amended through October 14, 2008)
purpose of the Amended and Restated EnerJex Resources, Inc. Stock Incentive
(the “Plan”) is to strengthen EnerJex Resources, Inc., a Nevada corporation
(“Corporation”), by providing to employees, officers, directors, consultants and
independent contractors of the Corporation or any of its subsidiaries (including
dealers, distributors, and other business entities or persons providing services
on behalf of the Corporation or any of its subsidiaries) added incentive
high levels of performance and unusual efforts to increase the earnings of
Corporation. The Plan seeks to accomplish this purpose by enabling specified
persons to acquire shares of the common stock of the Corporation, $0.001
value, thereby increasing their proprietary interest in the Corporation’s
success and encouraging them to remain in the employ or service of the
Corporation. Further purposes of the Plan are:
provide officers and other employees of the Corporation with opportunities
to purchase stock pursuant to options which qualify as “incentive stock
options” under Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), granted hereunder (“ISO” or “ISOs”);
provide directors, officers, employees, consultants and independent
contractors of the Corporation with opportunities to purchase stock
pursuant to options granted hereunder, which do not qualify as ISOs
(“Non-Qualified Option” or “Non-Qualified Options”); and
provide directors, officers, employees, consultants and independent
contractors of the Corporation with opportunities to make direct
of or be granted shares of restricted stock (“Restricted
and Non-Qualified Options are referred to hereafter individually as an “Option”
and collectively as “Options.”
herein, the terms “Parent” and “Subsidiary” mean “Parent Corporation” and
“subsidiary corporation” as those terms are defined in Section 425 of the Code.
CERTAIN DEFINITIONS. As
in this Plan, the following words and phrases shall have the respective meanings
set forth below, unless the context clearly indicates a contrary meaning:
document setting forth the terms and conditions of each Option or Restricted
Board of Directors of the Corporation.
Internal Revenue Code of 1986, as amended.
Committee means the Governance, Compensation and Nominating Committee of
Corporation’s Board of Directors.
Market Value Per Share”:
fair market value per share of the Shares as determined by the Committee
faith. The Committee is authorized to make its determination as to the fair
market value per share of the Shares on the following basis: (i) if the Shares
are traded only otherwise than on a securities exchange and are not quoted
the National Association of Securities Dealers’ Automated Quotation System
(“NASDAQ”), but are quoted on the bulletin board or in the “pink sheets”, the
greater of (a) the average of the mean between the average daily bid and
daily asked prices of the Shares during the thirty (30) day period preceding
date of grant of an Option, as quoted on the bulletin board or in the “pink
sheets”, or (b) the mean between the average daily bid and average daily asked
prices of the Shares on the date of grant, as published on the bulletin board
in such “pink sheets;” (ii) if the Shares are traded only otherwise than on a
securities exchange and are quoted on NASDAQ, the greater of (a) the average
the mean between the closing bid and closing asked prices of the Shares during
the thirty (30) day period preceding the date of grant of an Option, as reported
by the Wall Street Journal and (b) the mean between the closing bid and closing
asked prices of the Shares on the date of grant of an Option, as reported
Wall Street Journal; (iii) if the Shares are admitted to trading on a securities
exchange, the daily closing price of the Shares on the date of grant of an
Option, as quoted in the Wall Street Journal; or (iv) if the Shares are traded
only otherwise than as described in (i), (ii) or (iii) above, or if the Shares
are not publicly traded, the value determined by the Committee in good faith
based upon the fair market value as determined by completely independent
well qualified experts.
holder of an Option or Restricted Stock.
Option intended to qualify for treatment as an incentive stock option under
Sections 421 and 422A, and designated as an Incentive Stock Option.
Option not qualifying as an Incentive Stock Option.
stock option granted under the Plan.
subject to restrictions determined by the Committee, or federal or state
shares of common stock $.001 par value of the Corporation.
ADMINISTRATION OF PLAN.
Plan shall be administered by the Committee.
to the express provisions of this Plan, the Committee shall have the authority
to: (i) construe and interpret the Plan, decide all questions and settle
controversies and disputes which may arise in connection with the Plan and
define the terms used therein; (ii) prescribe, amend and rescind rules and
regulations relating to administration of the Plan; (iii) determine the purchase
price of the Shares covered by Options and Restricted Stock, if any, and
method of payment of such price, individuals to whom, and the time or times
which, Options or Restricted Stock shall be granted and exercisable and the
number of Shares covered by Options or Restricted Stock; (iv) determine the
terms and provisions of the respective Award Agreements (which need not be
identical); (v) determine the duration and purposes of leaves of absence
may be granted to Grantees without constituting a termination of their
employment for purposes of the Plan; (vi) determine whether each Option granted
shall be an ISO or a Non-Qualified Option; (vii) determine the time or times
specific conditions and restrictions subject to Options or Restricted Stock
the nature of those conditions or restrictions; and (viii) make all other
determinations necessary or advisable to the administration of the Plan.
Determinations of the Committee on matters referred to in this Section 3
be conclusive and binding on all parties howsoever concerned. With respect
ISOs, the Committee shall administer the Plan in compliance with the provisions
of Code Section 422A as the same may hereafter be amended from time to time.
member of the Committee shall be liable for any action or determination made
good faith with respect to the Plan or any Option or Restricted Stock
ELIGIBILITY AND PARTICIPATION.
officers, employees and directors who are also employees of the Corporation
any Subsidiary shall be eligible to receive grants of ISOs. Officers, employees
and directors (whether or not they are also employees) of the Corporation
Subsidiary, as well as consultants, independent contractors or other service
providers of the Corporation or any Subsidiary shall be eligible to receive
grants of Nonqualified Options and Restricted Stock. Within the foregoing
limits, the Committee, from time to time, shall determine and designate persons
to whom Options or Restricted Stock may be granted. All such designations
be made in the absolute discretion of the Committee and shall not require
approval of the stockholders. In determining (i) the number of Shares to
covered by each Option or Restricted Stock grant, (ii) the purchase price
such Shares and the method of payment of such price (subject to the other
sections hereof), (iii) the individuals of the eligible class to whom Options
Restricted Stock shall be granted, (iv) the terms and provisions of the
respective Award Agreements, and (v) the times at which such Options or
Restricted Stock shall be granted, the Committee shall take into account
factors as it shall deem relevant in connection with accomplishing the purpose
of the Plan as set forth in Section 1. An individual who has been granted
Option or Restricted Stock may be granted an additional Option or Restricted
Stock if the Committee shall so determine. No Option or Restricted Stock
be granted under the Plan after October 13, 2018, but Options or Restricted
Stock granted before such date may be exercisable or vest after such
event shall ISOs be granted to a Grantee such that the sum of (i) the aggregate
fair market value (determined at the time the ISOs are granted) of the Shares
subject to all Options granted under the Plan which are exercisable for the
first time during the same calendar year, plus (ii) the aggregate fair market
value (determined at the time the Options are granted) of all stock subject
all other ISOs granted to such Grantee by the Corporation, its parent and
Subsidiaries which are exercisable for the first time during such calendar
exceeds One Hundred Thousand Dollars ($100,000). For purposes of the immediately
preceding sentence, fair market value shall be determined as of the date
grant based on the Fair Market Value Per Share as determined pursuant to
AVAILABLE SHARES AND ADJUSTMENTS UPON CHANGES IN
to adjustment as provided in Section 5.2 below, the total number of Shares
subject to Options and Restricted Stock awards granted pursuant to this Plan
shall not exceed One Million Two Hundred Fifty Thousand (1,250,000) Shares.
Shares subject to the Plan may be either authorized but unissued shares or
shares that were once issued and subsequently reacquired by the Corporation;
Committee shall be empowered to take any appropriate action required to make
Shares available for Options or Restricted Stock granted under this Plan.
any Option is surrendered before exercise or lapses without exercise in full
for any other reason ceases to be exercisable, or (ii) Restricted Stock is
surrendered before vesting or lapses without vesting in full or for any other
reason ceases to be outstanding, the Shares reserved therefore shall continue
be available under the Plan. The maximum number of Options that may be granted
to a Grantee in any fiscal year of the Corporation is 500,000. The maximum
number of Shares subject to a Restricted Stock award to a Grantee in any
year of the Corporation is 250,000.
herein, the term “Adjustment Event” means an event pursuant to which the
outstanding Shares of the Corporation are increased, decreased or changed
or exchanged for a different number or kind of shares or securities, without
receipt of consideration by the Corporation, through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split, stock
dividend, stock consolidation or otherwise. Upon the occurrence of an Adjustment
Event, (i) appropriate and proportionate adjustments shall be made to the
and kind of Shares and exercise price for the Shares subject to the Options
Restricted Stock grants which may thereafter be granted under this Plan,
appropriate and proportionate adjustments shall be made to the number and
of and exercise price for the Shares subject to the then outstanding Options
Restricted Stock granted under this Plan, and (iii) appropriate amendments
the Award Agreements shall be executed by the Corporation and the Grantees,
the Committee determines that such an amendment is necessary or desirable
reflect such adjustments. If determined by the Committee to be appropriate,
the event of an Adjustment Event that involves the substitution of securities
a corporation other than the Corporation, the Committee shall make arrangements
for the assumptions by such other corporation of any Options or Restricted
then or thereafter outstanding under the Plan. Notwithstanding the foregoing,
such adjustment in an outstanding Option or Restricted Stock award shall
without change in the total exercise price applicable to the unexercised
of the Option or Restricted Stock, but with an appropriate adjustment to
number of shares, kind of shares and exercise price for each share subject
the Option or Restricted Stock award. The determination by the Committee
what adjustments, amendments or arrangements shall be made pursuant to this
Section 5.2, and the extent thereof, shall be final and conclusive. No
fractional Shares shall be issued under the Plan on account of any such
adjustment or arrangement.
TERMS AND CONDITIONS OF GRANTS.
Treatment as ISOs.
granted pursuant to this Plan are intended to be “incentive stock options” to
which Code Sections 421 and 422 apply, and the Plan shall be construed and
administered to implement that intent. If all or any part of an ISO shall
an “incentive stock option” subject to Sections 421 or 422 of the Code, such
Option shall nevertheless be valid and carried into effect. All Options granted
under this Plan shall be subject to the terms and conditions set forth in
Section 6 (except as provided in Section 5.2) and to such other terms and
conditions as the Committee shall determine to be appropriate to accomplish
purpose of the Plan as set forth in Section 1.
and Payment of Exercise Price for Options.
exercise price per Share for each Share which the Grantee is entitled to
purchase under a Nonqualified Option shall be determined by the Committee
shall not be less than one hundred percent (100%) of the Fair Market Value
Share on the date of the grant of the Nonqualified Option. The exercise price
per Share for each Share which the Grantee is entitled to purchase under
shall be determined by the Committee but shall not be less than 100% of the
Market Value Per Share on the date of the grant of the ISO; provided, however,
that the exercise price shall not be less than one hundred ten percent (110%)
the Fair Market Value Per Share on the date of the grant of the ISO in the
of an individual then owning (within the meaning of Code Section 425(d))
than ten percent (10%) of the total combined voting power of all classes
stock of the Corporation or of its parent or Subsidiaries.
of Exercise Price.
consideration to be paid for the Shares to be issued upon exercise of an
including the method of payment, shall be determined by the Committee and
consist of shares of the common stock of the Corporation or such other
consideration and method of payment for the Shares as may be permitted under
applicable state and federal laws.
Each Option granted under this Plan shall be exercisable at such times and
such conditions as may be determined by the Committee at the time of the
of the Option and as shall be permissible under the terms of the Plan; provided,
however, in no event shall an Option be exercisable after the expiration
(10) years from the date it is granted, and in the case of a Grantee owning
(within the meaning of Code Section 425(d)), at the time an ISO is granted,
than ten percent (10%) of the total combined voting power of all classes
stock of the Corporation or of its parent or Subsidiaries, such ISO shall
exercisable later than five (5) years after the date of grant.
Grantee may purchase less than the total number of Shares for which the Option
of Restricted Stock.
to the terms and provisions of this Plan, the Committee, at any time and
time to time, may grant Shares of Restricted Stock to Grantees in such amounts
as the Committee, in its sole discretion, shall determine. The Committee,
sole discretion, shall determine the number of Shares to be granted to each
award of Restricted Stock shall be evidenced by an Award Agreement that shall
specify the period of restriction, the number of Shares granted, and such
terms and conditions as the Committee, in its sole discretion, shall determine.
Unless the Committee, in its sole discretion, determines otherwise, Shares
Restricted Stock shall be held by the Corporation as escrow agent until the
of the applicable period of restriction.
as provided in this Section 6.4, Shares of Restricted Stock may not be sold,
transferred, gifted, bequeathed, pledged, assigned, or otherwise alienated
hypothecated, voluntarily or involuntarily, until the end of the applicable
period of restriction.
Committee, in its sole discretion, may impose such other restrictions on
of Restricted Stock as it may deem advisable or appropriate in accordance
this Section 6.4.
Committee may set restrictions based upon (a) the achievement of specific
performance objectives (Corporation-wide, divisional or individual), (b)
applicable Federal or state securities laws, or (c) any other basis determined
by the Committee in its sole discretion.
Committee, in its sole discretion, may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions. For example,
the Committee may determine that some or all certificates representing Shares
Restricted Stock shall bear the following legend:
OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE,
WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE ENERJEX RESOURCES, INC. STOCK
INCENTIVE PLAN, AND IN A RESTRICTED STOCK AGREEMENT. A COPY OF THIS PLAN
SUCH RESTRICTED STOCK AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF ENERJEX
as otherwise provided in this Section 6.4, Shares of Restricted Stock covered
each Restricted Stock grant made under this Plan shall be released from
as soon as practicable after the end of the applicable period of restriction.
The Committee, in its sole discretion, may accelerate the time at which
restrictions shall lapse and remove any restrictions. After the end of
applicable period of restriction, the Grantee shall be entitled to have
legend or legends under Section 18.104.22.168 removed from his or her Share
certificate, and the Shares shall be freely transferable by the
the period of restriction, Grantees holding Shares of Restricted Stock granted
hereunder may exercise full voting rights with respect to those Shares, unless
the applicable Award Agreement provides otherwise.
and Other Distributions.
the period of restriction, Grantees holding Shares of Restricted Stock shall
entitled to receive all dividends and other distributions paid with respect
such Shares unless otherwise provided in the applicable Award Agreement.
such dividends or distributions are paid in Shares, the Shares shall be subject
to the same restrictions on transferability and forfeitability as the Shares
Restricted Stock with respect to which they were paid.
of Restricted Stock to Corporation.
date set forth in the applicable Award Agreement, the Restricted Stock for
restrictions have not lapsed shall revert to the Corporation and thereafter
shall be available for grant under this Plan.
Nontransferability of Options.
Options granted under this Plan shall be nontransferable, either voluntarily
by operation of law, otherwise than by will or the laws of descent and
distribution, and shall be exercisable during the Grantee’s lifetime only by
of Termination of Employment or Other Relationship.
as otherwise determined by the Committee in connection with the grant of
Options, the effect of termination of a Grantee’s employment or other
relationship with the Corporation on such Grantee’s rights to acquire Shares
pursuant to the Plan shall be as follows:
for Other than Disability, Death or Cause.
Grantee ceases to be employed by, or ceases to have a relationship with,
Corporation for any reason other than for disability, death or cause, such
Grantee’s Options shall expire not later than three (3) months thereafter.
During such three (3) month period and prior to the expiration of the Option
its terms, the Grantee may exercise any Option granted to him, but only to
extent such Options were exercisable on the date of termination of his
employment or relationship and except as so exercised, such Options shall
at the end of such three (3) month period unless such Options by their terms
expire before such date. The decision as to whether a termination for a reason
other than disability, cause or death has occurred shall be made by the
Committee, whose decision shall be final and conclusive, except that employment
shall not be considered terminated in the case of sick leave or other bona
leave of absence approved by the Corporation.
Grantee ceases to be employed by, or ceases to have a relationship with,
Corporation by reason of disability (within the meaning of Code Section
22(e)(3)) or death, such Grantee’s Options shall expire not later than one (1)
year thereafter. During such one (1) year period and prior to the expiration
the Option by its terms, the Grantee may exercise any Option granted to him,
only to the extent such Options were exercisable on the date the Grantee
to be employed by, or ceased to have a relationship with, the Corporation
reason of disability or death and except as so exercised, such Options shall
expire at the end of such one (1) year period unless such Options by their
expire before such date. The decision as to whether a termination by reason
disability or death has occurred shall be made by the Committee, whose decision
shall be final and conclusive.
Grantee’s employment by, or relationship with, the Corporation or any of its
Subsidiaries is terminated for cause, such Grantee’s Option shall expire
immediately; provided, however, the Committee may, in its sole discretion,
within thirty (30) days of such termination, waive the expiration of the
by giving written notice of such waiver to the Grantee at such Grantee’s last
known address. In the event of such waiver, the Grantee may exercise the
only to such extent, for such time, and upon such terms and conditions as
such Grantee had ceased to be employed by, or ceased to have a relationship
with, the Corporation upon the date of such termination for a reason other
disability, cause, or death. Termination for cause shall include termination
malfeasance or gross misfeasance in the performance of duties or conviction
illegal activity in connection therewith or any conduct detrimental to the
interests of the Corporation. The determination of the Committee with respect
whether a termination for cause has occurred shall be final and
Corporation or any Subsidiary shall have the authority and the right to deduct
or withhold, or require a Grantee to remit to the Corporation, an amount
sufficient to satisfy federal, state, local and foreign taxes (including
Grantee's employment tax obligations) required by law to be withheld with
respect to any taxable event concerning a Grantee arising as a result of
Plan. The Committee may in its discretion and in satisfaction of the foregoing
requirement allow a Grantee to elect to have the Corporation withhold Shares
otherwise issuable under an Award Agreement (or allow the return of Shares
having a Fair Market Value equal to the sums required to be withheld.
Notwithstanding any other provision of the Plan, the number of Shares which
be withheld with respect to the issuance, vesting, exercise or payment of
award (or which may be repurchased from the Grantee of such award within
months after such Shares were acquired by the Grantee from the Corporation)
order to satisfy the Grantee's federal, state, local and foreign income and
payroll tax liabilities with respect to the issuance, vesting, exercise or
payment of the award shall be limited to the number of Shares which have
Market Value on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates
federal, state, local and foreign income tax and payroll tax purposes that
applicable to such supplemental taxable income.
Rights to Continued Employment or Relationship.
contained in this Plan or in any Award Agreement shall obligate the Corporation
to employ or have another relationship with any Grantee for any period or
interfere in any way with the right of the Corporation to reduce such Grantee’s
compensation or to terminate the employment of or relationship with any Grantee
at any time.
of Stock Ownership.
Grantee shall be entitled to the privileges of stock ownership as to any
not actually issued to such Grantee. No Shares shall be issued unless and
in the opinion of the Corporation’s counsel, any then applicable requirements of
any laws or governmental or regulatory agencies having jurisdiction and of
exchanges upon which the stock of the Corporation may be listed shall have
fully complied with.
Corporation will diligently endeavor to comply with all applicable securities
laws before any Options or Restricted Stock are granted under the Plan and
before any Shares are issued pursuant to Options or as Restricted Stock.
limiting the generality of the foregoing, the Corporation may require from
Grantee such investment representation or such agreement, if any, as counsel
the Corporation may consider necessary or advisable in order to comply with
Securities Act of 1933 as then in effect, and may require that the Grantee
that any sale of the Shares will be made only in such manner as is permitted
the Committee. The Committee in its discretion may cause the Shares underlying
the Options or subject to Restricted Stock grants to be registered under
Securities Act of 1933, as amended, by the filing of a Form S-8 Registration
Statement covering the Shares available for grant or issuance under this
Grantee shall take any action reasonably requested by the Corporation in
connection with registration or qualification of the Shares under federal
state securities laws.
Option and Restricted Stock granted under this Plan shall be evidenced by
appropriate written Award Agreement executed by the Corporation and the Grantee
and shall contain each of the provisions and agreements specifically required
be contained therein pursuant to this Section 6, and such other terms and
conditions as are deemed desirable by the Committee and are not inconsistent
with the purpose of the Plan as set forth in Section 1.
PLAN AMENDMENT AND TERMINATION.
Committee may at any time discontinue granting Options or Restricted Stock
the Plan or otherwise suspend, amend or terminate the Plan and may, with
consent of a Grantee, make such modification of the terms and conditions
Grantee’s Option or Restricted Stock grant as it shall deem advisable; provided
that, except as permitted under the provisions of Section 5.2, the Committee
shall have no authority to make any amendment or modification to this Plan
any outstanding Option or Restricted Stock grant thereunder which would:
increase the maximum number of shares which may be purchased pursuant to
or Restricted Stock granted under the Plan, either in the aggregate or by
Grantee (except pursuant to Section 5.2); (ii) change the designation of
class of the employees eligible to receive ISOs; (iii) extend the term of
Plan or the maximum Option period thereunder; (iv) decrease the minimum ISO
price or permit reductions of the price at which shares may be purchased
ISOs granted under the Plan; or (v) cause ISOs issued under the Plan to fail
meet the requirements of incentive stock options under Code Section 422.
amendment or modification made pursuant to the provisions of this Section
shall be deemed adopted as of the date of the action of the Committee effecting
such amendment or modification and shall be effective immediately, unless
otherwise provided therein, subject to approval thereof (1) within twelve
months before or after the effective date by stockholders of the Corporation
holding not less than a majority vote of the voting power of the Corporation
voting in person or by proxy at a duly held stockholders meeting when required
to maintain or satisfy the requirements of Code Section 422 with respect
ISOs, and (2) by any appropriate governmental agency. No Option or Restricted
Stock may be granted during any suspension or after termination of the Plan.
(10) Year Maximum Term.
previously terminated by the Committee, this Plan shall terminate on October
2018, and no Options shall be granted under the Plan thereafter.
on Outstanding Options.
Amendment, suspension or termination of this Plan shall not, without the
of the Grantee, alter or impair any rights or obligations under any Option
EFFECTIVE DATE OF PLAN.
Plan was originally adopted effective as of May 4, 2007, and was scheduled
terminate on August 1, 2012. The maximum number of shares available for award
under the original Plan was 1,000,000 shares. The Plan is being amended and
restated in its entirety effective as of October 14, 2008, upon the approval
the affirmative vote of a majority of the issued and outstanding Shares of
common stock of the Corporation represented at a duly held meeting at which
quorum was present.
Corporation shall indemnify and hold harmless the Committee from and against
and all liabilities, costs and expenses incurred by such persons as a resu