{"id":38505,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/amended-inlet-technologies-inc-stock-option-plan-cisco.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"amended-inlet-technologies-inc-stock-option-plan-cisco","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/amended-inlet-technologies-inc-stock-option-plan-cisco.html","title":{"rendered":"Amended Inlet Technologies, Inc. Stock Option Plan – Cisco"},"content":{"rendered":"

INLET TECHNOLOGIES, INC. <\/strong><\/p>\n

STOCK OPTION PLAN <\/strong><\/p>\n

(as amended and restated)<\/p>\n<\/p>\n\n\n\n
\n

1.<\/p>\n<\/td>\n

Purpose<\/u><\/p>\n

. The Inlet Technologies, Inc. Stock Option Plan (the “Plan”) is established
\nto create an additional incentive for key employees, directors and consultants
\nor advisors of Inlet Technologies, Inc. and any successor corporations or any
\npresent or future parent and\/or subsidiary corporations of such corporation
\n(collectively, the “Company”) to promote the financial success and progress of
\nthe Company. For purposes of the Plan, a parent corporation and a subsidiary
\ncorporation shall be as defined in Sections 424(e) and 424(f) of the Internal
\nRevenue Code of 1986, as amended (the “Code”).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

2.<\/p>\n<\/td>\n

Administration<\/u><\/p>\n

. The Plan shall be administered by the Board of Directors of the Company
\n(the “Board”) and\/or by a duly appointed committee of the Board having such
\npowers as shall be specified by the Board. Any subsequent references herein to
\nthe Board shall also mean the committee if such committee has been appointed
\nand, unless the powers of the committee have been specifically limited, the
\ncommittee shall have all of the powers of the Board granted herein, other than
\npower to terminate or amend the Plan as provided in Paragraph 11 hereof, subject
\nto the terms of the Plan and any applicable limitations imposed by law. All
\nquestions of interpretation of the Plan or of any award granted under the Plan
\nshall be determined by the Board, and such determinations shall be final and
\nbinding upon all persons having an interest in the Plan and\/or any Option (as
\ndefined below). Any officer of the Company shall have the authority to act on
\nbehalf of the Company with respect to any matter, right, obligation or election
\nwhich is the responsibility of or which is allocated to the Company herein,
\nprovided the officer has apparent authority with respect to such matter, right,
\nobligation or election.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

3.<\/p>\n<\/td>\n

Eligibility<\/u><\/p>\n

. The Board may grant options (each an “Option”) to purchase shares of the
\nauthorized but unissued common stock of the Company (the “Stock”), which Options
\nmay be either incentive stock options as defined in Section 422 of the Code (an
\n“Incentive Stock Option”) or nonqualified stock options. Options may be granted
\nto employees, officers, directors, consultants, advisors or other independent
\ncontractors (collectively “persons”). The Board, in its sole discretion, shall
\ndetermine to whom Options are granted (each an “Optionee”). An Option that the
\nBoard intends to be an Incentive Stock Option shall only be granted to an
\nemployee of the Company and shall be subject to and shall be construed
\nconsistently with the requirements of Section 422 of the Code. The Company shall
\nhave no liability to an Optionee, if an Option (or any part thereof) which is
\nintended to be an Incentive Stock Option does not qualify as an Incentive Stock
\nOption. An Optionee may, if otherwise eligible, be granted additional Options.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

4.<\/p>\n<\/td>\n

Shares Subject to Option<\/u><\/p>\n

. Subject to adjustment as provided in Paragraph 9 below, the maximum number
\nof shares of Stock which may be issued pursuant to Options granted under the
\nPlan shall be Five Million One Hundred Forty-Nine Thousand (5,149,000). If any
\noutstanding Option for any reason expires or is terminated or cancelled, the
\nshares of Stock allocable to the unexercised portion of such Option, may again
\nbe subject to an Option. It is intended that the Plan shall constitute a written
\ncompensatory benefit plan within the meaning of Rule 701 promulgated under the
\nSecurities Act of 1933, as amended (“Rule 701”), to the extent applicable, and
\nthat the Plan shall otherwise be administered in compliance with the
\nrequirements of Rule 701. To ensure such compliance, the Company shall maintain
\na record of shares subject to outstanding Options under the Plan and the
\nexercise price of the Options, plus a record of all shares of Stock issued upon
\nthe exercise of the Options and the exercise price of the Options.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

5.<\/p>\n<\/td>\n

Time for Granting Options<\/u><\/p>\n

. All Options shall be granted, if at all, within ten (10) years from the
\nearlier of the date the Plan is adopted by the Board or the date the Plan is
\nduly approved by the shareholders of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n
\n

6.<\/p>\n<\/td>\n

Terms, Conditions and Form of Options<\/u><\/p>\n

. Subject to the provisions of the Plan, the Board shall determine for each
\nOption the number of shares of Stock into which the Option is exercisable,
\nwhether the Option is to be treated as an Incentive Stock Option or as a
\nnonqualified stock option and all other terms and conditions of the Option. Each
\nOption granted pursuant to the Plan shall comply with and be subject to the
\nfollowing terms and conditions:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

Exercise Price<\/u><\/p>\n

. The exercise price for each Option shall be established in the sole
\ndiscretion of the Board; provided, however, that (i) the exercise price per
\nshare for an Incentive Stock Option shall be not less than the fair market value
\nof a share of Stock on the date of grant and (ii) the exercise price per share
\nof an Incentive Stock Option granted to an Optionee who on the date of the grant
\nowns stock possessing more than ten percent (10%) of the total combined voting
\npower of all classes of stock of the Company within the meaning of Section
\n422(b)(6) of the Code (a “Ten Percent Owner Optionee”) shall be not less than
\none hundred ten percent (110%) of the fair market value of a share of Stock on
\nthe date of grant. For this purpose, “fair market value” means the value
\nassigned to the Stock by the Board for any date of grant, as determined pursuant
\nto a reasonable method established by the Board that is consistent with the
\nrequirements of Sections 422 and 424 of the Code and the regulations thereunder
\n(which method may be changed from time to time). Notwithstanding the foregoing,
\nan Option (whether an Incentive Stock Option or a nonqualified stock option) may
\nbe granted by the Board in its discretion with an exercise price lower than the
\nminimum exercise price set forth above if, in the case of an Incentive Stock
\nOption, such Option is granted pursuant to an assumption or substitution for
\nanother option in accordance with the provisions of Section 424(a) of the Code.
\nThe foregoing shall not require that any such assumption or modification will
\nresult in the Option having the same characteristics, attributes or tax
\ntreatment as the Option for which it is substituted.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

Exercise Period of Options<\/u><\/p>\n

. The Board shall have the power to set the times on or within which an
\nOption shall be exercisable or the events upon which an Option shall be
\nexercisable and the term of an Option; provided, however, that (i) no Incentive
\nStock Option shall be exercisable after the expiration of ten (10) years after
\nthe date of grant, (ii) no Incentive Stock Option granted to a Ten Percent Owner
\nOptionee shall be exercisable after the expiration of five (5) years after the
\ndate of grant, (iii) no Option shall be exercisable after the date the
\nOptionee153s employment with the Company is terminated for cause (as determined in
\nthe sole discretion of the Board unless cause is defined in an employment
\nagreement between the Optionee and the Company in which case such definition
\nshall be used); and (iv) each Incentive Stock Option shall terminate and cease
\nto be exercisable no later than three (3) months after the date on which the
\nOptionee terminates employment with the Company, unless the Optionee153s
\nemployment with the Company was terminated as a result of the Optionee153s death
\nor disability (within the meaning of Section 22(e)(3) of the Code), in which
\nevent the Incentive Stock Option shall terminate and cease to be exercisable no
\nlater than twelve (12) months from the date on which the Optionee153s employment
\nterminated. For this purpose, an Optionee153s employment shall be deemed to have
\nterminated as a result of death if the Optionee dies within three (3) months
\nfollowing the Optionee153s termination of employment.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

Payment of Exercise Price<\/u>. Payment of the exercise price
\nfor the number of shares of Stock being purchased pursuant to any Option may
\nconsist entirely of (a) cash; (b) check; (c) subject to any requirements of the
\napplicable laws (including without limitation Section 153 of the Delaware
\nGeneral Corporation Law), delivery of Optionee153s promissory note having such
\nrecourse, interest, security and redemption provisions as the Board determines
\nto be appropriate after taking into account the potential accounting
\nconsequences of permitting an Optionee to deliver a promissory note; (d)
\ncancellation of indebtedness; (e) other shares of stock that have a fair market
\nvalue, as such fair market value determined by the Board on the date of
\nsurrender, equal to the aggregate exercise price of the shares as to which the
\nOption is exercised, provided that in the case of shares acquired, directly or
\nindirectly, from the Company, such shares must have been owned by the Optionee
\nfor more than six months on the date of surrender (or such other period as may
\nbe required to avoid the Company153s incurring an adverse accounting charge); (f)
\nif, as of the date of exercise of an Option the Company then is permitting
\nemployees to engage in a “same-day sale” cashless brokered exercise program
\ninvolving one or more brokers, through such a program that<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

2<\/p>\n

\n\n\n\n
<\/td>\n\n

complies with the applicable laws (including without limitation the
\nrequirements of Regulation T and other applicable regulations promulgated by the
\nFederal Reserve Board) and that ensures prompt delivery to the Company of the
\namount required to pay the exercise price and any applicable withholding taxes;
\nor (g) any combination of the foregoing methods of payment, in each case as the
\nOptionee desires upon exercise of such Optionee153s Option.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(d)<\/p>\n<\/td>\n

$100,000 Limitation<\/u><\/p>\n

. The aggregate fair market value, determined as of the date of grant of the
\nshares of the Stock with respect to which an Incentive Stock Option (determined
\nwithout regard to this subparagraph) is first exercisable during any calendar
\nyear (under this Plan or under any other plan of the Company) by any Optionee
\nshall not exceed $100,000. If such limitation would be exceeded with respect to
\nan Optionee for a calendar year, the Incentive Stock Option shall be deemed a
\nnonqualified stock option to the extent of such excess.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(e)<\/p>\n<\/td>\n

Early Exercise of Option<\/u><\/p>\n

. The Board may provide, in its sole discretion, that any Stock Option may be
\nexercisable pursuant to an early exercise provision in the Stock Option,
\nprovided that the shares of Stock received upon such early exercise shall be
\nsubject to a Stock Restriction Agreement substantially in the form as attached
\nhereto as Exhibit A<\/u><\/strong>. The Board may insert a paragraph
\nsubstantially in the form of the following into a Stock Option to create an
\nearly exercise option:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Early Exercise<\/u>. The Optionee may elect to exercise Optionee153s Option
\nor any portion thereof before it is fully vested and hold such shares of Stock
\nsubject to the provisions of a Restricted Stock Agreement substantially in the
\nform as attached hereto as Exhibit B<\/u><\/strong>.<\/p>\n\n\n\n
<\/td>\n\n

(f)<\/p>\n<\/td>\n

Condition to Exercise<\/u><\/p>\n

. As a condition to the exercise of any Option, each Optionee hereby shall
\nagree (a) to be bound by certain shareholder agreements or such other documents
\nas may be required by the Company from time to time (the “Shareholder
\nAgreements”) , (b) to be subject to all of the restrictions and conditions set
\nforth in such Shareholder Agreements applicable to holders of Common Stock of
\nthe Company, and (c) to execute such further documents as may be necessary to
\nevidence the joinder of the Optionee as a party to such Shareholder Agreements.
\nFurther, all certificates representing shares of Stock issued upon exercise of
\nany Option shall bear such legends as may be required by the Shareholder
\nAgreements.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

7.<\/p>\n<\/td>\n

Forms of Stock Option Agreements<\/u><\/p>\n

. All Options shall be evidenced by a written agreement substantially in the
\nform of incentive or nonqualified stock option agreements attached hereto as (i)
\nExhibit B-1<\/u><\/strong> or Exhibit C-1<\/u><\/strong>, with
\nrespect to the first Option granted to an individual, or (ii)
\nExhibit B-2<\/u><\/strong> or Exhibit C-2<\/u><\/strong>, with
\nrespect to subsequent Options granted to such individual, as applicable, each of
\nwhich are incorporated herein by reference (the “Form Option Agreements”) or
\nsuch other form or forms as may be approved by the Board consistent with the
\nterms of this Plan. The Board shall have the authority from time to time to vary
\nthe terms of the Form Option Agreements either in connection with the grant of
\nan Option or in connection with the authorization of a new standard form or
\nforms; provided, however, that the terms and conditions of such revised or
\namended standard form or forms of stock option agreement shall be in accordance
\nwith the terms of the Plan.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

8.<\/p>\n<\/td>\n

\n

Transfer of Control<\/u> Upon a merger, consolidation,
\ncorporate reorganization, or any transaction in which all or substantially all
\nof the assets or stock of the Company are sold, leased, transferred or otherwise
\ndisposed of (other than a mere reincorporation transaction or one in which the
\nholders of voting capital stock of the Company immediately prior to such merger
\nor consolidations continue to hold at least a majority of the voting power of
\nthe surviving corporation) (a “Transfer of Control”), then, except as otherwise
\nprovided in a particular stock option agreement approved by the Board, any
\nunexercisable portion of an outstanding Option that would otherwise become
\nexercisable within twelve (12) months following the effective time of the
\nTransfer of Control shall become immediately exercisable as of a date prior to
\nthe Transfer of Control, which date shall be determined by the Board. Upon the
\noccurrence<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

3<\/p>\n

\n\n\n\n
<\/td>\n\n

of a Transfer of Control, each outstanding Option, to the extent not
\nexercised prior to the Transfer of Control, shall terminate as of the effective
\ntime of the Transfer of Control, unless such Option is assumed by the successor
\ncorporation (or parent thereof) or replaced with a comparable option to purchase
\nshares of the capital stock of the successor corporation (or parent thereof).
\nThe exercise of any Option that was permissible solely by reason of this
\nParagraph 8 shall be conditioned upon the consummation of the Transfer of
\nControl.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

9.<\/p>\n<\/td>\n

Effect of Change in Stock Subject to Plan<\/u><\/p>\n

. The Board shall make appropriate adjustments in the number and class of
\nshares of the Stock subject to the Plan and to any outstanding Options and in
\nthe option price of any outstanding Options in the event of a stock dividend,
\nstock split, reverse stock split, combination, reclassification or similar
\nchange in the capital structure of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

10.<\/p>\n<\/td>\n

Options Non-Transferable<\/u><\/p>\n

. Except as otherwise provided in a stock option agreement, no Option shall
\nbe assignable or transferable by the Optionee, except by will or by the laws of
\ndescent and distribution. During the lifetime of an Optionee, an Option shall be
\nexercisable only by such Optionee.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

11.<\/p>\n<\/td>\n

Termination or Amendment<\/u><\/p>\n

. The Board may amend, suspend or terminate the Plan or any portion thereof
\nat any time. The Board may amend, modify or terminate any outstanding Option;
\nprovided, however, that no amendment authorized hereby may adversely affect the
\nrights of any Optionee under any then outstanding Option without the consent of
\nthe Optionee, unless such amendment is required to enable an Option designated
\nas an Incentive Stock Option to qualify as an Incentive Stock Option. The Board
\nshall be entitled to create, amend or delete appendices to this Plan as
\nspecified herein.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

12.<\/p>\n<\/td>\n

Withholding<\/u><\/p>\n

. Each Optionee shall pay to the Company, or make provision satisfactory to
\nthe Board for payment of, any taxes required by law to be withheld in connection
\nwith Options to such Optionee no later than the date of the event creating the
\ntax liability. Except as the Board may otherwise provide in an award, when the
\nStock is registered under the Securities Exchange Act of 1934, as amended,
\nOptionees may satisfy such tax obligations in whole or in part by delivery of
\nshares of Stock, including shares retained from the Option creating the tax
\nobligation, valued at their fair market value as determined by, or in a manner
\napproved by, the Board in good faith; provided, however, that the total tax
\nwithholding where stock is being used to satisfy such tax obligations cannot
\nexceed the Company153s minimum statutory withholding obligations (based on minimum
\nstatutory withholding rates for federal and state tax purposes, including
\npayroll taxes, that are applicable to such supplemental taxable income). The
\nCompany may, to the extent permitted by law, deduct any such tax obligations
\nfrom any payment of any kind otherwise due to an Optionee.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

13.<\/p>\n<\/td>\n

Conditions on Delivery of Stock<\/u><\/p>\n

. The Company will not be obligated to deliver any shares of Common Stock
\npursuant to the Plan or to remove restrictions from shares previously delivered
\nunder the Plan until (i) all conditions of the Option have been met or removed
\nto the satisfaction of the Company, (ii) in the opinion of the Company153s
\ncounsel, all other legal matters in connection with the issuance and delivery of
\nsuch shares have been satisfied, including any applicable securities laws and
\nany applicable stock exchange or stock market rules and regulations, and (iii)
\nthe Optionee has executed and delivered to the Company such representations or
\nagreements as the Company may consider appropriate to satisfy the requirements
\nof any applicable laws, rules or regulations.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

14.<\/p>\n<\/td>\n

Right of First Refusal<\/u><\/p>\n

.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

Right of First Refusal<\/u><\/p>\n

. If any Optionee proposes to sell, pledge or otherwise transfer any shares
\nof Stock acquired upon exercise of an Option (the “Exercise Shares”), the
\nCompany shall have the right to repurchase the Exercise Shares under the terms
\nand subject to the conditions set forth in this Paragraph 14 (the “Right of
\nFirst Refusal”).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

Notice of Proposed Transfer<\/u><\/p>\n

. Prior to any proposed transfer of the Exercise Shares, the Optionee shall
\ngive a written notice (the “Transfer Notice”) to the Company describing fully
\nthe proposed transfer, including the number of Exercise Shares, the name and
\naddress of the proposed transferee (the “Proposed Transferee”), the proposed
\ntransfer price and all other material terms and conditions of the proposed
\ntransfer.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

4<\/p>\n

\n\n\n\n
<\/td>\n\n

(c)<\/p>\n<\/td>\n

Exercise of the Right of First Refusal<\/u><\/p>\n

. The Company shall have the right to purchase all, but not less than all, of
\nthe Exercise Shares at the purchase price and on the terms set forth in the
\nTransfer Notice by delivery to the Optionee of a notice of exercise of the Right
\nof First Refusal within thirty (30) days after the date the Transfer Notice is
\ndelivered to the Company. The Company153s exercise or failure to exercise the
\nRight of First Refusal with respect to any proposed transfer described in a
\nTransfer Notice shall not affect the Company153s ability to exercise the Right of
\nFirst Refusal with respect to any proposed transfer described in any other
\nTransfer Notice, whether or not such other Transfer Notice is issued by the
\nOptionee or issued by any other person with respect to a proposed transfer to
\nthe same Proposed Transferee. If the Company exercises the Right of First
\nRefusal, the Company and the Optionee shall thereupon consummate the sale of the
\nExercise Shares to the Company on the terms set forth in the Transfer Notice;
\nprovided however, that if the Transfer Notice provides for the payment for the
\nExercise Shares other than in cash, the Company shall have the option of paying
\nfor the Exercise Shares by the discounted cash equivalent of the consideration
\ndescribed in the Transfer Notice as reasonably determined by the Company. For
\npurposes of the foregoing, cancellation of any indebtedness of the Optionee to
\nthe Company shall be treated as payment to the Optionee in cash to the extent of
\nthe unpaid principal and any accrued interest cancelled.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(d)<\/p>\n<\/td>\n

Failure to Exercise the Right of First Refusal<\/u><\/p>\n

. If the Company fails to exercise the Right of First Refusal within the
\nperiod specified in Paragraph 14(c) above, the Optionee may conclude a transfer
\nto the Proposed Transferee of the Exercise Shares on the terms and conditions
\ndescribed in the Transfer Notice, provided such transfer occurs not later than
\none hundred twenty (120) days following delivery to the Company of the Transfer
\nNotice. Any proposed transfer on terms and conditions different from those
\ndescribed in the Transfer Notice, as well as any subsequent proposed transfer by
\nthe Optionee, also shall be subject to the Right of First Refusal and shall
\nrequire compliance by the Optionee with the procedure described in this
\nParagraph 14.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(e)<\/p>\n<\/td>\n

Transferees of the Transfer Shares<\/u><\/p>\n

. All transferees of the Exercise Shares or any interest therein, other than
\nthe Company, shall be required as a condition of such transfer to agree in
\nwriting (in a form satisfactory to the Company) that such transferee shall
\nreceive and hold such Exercise Shares or interests subject to the provisions of
\nthis Paragraph 14 providing for the Right of First Refusal with respect to any
\nsubsequent transfer.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(f)<\/p>\n<\/td>\n

Transfers Not Subject to the Right of First Refusal<\/u><\/p>\n

. The Right of First Refusal shall not apply to any transfer or exchange of
\nthe Exercise Shares if: (i) such transfer is in connection with a Transfer of
\nControl; (ii) such transfer is to one or more members of the Optionee153s
\nimmediate family (or a trust for their benefit) provided all such transferees
\nagree in writing to the restrictions of Paragraph 14(e); or (iii) such transfer
\nhas been approved by the Board, which approval may be granted or withheld in its
\ncomplete discretion.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(g)<\/p>\n<\/td>\n

Assignment of the Right of First Refusal<\/u><\/p>\n

. The Company shall have the right to assign the Right of First Refusal at
\nany time.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(h)<\/p>\n<\/td>\n

Stock Dividends Subject to First Refusal Right<\/u><\/p>\n

. If, from time to time, there is any stock dividend, stock split,
\nrecapitalization, reclassification or other change in the character or amount of
\nany of the outstanding stock of the Company, the stock of which is subject to
\nthe provisions of an option agreement issued pursuant to the Plan, then, in such
\nevent, any and all new substituted or additional securities to which the
\nOptionee is entitled by reason of the Optionee153s ownership of the shares
\nacquired upon exercise of an Option shall be immediately subject to the Right of
\nFirst Refusal with the same force and effect as the shares subject to the Right
\nof First Refusal immediately before such event.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

5<\/p>\n

\n\n\n\n
<\/td>\n\n

(i)<\/p>\n<\/td>\n

Early Termination of the Right of First Refusal<\/u><\/p>\n

. The other provisions of this Paragraph 14 notwithstanding, the Right of
\nFirst Refusal shall terminate, and be of no further force and effect, upon the
\nearlier of (i) the occurrence of a Transfer of Control, unless the surviving,
\ncontinuing, successor, or purchasing corporation, as the case may be, assumes
\nthe Company153s rights and obligations under the Plan or (ii) the existence of a
\npublic market for the class of shares subject to the Right of First Refusal. A
\n“public market” shall be deemed to exist if (x) such stock is listed on a
\nnational securities exchange (as that term is used in the Exchange Act) or (y)
\nsuch stock is traded on the over-the-counter market and prices therefor are
\npublished daily on business days in a recognized financial journal.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(j)<\/p>\n<\/td>\n

Escrow<\/u><\/p>\n

. To ensure shares of Stock subject to Right of First Refusal will be
\navailable for repurchase, the Company may require an Optionee to deposit
\ncertificates evidencing the Exercise Shares in escrow with the Company or an
\nagent of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

15.<\/p>\n<\/td>\n

Legends<\/u><\/p>\n

. The Company may at any time place legends referencing any applicable
\nfederal or state securities law restriction on all certificates representing
\nshares of stock subject to the provisions of this Option Agreement. The Optionee
\nshall, at the request of the Company, promptly present to the Company any and
\nall certificates representing shares acquired pursuant to the Option in the
\npossession of the Optionee in order to effectuate the provisions of this
\nParagraph. Unless otherwise specified by the Company, legends placed on such
\ncertificates may include, but shall not be limited to, the following:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
\nBEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
\nSOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
\nREGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SHARES, THE SALE IS MADE IN
\nACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE CORPORATION RECEIVES
\nAN OPINION OF COUNSEL FOR THE HOLDER OF THESE SHARES REASONABLY SATISFACTORY TO
\nTHE CORPORATION, STATING THAT SUCH SALE, TRANSFER ASSIGNMENT OR HYPOTHECATION IS
\nEXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
\nACT.<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
\nTO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE
\nSET FORTH IN THE CORPORATION153S STOCK OPTION PLAN AND AN AGREEMENT BETWEEN THE
\nCORPORATION AND THE REGISTERED HOLDER, OR SUCH HOLDER153S PREDECESSOR IN INTEREST,
\nA COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.<\/strong>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(c)<\/p>\n<\/td>\n

THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY
\nTHE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK
\nOPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS
\nAMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE
\nCORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER
\nHEREOF MADE ON OR BEFORE THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED
\nUNDER THE OPTION IN THE REGISTERED HOLDER153S NAME (AND NOT IN THE NAME OF ANY
\nNOMINEE) FOR A PERIOD OF ONE YEAR FROM THE DATE OF EXERCISE OF THE OPTION OR TWO
\nYEARS FROM THE DATE OF GRANT OF THE OPTION. <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

6<\/p>\n

\n\n\n\n
\n

16.<\/p>\n<\/td>\n

Initial Public Offering<\/u><\/p>\n

. The event of an initial public offering of stock made by the Company under
\nthe Securities Act, Optionee shall not offer, sell, contract to sell, pledge,
\nhypothecate, grant any option to purchase or make any short sale of, or
\notherwise dispose of any shares of stock of the Company or any rights to acquire
\nstock of the Company for such period of time as may be established by the
\nunderwriter for such initial public offering.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

17.<\/p>\n<\/td>\n

Miscellaneous<\/u><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

Nothing in this Plan or any Option granted hereunder shall confer upon any
\nOptionee any right to continue in the employ of the Company, or to serve as a
\ndirector, consultant or advisor thereof, or interfere in any way with the right
\nof the Company to terminate such Optionee153s employment at any time. Unless
\nspecifically provided otherwise, no grant of an Option shall be deemed salary or
\ncompensation for the purpose of computing benefits under any employee benefit
\nplan or other arrangement of the Company for the benefit of its employees unless
\nthe Company shall determine otherwise. No Optionee shall have any claim to an
\nOption until it is actually granted under the Plan. To the extent that any
\nperson acquires a right to receive payments from the Company under the Plan,
\nsuch right shall, except as otherwise provided by the Board, be no greater than
\nthe right of an unsecured general creditor of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

The Plan and the grant of Options hereunder shall be subject to all
\napplicable federal and state laws, rules, and regulations and to such approvals
\nby any United States government or regulatory agency as may be required.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

The terms of the Plan shall be binding upon the Company, and its successors
\nand assigns.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

This Plan and all awards taken hereunder shall be governed by the laws of the
\nState of North Carolina, without regard to the conflicts of laws of North
\nCarolina, without regard to the conflicts of laws rules of North Carolina.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(e)<\/p>\n<\/td>\n

\n

If any provision of this Plan or a Form Option Agreement is or becomes or is
\ndeemed invalid, illegal or unenforceable in any jurisdiction, or would
\ndisqualify the Plan or any Form Option Agreement under any law deemed applicable
\nby the Board, such provision shall be construed or deemed amended to conform to
\napplicable laws or if it cannot be construed or deemed amended without, in the
\ndetermination of the Board, materially altering the intent of the Plan or the
\nForm Option Agreement, it shall be stricken and the remainder of the Plan or the
\nForm Option Agreement shall remain in full force and effect.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

(f)<\/p>\n<\/td>\n

\n

The Board may incorporate additional or alternative provisions for this Plan
\nwith respect to residents of one or more individual states to the extent
\nnecessary or desirable under state securities laws. Such provisions shall be set
\nout in one or more appendices hereto which may be amended or deleted by the
\nBoard from time to time.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that
\nthe foregoing Plan was duly adopted by the Board of Directors of the Company on
\nthe 9th day of September, 2003 and approved by the shareholders of the Company
\non the 9th day of September, 2003.<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
INLET TECHNOLOGIES, INC.<\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

Fred D. Hutchison, Secretary<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

7<\/p>\n

\n

APPENDIX A <\/strong><\/p>\n

INLET TECHNOLOGIES, INC. <\/strong><\/p>\n

STOCK OPTION PLAN (the “Plan”) <\/strong><\/p>\n

Provisions Applicable to California Residents
\n<\/strong><\/p>\n

Notwithstanding anything to the contrary otherwise appearing the Plan, the
\nfollowing provisions shall apply to any stock option or other award granted
\nunder the Plan to a resident of the State of California and, in the event of any
\nconflict or inconsistency between the following provisions and the provisions
\notherwise appearing in the Plan, the following provisions shall control, solely
\nwith respect to options or other awards granted under the Plan to residents of
\nthe State of California:<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

At no time shall the total number of shares of Company stock
\nissuable upon exercise of all outstanding stock options granted pursuant to this
\nPlan and the total number of shares provided for under any bonus or similar plan
\nor agreement of the Company exceed the limitations set forth in Rule 260.140.45
\npromulgated under the California Code, based on the number of shares of the
\nCompany which are outstanding at the time the calculation is made.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

The exercise price of an option granted to a California resident
\nmay not be less than 85% of the “fair value” (as defined by Rule 260.140.50
\npromulgated under the California Code) of the Company153s common stock at the time
\nthe option is granted (or 110% of the “fair value” in the case of any person who
\nowns stock possessing more than 10% of the total combined voting power of all
\nclasses of stock of the Company or its parent or subsidiary corporations at the
\ntime of such grant).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

The exercise period of a stock option granted to a California
\nresident shall be no longer than 120 months from the date the option is granted.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

An option granted to a California resident shall not be
\ntransferable, other than by will or the laws of descent and distribution, or as
\npermitted by Rule 701 of the Securities Act of 1933, as amended.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

An option granted to a California resident shall become
\nexercisable at the rate of at least 20% per year over 5 years from the date the
\noption is granted, subject to reasonable conditions such as continued
\nemployment. However, in the case of an option granted to a California resident
\nwho is an officer, director, or consultant of the Company or any of its
\naffiliates, the option may become fully exercisable, subject to reasonable
\nconditions such as continued employment, at any time or during any period
\nestablished by the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Unless employment is terminated for cause as defined by
\napplicable law, the terms of the Plan or stock option agreement or a contract of
\nemployment, the right to exercise an option granted to a California resident in
\nthe event of termination of such optionee153s employment (to the extent that such
\noptionee is otherwise entitled to exercise on the date of termination of
\nemployment) shall terminate as follows:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

At least 6 months from the date of termination if termination
\nwas caused by death or disability; or<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

At least 30 days from the date of termination if termination was
\ncaused by an event other than death or disability.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

The Plan shall terminate with respect to California residents on
\nthe earlier of ten years after the date the Plan is adopted or the date the Plan
\nis approved by the shareholders of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

The Plan shall be available to California residents only if the
\nshareholders of the Company approve the Plan within 12 months before or after
\nthe date the Plan is adopted. Any option exercised by a California resident
\nbefore such stockholder approval is obtained shall be rescinded if such
\nstockholder approval is not subsequently obtained and such shares shall not be
\ncounted in determining whether the required stockholder approval is obtained.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

8<\/p>\n

\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Each California resident participating in the Plan will be
\nprovided with a copy of the Company153s annual financial statements (which need
\nnot be audited). The Company shall not be required to provide such statements to
\nkey employees whose duties with the Company assure access to equivalent
\ninformation.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

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