in any such claim, action, suit or proceeding, except
in any
case in relation to matters as to which it shall be adjudged
in such
claim, action, suit or proceeding that such Board or Committee
member is
liable for negligence or misconduct in the performance of his
or her
duties; provided that within sixty (60) days after institution
of any such
action, suit or Board proceeding the member involved shall offer
the
Company, in writing, the opportunity, at its own expense, to
handle and
defend the same.
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13.
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Governing
Law. The Plan and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by the Code or the
securities
laws of the United States, shall be governed by the law of the
State of
Nevada and construed accordingly.
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14.
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Effective
and Termination Dates. The Plan shall become effective on the
date it is
approved by the holders of a majority of the shares of Stock
then
outstanding. The Plan shall terminate ten years later, subject
to earlier
termination by the Board pursuant to Section
8.
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15.
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The
foregoing 2007 Incentive
Stock Plan (consisting of 14 pages, including this page) was
duly adopted
and approved by the Board of Directors on [ ],
2007.
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FELLOWS
ENERGY LTD.
a
Nevada corporation
By: /s/
GEORGE S. YOUNG
George
S. Young
Its: Chief
Executive Officer
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