8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 9, 2007

INDIGO-ENERGY, INC.

(Exact name of registrant as specified in charter)

Nevada	002-75313	84-0871427
(State or other jurisdiction of incorporationor organization)	(Commission File Number)	(IRS Employee Identification No.)

701 N. Green Valley Pkwy., Suite 200, Henderson, Nevada	89052
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (702) 990-3387

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02.  DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS;

On October 15, 2007, Indigo-Energy, Inc., a Nevada Corporation (the “Company”) held its Annual Stockholders Meeting (the “Stockholder’s Meeting”), during which the following directors were elected as Directors of the Company:

Stanley L. Teeple	Over the past 25 years, Stan Teeple has acted as President of Stan Teeple Inc. In June of 2006, he joined the Company as its Chief Financial Officer. He has held numerous senior management positions over the last 30 years in a number of public and private companies across a broad spectrum of industries.
Stacey Yurkus	Ms.Yonkus has been a part of Asbury Automotive since 2002 as its Director of Investor Relations. From 2002 to 2007, Ms. Yonkus was a Director of Investor Relations for Asbury Automotive Group, a NYSE listed Fortune-500 Company. Ms. Yonkus was the Investor Relations Director for Globix Corporation, a publicly traded Internet infrastructure company where she was responsible for the development and execution of all investor relation programs, for both internal and external investors. Ms. Yonkus holds a bachelors degree in Economics from the State University of New York.
Frank Garufi	Mr. Garufi has been an independent consultant for the past 5 years. He has 45 years of experience in the oil and gas production field. He formed Baron Crest Energy Co. in 1963 for the purpose of drilling oil and gas wells. He has been a general partner in at least 35 drilling partnerships. Mr. Garufi also served as Senior Director of Investor Relations with Santa Fe Petroleum, LLC in Dallas, Texas. Mr. Garufi is also a Partner in Altoona Curve Baseball LP, a AA team affiliated with the Pittsburgh Pirates Baseball team.
John Hurley	Mr. Hurley has been in private law practice for the last 5 years. He has been practicing as an attorney since 1972 and has a wide range of experience in business, criminal and personal injury litigation. He has served on the board of directors of Marine National Bank in Naples, Florida since 2001 up to 2003. He has been with John R. Hurley, P.A. since 1989. He received his B.A. from Michigan State University and obtained his J.D. from Wayne State University in 1972
James C. Walters, Sr.	For the last 5 years, Mr. Walter has engaged in private investment and entrepreneurial development. He is one of the founding members of Indigo-Energy, LP and since its inception. In 1971, he built the largest All State Insurance Agencies and has been a part of such agency up to 2001, after which, he formed Business Financial Consultants, where he was appointed, and continues to act, as its President and Consultant since its inception.

Subsequent to the Stockholders Meeting, Mr. Garufi resigned from the Board of Directors citing personal reasons for such resignation. The remaining Directors will appoint his replacement at the next scheduled Meeting of the Board of Directors.

On October 15, 2007, at the meeting of the Board of Directors held prior to the Stockholder's meeting, Mr. David Larson formally resigned from his positions as Chief Executive Officer, President and Director of the Company. As a result, Mr. Steven P. Durdin was appointed as the Company’s Chief Executive Officer and President. Under the terms of his Employment Agreement (the “Agreement”), Mr. Durdin agreed to serve in such capacities for a period of 15 months from the time of the execution of such Agreement. As compensation for his services, Mr. Durdin will receive $9,500 per month, as well as stock options during the last quarter of the year 2007, at a quantity and price to be determined by the Board of Directors, but which shall not be less than 10,000,000 shares.

Since 1990 Mr. Durdin has been in the property/casualty insurance industry as an owner and operator of several agencies in New Jersey and Maryland. He has been an active investor and shareholder with the corporation since its inception in 2005. In 2006, he led a small group to form Indigo Partners, L.P. and played a major role in raising the funds necessary to drill the first round of wells for the company. As acting managing partner for the partners, he has been a key liaison with investor groups and shareholders for the organization and has been instrumental in raising the funding necessary to help the company operate up until this point. He also maintains an active role in two overseas partnerships in Panama and Mozambique. He accepted an active and working Directors role for the company in April of 2007. Steve graduated from Rider University in Lawrenceville, New Jersey with a degree in Finance.

There are no familial relationship between or among any of the officers and directors of the Company.

ITEM 8.01.  OTHER EVENTS

During the Stockholder’s Meeting, the stockholders of the Company approved the 2007 Stock Option Plan of Indigo-Energy, Inc. (the “Plan”). Under the terms provided in the Plan, 40,000,000 shares of the Company's Common Stock are made available for distribution to various employees, directors and consultants of the Company. The Plan was designed to encourage selected employees, directors and consultants to improve operations and increase profits of the Company and well as to accept or continue employment or association with the Company or its Affiliates.

Also during the Stockholder’s Meeting, the Stockholders ratified the appointment of L J Soldinger Associates, LLC as independent auditors for the Company for the fiscal hear ending December 31, 2007. L J Soldinger Associates, LLC has served as the Company’s independent auditors since January 1, 2006 and has been appointed by the Audit Committee to continue as the Company’s independent auditors for the fiscal year ending December 31, 2007.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

Not applicable.

(b)	Exhibits.
5.1	Employment Agreement between Indigo-Energy, Inc. and Steven P. Durdin
8.1	2007 Stock Option Plan of Indigo-Energy, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed onits behalf by the undersigned hereunto duly authorized.

Dated: October 23, 2007		INDIGO-ENERGY, INC.
	By:	/s/ Stanley L. Teeple
		Stanley L. Teeple

EX-5.1

Exhibit 5.1

Indigo-Energy, Inc.

Employment Agreement- Steven Durdin

This Agreement is made and entered into as of the 8`^s day of October, 2007 by and between Indigo-Energy, Inc., a Nevada Corporation, ("Employer and/or Company") located at 701 North Green Valley Parkway, Suite 200, Henderson, NV 89074 and Steven P. Durdin, located at 5 Pendleton Ct., Medford, NJ 08055 ("Employee").

WHEREAS, the Employer is engaged in the business of development of oil and gas properties; and

WHEREAS, the Employer desires to retain the services of the Employee in the following capacity: President.

NOW THEREFORE IT IS AGREED AS FOLLOWS:

Section 1.Employment.,The Employer agrees to employ the Employees and the Employees agree to accept the employment described in this Agreement.

Section 2.Duties.The Employee shall serve as President of the Employer, with such duties as are customarily associated with such positions. The Employee shall be responsible for day-today management and strategic planning, and implementation of the Employer's business as directed by the Board of Directors. The Employee shall not be entitled to additional compensation by reason of service as a member of the Board of Directors of the Employer or as a fiduciary of an employee benefit plan of the Employer.

Section 3.Extent of Services.The Employee shall devote whatever time necessary to the performance of his duties and shall not be engaged in any competing business activity, whether or not pursued for gain. The Employee shall at all times faithfully and to the best of his ability perform his duties under this Agreement. The duties shall be rendered either at the Employer's offices or from his home, or at other place or places of business and at such times as the needs of the Employer may dictate.

Section 4.Term.The term of this agreement shall begin October 1, 2007 (`Effective Date") and shall continue for a fifteen (15) month period. This agreement shall automatically renew year to year unless terminated under the provisions contained herein. This Agreement shall not give the Employee any enforceable right to employment beyond the initial term.

Section 5.Compensation.

5.1 Base Compensation_ The Employee will receive a base salary of Nine thousand five hundred ($9,500) per month, payable in accordance with the Employer's standard payroll procedures, The Employee is eligible for performance-based bonuses, but there is no assurance or expectation that the bonuses will be paid. Bonuses will be paid, if at all, on a quarterly basis, at the sole discretion of the Board of Directors according to an incentive plan to be mutually agreed upon.

5.2 Benefits. The Employee shall receive immediate family medical and dental insurance coverage, life insurance equal to thrice (three times) the annual base salary, and other fringe benefits provided to full time, non-union employees of the Employer. An auto allowance of one thousand ($1,000) per month, or alternately, a leased vehicle for company use will be provided.

5.3 Expenses. The Employer shall reimburse the Employee for reasonable out-of-pocket expenses incurred by the Employee in fulfilling his duties. The Employer shall provide the Employee with a home office allowance of one thousand ($1,000) per month to include suitable office facilities, equipment, supplies, telephone and staff.

5.4 Stock. Further, Employee shall receive stock options or cashless warrants in the last quarter of 2007 at a quantity and price to be determined by the Board of Directors but not less than ten million (10,000,000) shares, issued pursuant to a validly authorized stock option plan, duly adopted by the Company.

Section 6.Termination.

6.1 For Cause. The Employer may terminate the Employee's employment at any time "for cause" with immediate effect upon delivering written notice to the Employee. For purposes of this Agreement, "for cause" shall include: (a) embezzlement, theft, larceny, material fraud, or other acts of dishonesty; (b) material violation by Employee of any of his obligations under this Agreement; (c) conviction of or entrance of a plea of guilty or nolo contendere to a felony or other crime which has or may have a material adverse effect on the Employee's ability to carry out his duties under this Agreement or upon the reputation of the Employer; (d) conduct involving moral turpitude; (e) gross insubordination or repeated insubordination after written warning by the Chair of the Board; or (f) material and continuing failure by the Employee to perform duties described in this Agreement in a quality and professional manner for at least sixty (60) days after written warning by the Board of Directors or its Chair. Upon termination "for cause", the Employer's sole and exclusive obligation will be to pay the Employee his compensation earned through the date of termination, and the Employee shall not be entitled to any compensation after the date of termination.

6.2 Upon Death. In the event of the Employee's death during the term of this Agreement, the Employer's sole and exclusive obligation will be to pay the Employee's spouse, if living, or siblings, if living, or his estate, if his spouse and/or siblings are not then living, the Employee's compensation earned through the date of death, including any stock issuance due at time of death or in the future, plus six (6) months base compensation with an additional three (3) months base compensation for every full year of service as severance.

6.3 Upon Disability. The Employer may terminate the Employee's employment upon the Employee's total disability. The Employee shall be deemed to be totally disabled if he is unable to perform his duties under the Agreement by reason of mental or physical illness or accident, for a period of three consecutive months. Upon termination by reason of the Employee's disability, the Employer's sole and exclusive obligation will be to pay the Employee his compensation earned through the date of termination plus six (6) months base compensation severance.

Section 7.Covenant Not to Compete.

7.1Covenant. For a period of two years from the Effective Date of this Agreement, and for such period after one year as the Employee continues to be employed by the Employer, and for a one year period after the Employee's employment with the Employer has been terminated by either party, the Employee will not directly or indirectly:

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A. Enter into or attempt to enter into "Restricted Business" (as defined below) in the technology business;

B. Induce or attempt to persuade any former, current or future employee, agent, manager, consultant, director, or other participant in the Employer's business to terminate such employment or other relationship in order to enter into any relationship with the Employee, any business organization in which the Employee is a participant in any capacity whatsoever, or any other business organization in competition with the Employer's business; or

C. Use contracts, proprietary information, trade secrets, confidential information, customer lists, mailing lists, goodwill, or other intangible property used or useful in connection with the Employer's business.

7.2 Indirect Activity. The term "indirectly" as used in section 7.1 above, includes acting as a paid or unpaid director, officer, agent, representative, employee of, or consultant to any enterprise, or acting as a proprietor of an enterprise, or holding any direct or indirect participation in any enterprise as an owner, partner, limited partner, joint venturer, shareholder, or creditor,

7.3 Restricted Business. The term "Restricted Business" means the oil and gas exploration, development, drilling, and leasing business. Nevertheless, the Employee may own not more than five percent of the outstanding equity securities of a corporation that is engaged in the Restricted Business if the equity securities are listed for trading on a national stock exchange or is a reporting company under the Securities Exchange Act of 1934.

Section 8.Severability. The covenants set forth in this Agreement above shall be construed as a series of separate covenants, one for each county in each of the states of the United States to which such restriction applies. If, in any judicial proceeding, a court of competent jurisdiction shall refuse to enforce any of the separate covenants deemed included in this Agreement, or shall find that the term or geographical scope of one or more of the separate covenants is unreasonably broad, the parties shall use their best good faith efforts to attempt to agree on a valid provision which shall be a reasonable substitute for the invalid provision. The reasonableness of the substitute provision shall be considered in light of the purpose of the covenants and the reasonable prospectable interests of the Employer and the Employee. The substitute provision shall be incorporated into this Agreement. If the parties are unable to agree on a substitute provision, then the invalid or unreasonably broad provision shall be deemed deleted or modified to the minimum extent necessary to permit enforcement,

Section 9.Confidentiality.,The Employee acknowledges that he will develop and be exposed to information that is or will be confidential and proprietary to the Employer. The information includes customer lists, marketing plans, pricing data, product plans, software, and other intangible information. Such information shall be deemed confidential to the extent not generally known within the trade, The Employee agrees to make use of such information only in performance of his duties under this Agreement, to maintain such information in confidence and to disclose the information only to persons with a need to know.

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Section 10.Remedies.The Employee acknowledges that monetary damages would be inadequate to compensate the Employer for any breach by the Employee of the covenants set forth in this Agreement. The Employee agrees that, in addition to other remedies, which may be available, the Employer shall be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any breach, or both, without the necessity of proving actual damages.

Section 11.Waiver.The waiver by the Employer of the breach of any provision of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee.

Section 12.Law Governing.This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.

Section 13.Arbitration.If at anytime during the term of this Agreement any dispute, difference, or disagreement shall arise upon or in respect of this Agreement, and the meaning and construction thereof, every such dispute, difference, and disagreement shall be referred to a single arbiter agreed upon by both parties, or if no single arbiter can be agreed upon, an arbiter or arbiters shall be selected in accordance with the rules of the American Arbitration Association (AAA) and such dispute, difference, or disagreement shall be settled by arbitration in accordance with the then prevailing commercial rules of the AAA, and judgment upon the award rendered by the arbiter may be entered in any court having jurisdiction thereof.

Section 14.Attorney Fees,In the event an arbitration, suit or action is brought by any party under this Agreement to enforce any of its terms, or in any appeal there from, it is agreed that the prevailing party shall be entitled to reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or appellate court.

This Agreement is made and entered into as of the dated first above written.

Steve Durdin, Employee Stanley L. Teeple, Secretary, Employer

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EX-8.1

Exhibit 8.01

2007 STOCK OPTION PLAN

OF

Indigo-Energy, Inc.

1. PURPOSES OF THE PLAN

1.1. The purposes of the 2007 Stock Option Plan (the “Plan”) of Indigo-Energy, Inc., a Nevada corporation (the “Company”), are to:

1.2. Encourage selected employees, directors and consultants to improve operations and increase profits of the Company;

1.3. Encourage selected employees, directors and consultants to accept or continue employment or association with the Company or its Affiliates; and

1.4. Increase the interest of selected employees, directors and consultants in the Company's welfare through participation in the growth in value of the common stock of the Company (the “Shares”).

1.5. Options granted under this Plan (“Options”) may be “incentive stock options” (“ISOs”) intended to satisfy the requirements of Section 422 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”), or “non-qualified stock options” (“NQSOs”).

2. ELIGIBLE PERSONS

2.1. Every person who at the date of grant of an Option is an employee of the Company or of any Affiliate (as defined below) of the Company is eligible to receive NQSOs or ISOs under this Plan. Every person who at the date of grant is a consultant to, or non-employee director of, the Company or any Affiliate (as defined below) of the Company is eligible to receive NQSOs under this Plan. The term “Affiliate” as used in the Plan means a parent or subsidiary corporation as defined in the applicable provisions (currently Sections 424(e) and (f), respectively) of the Code. The term “employee” includes an officer or director who is an employee of the Company. The term “consultant” includes persons employed by, or otherwise affiliated with, a consultant.

3. STOCK SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF GRANTS

Subject to the provisions of Section 6.1.1 of the Plan, the total number of Shares, which may be issued under Options granted pursuant to this Plan, shall not exceed forty million (40,000,000) Shares. The Shares covered by the portion of any grant under the Plan which expires unexercised shall become available again for grants under the Plan.

4. ADMINISTRATION

4.1. The Plan shall be administered by either the Board of Directors of the Company (the “Board”) or by a committee (the “Committee”) to which administration of the Plan, or of part of the Plan, may be delegated by the Board (in either case, the “Administrator”). The Board shall appoint and remove members of such Committee, if any, in its discretion in accordance with applicable laws. If necessary in order to comply with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code, the Committee shall, in the Board's discretion, be comprised solely of “non-employee directors” within the meaning of said Rule 16b-3 and “outside directors” within the meaning of Section 162(m) of the Code. The foregoing notwithstanding, the Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper and the Board, in its absolute discretion, may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan.

4.2. Subject to the other provisions of this Plan, the Administrator shall have the authority, in its discretion: (a) to grant Options; (b) to determine the fair market value of the Shares subject to Options; (c) to determine the exercise price of Options granted; (d) to determine the persons to whom, and the time or times at which, Options shall be granted, and the number of shares subject to each Option; (e) to interpret this Plan; (f) to prescribe, amend, and rescind rules and regulations relating to this Plan; (g) to determine the terms and provisions of each Option granted (which need not be identical), including but not limited to, the time or times at which Options shall be exercisable; (h) with the consent of the optionee, to modify or amend any Option; (i) to defer (with the consent of the optionee) the exercise date of any Option, but in no circumstances for a longer term than ten (10) years from the date of the original grant; (j) to authorize any person to execute on behalf of the Company any instrument evidencing the grant of an Option; and (k) to make all other determinations deemed necessary or advisable for the administration of this Plan. The Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper.

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4.3. All questions of interpretation, implementation, and application of this Plan shall be determined by the Administrator. Such determinations shall be final and binding on all persons.

5. GRANTING OF OPTIONS; OPTION AGREEMENT

5.1. No Options shall be granted under this Plan after 10 years from the date of adoption of this Plan by the Board.

5.2. Each Option shall be evidenced in a form satisfactory to the Administrator, executed by the Company and the person to whom such Option is granted.

5.3. The stock option agreement shall specify whether each Option it evidences is an NQSO or an ISO.

5.4. Subject to Section 6.3.3 with respect to ISOs, the Administrator may approve the grant of Options under this Plan to persons who are expected to become employees or directors of the Company, but are not employees, directors or consultants at the date of approval, and the date of approval shall be deemed to be the date of grant unless otherwise specified by the Administrator.

6. TERMS AND CONDITIONS OF OPTIONS

Each Option granted under this Plan shall be subject to the terms and conditions set forth in Section 6.1. NQSOs shall also be subject to the terms and conditions set forth in Section 6.2, but not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set forth in Section 6.3, but not those set forth in Section 6.2.

6.1. Terms and Conditions to Which All Options Are Subject. All Options granted under this Plan shall be subject to the following terms and conditions:

6.1.1. Changes in Capital Structure. Subject to Section 6.2.2, if the stock of the Company is changed by reason of a stock split, reverse stock split, stock dividend, or recapitalization, combination or reclassification, appropriate adjustments shall be made by the Board in (a) the number and class of shares of stock subject to this Plan and each Option outstanding under this Plan, and (b) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustments. Each such adjustment shall be subject to approval by the Board in its sole discretion.

6.1.2. Corporate Transactions. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each optionee at least 30 days prior to such proposed action. To the extent not previously exercised, all Options will terminate immediately prior to the consummation of such proposed action; provided, however, that the Administrator, in the exercise of its sole discretion, may permit exercise of any Options prior to their termination, even if such Options were not otherwise exercisable. In the event of a merger or consolidation of the Company with or into another corporation or entity in which the Company does not survive, or in the event of a sale of all or substantially all of the assets of the Company in which the shareholders of the Company receive securities of the acquiring entity or an affiliate thereof, all Options shall be assumed or equivalent options shall be substituted by the successor corporation (or other entity) or a parent or subsidiary of such successor corporation (or other entity); provided, however, that if such successor does not agree to assume the Options or to substitute equivalent options therefor, the Administrator, in the exercise of its sole discretion, may permit the exercise of any of the Options prior to consummation of such event, even if such Options were not otherwise exercisable.

6.1.3. Time of Option Exercise. Subject to Section 5 and Section 6.3.4, Options granted under this Plan shall be exercisable (a) immediately as of the effective date of the stock option agreement granting the Option, or (b) in accordance with a schedule as may be set by the Administrator (each such date on such schedule, the “Vesting Base Date”) and specified in the written stock option agreement relating to such Option. In any case, no Option shall be exercisable until a written stock option agreement in form satisfactory to the Company is executed by the Company and the optionee.

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6.1.4. Option Grant Date. The date of grant of an Option under this Plan shall be the date as of which the Administrator approves the grant.

6.1.5. Nontransferability of Option Rights. Except with the express written approval of the Administrator which approval the Administrator is authorized to give only with respect to NQSOs, no Option granted under this Plan shall be assignable or otherwise transferable by the optionee except by will, by the laws of descent and distribution or pursuant to a qualified domestic relations order. During the life of the optionee, an Option shall be exercisable only by the optionee.

6.1.6. Payment. All options issued under this plan are deemed to be cashless. Options may be exercised using the intrinsic value of the options.

(a)Subject to the discretion of the Administrator and the terms of the stock option agreement granting the Option, delivery by the optionee of Shares already owned by the optionee for all or part of the Option price, provided the fair market value (determined as set forth in Section 6.1.10) of such Shares being delivered is equal on the date of exercise to the Option price, or such portion thereof as the optionee is authorized to pay by delivery of such stock; and

(b)Subject to the discretion of the Administrator, through the surrender of Shares then issuable upon exercise of the Option, provided the fair market value (determined as set forth in Section 6.1.10) of such Shares is equal on the date of exercise to the Option price, or such portion thereof as the optionee is authorized to pay by surrender of such stock.

6.1.7. Termination of Employment. All options issued under this plan are to be vested immediately unless stipulated otherwise by the Administrator at the time of issuance. The Employee shall have 90 days from termination to exercise the option or it shall expire.

6.1.8. Withholding and Employment Taxes. At the time of exercise of an Option and as a condition thereto, or at such other time as the amount of such obligations becomes determinable (the “Tax Date”), the optionee shall remit to the Company in cash all applicable federal and state withholding and employment taxes. Such obligation to remit may be satisfied, if authorized by the Administrator in its sole discretion, after considering any tax, accounting and financial consequences, by the optionee's (a) delivery of a promissory note in the required amount on such terms as the Administrator deems appropriate, (b) tendering to the Company previously owned Shares or other securities of the Company with a fair market value equal to the required amount, or (c) agreeing to have Shares (with a fair market value equal to the required amount) which are acquired upon exercise of the Option withheld by the Company.

6.1.9. Other Provisions. Each Option granted under this Plan may contain such other terms, provisions, and conditions not inconsistent with this Plan as may be determined by the Administrator, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify the Option as an “incentive stock option” within the meaning of Section 422 of the Code.

6.1.10. Determination of Value. For purposes of the Plan, the fair market value of Shares or other securities of the Company shall be determined as follows:

(a)Fair market value shall be the closing price of such stock on the date before the date the value is to be determined on the principal recognized securities exchange or recognized securities market on which such stock is reported, but if selling prices are not reported, its fair market value shall be the mean between the high bid and low asked prices for such stock on the date before the date the value is to be determined (or if there are no quoted prices for such date, then for the last preceding business day on which there were quoted prices).

(b)In the absence of an established market for the stock, the fair market value thereof shall be determined in good faith by the Administrator, with reference to the Company's net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including the goodwill of the Company, the economic outlook in the Company's industry, the Company's position in the industry, the Company's management, and the values of stock of other corporations in the same or similar line of business.

6.1.11 Option Term. Subject to Section 6.3.4, no Option shall be exercisable more than 10 years after the date of grant, or such lesser period of time as is set forth in the stock option agreement (the end of the maximum exercise period stated in the stock option agreement is referred to in this Plan as the “Expiration Date”).

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6.2. Terms and Conditions to Which Only NQSOs Are Subject. Options granted under this Plan which are designated as NQSOs shall be subject to the following terms and conditions:

6.2.1. Exercise Price.

(a)Except as set forth in Section 6.2.1(b), the exercise price of an NQSO shall be not less than 100% of the fair market value (determined in accordance with Section 6.1.10) of the stock subject to the Option on the date of grant.

(b)To the extent required by applicable laws, rules and regulations, the exercise price of a NQSO granted to any person who owns, directly or by attribution under the Code (currently Section 424(d)), stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Affiliate (a “Ten Percent Shareholder”) shall in no event be less than 110% of the fair market value (determined in accordance with Section 6.1.10) of the stock covered by the Option at the time the Option is granted.

6.3. Terms and Conditions to Which Only ISOs Are Subject. Options granted under this Plan which are designated as ISOs shall be subject to the following terms and conditions:

6.3.1. Exercise Price.

(a)Except as set forth in Section 6.3.1(b), the exercise price of an ISO shall be determined in accordance with the applicable provisions of the Code and shall in no event be less than the fair market value (determined in accordance with Section 6.1.10) of the stock covered by the Option at the time the Option is granted.

(b)The exercise price of an ISO granted to any Ten Percent Shareholder shall in no event be less than 110% of the fair market value (determined in accordance with Section 6.1.10) of the stock covered by the Option at the time the Option is granted.

6.3.2. Disqualifying Dispositions. If stock acquired by exercise of an ISO granted pursuant to this Plan is disposed of in a “disqualifying disposition” within the meaning of Section 422 of the Code (a disposition within two years from the date of grant of the Option or within one year after the transfer such stock on exercise of the Option), the holder of the stock immediately before the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other information regarding the Option as the Company may reasonably require.

6.3.3. Grant Date. If an ISO is granted in anticipation of employment as provided in Section 5.1, the Option shall be deemed granted, without further approval, on the date the grantee assumes the employment relationship forming the basis for such grant, and, in addition, satisfies all requirements of this Plan for Options granted on that date.

6.3.4. Term. Notwithstanding Section 6.1.11, no ISO granted to any Ten Percent Shareholder shall be exercisable more than five years after the date of grant.

7. MANNER OF EXERCISE

7.1. An optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, to the attention of the officer of the Company designated by the Administrator, accompanied by payment of the exercise price and withholding taxes as provided in Sections 6.1.6 and 6.1.8. The date the Company receives written notice of an exercise hereunder accompanied by payment of the exercise price will be considered as the date such Option was exercised.

7.2. Promptly after receipt of written notice of exercise of an Option and the payments called for by Section 7.1, the Company shall, without stock issue or transfer taxes to the optionee or other person entitled to exercise the Option, deliver to the optionee or such other person a certificate or certificates for the requisite number of shares of stock. An optionee or permitted transferee of the Option shall not have any privileges as a shareholder with respect to any shares of stock covered by the Option until the date of issuance (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent) of such shares.

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8. EMPLOYMENT OR CONSULTING RELATIONSHIP

Nothing in this Plan or any Option granted hereunder shall interfere with or limit in any way the right of the Company or of any of its Affiliates to terminate any optionee's employment or consulting at any time, nor confer upon any optionee any right to continue in the employ of, or consult with, the Company or any of its Affiliates.

9. CONDITIONS UPON ISSUANCE OF SHARES

Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended (the “Securities Act”).

10. NON-EXCLUSIVITY OF THE PLAN

The adoption of the Plan shall not be construed as creating any limitations on the power of the Company to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options other than under the Plan.

11. AMENDMENTS TO PLAN

The Board may at any time amend, alter, suspend or discontinue this Plan. Without the consent of an optionee, no amendment, alteration, suspension or discontinuance may adversely affect outstanding Options except to conform this Plan and ISOs granted under this Plan to the requirements of federal or other tax laws relating to incentive stock options. No amendment, alteration, suspension or discontinuance shall require shareholder approval unless (a) shareholder approval is required to preserve incentive stock option treatment for federal income tax purposes or (b) the Board otherwise concludes that shareholder approval is advisable.

12. EFFECTIVE DATE OF PLAN; TERMINATION

This Plan shall become effective upon adoption by the Board; provided, however, that no Option shall be exercisable unless and until written consent of the shareholders of the Company, or approval of shareholders of the Company voting at a validly called shareholders' meeting, is obtained within twelve months after adoption by the Board. If such shareholder approval is not obtained within such time, Options granted hereunder shall be of the same force and effect as if such approval was obtained except that all ISOs granted hereunder shall be treated as NQSOs. Options may be granted and exercised under this Plan only after there has been compliance with all applicable federal and state securities laws. This Plan shall terminate within ten years from the date of its adoption by the Board.

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