Nation Energy (NEGY) DEF 14A Definitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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NATION ENERGY INC.

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NATION ENERGY INC.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON FRIDAY, NOVEMBER 18, 2016

To Our Shareholders:

Notice is hereby given that the annual and special meeting (the “Meeting”) of the shareholders of Nation Energy Inc. (“we”, “us”, “our”, “Nation” or the “Company”) will be held at the offices of PointAcross Info Network, LLC, 25 Edwards Court, Burlingame, California 94010 at 4:15 p.m. (Pacific time) on Friday, November 18, 2016 for the following purposes:

1.To elect John R. Hislop, David N. Siegel, and Darrel J. Causbrook as directors;

2.To ratify the appointment of our independent registered public accounting firm;

3.To approve our proposed director and officer equity compensation plan; and

4.To transact such other business, if any, as may properly come before the Meeting.

The accompanying proxy statement provides additional information in relation to the Meeting and is supplemental to, and expressly made part of, the Notice of Annual and Special Meeting. These items of business are more fully described in the proxy statement accompanying this Notice.

Only shareholders of record at the close of business on October 20, 2016 are entitled to notice of and to vote at the Meeting. Whether or not you expect to attend the Meeting in person, the Company urges you to submit your vote as promptly as possible by following instructions provided in the proxy card. You may revoke your proxy at any time before the Meeting. If your shares are held in the name of a broker, bank, or other nominee, please follow the instructions in the voting instruction card furnished to you by such record holder. Even if you have voted by proxy, you may still vote in person if you attend the Meeting. Please note, however, that if your shares are held of record by a broker, bank, or other nominee and you wish to vote at the Meeting, you must obtain a valid proxy issued in your name from that record holder.

By Order of the Board of Directors

            /s/ David N. Siegel                                           

David N. Siegel

Chairman of the Board

November 1, 2016

NATION ENERGY INC.

PROXY STATEMENT

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOVEMBER 18, 2016

Questions and Answers about the Meeting of Shareholders

Why am I receiving these materials?

The board of directors of Nation Energy Inc. (“we”, ���us”, “our”, “Nation” or the “Company”) is soliciting proxies for use at the annual and special meeting to be held on Friday, November 18, 2016, or at any adjournment of the annual and special meeting (the “Meeting”) from shareholders of shares of common stock of our company. These materials were first sent or given to our shareholders on or about November 7, 2016.

What is included in these materials?

These materials include:

• the notice of the Meeting of shareholders;
• this proxy statement for the Meeting of shareholders;
• the proxy card; and
• our annual report on Form 10-K for the year ended March 31, 2016, as filed with the Securities and Exchange Commission on June 29, 2016, with an annual report to security holders addendum.

Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be Held on Friday, November 18, 2016

Above materials are also available at http://nationenergy.com/agm

The annual report on Form 10-K accompanies this proxy statement, but does not constitute a part of the proxy soliciting material.

What items will be voted at the Meeting?

Our shareholders will vote on:

1.the election of John R. Hislop, David N. Siegel, and Darrel J. Causbrook as directors;

2.the ratification of the appointment of our independent registered public accounting firm; and

3.the approval of our proposed director and officer equity compensation plan.

What do I need to do now?

We urge you to carefully read and consider the information contained in this proxy statement. We request that you cast your vote on the proposals described in this proxy statement. You are invited to attend the Meeting, but you do not need to attend the Meeting in person to vote your shares of our common stock. Even if you do not plan to attend the Meeting, please vote by proxy by following instructions provided in the proxy card.

Who can vote at the Meeting?

Our board of directors has fixed the close of business on October 20, 2016 as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Meeting or any adjournment. If you were a shareholder of record on the record date, you are entitled to vote at the Meeting.

As of the record date, 1,050,020,000 shares of our common stock were issued and outstanding and, therefore, a total of 1,050,020,000 votes are entitled to be cast at the Meeting.

How many votes do I have?

On each proposal to be voted upon, you have one vote for each share of our common stock that you owned on the record date.

How do I vote my shares?

If you are a shareholder of record, you may vote in person at the Meeting or by proxy.

• To vote in person, come to the Meeting, and we will give you a ballot when you arrive.
• If you do not wish to vote in person or if you will not be attending the Meeting, you may vote by proxy by following instructions provided in the proxy card.

If you hold your shares of our common stock in “street name” and:

• you wish to vote in person at the Meeting, you must obtain a valid proxy from your broker, bank, or other nominee that holds your shares of our common stock giving you the right to vote the shares of our common stock at the Meeting.
• you do not wish to vote in person or you will not be attending the Meeting, you must vote your shares of our common stock in the manner prescribed by your broker, bank or other nominee. Your broker, bank or other nominee should have enclosed or otherwise provided a voting instruction card for you to use in directing the broker, bank or nominee how to vote your shares of our common stock.

What is the difference between a shareholder of record and a “street name” holder?

If your shares of our common stock are registered directly in your name with our transfer agent, Interwest Transfer Co., Inc., then you are a shareholder of record with respect to those shares.

If your shares of our common stock are held in a stock brokerage account or by a bank, or other nominee, then the broker, bank, or other nominee is the shareholder of record with respect to those shares. However, you still are the beneficial owner of those shares, and your shares are said to be held in “street name”. Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, or other nominee how to vote their shares. Street name holders are also invited to attend the Meeting.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, it means that you hold shares of our common stock registered in more than one name or in different accounts. To ensure that all of your shares are voted, please vote by proxy by following instructions provided in each proxy card. If some of your shares are held in “street name”, you should have received voting instruction with these materials from your broker, bank or other nominee. Please follow the voting instruction provided to ensure that your vote is counted.

What vote is required for the election of directors or for the approval of a proposal?

Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.  To be elected, a nominee shall have received a plurality of the votes cast by holders of shares entitled to vote in the election.  There is no cumulative voting in the election of directors.

Any proposals for approval of amendments of our articles of incorporation require the affirmative vote of shareholders holding shares in our company entitling them to exercise at least a majority of the voting power.  This means that each proposal must receive “For” votes from the holders of at least 525,010,001 shares of our common stock.

All other proposals require the affirmative vote of the holders of a majority of the stock having voting power in person or represented by proxy at the Meeting. Therefore, for the other proposals to be approved, each proposal must receive more “For” votes than the combined votes of “Against” votes and votes that are abstained.

How are votes counted?

For the election of directors, you may vote “For” or “Withhold” for each nominee.  Votes that are withheld will not be counted towards the vote total for the election of directors.  Broker non-votes, if any, will not be counted towards the vote total for the election of directors and thus have no effect on the outcome of the vote on the election of directors.

For all other proposals, you may vote “For”, “Against”, or “Abstain” for each proposal. Votes that are abstained will be counted towards the vote total for the proposal and thus have the same effect as “Against” votes.  Broker non-votes, if any, will not be counted towards the vote total for the proposals and thus have no effect on the outcome of the vote on the proposals.

A “broker non-vote” occurs when a broker, bank, or other nominee holding shares for a beneficial owner in street name does not vote on a particular proposal because it does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner of those shares, despite voting on at least one other proposal for which it does have discretionary authority or for which it has received instructions.

What happens if I do not make specific voting choices?

If you are a shareholder of record and you submit your proxy without specifying how you want to vote your shares of our common stock, then the proxy holder will vote your shares in the manner recommended by our board of directors.

If you hold your shares in street name and you do not give instructions to your broker, bank or other nominee to vote your shares, under the rules that govern brokers, banks, and other nominees who are the shareholders of record of the shares held in street name, it generally has the discretion to vote uninstructed shares on routine matters but has no discretion to vote them on non-routine matters.

What is the quorum requirement?

A quorum of shareholders is necessary for the transaction of business at the Meeting.  Shareholders holding at least a majority of the shares of our common stock issued and outstanding and entitled to vote, present in person or represented by proxy, constitute a quorum at the Meeting. Your shares will be counted towards the quorum requirement only if you or the registered holder of your shares, properly vote by proxy or are present in person at the Meeting.  Votes that are abstained and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the shareholders entitled to vote at the Meeting, present in person or represented by proxy, will have power to adjourn the meeting without notice other than announcement at the meeting, until a quorum is present or represented.

How does the board of directors recommend that I vote?

Our board of directors recommends that you vote your shares:

·“For” the election of John R. Hislop, David N. Siegel and Darrel J. Causbrook as directors;

·“For” the ratification of the appointment of the independent registered public accounting firm; and

·“For” the approval of our proposed director and officer equity compensation plan.

Can I change my vote after submitting my proxy?

Yes. You may revoke your proxy and change your vote at any time before the final vote at the Meeting. If you are a shareholder of record, you may vote by proxy again on a later date, or by attending the Meeting and voting in person. Your attendance at the Meeting will not automatically revoke your proxy unless you vote again at the Meeting or specifically request in writing that your prior proxy be revoked. You may also request that your prior proxy be revoked by delivering us, at RPO Box 60610 Granville Park, Vancouver, British Columbia V6H 4B9, Attention: President, a written notice of revocation prior to the Meeting.

If you hold your shares in street name, you will need to follow the voting instruction provided by your broker, bank or other nominee regarding how to revoke or change your vote.

How can I attend the Meeting?

You may call us at 604.331.3399 if you want to obtain information or directions to be able to attend the Meeting and vote in person.

You may be asked to present valid picture identification, such as a driver’s license or passport, before being admitted to the Meeting. If you hold your shares in street name, you also will need proof of ownership to be admitted to the Meeting. A recent brokerage statement or letter from your broker, bank or other nominee is an example of proof of ownership.

Who pays for the cost of proxy preparation and solicitation?

We pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokers, banks or other nominees for forwarding proxy materials to street name holders.

We are soliciting proxies primarily by mail. In addition, our directors, officers and regular employees may solicit proxies by telephone, facsimile, mail, other means of communication or personally. These individuals will receive no additional compensation for such services.

We will ask brokers, banks, and other nominees to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. We will reimburse them for their reasonable expenses.

Forward-Looking Statements

This proxy statement contains forward-looking statements. These statements relate to future events. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

References in this proxy statement to “$” refer to the currency of the United States of America.  References to AUD$ refer to the currency of Australia.

VOTING SECURITIES

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of October 20, 2016, certain information with respect to the beneficial ownership of our common stock by each shareholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our directors and executive officers and by our directors and executive officers as a group.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership(1)		Percent of Class(1)
Common Stock	John R. Hislop PO Box 7814 Ringwood, UK BH24 9FF	145,403,500	Direct	13.848%
Common Stock	Paltar Petroleum Limited	900,000,000	Direct	85.713%
Common Stock	Directors and Current Executive  Officers as a group (1 person)	145,403,500	Direct	13.848%

(1) Percentage of ownership is based on 1,050,020,000 shares of our common stock issued and outstanding as of October 20, 2016. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares of our common stock, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of our common stock subject to stock options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such stock option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

Changes in Control

On September 29, 2016, as contemplated under the third amended and restated agreement between the Company and Paltar Petroleum Limited (“Paltar”) dated August 30, 2015, and as further amended (the “Third Agreement”), we issued 900,000,000 shares of common stock to Paltar at a value of $0.03 and one-third cent per share (“The Paltar Common Stock Issuance”), subject to the restrictions on the transfer of shares as set forth in the Third Agreement.

Upon the issuance to Paltar, it acquired control of the Company, as it now holds 85.7% of the issued and outstanding voting common stock of the Company. The consideration used by Paltar was its agreement, under the Third Agreement and those certain earning agreements dated May 31, 2016 (the “Earning Agreements”), to transfer certain Australian oil and gas exploration and development permits and related assets to Nation Australia pursuant to the terms of the Earning Agreements. As the source of its consideration, Paltar has received certain exploration permits from the Northern Territory of Australia and has subjected those permits, and certain other applications for exploration permits, to the terms of the Earning Agreements.

Prior to The Paltar Common Stock Issuance, Mr. John Hislop held control of the Company by virtue of his then-ownership of 96.92% of the then-issued-and-outstanding voting common stock of the Company.

The Company is not aware of any arrangements among members of both the former and new control groups and their associates with respect to election of directors. Regarding other matters, the terms of the Third Agreement provide restrictions on resale of the common stock of the Company held by Mr. Hislop and by Paltar.

Proposal No. 1
Election of Directors

Our board of directors has nominated John R. Hislop, David N. Siegel and Darrel J. Causbrook for election as directors. Unless otherwise directed, the proxy holder will vote the proxies received by him for John R. Hislop, David N. Siegel and Darrel J. Causbrook.

Management has no reason to believe that any of the nominees is unable or unwilling to serve, if elected. However, in the event that any of the nominees should become unable or unwilling to serve as a director, the proxy will be voted for the election of such person or persons as shall be designated by the board of directors.

Our Board of Directors unanimously recommends that you vote FOR each of the three nominees.

Nominee

Name	Age	Positions Held with Our Company
John R. Hislop	63	President, Chief Executive Officer, Chief Financial Officer, Vice President, Secretary and Director
David N. Siegel	54	Chairman of the Board and Director
Darrel J. Causbrook	60	Director

The following is a brief account of the education and business experience during the past five years of the nominees, indicating the principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

John R. Hislop, interim president and chief executive officer, chief financial officer, vice president, secretary and director

Mr. Hislop has been the President and Chief Executive Officer of our company since March 15, 2016, Vice President of our company since September 15, 2015  and the Chief Financial Officer, Secretary and a Director of our company since June 1999. Mr. Hislop was also President and Chief Executive Officer of our company from October 22, 2003 to September 15, 2015.  Since 1990, Mr. Hislop has been working as an independent financial consultant and has served as an officer and director of various emerging growth companies.  Mr. Hislop is currently serving as a Director and/or Officer on the following company: Director of XXL Energy Corp. (formerly Exxel Energy Corp.) since October 15, 2001, Chairman of the Board of XXL Energy Corp. (formerly Exxel Energy Corp.) since July 27, 2006, President and Chief Executive Officer of XXL Energy Corp. (formerly Exxel Energy Corp.) since December 31, 2008.  In the past five years, Mr. Hislop has also served as a director of the following companies: formerly a Director of Patriot Petroleum Corp. from April 7, 1999 to February 16, 2011 (Mr. Hislop also served as President and Chief Executive Officer of Patriot Petroleum Corp. from October 22, 2003 to November 26, 2010); and formerly a Director of Q Investments Ltd., (formerly Cubix Investments Ltd.), an investment holding company for various public oil and gas companies, from February 1994 to December 2014.  Mr. Hislop trained as a Chartered Accountant with Ernst & Young and has a bachelor of Commerce in Finance from the University of British Columbia.We believe Mr. Hislop is qualified to serve on our board of directors because of his knowledge of our company’s history and current operations, which he gained from working for our company as described above, in addition to his education and business experience as described above.

David N. Siegel, chairman of the board and director

Mr. Siegel has been the Chairman of the Board and a Director of our company since 2015.  He currently

serves as Chief Executive Officer of AWAS, one of the ten largest global aircraft leasing firms with $8 BB is assets. Prior to AWAS, Siegel served for four years as President and Chief Executive Officer of Frontier Airlines, a private equity backed ultra-low cost carrier based in Denver, transforming it from the brink of bankruptcy to one of the world's most profitable airlines. Over the past 20 years Mr. Siegel has served as Chief Executive Officer of several travel and aviation related companies including: XOJET, Inc., gategroup AG, US Airways, Avis Budget Group, Inc., and Continental Express. Mr. Siegel also served in various senior management roles at Continental Airlines and Northwest Airlines. He began his career as a consultant with Bain & Company. He earned a master’s degree in business administration from Harvard Business School, with first-year honors, and a Bachelor of Science degree, magna cum laude, in applied mathematics-economics from Brown University.

Mr. Siegel recently served as a board member of URS Corporation (NYSE: URS) and for the past eight years has served on the Advisory Board of Trilantic Capital Partners, formerly Lehman Brothers Private Equity.

We believe Mr. Seigel is qualified to serve on our board of directors because of his education and business experience as described above.

Darrel J. Causbrook, director

Mr. Causbrook has been a Director of our company since 2015.  Darrel Causbrook is a Chartered Accountant with over 30 years of experience in the accountancy profession, having worked for both large and mid-sized accounting firms.  Over 10 years ago, Darrel established his own accounting practice (Causbrook and Associates), providing business and strategic advice to a variety of industries. Darrel’s professional interest includes financial reporting and corporate governance.

He holds a Bachelor of Commerce Degree from the University of Wollongong (1982), is a Fellow of Institute of Chartered Accountants in Australia, Fellow of CPA Australia and Fellow of the Taxation Institute of Australia and is a member of Australian Institute of Company Directors.

We believe Mr. Causbrook is qualified to serve on our board of directors because of his education and business experience as described above.

Term of Office

The directors serve until their successors are elected by the shareholders.  Vacancies on the Board of Directors may be filled by appointment of the majority of the continuing directors.  The executive officers serve at the discretion of the Board of Directors.

Family Relationships

None.

Involvement in Certain Legal Proceedings

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder is a party adverse to our company or any of our subsidiaries or has a material interest adverse to our company or any of our subsidiaries.

Our directors, executive officers and proposed directors have not been involved in any of the following events during the past ten years:

1.	any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2.	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
4.	being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
5.	being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
6.	being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the year ended March 31, 2016, all filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with other than as disclosed in the table below:

Name	Number of Late Reports	Number of Transactions Not Reported on a Timely Basis	Failure to File Requested Forms
Darrel J. Causbrook	Nil	Nil	1
Marc A. Bruner	1	Nil	Nil
Carmen J. Lotito	1	Nil	Nil

Board and Committee Meetings

All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors.  Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Wyoming corporate law and the By-laws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

Board Leadership Structure

The positions of President and Chief Executive Officer were held by Marc A. Bruner, also a director, from September 15, 2015 until Mr. Bruner resigned from his roles as President, Chief Executive Officer and Director effective March 15, 2016. Currently, John R. Hislop holds the positions of interim President, interim Chief Executive Officer, Chief Financial Officer, Vice President, Secretary and director. David N. Siegel is currently the Chairman of the Board. We have determined that the leadership structure of our board of directors is appropriate, especially given the early stage of our development and the size of our company.

Director Independence

We currently act with three directors, John R. Hislop, David N. Siegel and Darrel J. Causbrook.  Marc A. Bruner resigned from his position as director effective March 15, 2016.  Our common stock is quoted on the OTCQB operated by the OTC Markets Group, which does not impose any director independence requirements. Under NASDAQ rule 5605(a)(2), a director is not independent if he or she is also an executive officer or employee of the corporation or was, at any time during the past three years, employed by the corporation. Using this definition of independent director, Mr. Hislop is not independent because he is an executive officer.  At the Meeting we intend to elect Mr. Hislop, Mr. Siegel and Mr. Causbrook as our directors. 

Orientation and Continuing Education

We have an informal process to orient and educate new recruits to the board regarding the role of the board, our committees and our directors, as well as the nature and operations of our business.  This process provides for an orientation with key members of the management staff, and further provides access to materials necessary to inform them of the information required to carry out their responsibilities as a board member.  This information includes the most recent board approved budget, the most recent annual report, the audited financial statements and copies of the interim quarterly financial statements.

The board does not provide continuing education for its directors.  Each director is responsible to maintain the skills and knowledge necessary to meet his or her obligations as directors.

Nomination of Directors

There have been no material changes to the procedures by which our shareholders may recommend nominees to our board of directors during the year ended March 31, 2016. Shareholders may contact our interim President, John Hislop, to recommend nominees to our board of directors.

The board is responsible for identifying new director nominees.  In identifying candidates for membership on the board, the board takes into account all factors it considers appropriate, which may include strength of character, mature judgment, career specialization, relevant technical skills, diversity and the extent to which the candidate would fill a present need on the board.  As part of the process, the board, together with management, is responsible for conducting background searches, and is empowered to retain search firms to assist in the nominations process.  Once candidates have gone through a screening process and met with a number of the existing directors, they are formally put forward as nominees for approval by the board.

Compensation

The board is responsible for determining compensation for the directors and executive officers of our company to ensure it reflects the responsibilities and risks of being a director or executive officer, as applicable, of a public company.  Our board of directors believes the executive equity compensation plan further described herein is an appropriate plan to ensure the retention of our current directors and executive officers.  For more information on said plan, see “Proposal No. 3, Approval of Executive Equity Compensation Plan.”

Assessments

The board intends that individual director assessments will eventually be conducted by other directors, taking into account each director’s contributions at board meetings, service on committees, experience base, and their general ability to contribute to one or more of our company’s major needs.  However, due to our stage of development and our need to deal with other urgent priorities, the board has not yet implemented such a process of assessment.

Committees

Our only standing committee of the board of directors is our audit committee. We do not have a nominating committee or a compensation committee. Our board of directors believes that it is not necessary to have a standing nominating committee or compensation committee because of the early stage of our development and the size of our company.

Audit Committee

Our audit committee consists of our director, John Hislop. Because Mr. Hislop is an executive officer of our company, he is not independent.

Our board of directors has determined that John Hislop qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K.  Mr. Hislop, who is currently our interim President, interim Chief Executive Officer and Chief Financial Officer and a director, is not an independent director.  We believe that Mr. Hislop is financially literate and is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.  In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have generated minimum revenues to date.

Since the commencement of our company’s most recently completed financial year, our company has not relied on the exemptions contained in sections 2.4 or 8 of National Instrument 52-110 of the Canadian Securities Administrators.  Section 2.4 (De Minimis Non-audit Services) provides an exemption from the requirement that the audit committee must pre-approve all non-audit services to be provided by the auditor, where the total amount of fees relates to the non-audit services are not expected to exceed 5% of the total fees payable to the auditor in the fiscal year in which the non-audit services were provided.  Section 8 (Exemptions) permits a company to apply to a securities regulatory authority for an exemption from the requirements of National Instrument 52-110 in whole or in part. We are relying on the exemption provided by section 6.1 of NI 52-110 which provides that we, as a venture issuer, are not required to comply with Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.

The audit committee has adopted specific policies and procedures for the engagement of non-audit services as set out in the Audit Committee Charter of our company. In meeting its responsibilities, the Audit Committee is expected to select the independent accountants, considering independence and effectiveness, approve all audit and non-audit services in advance of the provision of such services and the fees and other compensation to be paid to the independent accountants, and oversee the services rendered by the independent accountants (including the resolution of disagreements between management and the independent accountants regarding preparation of financial statements) for the purpose of preparing or issuing an audit report or related work. In addition, the Audit Committee is expected to periodically review and discuss with the independent accountants all significant relationships the independent accountants have with our company to determine the independence of the independent accountants, including a review of service fees for audit and non-audit services.

Our Audit Committee Charter was filed with the Securities and Exchange Commission as Exhibit 99.1 to our annual report on Form 10K filed on February 9, 2011.

Audit Committee Report

Our audit committee oversees our financial reporting process. Management has primary responsibility for our financial statements and the reporting process, including the system of internal controls. In fulfilling its oversight responsibilities, our audit committee reviewed the audited financial statements in the annual report on Form 10-K for the year ended March 31, 2016, with management including a discussion of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

Our audit committee reviewed with the independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of audited financial statements with generally accepted accounting principles, its judgments as to our accounting principles and such other matters as are required to be discussed with our audit committee under auditing standards of the Public Company Accounting Oversight Board (United States), including those described in Statement on Auditing Standards No. 61, as amended, “Communication with Audit Committees,” and discussed and reviewed results of the independent registered public accounting firm’s examination of the financial statements. In addition, our audit committee discussed with the independent registered public accounting firm its independence from management and our company, including the matters in the written disclosures required by the Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees.” Our audit committee also considered whether the provision of non-audit services is compatible with maintaining the auditor’s independence.

In reliance on the reviews and discussions referred to above, our audit committee recommended to our board of directors that the audited financial statements be included in our annual report on Form 10-K for the year ended March 31, 2016, filed with the Securities and Exchange Commission.

Member of the Audit Committee
	John R. Hislop

The material in this report is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference in any filing of our company under the Securities Act of 1933 or the Securities Exchange Act of 1934 whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Executive Compensation

Following are the particulars of all compensation paid or accruing to our named executive officers for the last two fiscal years ended.

Summary Compensation Table
Name andPrincipalPosition	Year	Salary(US$)	Bonus(US$)	StockAwards(US$)	OptionAwards(US$)	NonequityIncentive PlanCompensation(US$)	Non-qualifiedDeferredCompensationEarnings(US$)	All OtherCompensation(US$)	Total(US$)
John R. Hislop President, Chief Executive Officer, Secretary, Chief Financial Officer and Director	2015 2014	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	42,000 (1) 42,000 (1)	$42,000 $42,000
Carmen J. Lotito Vice President	2016 2015	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	$180,000 (2) Nil	$180,000 Nil
Andrew Logan (3)	2016 2015	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil

(1)	Effective November 1, 2010, our company signed a management agreement which provides for the provision of management services for a fee of $3,500 per month.  This arrangement is between our company and Caravel Management Corp., a private management company owned by Mr. Hislop.
(2)	Our subsidiary Nation Australia currently has a compensation agreement with Carmen J. Lotito, our Vice President, to provided operational and management services for $20,000 per month, on a month-to-month agreement.
(3)	Our subsidiary Nation Australia currently has a compensation agreement with Andrew Logan, its President and Director, to provided operational and business development services for $25,000 per month, on a month-to-month agreement.

Employment or Consulting Agreements

Other than as described below, we have not entered into any employment or consulting agreements with any of our current officers or directors.

On January 1, 2009, we entered into a written contract with Caravel Management Corp., a private company owned by our sole officer and director, John Hislop, to provide office rent, reception, compliance and accounting services for $7,865 per month.  The term of this agreement commenced on January 1, 2009 and continues on a month to month basis unless terminated by the parties; the agreement may be terminated by either party upon 30 days’ notice.  Subsequently, we amended our agreement with Caravel Management Corp. to reduce the monthly charge for administrative services to $3,500 per month, effective November 1, 2010.

Nation Australia currently has a compensation arrangement with Carmen J. Lotito, the Company’s Vice President, to provide operational and management services for $20,000 per month, on a month-to-month agreement. Nation Australia also has an arrangement with Andrew Logan, the president and a director of Nation Australia, to provide operational and business development services for $25,000 per month, on a month-to-month agreement.

Outstanding Equity Awards at Fiscal Year-End

None of our named executive officers held any unexercised options or stock awards that had not vested or equity incentive plan awards as of March 31, 2016.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers, except that our directors and executive officers were eligible to receive stock options at the discretion of our board of directors under the now-terminated 1999 Stock Option Plan. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options or other equity may be granted at the discretion of our board of directors, in the event that the 2016 Equity Incentive Plan is approved by the Company’s shareholders at the 2016 Annual Meeting.

We have no compensatory plan or arrangement with respect to any officer that results or will result in the payment of compensation in any form from the resignation, retirement or any other termination of employment of such officer's employment with our company, from a change in control of our company or a change in such officer's responsibilities following a change in control.

Compensation of Directors

We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director's fees or other cash compensation for services rendered as a director in the year ended March 31, 2016.

We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors except for the granting from time to time of incentive equity, in the event that the 2016 Equity Incentive Plan is approved by the Company’s shareholders at the 2016 Annual Meeting.  The board of directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. 

Transactions with Related Persons

Except as otherwise indicated below, since April 1, 2014, there has been no transaction, or currently proposed transaction, in which our company was or is to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any of the following persons had or will have a direct or indirect material interest:

(a)	Any director or executive officer of our company;
(b)	Any person who beneficially owns, directly or indirectly, more than 5% of any class of our voting securities; and
(c)	Any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.

We entered into loan agreements with Caravel and John Hislop in 2003 and 2004 to fund operations.  Caravel is a private management company that is wholly-owned by John Hislop, our chief financial officer and director. The terms of these loan agreements provided that any principal amount outstanding is payable upon demand and bears interest at 15% per annum, payable quarterly. On March 31, 2006, we consolidated and restructured the loans.  As part of the restructuring, we borrowed an additional C$250,000 (US $203,932).  The new loan bore interest at 15% per annum, calculated and compounded monthly and payable quarterly. Any principal amount outstanding under the loan was payable upon demand.  The loan was payable in Canadian dollars and was secured by a Promissory Note.  As of July 28, 2015, the principal balance of the loan and accrued interest payable totaling $1,108,165 were settled in full as part of the debt settlement agreement described below.

On July 18, 2014, we entered into a promissory note with an officer and director, John Hislop for US$50,000. The loan bore interest calculated quarterly, not in advance, at a rate of 15% per annum.  The note was payable upon demand by Mr. Hislop, both before and after each of maturity, default and judgment commencing effective July 18, 2014. As of July 28, 2015, the principal balance of the loan and accrued interest payable totaling $57,726 were settled in full as part of the debt settlement agreement described below.

On September 2, 2014, we entered into a promissory note with an officer and director, John Hislop for C$20,000 (US$16,012). The loan bore interest calculated quarterly, not in advance, at a rate of 15% per annum. The note was payable upon demand by Mr. Hislop, both before and after each of maturity, default and judgment commencing effective September 2, 2014. As of July 28, 2015, the principal balance of the loan and accrued interest payable totaling $17,690 were settled in full as part of the debt settlement agreement described below.

On January 29, 2015, we entered into a promissory note with an officer and director, John Hislop (“Lender”) for C$50,000 (US$40,030). The loan bore interest calculated quarterly, not in advance, at a rate of 15% per annum. The note was payable upon demand by the Lender, both before and after each of maturity, default and judgment commencing effective January 29, 2015. As of July 28, 2015, the principal balance of the loan and accrued interest payable totaling $41,612 were settled in full as part of the debt settlement agreement described below.

On April 21, 2015, we entered into a debt settlement and subscription agreement with our chief financial officer and director, John Hislop whereby we agreed to settle a portion of the indebtedness, in the amount of $1,340,000, by allotting and issuing to John Hislop 134,000,000 shares of our common stock at a deemed price of $0.01 per share.  On April 24, 2015, we announced that we had issued 134,000,000 shares of our common stock at a deemed price of $0.01 per share to Mr. Hislop.  However, due to a technical flaw in the process of adopting the amendment to our Articles of Incorporation (announced on February 3, 2014), we were only authorized to issue 100,000,000 shares of our common stock on April 23, 2015, and the issuance to Mr. Hislop on April 23, 2015, was therefore void.  On June 29, 2015, we sent to our shareholders a proxy statement for a shareholder meeting to be held July 22, 2015, at which meeting we proposed to rectify the technical flaw in our earlier effort to increase our authorized capital.  On July 28, 2015, we closed the debt settlement agreement and reissued the 134,000,000 shares to Mr. Hislop pursuant to the debt settlement and subscription agreement which settled a debt to Mr. Hislop equal to $1,340,000 immediately following shareholder approval of the increase in our authorized capital on July 23, 2015. The shares were valued at $4,690,000 ($0.035 per share based upon market price). The Company recorded a loss on extinguishment of debt of $3,350,000.

As of August 4, 2015, Paltar Nation Limited Partnership (“Paltar Nation”) entered into a secured convertible note purchase agreement with David N. Siegel Family Trust 2015 (the “2015 Secured Note Purchase Agreement”), pursuant to which Paltar Nation issued a secured convertible promissory note in the principal amount of $584,000 in consideration for $584,000.  The secured convertible promissory note bears interest at the rate of 10% per annum (15% per annum on and after the maturity date or an Event of Default (as defined below)) and matures on August 4, 2016.  The entire unpaid principal sum of the secured convertible promissory note will become immediately due and payable upon a material breach by (a) Paltar Nation of the note, another note or the 2015 Secured Note Purchase Agreement, or (b) Wotan Group Limited, an Australian limited company, of the Wotan Pledge, described below, in each case that is not cured within 30 days of such breach (referred to as an “Event of Default”).

The 2015 Secured Note Purchase Agreement also contemplates sales of additional secured convertible promissory notes up to an aggregate maximum of $5,000,000 (including the initial $584,000 sale to David N. Siegel Family Trust 2015).  The secured convertible promissory note issued to Michael B. Cox, described below, has been issued pursuant to the 2015 Secured Note Purchase Agreement.

Upon a sale of Paltar Nation’s limited partnership interests (“Interests”) in a single transaction or a series of related transactions yielding gross cash proceeds to Paltar Nation of at least $20,000,000 (including $584,000 from the sale of the secured convertible promissory note to David N. Siegel Family Trust 2015 and including $100,000 from the sale of the secured convertible promissory note to Michael B. Cox) on or before the maturity dates of the notes (the “Qualified Financing”), the principal and any accrued but unpaid interest under the notes will automatically be converted into Interests.  The Interests to be issued to David N. Siegel Family Trust 2015 upon conversion will be equal to the quotient obtained by dividing (i) the entire principal amount of the note plus any accrued but unpaid interest under the note by (ii) 80.00% of the per-Interest price of the Interests sold to persons other than David N. Siegel Family Trust 2015 and other holders of the notes, if any, in the Qualified Financing.

In connection with the secured convertible note purchase agreement, Paltar Nation entered into a pledge agreement dated as of August 4, 2015 with Wotan Group Limited (the “Wotan Pledge”), pursuant to which Wotan Group Limited pledged to each of David N. Siegel Family Trust 2015 and any future secured noteholders pursuant to the 2015 Secured Note Purchase Agreement (of which Michael B. Cox is one) a continuing first priority security interest in a number of Wotan Group Limited’s shares of Paltar Petroleum Limited equal to five multiplied by the sum of the aggregate outstanding principal amounts owed under each noteholder’s respective note and Paltar Nation agreed to pay a commitment fee to Wotan Group Limited equal to $250,000 from the proceeds of the secured convertible promissory notes upon the receipt by Paltar Nation of proceeds from the sale of such notes equal to or greater than $2,500,000 in the aggregate and an additional commitment fee of $250,000 upon conversion of all of such notes.

As of June 30, 2016, the principal balance of the loan was $584,000 and accrued interest payable of $52,960. The loan was not repaid on August 4, 2016 and continues to accrue interest at a rate of 15% per annum.

On August 5, 2015, we entered into a promissory note with an officer and director, John Hislop for C$10,000 (US$7,742). The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum. The note is payable upon demand by Mr. Hislop, both before and after each of maturity, default and judgment commencing effective August 5, 2015. The principal sum and all accrued and unpaid interest will become due and payable on August 5, 2017. As of June 30, 2016, the principal balance of the loan was $7,742 and accrued interest payable of $1,050.

On August 25, 2015, we entered into a promissory note with an officer and director, John Hislop for $10,000. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum. The note is payable upon demand by Mr. Hislop, both before and after each of maturity, default and judgment commencing effective August 25, 2015. The principal sum and all accrued and unpaid interest will become due and payable on August 25, 2017. As of June 30, 2016, the principal balance of the loan was $10,000 and accrued interest payable of $1,270.

On September 10, 2015, we entered into a promissory note with an officer and director, John Hislop for C$6,000 (US$4,645). The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum. The note is payable upon demand by Mr. Hislop, both before and after each of maturity, default and judgment commencing effective September 10, 2015. The principal sum and all accrued and unpaid interest will become due and payable on September 10, 2017. As of June 30, 2016, the principal balance of the loan was $4,645 and accrued interest payable of $561.

On September 24, 2015, we entered into a promissory note with an officer and director, John Hislop for $5,000. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum. The note is payable upon demand by Mr. Hislop, both before and after each of maturity, default and judgment commencing effective September 24, 2015. The principal sum and all accrued and unpaid interest will become due and payable on September 24, 2017. As of June 30, 2016, the principal balance of the loan was $5,000 and accrued interest payable of $573.

On September 30, 2015, Paltar Nation entered into a promissory note with a director, David N. Siegel Dynasty Trust dated November 16, 2015 for $14,210. The loan bears interest at a rate of 10% per annum from the disbursement date of the funds. The principal sum and all accrued and unpaid interest will become due and payable on September 30, 2016. As of June 30, 2016, the principal balance of the loan was $14,210 and accrued interest payable of $1,266.

On October 29, 2015, the Company entered into a promissory note with a related party, John Hislop for $7,960. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum. The note is payable upon demand by Mr. Hislop, both before and after each of maturity, default and judgment commencing effective October 29, 2015. The principal sum and all accrued and unpaid interest will become due and payable on October 29, 2022. As of June 30, 2016, the principal balance of the loan was $7,960 and accrued interest payable of $805.

On March 31, 2016, Paltar Nation entered into a promissory note with a director, David N. Siegel Revocable Trust 2009 for $188,483. The loan bears interest at a rate of 10% per annum from the disbursement date of the funds. The principal sum and all accrued and unpaid interest will become due and payable on March 31, 2017. As of June 30, 2016, the principal balance of the loan was $188,483 and accrued interest payable of $6,463.

On April 8, 2016, Paltar Nation entered into a promissory note with a director, David N. Siegel Revocable Trust 2009 for $25,000. The loan will bear interest at a rate of 10% per annum. The principal sum and all accrued and unpaid interest will become due and payable on April 8, 2017. As of June 30, 2016, the principal balance of the loan was $25,000 and accrued interest payable of $576.

On May 3, 2016, Paltar Nation entered into a promissory note with a director, David N. Siegel Revocable Trust 2009 for $34,000. The loan will bear interest at a rate of 10% per annum. The principal sum and all accrued and unpaid interest will become due and payable on May 3, 2017. As of June 30, 2016, the principal balance of the loan was $34,000 and accrued interest payable of $548.

On May 31, 2016, we entered into a promissory note with an officer and director, John Hislop for $23,100. The loan bears interest calculated quarterly, not in advance, at a rate of 15% per annum both before and after each of maturity, default and judgment commencing effective May 31, 2016. The principal sum and all accrued and unpaid interest will become due and payable on May 31, 2023. As of June 30, 2016, the principal balance of the loan was $23,100 and accrued interest payable of $285.

On May 31, 2016, Nation Australia entered into a promissory note with Paltar Petroleum Limited for AUD$24,322,501 (US$18,078,915). Interest shall accrue from the date of this promissory note on the unpaid principal amount hereunder at a rate equal to 5.00% per annum; provided, that on and after the maturity date of May 31, 2019 or an event of default, interest shall accrue from and after such date on the unpaid principal and all accrued but unpaid interest of this note at a rate equal to 10.00% per annum.  As of June 30, 2016, the principal balance of the loan was $18,078,945 and accrued interest payable was $76,773.

Proposal No. 2
Ratification of the Appointment of the Independent Registered Public Accounting Firm

Our board of directors is asking our shareholders to ratify the appointment of SingerLewak LLP as our independent registered public accounting firm.  Even if the appointment is ratified, our board of directors in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if our board of directors determines that such a change would be in the best interest of our company and our shareholders.

Representatives of SingerLewak LLP are not expected to be present at the Meeting. However, we will provide contact information for SingerLewak LLP to any shareholders who would like to contact the firm with questions.

Unless otherwise directed, the proxy holder will vote the proxies received by him for the ratification of the appointment of SingerLewak LLP as our independent registered public accounting firm.

Our Board of Directors unanimously recommends that you vote FOR the ratification of the appointment of SingerLewak LLP as our independent registered public accounting firm

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On May 1, 2015, we received notice that our auditing firm StarkSchenkein, LLP announced that certain individuals have joined the practice of SingerLewak LLP. As a result, StarkSchenkein, LLP resigned as our independent registered public accounting firm, effective as of June 24, 2015.

StarkSchenkein, LLP's reports on the financial statements of our company for the years ended March 31, 2016 and 2015 did not contain an adverse opinion or disclaimer of opinion, nor were they modified or qualified as to uncertainty, audit scope or accounting principles with the exception of a statement regarding the uncertainty of our ability to continue as a going concern.

There have been no disagreements during the fiscal years ended March 31, 2016 and 2015 and the subsequent interim period up to and including the date of resignation between our company and StarkSchenkein, LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of StarkSchenkein, LLP, would have caused them to make reference to the subject matter of the disagreement in connection with StarkSchenkein LLP’s report.

On June 26, 2015, we appointed SingerLewak LLP as our new independent registered public accounting firm.  Our board of directors approved the engagement of SingerLewak LLP.

We did not consult with SingerLewak LLP during the fiscal years ended March 31, 2015 and 2014 and any subsequent interim period prior to their engagement regarding: (i) the application of accounting principles to a specific completed or proposed transaction or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to our company nor oral advice was provided that the newly appointed accountant concluded was an important factor in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event in response to paragraph (a)(1)(iv) of Item 304 of Regulation S-K, promulgated under the Securities Exchange Act of 1934, as amended.

Audit Fees

Our company booked the following aggregate fees billed by SingerLewak LLP for professional services rendered for the audit of our annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2016 and by StarkSchenkein, LLP for professional services rendered for the audit of our annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015, and for the review of quarterly financial statements included in our Quarterly Reports were as follows:

	Year Ended March 31, 2016	Year Ended March 31, 2015
Audit Fees*	$36,500	$25,500
Audit Related Fees	$Nil	$Nil
Tax Fees	$2,100	$2,250
All Other Fees	$1,000	$960
Total	$39,600	$28,710

In the above table, “audit fees” are fees billed by our company’s external auditor for services provided in auditing our company’s annual financial statements for the subject year along with reviews of interim quarterly financial statements. “Audit-related-fees” are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit review of our company’s financial statements.  “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning.  “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

The board of directors pre-approves all services provided by our independent auditors.  All of the above services and fees were reviewed and approved by the board of directors before the respective services were rendered.

The board of directors has considered the nature and amount of fees billed by SingerLewak LLP and believes that the provision of services for activities unrelated to the audit was compatible with maintaining SingerLewak LLP as auditors.

Proposal No. 3

Approval of Director and Officer Equity Compensation Plan

The 2016 Equity Incentive Plan is aimed at promoting the success and value of our company by providing incentives to directors, officers, employees and consultants for outstanding performance to generate superior returns to our shareholders.  The plan Administrator may, at its discretion, grant Awards in the form of options, restricted stock, restricted stock units, performance awards, deferred stock, stock payment awards, or stock appreciation rights to any eligible individual(s) under the plan, such eligible individuals including any person who is an employee of the Company or its subsidiaries, a consultant or advisor who provides services to the Company, or a non-employee director of the Company.  Such eligible individuals would include John R. Hislop, a director and our interim President, interim Chief Executive Officer, Vice President, Secretary and Chief Financial Officer, our proposed directors David N. Siegel and Darrel J. Causbrook upon shareholder approval of such role, Carmen J. Lotito, our Vice President, Andrew Logan, director and President of our subsidiary Nation Australia, and a currently indeterminable number of third-party consultants and advisors.  For further information regarding the specifics of the 2016 Equity Incentive Plan, please see a copy of said plan attached hereto.

TheaggregatenumberofsharesofCommon Stockwhichmay be issuedortransferred pursuant toawardsunderthe plan is 210,004,000shares, which is 20% of the total currently authorized and outstanding shares of Common Stock of the Company.

The grants to be awarded under the plan will be determined by the Administrator at a later date following shareholder approval of the plan.  The specific benefits and amounts that will be received by or allocated to eligible individuals under the plan are unable to be determined at this time.

Interest of Certain Persons in Matters to be Acted Upon

No director, executive officer, or nominee for election as a director of our company and no associate of any of the foregoing persons has any substantial interest, direct or indirect, by security holding or otherwise, in any matter to be acted upon at the Meeting other than the election of director and the approval of the executive compensation plan.

John Hislop, interim President and Chief Executive Officer, Chief Financial Officer, Vice President, Secretary and director, David N. Siegel, Chairman of the Board and director, Darrel J. Causbrook, director, Carmen J. Lotito, Vice President, and Andrew Logan, director and President of Nation Australia, each have substantial interest in the approval of the executive compensation plan. 

 “Householding” of Proxy Materials

The Securities and Exchange Commission permits companies and intermediaries such as brokers to satisfy the delivery requirements for proxy statements or annual reports with respect to two or more shareholders sharing the same address by delivering a single copy of the proxy statement or annual report, as applicable, addressed to those shareholders. This process, which is commonly referred to as “householding”, potentially provides extra conveniences for shareholders and cost savings for companies.

Although we do not intend to household for our shareholders of record, some brokers household our proxy materials and annual reports, delivering a single copy of proxy statement or annual report to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that it will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of proxy statement or annual report, or if you are receiving multiple copies of either document and wish to receive only one, please notify your broker. Shareholders who currently receive multiple copies of the proxy statement or annual report at their address from their brokers and would like to request householding of their communications should contact their brokers.

Shareholder Proposals

Shareholder proposals to be considered for inclusion in the proxy statement and form of proxy relating to our next annual meeting of shareholders must be received by no later than March 1, 2017. If we change the date of our next annual meeting of shareholders by more than 30 days from the date of this year’s annual meeting of shareholders, then the deadline is a reasonable time before we begin to print and send our proxy materials. All such proposals must comply with the requirements of Rule 14a-8 of Regulation 14A of the Securities Exchange Act of 1934, which sets forth specific requirements and limitations applicable to nominations and proposals at annual meetings of shareholders.

All shareholder proposals, notices and requests should be made in writing and sent via registered, certified or express mail to Nation Energy Inc., RPO Box 60610 Granville Park, Vancouver, British Columbia V6H 4B9, Attention: President.

Where You Can Find More Information

We are subject to the information and reporting requirements of the Securities Exchange Act of 1934 and in accordance with that act, we file periodic reports, documents and other information with the Securities and Exchange Commission relating to our business, financial statements and other matters. These reports and other information may be inspected and are available for copying at the offices of the Securities and Exchange Commission, 100 F. Street NE, Washington, DC 20549 or may be accessed at www.sec.gov.

Other Matters

Our board of directors does not intend to bring any other business before the Meeting, and so far as is known to our board of directors, no matters are to be brought before the Meeting except as specified in the notice of the Meeting. If any other matters are properly brought before the Meeting, it is the intention of the persons named on the proxy to vote the shares represented by the proxy on such matters in accordance with their judgment.

BY ORDER OF THE BOARD OF DIRECTORS

            /s/  David N. Siegel                                          
David N. Siegel

Chairman of the Board

November 1, 2016

2016EQUITYINCENTIVE PLAN

1.Purpose of the Plan.  Thepurposeofthe 2016Equity Incentive Plan (the“Plan”)istopromotethesuccessand enhance thevalueof Nation Energy, Inc. (the“Company”)bylinking thepersonalinterestsofthemembersofthe Board, Employees,andConsultantstothoseofCompanystockholdersandbyprovidingsuch individualswith anincentivefor outstandingperformancetogeneratesuperiorreturnstoCompanystockholders.The Plan isfurtherintendedtoprovide flexibilitytotheCompanyinitsabilitytomotivate,attract,andretaintheservicesofmembersoftheBoard,Employees,and Consultantsupon whosejudgment,interest,andspecialeffortthesuccessfulconductoftheCompany’soperationislargely dependent.

2.Definitions.As used herein, the following definitions shall apply:

(a)“Administrator”means the Board or a Committee designated by the Board.

(b)“Award”means anOption,aRestrictedStockaward,aRestrictedStockUnitaward,aPerformanceAward,a DividendEquivalentsaward,aDeferredStockaward,aStockPaymentawardoraStockAppreciationRight,whichmay beawardedorgrantedunderthe Plan (collectively,“Awards”).

(c)“AwardAgreement”means anywrittennotice,agreement,termsandconditions,contractorother instrumentordocument evidencinganAward,includingthroughelectronicmedium,which shallcontainsuch terms andconditionswith respecttoanAwardastheAdministratorshalldetermineconsistent with the Plan.

(d)“Board”means theBoardofDirectorsoftheCompany.

(e)“Cause” means (i) conviction of any felony or other criminal act involving fraud; (ii) willful misconduct that results in a material economic detriment to the Company; (iii) material violation of Company policies and directives, which is not cured after written notice and an opportunity for cure; (iv) continued refusal by the Participant to perform the Participant’s duties after written notice identifying the deficiencies and an opportunity for cure; (v) a material violation by the Participant of any material covenants to the Company and (vi) such other actions constituting cause under applicable common law. No action or inaction shall be deemed willful if not demonstrably willful and if taken or not taken by the Participant in good faith and with the understanding that such action or inaction was not adverse to the best interests of the Company. Reference in this definition to the Company shall also include direct and indirect Subsidiaries of the Company, and materiality shall be measured based on the action or inaction and the impact upon the Company taken as a whole

(f)“ChangeinControl”means the occurrence of any of the following events:

(i)A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting

power of the stock of the Company will not be considered a Change in Control; or

(ii)A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

(iii)A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this Section 2(e)(iii). For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

(g)“Code”means theInternalRevenueCodeof1986,asamended.

(h)“Committee”means theCompensationCommitteeoftheBoard,oranothercommitteeorsubcommitteeof theBoard,appointedasprovidedinSection15(a) herein.

(i)“CommonStock”means thecommonstock oftheCompany.

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(j)“Company”means Nation Energy, Inc.,aWyomingcorporation.

(k)“Consultant” means any consultant or adviser engaged to provide services to the Company or any Subsidiary.

(l)“Covered Employee” means any Employee who is, or could be, a “covered employee” within the meaning of Section 162(m) of the Code.

(m)“DeferredStock”means arighttoreceiveCommon StockawardedunderSection 12(c) herein.

(n)“Director”means a memberoftheBoard.

(o)“DividendEquivalent”means arighttoreceivetheequivalentvalue (incash orCommon Stock)of dividendspaid onCommon Stock,awardedunderSection 12(a).

(p)“EffectiveDate” means thedatethe Plan is approvedbytheBoard,subjecttoapprovalofthe Plan bythe Company’sstockholders.

(q)“EligibleIndividual”means anypersonwho is anEmployee,aConsultantoraNonemployeeDirector, asdeterminedbytheCommittee.

(r)“Employee”means anyofficerorotheremployee(asdeterminedinaccordancewith Section3401(c)of theCodeandtheTreasuryRegulationsthereunder)oftheCompanyorofanySubsidiary.

(s)“EquityRestructuring”means anonreciprocaltransactionbetweentheCompanyanditsstockholders, such asastock dividend,stock split,spin­off,rightsofferingorrecapitalizationthroughalarge,nonrecurringcash dividend,thataffectsthenumberorkind ofsharesofCommon Stock(orothersecuritiesoftheCompany)ortheshare priceofCommon Stock(orothersecurities)andcausesachangeinthepersharevalue oftheCommon Stockunderlying outstanding Awards.

(t)“ExchangeAct”means the SecuritiesExchangeActof1934,asamended.

(u)“FairMarketValue”means,asofanygivendate,thevalue ofashareofCommon Stockdeterminedas follows:

(i)IftheCommon Stockislistedonany established stock exchange(suchastheNewYork StockExchange,the NASDAQGlobalMarketand theNASDAQGlobal SelectMarket)ornational marketsystem,itsFairMarketValueshallbe theclosingsalesprice forashare ofCommon Stockasquotedonsuch exchangeorsystemforsuch dateor,ifthere isno closingsalesprice forashare ofCommon Stockonthedateinquestion,theclosingsalesprice forashare ofCommon Stock onthelastprecedingdateforwhich such quotationexists,asreportedinTheWallStreetJournal orsuch othersourceasthe Administratordeemsreliable;

(ii)IftheCommon Stockisnotlistedonanestablished stock exchangeornational marketsystem,buttheCommon Stockisregularlyquotedbyarecognized securitiesdealer,itsFairMarketValueshallbethemeanofthehigh bid and low askedpricesforsuch dateor,ifthere arenohigh bid and lowaskedpricesforashare of

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Common Stockonsuch date,thehigh bid and lowaskedpricesforashare ofCommon Stockonthelastprecedingdateforwhich such informationexists,as reportedinTheWallStreetJournal orsuch othersourceastheAdministratordeemsreliable; or

(iii)IftheCommon Stockisneitherlistedonanestablished stock exchangeoranational marketsystemnor regularlyquotedbyarecognized securitiesdealer,itsFairMarketValueshallbeestablished bytheAdministratoringood faith.

(v)“GreaterThan10% Stockholder”means anindividualthen owning(withinthemeaningof Section424(d)oftheCode)morethan 10% ofthetotalcombinedvotingpowerofall classesofstock oftheCompany oranysubsidiarycorporation (asdefinedinSection424(f)oftheCode)orparentcorporation thereof(asdefinedin Section424(e)oftheCode).

(w) “IncentiveStockOption”means anOptionthatis intendedtoqualifyasanincentivestock optionand conformstotheapplicableprovisionsofSection422oftheCode.

(x)“NonemployeeDirector”means aDirectoroftheCompanywho is notanEmployee.

(y)“NonqualifiedStockOption”means anOptionthatis notanIncentiveStockOption.

(z)“Option”means arighttopurchasesharesofCommon Stockat aspecifiedexerciseprice,grantedunder Section6.AnOptionshallbeeitheraNonqualifiedStockOptionoranIncentiveStockOption;provided,however,that OptionsgrantedtoNonemployeeDirectorsandConsultantsshallbeNonqualifiedStockOptions.

(aa) “Participant” means the holder of an outstanding Award.

(bb)“Performance” Award means either a Performance Share or Performance Unit.

(cc)"Performance Share" means an Award denominated in Shares which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10.

(dd)"Performance Unit" means an Award which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10.

(ee)“Performance­BasedCompensation”means anycompensationthatis intendedtoqualifyas “performance­basedcompensation”asdescribedinSection162(m)(4)(C)oftheCode.

(ff) “Plan”means this 2016 EquityIncentiveAwardPlan,asitmay beamendedor restatedfromtimetotime.

(gg)“PublicTradingDate” means thefirstdateupon whichCommon Stockis listed(orapprovedforlisting) upon notice ofissuanceonanysecuritiesexchangeordesignated (orapprovedfordesignation)upon notice ofissuance asanationalmarketsecurityonan

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interdealerquotationsystem.

(hh)“Restricted Stock”means Common Stockawardedunder Section8thatis subjecttocertainrestrictions andmay besubjecttoriskofforfeitureorrepurchase.

(ii)“Restricted StockUnits” means therighttoreceiveCommon StockawardedunderSection9.

(jj)“SecuritiesAct”means the SecuritiesActof1933,asamended.

(kk)“StockAppreciationRight”means astock appreciation rightgrantedunder Section10.

(ll)“StockPayment”means (a)apaymentintheformofsharesofCommon Stock,or(b)anoptionorother righttopurchasesharesofCommon Stock,aspartofabonus,deferredcompensationorotherarrangement,awarded underSection 12(c).

(mm)“Subsidiary”meansanyentity(otherthan theCompany),whetherdomesticorforeign,inanunbrokenchain ofentitiesbeginningwith theCompanyifeach oftheentities otherthan thelastentityintheunbrokenchainbeneficially owns,at thetimeofthedetermination,securitiesorinterests representing morethan fifty percent(50%)ofthetotalcombinedvotingpowerofall classesofsecuritiesorinterestsin oneoftheotherentitiesinsuch chain.

(nn)“SubstituteAward”means anAwardgrantedunderthe Plan upon theassumption of,orinsubstitution for, outstanding equityawardspreviouslygrantedbyacompanyorotherentityinconnectionwith acorporatetransaction, such asa merger,combination,consolidationoracquisitionofpropertyorstock;provided,however,thatinnoevent shalltheterm“SubstituteAward”beconstruedtorefertoanawardmade inconnectionwith the cancellation and repricingofanOptionorStockAppreciationRight.

(a)“TerminationofService”means:

(i)As to a Consultant, the time when the engagement of a Participant as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Subsidiary.

(ii)As to a Nonemployee Director, the time when a Participant who is a Nonemployee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Participant simultaneously commences or remains in employment or service with the Company or any Subsidiary.

(i)As to an Employee, the time when the employee­employer relationship between a Participant and the Company or any Subsidiary is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Participant simultaneously commences or remains in employment or service with the Companyorany Subsidiary.

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TheAdministrator,initssolediscretion,shalldeterminetheeffectofall mattersandquestionsrelatingtoaTermination ofService,including,withoutlimitation,thequestionofwhetheraTerminationofServiceresultedfromadischargeforcause andall questionsofwhetherparticularleavesofabsenceconstituteaTerminationofService;provided,however,that,with respecttoIncentiveStockOptions,unlesstheAdministratorotherwiseprovidesinthetermsoftheAwardAgreementor otherwise,aleaveofabsence,changeinstatusfromanemployeetoanindependentcontractororotherchangeinthe employee­employerrelationshipshallconstituteaTerminationofServiceonly if,andtotheextentthat,such leaveof absence,changeinstatusorotherchangeinterruptsemploymentforthepurposesofSection422(a)(2)oftheCodeandthe then applicableregulationsandrevenuerulingsundersaidSection.Forpurposesofthe Plan,aParticipant’semployee­employer relationshiporconsultancyrelationsshallbedeemedtobeterminatedintheeventthatthe Subsidiaryemployingor contractingwith such ParticipantceasestoremainaSubsidiary followinganymerger,saleofstock orothercorporatetransaction orevent(including,withoutlimitation,aspin­off).

3.Shares Subject to the Plan

(a)NumberofShares.

(i)SubjecttoSection14(b)and Section3(a)(ii)theaggregatenumberofsharesofCommon Stockwhichmay be issuedortransferred pursuant toAwardsunderthe Plan is 210,004,000shares;provided,however,nomore than 210,004,000 sharesofCommon Stockmay beissuedupon theexerciseofIncentiveStockOptions.

(ii)TotheextentthatanAwardterminates,expires,orlapsesforany reason,oranAwardissettledincash without thedeliveryofsharestotheParticipant,then any sharesofCommon Stock subjecttotheAwardshallagainbeavailableforthe grantofanAwardpursuant tothe Plan.Any sharesofCommon Stocktenderedorwithheldtosatisfythegrantorexercise price ortax withholdingobligation pursuant toany AwardshallagainbeavailableforthegrantofanAwardpursuant tothe Plan.Any sharesofCommon StockrepurchasedbytheCompanypriortovestingsothat such sharesarereturnedtothe CompanywillagainbeavailableforAwards.Totheextentpermittedbyapplicablelaworany exchangerule,sharesof Common Stockissuedinassumptionof,orinsubstitutionfor,any outstandingawardsofany entityacquiredinany formof combinationbytheCompanyorany Subsidiary shallnotbecountedagainstsharesofCommon Stockavailableforgrant pursuant tothe Plan.Thepayment ofDividendEquivalentsincash inconjunction with any outstanding Awardsshallnotbe countedagainstthesharesavailableforissuanceunderthe Plan.NotwithstandingtheprovisionsofthisSection3(a)(ii),no sharesofCommon Stockmay againbeoptioned,grantedorawardedifsuch actionwouldcauseanIncentiveStockOptionto failtoqualifyasanincentivestock optionunderSection422 oftheCode.

(b)StockDistributed.Any Common StockdistributedpursuanttoanAward may consist,inwhole orinpart,of authorizedandunissuedCommon Stock,treasuryCommon StockorCommon Stockpurchasedontheopen market.

4.Granting of Awards.

(a)Participation.TheAdministratormay,fromtimetotime,selectfromamong all EligibleIndividuals,thoseto whomanAward shall begranted andshall determinethenature andamountofeach Award,which shall notbe inconsistentwith therequirementsofthe Plan.  NoEligibleIndividualshall haveanyright tobegranted anAward pursuanttothe Plan.

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(b)AwardAgreement.Each AwardshallbeevidencedbyanAwardAgreement.AwardAgreementsevidencing AwardsintendedtoqualifyasPerformance­BasedCompensationshallcontainsuch termsandconditionsasmay be necessarytomeettheapplicableprovisionsofSection162(m)oftheCode.AwardAgreementsevidencing Incentive StockOptionsshallcontainsuch termsandconditionsasmay benecessarytomeettheapplicableprovisionsof Section422oftheCode.

(c)LimitationsApplicabletoSection16Persons.Notwithstandinganyotherprovisionofthe Plan,the Plan,and anyAward granted orawardedtoanyindividualwho is then subjecttoSection 16oftheExchangeAct,shall besubject toanyadditional limitationsset forth inanyapplicableexemptiveruleunderSection 16oftheExchangeAct (includingRule16b­3oftheExchangeActandanyamendmentsthereto)thatarerequirementsfortheapplicationof such exemptiverule.Totheextentpermittedbyapplicablelaw,the Plan andAwardsgranted orawardedhereundershall bedeemedamendedtotheextentnecessarytoconformtosuch applicableexemptiverule.

(d)At­WillEmployment.Nothinginthe Plan orinanyAwardAgreementhereundershallconferupon anyParticipant anyrighttocontinueintheemployof,orasaDirectororConsultantfor,theCompanyoranySubsidiary,orshall interferewith orrestrictinanyway therightsoftheCompanyandanySubsidiary,whichrightsareherebyexpressly reserved,todischargeanyParticipantat anytime foranyreasonwhatsoever,with orwithoutcause,excepttotheextent expresslyprovidedotherwiseinawrittenagreementbetweentheParticipantandtheCompanyoranySubsidiary.

(e)Foreign Participants.Notwithstandinganyprovisionofthe Plan tothecontrary,inordertocomplywith thelawsin othercountriesinwhichtheCompanyanditsSubsidiariesoperateorhaveEmployees,NonemployeeDirectorsor Consultants,orinordertocomplywith therequirementsofanyforeignstock exchange,theAdministrator,initssole discretion,shallhavethepowerandauthorityto: (a)determinewhichSubsidiariesshallbecoveredbythe Plan; (b)determinewhichEligibleIndividualsoutsidetheUnitedStatesareeligibletoparticipateinthe Plan;(c)modifythe termsandconditionsofanyAwardgrantedtoEligibleIndividualsoutsidetheUnitedStatestocomplywith applicable foreignlawsorlistingrequirementsofanysuch foreignstock exchange;(d)establishsubplansandmodifyexercise proceduresandothertermsandprocedures,totheextentsuch actionsmay benecessaryoradvisable(any such subplans and/ormodificationsshallbeattachedtothe Plan asappendices);provided,however,thatnosuch subplansand/or modificationsshallincreasethesharelimitationscontainedinSection3(a)and(e)takeanyaction,before orafteran Awardis made,thatitdeemsadvisabletoobtainapprovalorcomplywith anynecessarylocalgovernmentalregulatory exemptionsorapprovalsorlistingrequirementsofanysuch foreignstock exchange.Notwithstandingtheforegoing,the Administratormay nottakeanyactionshereunder,andnoAwardsshallbegranted,thatwouldviolatetheExchange Act,the SecuritiesActoranyothersecuritieslaworgoverningstatute oranyotherapplicablelaw.

(f)Stand­Aloneand TandemAwards.Awardsgrantedpursuanttothe Plan may,inthesolediscretionofthe Administrator,begrantedeitheralone,inadditionto,orintandemwith,anyotherAwardgrantedpursuanttothe Plan. Awardsgrantedinadditiontoorintandemwith otherAwardsmay begrantedeitherat thesametimeasorat adifferent time fromthegrantofsuch otherAwards.

5.Provisions Applicable to Awards Intended to Qualify as Performance-based Compensation.

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(a)Purpose.TheCommittee,initssolediscretion,may determinewhetheranAward is toqualify asPerformance­BasedCompensation.IftheCommittee,initssolediscretion,decidestogrant such anAward toanEligibleIndividual thatis intendedtoqualify asPerformance­BasedCompensation,then theprovisionsofthis Section5shall controlover anycontraryprovisioncontainedinthe Plan.TheAdministratormay initssolediscretiongrant Awardstoother EligibleIndividualsthatarebasedonPerformanceCriteriaorPerformanceGoalsbutthatdonot satisfytherequirements ofthisSection5andthatarenotintendedtoqualify asPerformance­BasedCompensation.Unlessotherwisespecifiedby theAdministratorat thetimeofgrant,the PerformanceCriteriawith respecttoanAward intendedtobePerformance­ BasedCompensationpayabletoa CoveredEmployeeshall bedeterminedonthebasisofGAAP.

(b)Applicability.ThegrantofanAwardtoanEligibleIndividualforaparticularPerformancePeriod shallnot requirethegrantofanAwardtosuch IndividualinanysubsequentPerformancePeriodandthegrantofanAwardtoany oneEligibleIndividualshallnotrequirethegrantofanAwardtoanyotherEligibleIndividualinsuch periodorinany otherperiod.

(c)TypesofAwards.Notwithstandinganythinginthe Plan tothecontrary,theCommitteemay grantanyAwardto anEligibleIndividualintendedtoqualifyasPerformance­BasedCompensation,including,withoutlimitation, RestrictedStocktherestrictionswith respecttowhichlapseupon theattainmentofspecified Performance Objectives,and anyperformanceorincentiveAwardsdescribedinSection 10thatvestorbecomeexercisableorpayableupon the attainmentofoneormorespecified PerformanceObjectives.

(d)Payment ofPerformance­BasedAwards.UnlessotherwiseprovidedintheapplicableAwardAgreementand only totheextentotherwisepermittedbySection162(m)(4)(C)oftheCode,astoanAwardthatis intendedtoqualifyas Performance­BasedCompensation,theParticipantmustbeemployedbytheCompanyoraSubsidiarythroughoutthe PerformancePeriod.Furthermore,aParticipantshallbeeligibletoreceivepaymentpursuanttosuch Awardsfora PerformancePeriodonly ifandtotheextentthe PerformanceObjectivesforsuch periodareachieved.

(e)AdditionalLimitations.Notwithstandinganyotherprovisionofthe Plan,anyAwardwhichis grantedtoan EligibleIndividualandis intendedtoqualifyasPerformance­BasedCompensationshallbesubjecttoanyadditional limitationsset forth inSection162(m)oftheCodeoranyregulationsorrulingsissuedthereunderthatarerequirements forqualificationasPerformance­BasedCompensation,andthe Plan andtheAwardAgreementshallbedeemedamended totheextentnecessarytoconformtosuch requirements.

6.Granting of Options.

(a)GrantingofOptionstoEligibleIndividuals.TheAdministratoris authorizedtogrant OptionstoEligible Individualsfromtimetotime,initssolediscretion,onsuch termsandconditionsasitmay determinewhich shall notbe inconsistentwith the Plan.

(b)QualificationofIncentiveStockOptions.NoIncentiveStockOptionshallbegrantedtoanypersonwho is not anEmployeeoftheCompanyoranysubsidiarycorporation oftheCompany(asdefinedinSection424(f)oftheCode). Nopersonwho qualifiesasaGreaterThan 10% Stockholdermay begrantedanIncentiveStockOptionunlesssuch

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IncentiveStockOptionconformstotheapplicableprovisionsofSection422oftheCode.Any IncentiveStockOption grantedunderthe Plan may bemodifiedbytheAdministrator,with theconsentoftheParticipant,todisqualifysuch Option fromtreatment asan“incentivestock option”underSection422oftheCode.Totheextentthattheaggregatefair marketvalue ofstock with respecttowhich“incentivestock options”(withinthemeaningofSection422oftheCode, butwithoutregardtoSection422(d)oftheCode)areexercisableforthefirsttimebyaParticipantduringanycalendaryear underthe Plan,andall otherplansoftheCompanyandanySubsidiaryorparentcorporation thereof(asdefinedin Section424(e)oftheCode),exceeds$100,000,theOptionsshallbetreatedasNon­QualifiedStockOptionstothe extentrequiredbySection422oftheCode.Theruleset forth intheprecedingsentenceshallbeappliedbytaking Optionsandother“incentivestock options”intoaccountintheorderinwhichthey weregrantedandthefairmarket value ofstock shallbedeterminedasofthetimetherespectiveoptionsweregranted.

(c)OptionExercisePrice.TheexercisepricepershareofCommon Stock subjecttoeach Optionshallbeset bythe Administrator,but shallnotbelessthan 100%ofthe FairMarketValue ofashareofCommon Stockonthedatethe Optionis granted(or,astoIncentiveStockOptions,onthedatetheOptionis modified,extendedorrenewedfor purposesofSection424(h)oftheCode),unlessotherwisedeterminedbytheAdministrator.Inaddition,inthecaseof IncentiveStockOptionsgrantedtoaGreaterThan 10% Stockholder,such priceshallnotbelessthan 110%ofthe Fair MarketValue ofashareofCommon StockonthedatetheOptionis granted(orthedatetheOptionis modified, extendedorrenewedforpurposesofSection424(h)oftheCode).

(d)OptionTerm.Thetermofeach Optionshallbeset bytheAdministratorinitssolediscretion;provided, however,thatthetermshallnotbemorethan ten(10)yearsfromthedatetheOptionis granted,orfive(5)yearsfromthe dateanIncentiveStockOptionis grantedtoaGreaterThan 10% Stockholder.TheAdministratorshalldeterminethe timeperiod,includingthetimeperiodfollowingaTermination ofService,duringwhichtheParticipanthastherightto exercisethevestedOptions,whichtimeperiodmay notextendbeyondthetermoftheOptionterm.Exceptaslimitedby therequirementsofSection409AorSection422oftheCodeandregulationsandrulingsthereunder,theAdministrator may extendthetermofanyoutstanding Option,andmay extendthetimeperiodduringwhichvestedOptionsmay be exercised,inconnectionwith any Termination ofServiceoftheParticipant,andmay amendanyothertermorconditionof such Optionrelatingtosuch aTermination ofService.

(e)OptionVesting.

(i)TheAdministratorshalldeterminetheperiodduringwhichaParticipantshallvestinanOptionand have theright toexercisesuch Optioninwholeorinpart.Such vesting may bebasedonservicewith theCompanyorany Subsidiary,any ofthe PerformanceCriteria,orany othercriteriaselectedbytheAdministrator.At any time aftergrantofanOption,the Administratormay,initssolediscretionand subjecttowhatevertermsand conditionsit selects,acceleratetheperiodduring whichanOptionvests.

(ii)No portionofanOptionwhichis unexercisableat aParticipant’sTermination ofServiceshallthereafterbecome exercisable,exceptasmay beotherwiseprovidedbytheAdministratoreitherintheAwardAgreementorbyactionofthe AdministratorfollowingthegrantoftheOption.

(f)SubstituteAwards.Notwithstandingtheforegoingprovisionsofthis

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Section6tothecontrary,inthecaseofan Optionthatis aSubstituteAward,thepricepershareofthesharessubjecttosuch Option may belessthan the Fair MarketValue pershareonthedateofgrant,provided,thattheexcessof: (a)theaggregateFairMarketValue (asofthe datesuch SubstituteAwardis granted)ofthesharessubjecttothe SubstituteAward,over(b)theaggregateexercise pricethereofdoesnotexceedtheexcessof: (x)theaggregatefairmarketvalue (asofthetimeimmediatelyprecedingthe transactiongivingrisetothe SubstituteAward,such fairmarketvalue tobedeterminedbytheAdministrator)ofthe sharesofthepredecessorentitythatweresubjecttothegrantassumedorsubstituted forbytheCompany,over(y)the aggregateexercisepriceofsuch shares.

(g)SubstitutionofStockAppreciationRights.TheAdministratormay provideintheAwardAgreementevidencing thegrantofanOptionthattheAdministrator,initssolediscretion,shallhavetherighttosubstituteaStock AppreciationRightforsuch Optionat anytimepriortoorupon exerciseofsuch Option;provided,that such Stock AppreciationRightshallbeexercisablewith respecttothesamenumberofsharesofCommon Stockforwhich such substitutedOptionwouldhavebeen exercisable.

7.Exercise of Options.

(a)PartialExercise.AnexercisableOption may beexercisedinwhole orinpart.However,anOption shall notbe exercisablewith respecttofractional sharesandtheAdministratormay requirethat,bythetermsoftheOption,a partial exercisemust bewith respecttoa minimumnumberofshares.

(b)MannerofExercise.AlloraportionofanexercisableOptionshallbedeemedexercisedupon deliveryofall of thefollowingtothe SecretaryoftheCompany,orsuch otherpersonorentitydesignatedbytheAdministrator,orhis, heroritsoffice,asapplicable:

(i)Awrittennotice complying with theapplicablerulesestablished bytheAdministratorstatingthattheOption, oraportionthereof,is exercised.Thenotice shallbesignedbytheParticipantorotherpersonthen entitledtoexercisetheOption orsuch portionoftheOption.

(ii)Such representationsand documentsastheAdministrator,initssolediscretion,deemsnecessaryoradvisableto effectcompliancewith all applicableprovisionsofthe SecuritiesActand any otherfederal,state orforeignsecuritieslawsor regulations.TheAdministratormay,initssolediscretion,also takewhateveradditionalactionsit deemsappropriatetoeffect such complianceincluding,withoutlimitation,placinglegendsonshare certificatesand issuingstop­transfernoticesto agentsand registrars;

(iii)IntheeventthattheOptionshallbeexercisedpursuant toSection13(a)byany personorpersonsotherthan the Participant,appropriateproofoftherightofsuch personorpersonstoexercisetheOption;and

(iv)Fullpayment oftheexerciseprice and applicablewithholdingtaxestothe SecretaryoftheCompanyforthe shareswith respecttowhichtheOption,orportionthereof,isexercised,ina mannerpermittedbySection13(a)and 13(b).

(c)NotificationRegardingDisposition.TheParticipantshallgivetheCompanypromptnotice ofanydispositionof sharesofCommon StockacquiredbyexerciseofanIncentiveStockOptionwhichoccurswithin(a)twoyearsfromthe dateofgranting(including

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thedatetheOptionis modified,extendedorrenewedforpurposesofSection424(h)ofthe Code)such Optiontosuch Participant,or(b)oneyearafterthetransferofsuch sharestosuch Participant.

8.Award of Restricted Stock.

(a)Award ofRestrictedStock.

(i)TheAdministratoris authorized tograntRestricted StocktoEligibleIndividuals,and shalldeterminetheterms and conditions,includingtherestrictionsapplicabletoeach awardofRestricted Stock,whichtermsand conditionsshallnot beinconsistentwith the Plan,and may imposesuch conditionsontheissuanceofsuch Restricted Stockasit deems appropriate.

(ii)TheAdministratorshallestablishthepurchaseprice,ifany,and formofpayment forRestricted Stock;provided, however,that such purchaseprice shallbenolessthan theparvalueoftheCommon Stocktobepurchased,unlessotherwise permittedbyapplicablestate law.Inall cases,legalconsiderationshallberequiredforeach issuanceofRestricted Stock.

(b)RightsasStockholders.SubjecttoSection8(d),upon issuanceofRestrictedStock,theParticipantshallhave,unless otherwiseprovidedbytheAdministrator,all therightsofastockholderwith respecttosaidshares,subjecttothe restrictionsinhisorherAwardAgreement,includingtherighttoreceiveall dividendsandotherdistributionspaid or made with respecttotheshares;provided,however,that,inthesolediscretionoftheAdministrator,anyextraordinary distributionswith respecttotheCommon Stock shallbesubjecttotherestrictionsset forth inSection8.3.

(c)Restrictions.All sharesofRestrictedStock(includinganysharesreceivedbyParticipantsthereofwith respectto sharesofRestrictedStockasaresultofstock dividends,stock splitsoranyotherformofrecapitalization)shall,inthe termsofeach individualAwardAgreement,besubjecttosuch restrictionsandvestingrequirementsastheAdministrator shallprovide.Such restrictionsmay include,withoutlimitation,restrictionsconcerningvotingrightsandtransferability andsuch restrictionsmay lapseseparatelyorincombinationat such timesandpursuanttosuch circumstancesorbased onsuch criteriaasselectedbytheAdministrator,including,withoutlimitation,criteriabasedontheParticipant’sduration ofemployment,directorship orconsultancy with theCompany,the PerformanceCriteria,Companyperformance, individualperformanceorothercriteriaselectedbytheAdministrator.ByactiontakenaftertheRestrictedStockis issued,theAdministratormay,onsuch termsandconditionsasitmay determinetobeappropriate,acceleratethe vestingofsuch RestrictedStockbyremovinganyorall oftherestrictionsimposedbythetermsoftheAward Agreement.RestrictedStockmay notbesold orencumbered untilall restrictionsareterminatedorexpire.

(d)RepurchaseorForfeitureofRestrictedStock.Ifnopricewaspaid bytheParticipantfortheRestrictedStock,upon a Termination ofServicetheParticipant’srightsinunvestedRestrictedStockthen subjecttorestrictionsshalllapse,andsuch RestrictedStock shallbesurrendered totheCompanyandcancelledwithoutconsideration.Ifapricewaspaid bythe ParticipantfortheRestrictedStock,upon aTermination ofServicetheCompanyshallhavetherighttorepurchasefromthe ParticipanttheunvestedRestrictedStockthen subjecttorestrictionsat acash pricepershareequaltothepricepaid bytheParticipantforsuch RestrictedStockorsuch otheramountasmay be specifiedintheAwardAgreementThe

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Administratorinitssolediscretionmay providethatintheeventofcertain events,includingaChangeinControl,theParticipant’sdeath,retirementordisabilityoranyotherspecifiedTermination of Serviceoranyotherevent,theParticipant’srightsinunvestedRestrictedStock shallnotlapse,such RestrictedStock shall vestand,ifapplicable,theCompanyshallnothavearightofrepurchase.

(e)CertificatesforRestrictedStock.RestrictedStockgrantedpursuanttothe Plan may beevidencedinsuch mannerastheAdministratorshalldetermine.Certificatesorbook entriesevidencingsharesofRestrictedStockmust includeanappropriatelegendreferringtotheterms,conditions,andrestrictionsapplicabletosuch RestrictedStock, andtheCompanymay,initssolediscretion,retainphysicalpossessionofanystock certificateuntilsuch timeasall applicablerestrictionslapse.

(f)Section83(b)Election.IfaParticipantmakesanelectionunderSection83(b)oftheCodetobetaxedwith respect to theRestrictedStockasofthedateoftransferoftheRestrictedStockratherthan asofthedateordatesupon whichthe ParticipantwouldotherwisebetaxableunderSection83(a)oftheCode,theParticipantshallberequiredtodeliveracopy of such electiontotheCompanypromptlyafterfiling such electionwith theInternalRevenueService.

9. Awards of Restricted Stock Units.

(a)        Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units.

(b)        Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the Administrator in its discretion.

(c)        Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

(d)        Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both.

(e)        Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.

10.Award of Performance Units and Performance Shares,

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(a)Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant.

(b)Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

(c)Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of performance Units/Shares that will be paid out to the Service Providers. The time period during which the performance objectives or other vesting provisions must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, business unit or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.

(d)Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share.

(e)Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

(f)Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.

11.Award of Stock Appreciation Rights

a.GrantofStockAppreciationRights.

(i)TheAdministratoris authorized tograntStockAppreciationRightstoEligibleIndividualsfromtime totime,in itssolediscretion,onsuch termsand conditionsasit may determineconsistent with the Plan.

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(ii)AStockAppreciationRightshallentitletheParticipant(orotherpersonentitledtoexercisethe StockAppreciation Rightpursuant tothe Plan)toexerciseall oraspecifiedportionofthe StockAppreciationRight(totheextentthen exercisablepursuant toitsterms)and toreceivefromtheCompanyanamountdetermined bymultiplyingthedifference obtainedbysubtracting theexerciseprice pershare ofthe StockAppreciationRightfromthepershare FairMarketValueon thedateofexerciseofthe StockAppreciationRightbythenumberofsharesofCommon Stockwith respecttowhichthe StockAppreciationRightshallhave been exercised,subjecttoany limitationstheAdministratormay impose.Exceptas describedin(c)below,theexerciseprice pershare ofCommon Stock subjecttoeach StockAppreciationRightshallbeset by theAdministrator,but shallnotbelessthan 100%ofthe FairMarketValueonthedatethe StockAppreciationRightis granted,unlessdetermined otherwisebytheAdministrator.

(iii)NotwithstandingtheforegoingprovisionsofSection11(a)(ii)tothecontrary,inthecase ofanStock AppreciationRightthatisaSubstituteAward,theprice pershare ofthesharessubjecttosuch StockAppreciationRightmay belessthan the FairMarketValuepershare onthedateofgrant,provided,thattheexcessof: (a)theaggregateFairMarket Value(asofthedatesuch SubstituteAwardisgranted)ofthesharessubjecttothe SubstituteAward,over(b)theaggregate exerciseprice thereofdoesnotexceedtheexcessof: (x)theaggregatefairmarketvalue(asofthetime immediatelypreceding thetransaction givingriseto the SubstituteAward,such fairmarketvaluetobedetermined bytheAdministrator)ofthesharesofthepredecessorentity thatwere subjecttothegrantassumedorsubstituted forbytheCompany,over(y)theaggregateexerciseprice ofsuch shares.

(b)StockAppreciationRightVesting.

(i)TheAdministratorshalldeterminetheperiodduringwhichaParticipantshallvestinaStockAppreciationRight and have therighttoexercisesuch StockAppreciationRightinwhole orinpart.Such vesting may bebasedonservicewith theCompanyorany Subsidiary,orany othercriteriaselectedbytheAdministrator.At any time aftergrantofaStock AppreciationRight,theAdministratormay,initssolediscretionand subjecttowhatevertermsand conditionsit selects, acceleratetheperiodduringwhichaStockAppreciationRightvests.

(ii)No portionofaStockAppreciationRightwhichisunexercisableat TerminationofServiceshallthereafter becomeexercisable,exceptasmay beotherwiseprovidedbytheAdministratoreitherintheAwardAgreementorbyactionof theAdministratorfollowingthegrantofthe StockAppreciationRight.

(c)MannerofExercise.AlloraportionofanexercisableStockAppreciationRightshallbedeemedexercised upon deliveryofall ofthefollowingtothe SecretaryoftheCompany,orsuch otherpersonorentitydesignatedbythe Administrator,orhis,heroritsoffice,asapplicable:

(i)Awrittennotice complying with theapplicablerulesestablished bytheAdministratorstatingthatthe Stock AppreciationRight,oraportionthereof,is exercised.Thenotice shallbesignedbytheParticipantorotherpersonthen entitled toexercisethe StockAppreciationRightorsuch portionofthe StockAppreciationRight;

(ii)Such representationsand documentsastheAdministrator,initssolediscretion,deemsnecessaryoradvisableto effectcompliancewith all applicable

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provisionsofthe SecuritiesActand any otherfederal,state orforeignsecuritieslawsor regulations.TheAdministratormay,initssolediscretion,also takewhateveradditionalactionsit deemsappropriatetoeffect such compliance;and

(iii)Intheeventthatthe StockAppreciationRightshallbeexercisedpursuant tothisSection11(c)(iii)byany personor personsotherthan theParticipant,appropriateproofoftherightofsuch personorpersonstoexercisethe StockAppreciation Right.

(d)Payment.PaymentoftheamountdeterminedunderSection11(a)(i)above shallbeincash,sharesofCommon Stock(basedonitsFairMarketValue asofthedatethe StockAppreciationRightis exercised),oracombinationof both,asdeterminedbytheAdministrator.

12.Dividend Equivalents, Deferred Stock, Stock Payments.

(a)DividendEquivalents.

(i)DividendEquivalentsmay begrantedbytheAdministratorbasedondividendsdeclaredontheCommon Stock, tobecreditedasofdividendpayment datesduringtheperiodbetweenthedateanAwardisgrantedtoaParticipantand thedate such Awardvests,isexercised,isdistributed orexpires,asdetermined bytheAdministrator.Such DividendEquivalentsshall beconvertedtocash oradditionalsharesofCommon Stockbysuch formulaand at such time and subjecttosuch limitations asmay bedetermined bytheAdministrator.

(ii)Notwithstandingtheforegoing,noDividendEquivalentsshallbepayablewith respecttoOptionsorStock AppreciationRights,unlessotherwisedetermined bytheAdministrator.

(b)StockPayments.TheAdministratoris authorizedtomake StockPaymentstoany EligibleIndividual.The numberorvalue ofsharesofanyStockPaymentshallbedeterminedbytheAdministratorandmay bebasedupon one ormorePerformanceCriteriaoranyotherspecificcriteria,includingservicetotheCompanyoranySubsidiary, determinedbytheAdministrator.StockPaymentsmay,butarenotrequiredtobemade inlieuofbasesalary,bonus,fees orothercash compensationotherwisepayabletosuch EligibleIndividual.

(c)Deferred Stock.TheAdministratoris authorizedtograntDeferredStocktoany EligibleIndividual.Thenumber ofsharesofDeferredStock shallbedeterminedbytheAdministratorandmay bebasedononeormorePerformance Criteriaorotherspecificcriteria,includingservicetotheCompanyoranySubsidiary,astheAdministratordetermines, in each caseonaspecifieddateordatesoroveranyperiodorperiodsdeterminedbytheAdministrator.Common Stock underlyingaDeferredStockawardwillnotbeissueduntiltheDeferredStockawardhasvested,pursuanttoavesting scheduleorotherconditionsorcriteriaset bytheAdministrator.UnlessotherwiseprovidedbytheAdministrator,a ParticipantofDeferredStock shallhavenorightsasaCompanystockholderwith respecttosuch DeferredStockuntilsuch timeastheAwardhasvestedandtheCommon StockunderlyingtheAwardhasbeen issuedtotheParticipant.

(d)Term.ThetermofaDividendEquivalentaward,DeferredStockaward, and/or StockPayment award shallbeset bytheAdministratorinitssolediscretion.

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(e)ExerciseorPurchasePrice.TheAdministratormay establishtheexerciseorpurchasepriceofsharesofDeferredStock or sharesdistributedasaStockPaymentaward;provided,however,thatvalue oftheconsiderationshallnotbelessthan theparvalue ofa shareofCommon Stock,unlessotherwisepermittedbyapplicablelaw.

(f)ExerciseuponTerminationofService.ADividendEquivalentaward,DeferredStock award, and/or StockPaymentawardis exercisableordistributableonly while theParticipantis anEmployee,DirectororConsultant,asapplicable.TheAdministrator,however,initssolediscretionmay providethat theDividendEquivalentaward,DeferredStockaward, and/or StockPaymentaward may beexercisedordistributedsubsequenttoaTermination ofServiceincertainevents,includinga ChangeinControl,theParticipant’sdeath,retirementordisabilityoranyotherspecifiedTermination ofService.

13.Additional Terms of Awards.

(a)Payment.TheAdministratorshall determinethemethodsbywhichpaymentsbyanyParticipantwith respectto anyAwardsgranted underthe Plan shall bemade,including,withoutlimitation:(a)cash orcheck,(b)sharesof Common Stock(including,inthecaseofpaymentoftheexercisepriceofanAward,sharesofCommon Stockissuable pursuanttotheexerciseoftheAward)orsharesofCommon Stockheld forsuch periodoftimeasmay berequiredbythe Administratorinordertoavoidadverseaccountingconsequences,ineach case,having a FairMarketValue onthedate ofdeliveryequaltotheaggregatepaymentsrequired,(c)deliveryofa notice thattheParticipanthasplaceda marketsell orderwith a brokerwith respecttosharesofCommon Stockthen issuableupon exerciseorvesting ofanAward,andthat thebrokerhasbeen directedtopaya sufficient portion ofthenetproceedsofthesaletotheCompanyinsatisfaction of theaggregatepaymentsrequired,provided,thatpaymentofsuch proceedsis then made totheCompanyupon settlementofsuch sale,or(d)otherformoflegal considerationacceptabletotheAdministrator.TheAdministratorshall alsodeterminethemethodsbywhich sharesofCommon Stock shall bedeliveredordeemedtobedeliveredto Participants. Notwithstandinganyotherprovisionofthe Plan tothecontrary,noParticipantwho is a Directororan“executiveofficer”of theCompanywithinthemeaningofSection 13(k)oftheExchangeAct shall bepermittedtomake paymentwith respect toanyAwardsgranted underthe Plan,orcontinueanyextensionofcreditwith respecttosuch paymentwith a loan from theCompanyora loan arrangedbytheCompanyinviolationofSection 13(k)oftheExchangeAct.

(b)Tax Withholding.TheCompanyoranySubsidiaryshallhavetheauthorityandtherighttodeductor withhold,orrequireaParticipanttoremittotheCompany,anamountsufficient tosatisfyfederal,state,localandforeign taxes(includingtheParticipant’sFICAoremploymenttaxobligation)requiredbylawtobewithheldwith respecttoany taxableeventconcerningaParticipantarisingasaresultofthe Plan.TheAdministratormay initssolediscretionandin satisfaction oftheforegoingrequirementwithhold,orallowaParticipanttoelecttohavetheCompanywithholdsharesof Common StockotherwiseissuableunderanAward(orallowthesurrenderofsharesofCommon Stock).Unless determinedotherwisebytheAdministrator,thenumberofsharesofCommon Stockwhichmay besowithheldor surrendered shallbelimitedtothenumberofshareswhichhaveaFairMarketValue onthedateofwithholding or repurchasenogreaterthan theaggregateamountofsuch liabilitiesbasedontheminimumstatutorywithholding rates forfederal,state,localandforeignincometaxandpayrolltaxpurposesthatareapplicabletosuch supplementaltaxable income.TheAdministratorshalldeterminethefairmarketvalue oftheCommon Stock,consistent with applicable provisionsoftheCode,fortaxwithholding obligationsdueinconnectionwith abroker­assistedcashlessOptionor StockAppreciationRightexerciseinvolvingthesaleofsharestopaytheOptionor

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StockAppreciationRightexercise priceoranytaxwithholding obligation.

(c)TransferabilityofAwards.

(i)ExceptasotherwiseprovidedinSection13(c)(ii):

(1)No Awardunderthe Plan may besold,pledged,assignedortransferred inany mannerotherthan bywillor thelawsofdescentand distributionor,subjecttotheconsentoftheAdministrator,unlessand untilsuch Awardhasbeen exercised,orthesharesunderlying such Awardhave been issued,and all restrictionsapplicabletosuch shareshave lapsed;

(2)No Awardorinterestorrightthereinshallbeliableforthedebts,contractsorengagementsoftheParticipant orhissuccessorsininterestorshallbesubjecttodisposition bytransfer,alienation,anticipation,pledge,hypothecation, encumbrance,assignmentorany othermeanswhethersuch disposition bevoluntaryorinvoluntaryorbyoperationoflawby judgment,levy,attachment,garnishmentorany otherlegalorequitableproceedings(including bankruptcy),and any attempteddisposition thereofshallbenulland void and ofnoeffect,excepttotheextentthat such disposition ispermitted bytheprecedingsentence;and

(3)DuringthelifetimeoftheParticipant,only theParticipantmay exerciseanAward(orany portionthereof) grantedtohimunderthe Plan;afterthedeathoftheParticipant,any exercisable portionofanAward may,priortothetime when such portionbecomesunexercisableunderthe Plan ortheapplicableAward Agreement,beexercisedbyhispersonal representativeorbyany personempoweredtodosounderthedeceasedParticipant’s willorunderthethen applicablelawsofdescentand distribution.

(ii)NotwithstandingSection13(c)(i),theAdministrator,initssolediscretion,may determinetopermitaParticipantto transferanAwardotherthan anIncentiveStockOptiontoany oneormore PermittedTransferees(asdefinedbelow),subject tothefollowingtermsand conditions:(i)anAwardtransferred toaPermittedTransfereeshallnotbeassignableor transferablebythe PermittedTransfereeotherthan bywillorthelawsofdescentand distribution;(ii)anAwardtransferred to aPermittedTransfereeshallcontinuetobesubjecttoall thetermsand conditionsoftheAwardasapplicabletotheoriginal Participant(otherthan theabilitytofurthertransfertheAward); and (iii)theParticipantand the PermittedTransfereeshallexecute any and all documentsrequestedbytheAdministrator,including,withoutlimitationdocumentsto(A)confirmthestatusof thetransfereeasaPermittedTransferee,(B)satisfyany requirementsforanexemption forthetransferunderapplicable federal,state and foreignsecuritieslawsand (C)evidencethetransfer.ForpurposesofthisSection11.3(b),“PermittedTransferee”means,with respecttoaParticipant,any “family member”oftheParticipant,asdefinedundertheinstructionstouse ofthe FormS­8 RegistrationStatementunderthe SecuritiesAct,orany othertransfereespecificallyapprovedbythe Administratoraftertakinginto account any state,federal,localorforeigntax and securitieslawsapplicabletotransferable Awards.

(iii)NotwithstandingSection13(c)(i),aParticipantmay,inthemannerdetermined bytheAdministrator,designatea beneficiary toexercisetherightsoftheParticipantand toreceiveany distribution with respecttoany Awardupon theParticipant’s death.Abeneficiary,legalguardian,legalrepresentative,orotherpersonclaimingany rightspursuant tothe Plan issubject toall termsand conditionsofthe Plan and any AwardAgreementapplicable

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totheParticipant,excepttotheextentthe Plan and AwardAgreementotherwiseprovide,and toany additionalrestrictionsdeemednecessaryorappropriatebythe Administrator.IftheParticipantismarriedoradomesticpartnerinadomesticpartnership qualifiedunderapplicablelawand residesinacommunitypropertystate,adesignationofapersonotherthan theParticipant’sspouseordomestic partner,asapplicable,ashisorherbeneficiary with respecttomore than 50%oftheParticipant’sinterestintheAwardshallnot beeffectivewithoutthepriorwrittenconsentoftheParticipant’sspouseordomesticpartner.Ifnobeneficiary hasbeen designated orsurvivestheParticipant,payment shallbemadetothepersonentitledtheretopursuant totheParticipant’swillorthe lawsofdescentand distribution.Subjecttotheforegoing,abeneficiary designationmay bechangedorrevokedbyaParticipantat any time providedthechangeorrevocation isfiled with theAdministratorpriortotheParticipant’sdeath.

(d)ConditionstoIssuanceofShares.

i.Notwithstandinganythinghereintothecontrary,theCompanyshallnotberequiredtoissue ordeliverany certificatesormakeany book entriesevidencing sharesofCommon Stockpursuant totheexerciseofany Award,unlessand untiltheBoardhasdetermined,with adviceofcounsel,thattheissuanceofsuch sharesisincompliancewith all applicable laws,regulationsofgovernmentalauthoritiesand,ifapplicable,therequirementsofany exchangeonwhichthesharesof Common Stockarelistedortraded,and thesharesofCommon Stockarecoveredbyaneffectiveregistrationstatementor applicableexemption fromregistration.Inadditiontothetermsand conditionsprovidedherein,theBoardmay requirethata Participantmakesuch reasonablecovenants,agreements,and representationsastheBoard,initsdiscretion,deemsadvisablein ordertocomplywith any such laws,regulations,orrequirements.

(i)AllCommon Stockcertificatesdeliveredpursuant tothe Plan and all sharesissuedpursuant tobook entry proceduresaresubjecttoany stop­transferordersand otherrestrictionsastheAdministratordeemsnecessaryoradvisableto complywith federal,state,orforeignsecuritiesorotherlaws,rulesand regulationsand therulesofany securitiesexchangeor automated quotationsystemonwhichtheCommon Stockislisted,quoted,ortraded.TheAdministratormay place legends onany Common Stockcertificateorbook entry toreferencerestrictionsapplicabletotheCommon Stock.

(ii)TheAdministratorshallhave therighttorequireany Participanttocomplywith any timingorotherrestrictions with respecttothesettlement,distributionorexerciseofany Award,includingawindow­periodlimitation,asmay be imposedinthesolediscretionoftheAdministrator.

(iii)No fractionalsharesofCommon Stock shallbeissuedand theAdministratorshalldetermine,initssole discretion,whethercash shallbegiveninlieu offractionalsharesorwhethersuch fractionalsharesshallbeeliminated by roundingdown.

(iv)Notwithstandingany otherprovisionofthe Plan,unlessotherwisedetermined bytheAdministratororrequired byany applicablelaw,ruleorregulation,theCompanyshallnotdelivertoany Participantcertificatesevidencing sharesof Common Stockissuedinconnection with any Awardand insteadsuch sharesofCommon Stock shallberecordedinthe booksoftheCompany(or,asapplicable,itstransferagentorstock plan administrator).

(e)ForfeitureProvisions.Pursuanttoitsgeneralauthoritytodeterminethe

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termsandconditionsapplicableto Awardsunderthe Plan,theAdministratorshallhavetherighttoprovide,inthetermsofAwardsmade underthe Plan,or torequireaParticipanttoagree by separatewritteninstrument,that:(a)(i)anyproceeds,gainsorothereconomicbenefitactuallyorconstructivelyreceived bytheParticipantupon anyreceiptorexerciseoftheAward,orupon thereceiptorresale ofanyCommon Stockunderlying theAward,mustbepaid totheCompany,and(ii)theAwardshallterminateandanyunexercised portionoftheAward (whetherornotvested)shallbeforfeited,if(b)(i)aTermination ofServiceoccurspriortoaspecifieddate,orwithina specifiedtimeperiodfollowingreceiptorexerciseoftheAward,or(ii)theParticipantat anytime,orduringaspecifiedtime period,engagesinanyactivityincompetition with theCompany,orwhichis inimical,contraryorharmfultothe interestsoftheCompany,asfurtherdefinedbytheAdministratoror(iii)theParticipantincursaTermination ofServicefor “cause”(assuch termis definedinthesolediscretionoftheAdministrator,orasset forth inawrittenagreementrelating tosuch AwardbetweentheCompanyandtheParticipant).

(f)Repricing.SubjecttoSection16(b),theAdministratorshallhavetheauthority,withouttheapprovalofthe stockholdersoftheCompany,toamendanyoutstanding award,inwhole orinpart,toincreaseorreducethepriceper shareortocancelandreplaceanAward,inwhole orinpart,with thegrantofanAwardhavingapricepersharethatis lessthan,greaterthan orequaltothepricepershareoftheoriginalAward.

14.Non-Employee Director Awards

a.NonemployeeDirectorAwards.In order to align the interests of Non-Employee Directors with those of the Company's stockholders, a portion of the compensation paid to Non-Employee Directors for their service to the Company will be paid through a grant of an equity-based Award under the Plan (each a "Director Equity Award").  Director Equity Awards may consist of Options, Restricted Stock, Restricted Stock Units, SARs, other equity-based Awards available under the Plan, or any combination of the foregoing, as determined by the Committee from time to time.

15.Administration

(a)Administrator.TheCompensationCommittee(oranothercommitteeora subcommitteeoftheBoardassuming thefunctionsoftheCommitteeunderthe Plan)shall administerthe Plan (exceptasotherwisepermittedherein)andshall consistsolelyoftwoormoreNonemployeeDirectorsappointedbyandholding office at thepleasureoftheBoard, each ofwhomis intendedtoqualify asboth a “non­employeedirector”asdefined byRule16b­3oftheExchangeActor anysuccessorrule,an“outsidedirector”forpurposesofSection 162(m)oftheCodeandan“independentdirector” undertherulesoftheNASDAQ StockMarket(orotherprincipalsecuritiesmarketonwhich sharesofCommon Stockaretraded);provided,thatany actiontakenbytheCommitteeshall bevalid andeffective,whetherornotmembersoftheCommitteeat thetimeof such actionarelaterdeterminednottohavesatisfiedtherequirementsformembership set forth inthisSection 13(a)or otherwiseprovidedinanycharteroftheCommittee.Exceptasmay otherwisebeprovidedinanycharterofthe Committee,appointmentofCommitteemembersshall beeffectiveupon acceptanceofappointment.Committee membersmay resignat anytimebydeliveringwritten notice totheBoard.VacanciesintheCommitteemay only be filled bytheBoard.Notwithstandingtheforegoing,(a)thefullBoard,actingbya majorityofitsmembersinoffice,shall conductthegeneraladministrationofthe Plan with respecttoAwardsgranted toNonemployeeDirectorsand(b)the BoardorCommitteemay delegateitsauthorityhereundertotheextentpermittedbySection 13(f).

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(b)DutiesandPowersofCommittee.Itshallbetheduty oftheCommitteetoconductthegeneraladministration ofthe Plan inaccordancewith itsprovisions.TheCommitteeshallhavethepowertointerpretthe Plan andtheAward Agreement,andtoadoptsuch rulesfortheadministration,interpretationandapplicationofthe Plan asarenot inconsistenttherewith,tointerpret,amendorrevokeanysuch rulesandtoamendanyAwardAgreementprovidedthat therightsorobligationsoftheholderoftheAwardthatis thesubjectofanysuch AwardAgreementarenotaffected adverselybysuch amendment,unlesstheconsentoftheParticipantis obtainedorsuch amendmentis otherwisepermitted underSection16(j).Any such grantorawardunderthe Plan need notbethesamewith respecttoeach holder.Any such interpretationsandruleswith respecttoIncentiveStockOptionsshallbeconsistent with theprovisionsofSection422 oftheCode.Initssolediscretion,theBoardmay at anytimeandfromtimetotimeexerciseanyandall rightsandduties oftheCommitteeunderthe Plan exceptwith respecttomatterswhichunderRule16b­3undertheExchangeActorany successorrule,orSection162(m)oftheCode,oranyregulationsorrulesissuedthereunder,arerequiredtobe determinedinthesolediscretionoftheCommittee.

(c)ActionbytheCommittee.UnlessotherwiseestablishedbytheBoardorinanycharteroftheCommittee,a majorityoftheCommitteeshallconstituteaquorumandtheactsofa majorityofthememberspresentat anymeetingat whichaquorumis present,andactsapprovedinwritingbyall membersoftheCommitteeinlieuofa meeting,shallbe deemedtheactsoftheCommittee.Each memberoftheCommitteeis entitledto,ingood faith,relyoract upon any reportorotherinformation furnishedtothatmemberbyanyofficerorotheremployeeoftheCompanyorany Subsidiary,theCompany’sindependentcertifiedpublic accountants,oranyexecutivecompensationconsultantor otherprofessionalretainedbytheCompanytoassistintheadministrationofthe Plan.

(d)AuthorityofAdministrator.Subjecttoanyspecificdesignation inthe Plan,theAdministratorhasthe exclusivepower,authorityandsolediscretionto:

(i)DesignateEligibleIndividualstoreceiveAwards;

(ii)Determinethetype ortypesofAwardstobegrantedtoeach Participant;

(iii)DeterminethenumberofAwardstobegrantedand thenumberofsharesofCommon Stocktowhichan Awardwillrelate;

(iv)Determinethetermsand conditionsofany Awardgrantedpursuant tothe Plan,including,butnotlimited to,theexerciseprice,grantprice,orpurchaseprice,any reloadprovision,any restrictionsorlimitationsonthe Award,any scheduleforvesting,lapse offorfeiturerestrictionsorrestrictionsontheexercisabilityofanAward,and accelerationsorwaiversthereof,and any provisionsrelatedtonon­competitionand recaptureofgain onanAward, basedineach case onsuch considerationsastheAdministratorinitssolediscretiondetermines;

(v)Determinewhether,towhatextent,and pursuant towhatcircumstancesanAward may besettledin,orthe exerciseprice ofanAward may bepaid incash,Common Stock,otherAwards,orotherproperty,oranAward may becanceled,forfeited,orsurrendered;

(vi)Prescribetheformofeach AwardAgreement,whichneed notbe

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identical foreach Participant

(vii)Decideall othermattersthatmustbedetermined inconnection with an Award;

(viii)Establish,adopt,orreviseany rulesand regulationsasit may deemnecessaryoradvisabletoadminister the Plan;

(ix)Interpret thetermsof,and any matterarisingpursuant to,the Plan orany AwardAgreement;and

(x)Makeall otherdecisionsand determinationsthatmay berequiredpursuant tothe Plan orasthe Administratordeemsnecessaryoradvisabletoadministerthe Plan.

(e)DecisionsBinding.TheAdministrator’sinterpretationofthe Plan,anyAwardsgrantedpursuanttothe Plan, anyAwardAgreementandall decisionsanddeterminationsbytheAdministratorwith respecttothe Plan arefinal, binding,andconclusiveonall parties.

(f)Delegation ofAuthority.Totheextentpermittedbyapplicablelaw,theBoardorCommitteemay fromtimeto timedelegatetoacommitteeofoneormoremembersoftheBoardoroneormoreofficersoftheCompanytheauthority tograntoramendAwards;provided,however,thatinnoeventshallanofficerbedelegatedtheauthoritytogrant awardsto,oramendawardsheld by,thefollowingindividuals:(a)individualswho aresubjecttoSection16ofthe ExchangeAct,(b)CoveredEmployees,or(c)officersoftheCompany(orDirectors)towhomauthoritytograntor amendAwardshasbeen delegatedhereunder.Any delegationhereundershallbesubjecttotherestrictionsandlimits thattheBoardorCommitteespecifiesat thetimeofsuch delegation,andtheBoardmay at anytime rescindthe authoritysodelegatedorappointanewdelegate.At all times,thedelegateappointedunderthisSection15(f) shall serveinsuch capacityat thepleasureoftheBoardandtheCommittee.

16.Miscellaneous Provisions

(a)Amendment,Suspension orTerminationofthe Plan.ExceptasotherwiseprovidedinthisSection 16(a),the Plan may bewholly orpartiallyamendedorotherwisemodified,suspendedorterminatedat anytimeorfromtimeto timebytheBoard.However,withoutapprovaloftheCompany’sstockholdersgivenwithintwelve(12)monthsbefore oraftertheactionbytheAdministrator,noactionoftheAdministratormay,exceptasprovidedinSection 16(b),increase thelimitsimposedinSection 3(a)onthemaximumnumberofshareswhichmay beissuedunderthe Plan.Exceptas providedinSection 16(j),noamendment,suspensionortermination ofthe Plan shall,withouttheconsentofthe Participant,impairanyrightsorobligationsunderanyAward theretoforegranted orawarded,unlesstheAward itself otherwiseexpresslysoprovides.NoAwardsmay begranted orawardedduringanyperiodofsuspensionorafter termination ofthe Plan,andinnoeventmay anyAward begranted underthe Plan afterthetenth (10th)anniversary of the EffectiveDate.

(b)ChangesinCommon StockorAssetsoftheCompany,Acquisition orLiquidation oftheCompanyandOther CorporateEvents.

(i)Intheeventofany stock dividend,stock split,combinationor

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exchangeofshares,merger,consolidationor otherdistribution (otherthan normalcash dividends)ofCompanyassetstostockholders,orany otherchangeaffectingthe sharesoftheCompany’sstock ortheshare price oftheCompany’sstock otherthan anEquityRestructuring,the Administratormay make equitableadjustments,ifany,toreflectsuch changewith respectto(i)theaggregatenumberand kind ofsharesthatmay beissuedunderthe Plan (including,butnotlimitedto,adjustmentsofthelimitationsinSection3(a) onthemaximumnumberand kind ofshareswhichmay beissuedunderthe Plan);(ii)thenumberand kind ofsharesof Common Stock(orothersecuritiesorproperty)subjecttooutstanding Awards; (iii)thetermsand conditionsofany outstanding Awards(including,withoutlimitation,any applicableperformancetargetsorcriteriawith respectthereto); and (iv)thegrantorexerciseprice pershare forany outstanding Awardsunderthe Plan.Any adjustmentaffectinganAward intendedasPerformance­BasedCompensationshallbemade consistent with therequirementsofSection162(m)oftheCode.

(ii)Intheeventofany transaction oreventdescribedinSection16(b)(i)orany unusual ornonrecurringtransactions oreventsaffectingtheCompany,any affiliateoftheCompany,orthefinancial statementsoftheCompanyorany affiliate,or ofchangesinapplicablelaws,regulationsoraccounting principles,theAdministrator,initssolediscretion,and onsuch termsand conditionsasit deemsappropriate,eitherbythetermsoftheAwardorbyactiontakenpriortotheoccurrenceof such transaction oreventand eitherautomaticallyorupon theParticipant’srequest,isherebyauthorized totakeany oneormore ofthefollowingactionswhenevertheAdministratordeterminesthat such actionisappropriateinordertopreventdilutionor enlargementofthebenefitsorpotential benefitsintendedtobemadeavailableunderthe Plan orwith respecttoany Award underthe Plan,tofacilitatesuch transactionsoreventsortogive effecttosuch changesinlaws,regulationsorprinciples.

(1)Toprovideforeither(A)terminationofanysuch Awardinexchangeforanamountofcash,ifany,equal totheamountthatwouldhavebeen attainedupon theexerciseofsuch AwardorrealizationoftheParticipant’srights(and,for theavoidanceofdoubt,ifasofthedateoftheoccurrenceofthetransactionoreventdescribedinthisSection16(b)the Administratordeterminesingood faith thatnoamountwouldhavebeen attainedupon theexerciseofsuch Awardor realizationoftheParticipant’srights,then such Award may beterminatedbytheCompanywithoutpayment)or(B)the replacementofsuch Awardwith otherrightsorpropertyselectedbytheAdministratorinitssolediscretionhavingan aggregatevaluenotexceedingtheamountthatcouldhavebeen attainedupon theexerciseofsuch Awardorrealizationof theParticipant’srightshadsuch Awardbeen currentlyexercisableorpayableorfully vested.

(2)Toprovidethat such Awardbeassumedbythesuccessororsurvivorcorporation,oraparentorsubsidiary thereof,orshallbesubstituted forbysimilaroptions,rightsorawardscoveringthestock ofthesuccessororsurvivor corporation,oraparentorsubsidiarythereof,with appropriateadjustmentsastothenumberandkind ofsharesandprices;

(3)TomakeadjustmentsinthenumberandtypeofsharesoftheCompany’sstock (orothersecuritiesor property)subjecttooutstanding Awards,andinthenumberandkind ofoutstandingRestrictedStockorDeferredStock and/orinthetermsandconditionsof(includingthegrantorexerciseprice),andthecriteriaincludedin,outstanding Awards andAwardswhichmay begrantedinthefuture;

(4)Toprovidethat such Awardshallbeexercisableor

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payableorfully vestedwith respecttoall shares coveredthereby,notwithstandinganythingtothecontraryinthe Plan ortheapplicableAwardAgreement;and

(5)ToprovidethattheAwardcannotvest,beexercisedorbecomepayableaftersuch event.

(iii)Inconnection with theoccurrenceofany EquityRestructuring,and notwithstandinganythingtothecontraryin Sections16(b)(i)and 16(b)(ii):

(1)Thenumberand typeofsecuritiessubjecttoeach outstanding Awardand/ortheexercisepriceorgrant pricethereof,ifapplicable,shallbeequitablyadjusted.TheadjustmentsprovidedunderthisSection16(b)(iii)shallbe nondiscretionaryand shallbefinaland bindingontheaffectedParticipantand theCompany.

(2)TheAdministratorshall makesuch equitableadjustments,ifany,astheAdministratorinitsdiscretion may deemappropriatetoreflectsuch EquityRestructuringwith respecttotheaggregatenumberandkind ofsharesthatmay beissuedunderthe Plan (including,butnotlimitedto,adjustmentsofthelimitationsinSection3(a)onthemaximumnumber andkind ofshareswhichmay beissuedunderthe Plan).

(iv)Notwithstandingany otherprovisionofthe Plan,but subjecttoSection16(b)(iv),intheeventofaChangein Control,each outstanding AwardshallbeassumedoranequivalentAwardsubstituted bythesuccessorcorporationora parentorsubsidiary ofthesuccessorcorporation.

(v)IntheeventthatthesuccessorcorporationinaChangeinControlrefusestoassumeorsubstituteforanAward upon aChangeinControl,such Awardshallbecomefully vestedand,ifapplicable,exercisableand all forfeiturerestrictions onsuch Awardshalllapse,ineach case,asofimmediatelypriortotheconsummationofsuch ChangeinControl.IfanAward isexercisableinlieu ofassumptionorsubstitutionintheeventofaChangeinControl,theAdministratorshallnotifythe ParticipantthattheAwardshallbefully exercisableforaperiodoffifteen(15)daysfromthedateofsuch notice,contingentupon theoccurrenceoftheChangeinControl,and theAwardshallterminateupon theexpiration ofsuch period.

(vi)TheAdministratormay,initssolediscretion,includesuch furtherprovisionsand limitationsinany Award, agreementorcertificate,asit may deemequitableand inthebestinterestsoftheCompanythatarenotinconsistentwith the provisionsofthe Plan.

(vii)With respecttoAwardswhicharegrantedtoCoveredEmployeesand areintendedtoqualifyasPerformance­ BasedCompensation,noadjustmentoractiondescribedinthisSection16(b) orinany otherprovisionofthe Plan shallbe authorized totheextentthat such adjustmentoractionwouldcausesuch AwardtofailtosoqualifyasPerformance­Based Compensation,unlesstheAdministratordeterminesthattheAwardshouldnot soqualify.No adjustmentoractiondescribed inthisSection16(b) orinany otherprovisionofthe Plan shallbeauthorized totheextentthat such adjustmentoraction wouldcausethe Plan toviolateSection422(b)(1)oftheCode.Furthermore,nosuch adjustmentoraction shallbeauthorized totheextentsuch adjustmentoractionwouldresultinshort­swingprofitsliabilityunderSection16orviolatetheexemptive conditionsofRule 16b­3unlesstheAdministratordeterminesthattheAwardisnottocomplywith such exemptive conditions.

(viii)Theexistenceofthe Plan,theAwardAgreementand theAwards

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grantedhereundershallnotaffectorrestrictin any way therightorpoweroftheCompanyorthestockholdersoftheCompanytomakeorauthorizeany adjustment, recapitalization,reorganizationorotherchangeintheCompany’scapitalstructureoritsbusiness,any mergeror consolidationoftheCompany,any issue ofstock orofoptions,warrantsorrightstopurchasestock orofbonds,debentures, preferredorpriorpreferencestockswhoserightsaresuperiortooraffecttheCommon Stockortherightsthereoforwhichare convertibleinto orexchangeableforCommon Stock,orthedissolution orliquidation ofthecompany,orany saleortransfer ofall orany partofitsassetsorbusiness,orany othercorporateact orproceeding,whetherofasimilarcharacterorotherwise.

(1)No action shallbetakenunderthisSection16(b) which shallcauseanAwardtofailtocomplywith Section409AoftheCodeortheTreasuryRegulationsthereunder,totheextentapplicabletosuch Award.

(2)Intheeventofanypendingstock dividend,stock split,combinationorexchangeofshares,merger, consolidationorotherdistribution(otherthan normalcash dividends)ofCompanyassetstostockholders,oranyother changeaffectingthesharesofCommon StockorthesharepriceoftheCommon Stockincludingany EquityRestructuring, for reasonsofadministrativeconvenience,theCompanyinitssolediscretionmay refusetopermittheexerciseofanyAward duringaperiodofuptothirty(30)dayspriortotheconsummationofanysuch transaction.

(c)Approval ofPlan byStockholders.The Plan willbesubmittedfortheapprovaloftheCompany’sstockholders withintwelve(12)monthsofthedateoftheBoard’sinitialadoptionofthe Plan.Awardsmay begrantedorawarded priortosuch stockholderapproval,providedthat such Awardsshallnotbeexercisable,shallnotvestandthe restrictionsthereonshallnotlapseandnosharesofCommon Stock shallbeissuedpursuanttheretopriortothetime whenthe Plan is approvedbythestockholders,andprovidedfurtherthatifsuch approvalhasnotbeen obtainedat the endofsaidtwelve(12)monthperiod,all Awardspreviouslygrantedorawardedunderthe Plan shallthereuponbe canceledandbecomenullandvoid.

(d)NoStockholdersRights.Exceptasotherwiseprovidedherein,aParticipantshallhavenoneoftherightsofa stockholderwith respecttosharesofCommon StockcoveredbyanyAwarduntiltheParticipantbecomestherecordowner ofsuch sharesofCommon Stock.

(e)PaperlessAdministration.IntheeventthattheCompanyestablishes,foritselforusingtheservicesofathird party,anautomatedsystemforthedocumentation,grantingorexerciseofAwards,such asasystemusinganinternet websiteorinteractivevoice response,then thepaperlessdocumentation,grantingorexerciseofAwardsbyaParticipantmay bepermittedthroughtheuseofsuch anautomatedsystem.

(f)EffectofPlan uponOtherCompensationPlans.Theadoptionofthe Plan shallnotaffectanyother compensationorincentiveplansineffectfortheCompanyoranySubsidiary.Nothinginthe Plan shallbeconstruedto limittherightoftheCompanyoranySubsidiary:(a)toestablishanyotherformsofincentivesorcompensationfor Employees,DirectorsorConsultantsoftheCompanyoranySubsidiary,or(b)tograntorassumeoptionsorotherrights orawardsotherwisethan underthe Plan inconnectionwith anypropercorporatepurposeincludingwithoutlimitation, thegrantorassumption ofoptionsinconnectionwith theacquisitionbypurchase,lease,merger,consolidationor otherwise,ofthebusiness,stock or

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assetsofanycorporation,partnership,limitedliabilitycompany,firmorassociation.

(g)Compliancewith Laws.The Plan,thegrantingandvestingofAwardsunderthe Plan andtheissuanceand deliveryofsharesofCommon Stockandthepaymentofmoneyunderthe Plan orunderAwardsgrantedorawarded hereunderaresubjecttocompliancewith all applicablefederal,state,localandforeignlaws,rulesandregulations (includingbutnotlimitedtostate,federalandforeignsecuritieslawandmarginrequirements)andtosuch approvalsby anylisting,regulatoryorgovernmentalauthorityasmay,intheopinionofcounselfortheCompany,benecessaryor advisableinconnectiontherewith.Any securitiesdeliveredunderthe Plan shallbesubjecttosuch restrictions,andthe personacquiringsuch securitiesshall,ifrequestedbytheCompany,providesuch assurancesandrepresentationstothe CompanyastheCompanymay deemnecessaryordesirabletoassure compliancewith all applicablelegalrequirements. Totheextentpermittedbyapplicablelaw,the Plan andAwardsgrantedorawardedhereundershallbedeemedamended totheextentnecessarytoconformtosuch laws,rulesandregulations.

(h)TitlesandHeadings,ReferencestoSectionsoftheCode orExchangeAct.Thetitlesandheadingsofthe Sectionsinthe Plan areforconvenienceofreferenceonly and,intheeventofanyconflict,thetextofthe Plan,rather than such titlesorheadings,shallcontrol.ReferencestosectionsoftheCodeortheExchangeAct shallincludeany amendmentorsuccessorthereto.

(i)GoverningLaw.The Plan andanyagreementshereundershallbeadministered,interpretedandenforcedunder theinternallawsofthe Stateof Wyomingwithoutregardtoconflictsoflawsthereof.

(j)Section409A.TotheextentthattheAdministratordeterminesthatanyAwardgrantedunderthe Plan is subjecttoSection409AoftheCode,theAwardAgreementevidencingsuch Awardshallincorporatethetermsand conditionsrequiredbySection409AoftheCode.Totheextentapplicable,the Plan andAwardAgreementsshallbe interpretedinaccordancewith Section409AoftheCodeandDepartmentofTreasuryregulationsandotherinterpretive guidanceissuedthereunder,includingwithoutlimitationanysuch regulationsorotherguidancethatmay beissued aftertheEffectiveDate.Notwithstandinganyprovisionofthe Plan tothecontrary,intheeventthatfollowingthe EffectiveDatetheAdministratordeterminesthatanyAward may besubjecttoSection409AoftheCodeandrelated DepartmentofTreasuryguidance(includingsuch DepartmentofTreasuryguidanceasmay beissuedaftertheEffective Date),theAdministratormay adoptsuch amendmentstothe Plan andtheapplicableAwardAgreementoradoptother policiesandprocedures(includingamendments,policiesandprocedureswith retroactiveeffect),ortakeanyother actions,thattheAdministratordeterminesarenecessaryorappropriateto(a)exempttheAwardfromSection409Aof theCodeand/orpreservetheintendedtaxtreatment ofthebenefitsprovidedwith respecttotheAward,or(b)comply with therequirementsofSection409AoftheCodeandrelatedDepartmentofTreasuryguidanceandtherebyavoidthe applicationofanypenaltytaxesundersuch Section.

(k)NoRightstoAwards.No EligibleIndividualorotherpersonshallhaveanyclaimtobegrantedanyAward pursuanttothe Plan,andneithertheCompanynortheAdministratoris obligatedtotreatEligibleIndividuals,Participants oranyotherpersonsuniformly.

(l)UnfundedStatusofAwards.The Plan is intendedtobean“unfunded”plan forincentivecompensation.With respecttoanypaymentsnotyetmade toaParticipant

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pursuanttoanAward,nothingcontainedinthe Plan oranyAward AgreementshallgivetheParticipantanyrightsthataregreaterthan thoseofageneralcreditoroftheCompanyorany Subsidiary.

(m)Indemnification.Totheextentallowablepursuanttoapplicablelaw,each memberoftheCommitteeoroftheBoard shallbeindemnified andheld harmlessbytheCompanyfromanyloss,cost,liability,orexpensethatmay be imposedupon orreasonablyincurredbysuch memberinconnectionwith orresultingfromanyclaim,action,suit,or proceedingtowhichheorshemay beaparty orinwhichheorshemay beinvolvedbyreasonofanyactionorfailure to act pursuanttothe Plan andagainstandfromanyandall amountspaid byhimorherinsatisfaction ofjudgment insuch action,suit,orproceedingagainsthimorher;providedheorshegivestheCompanyanopportunity,at itsown expense, tohandleand defendthesamebefore heorsheundertakestohandleanddefenditonhisorherown behalf.Theforegoingrightof indemnificationshallnotbeexclusiveofanyotherrightsofindemnificationtowhich such personsmay beentitled pursuanttotheCompany’sCertificateofIncorporationorBylaws,asa matteroflaw,orotherwise,oranypowerthatthe Companymay havetoindemnifythemorhold themharmless.

(n)RelationshiptootherBenefits.Nopaymentpursuanttothe Plan shallbetakenintoaccountindetermining anybenefitsunderanypension,retirement,savings,profitsharing,groupinsurance,welfareorotherbenefitplan ofthe CompanyoranySubsidiaryexcepttotheextentotherwiseexpresslyprovidedinwritinginsuch otherplan oran agreementthereunder.

(o)Expenses.Theexpensesofadministeringthe Plan shallbeborne bytheCompanyanditsSubsidiaries.

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