CANNABIS SCIENCE,
INC.
2009 STOCK COMPENSATION
PLAN
SECTION 1
INTRODUCTION
1.1
Establishment. Cannabis Science, Inc. (the
“ Company ”), a Nevada corporation, hereby
establishes the Cannabis Science, Inc. 2009 Non-qualified Stock
Plan (the “ Plan ”) for employees, consultants,
directors, and other persons associated with the Company and any of
the Company’s subsidiaries, whom the Board wishes to
incite.
1.2
Purposes. The purposes of this Plan are to (i)
attract and retain the best available personnel for positions of
responsibility within the Company (ii) provide incentives to
employees, officers, and management of the Company, (iii) provide
Directors, Consultants and Advisors of the Company with an
opportunity to acquire a proprietary interest in the Company to
encourage their continued provision of services to the Company, and
to provide such persons with incentives and rewards for superior
performance more directly linked to the profitability of the
Company's business and increases in shareholder value, and (iv)
generally to promote the success of the Company's business and the
interests of the Company and all of its stockholders, through the
issuance of shares of the Company's Common Stock.
Incentive
benefits granted hereunder may be shares. The amount of
shares issued shall be determined by the board or the Compensation
Committee and reflected in the terms of written
agreements.
SECTION 2
DEFINITIONS
2.1
Definitions. The following terms will have the
meanings set forth below:
“
Affiliated Corporation” means any corporation or other
entity (including, but not limited to, a partnership) which
exercises control over the Company through stock ownership or
otherwise, and includes subsidiaries of the Company.
“Board” means the Board of Directors of the
Company.
“Code” means the Internal Revenue Code of the USA or
the Income Tax Act of Canada, as it may be amended form time to
time, and as appropriate to the context and as applies to the
Eligible Participant.
“Effective Date”
means the effective date of the
Plan, which will be upon approval of the Board of Directors of the
Company.
“Eligible Participants”
means any employees (including,
without limitation, all officers), directors, consultants and any
other persons whom the Board wishes to incite to contribute to the
fortunes of the Company and permitted by law or policy to receive
Shares.
“Non-Statutory Share”
means a Share issued under this Plan
in accordance with the requirements of the Code, as amended from
time to time.
“ Plan
Limit” shall have the meaning set forth in section
4.1.
“Share” or “Shares” shall mean the
Company's Common Shares, $.001 par value per share, or, in the
event that the outstanding Common Shares are hereafter changed into
or exchanged for different shares of securities of the Company,
such other shares or securities.
“Share
Agreement” shall
mean an agreement that will be entered into by the Company and the
Eligible Participant to whom the Shares are issued and will contain
terms and conditions governing the issuance of Shares
“Stockholder”
means an Eligible Participant
designated by the Share Issuance Committee from time to time during
the term of the Plan to receive one or more Shares under the
Plan.
“Share Issuance
Committee” means
the Compensation Committee of the Company, unless the Board strikes
a separate committee, and in the absence of an empowered committee
shall mean the Board.
“Stock” means the common stock of the
Company.
2.2
Gender and Number. Except where otherwise
indicated by the context, the masculine gender also will include
the feminine gender, and the definition of any term herein in the
singular also will include the plural.
SECTION 3
PLAN
ADMINISTRATION
3.1 The
Plan shall be administered by the Board. Subject to the
express limitations of the Plan, the Board shall have authority in
its discretion to determine the Eligible Persons to whom, and the
time or times at which, Awards may be granted, the number of shares
subject to each Award, the time or times at which an Award will
become vested, the performance criteria, business or performance
goals or other conditions of an Award, and all other terms of the
Award. The Board shall also have discretionary authority
to interpret the Plan, to make all factual determinations under the
Plan, and to make all other determinations necessary or advisable
for Plan administration. The Board may prescribe, amend,
and rescind rules and regulations relating to the
Plan. All interpretations, determinations, and actions
by the Board shall be final, conclusive, and binding upon all
parties.
SECTION 4
STOCK SUBJECT TO THE PLAN AND
EXCEPTIONS
4.1
Plan limit. A maximum of 6,500,000 Shares
(“ Plan Limit ”) are authorized for issuance
under the Plan in accordance with the provisions of the
Plan. Shares that are issued will be deducted from the
Plan Limit and such Plan Limit shall not be increased without
approval of the board or, if shareholders of the Company have so
required, without approval of the shareholders of the
Company. While any Shares are outstanding, the Company
will retain as authorized and unissued Stock at least the number of
Shares from time to time required under the provisions of the Plan
or otherwise assure itself of its ability to perform its
obligations hereunder.
4.2
Unused and Forfeited Stock. Any Shares that are
subject to this Plan that are not used because the terms and
conditions of the Share Agreement are not met or any Shares that
are used for full or partial payment of the purchase price of
Shares or any Shares retained by the Company for any purpose of
this Plan automatically will be returned to the Plan Limit and
become available for again for use under the Plan.
4.3
Adjustments for Stock Split, Stock Dividend,
Etc. If the Company \at any time increases or
decreases the number of its outstanding Shares of Stock, or changes
in any way the rights and privileges of such Shares by means of the
Payment of a Stock dividend or any other distribution upon such
Shares payable in Stock, or through a stock split, subdivision,
consolidation, combination, reclassification or recapitalization
involving the Stock, then, in relation to the Stock that is
affected by the above events, the provisions of this Section 4.3
will apply. In such event, the numbers, rights and
privileges of the following will be increased, decreased or changed
in like manner as if such shares had been issued and outstanding,
fully paid and non-assessable at the time of such event.
4.4
General Adjustment Rules. If any adjustment or
substitution provided for in this Section 4 will result in the
creation of a fractional Share, the number of Shares will be
rounded to the next higher Share.
4.5
Determination by Share Issuance Committee, Etc.
Adjustments under this Section 4 will be made by the
Share Issuance Committee, whose determinations with regard thereto
will be final and binding upon all parties.
4.6
Shares Exceptional to Plan. With the concurrence
of the Board, the Share Issuance Committee may issue Shares outside
the Plan or within the Plan but in excess of the Plan Limit, such
that the available Plan Limit is not diminished, for exceptional
circumstances or to acquire or retain personnel or
