by the Board of Directors on October 7, 1999)
by the Stockholders on October 7, 1999)
Stock Option Plan is intended to encourage stock ownership in ENERGENX, INC.
the officers, directors, employees, consultants, and advisors of the Company
its affiliates in order to promote their interest in the success of the Company
and to encourage their continued affiliation. All options granted under this
1999 Stock Option Plan are intended to be either (a) Incentive Stock Options
(b) Non-Statutory Stock Options.
herein the following definitions shall apply:
shall mean the Securities Exchange Act of 1934, as amended from time to
shall mean an individual who provides bona fide services to the Company or
Affiliate pursuant to a written contract.
shall mean any corporation defined as a "parent corporation" or a "subsidiary
corporation" by Code Section 424(e) and (f), respectively.
shall mean either a 1999 Incentive Stock Option Agreement or a 1999
Non-Statutory Stock Option Agreement, embodying the terms of the agreement
between the Company and the Optionee with respect to Optionee's
shall mean the Board of Directors of the Company.
shall mean the Internal Revenue Code of 1986, as amended from time to
shall mean any person who is placed on the Company's Consultants List by
who agrees in writing to be included thereon.
or "Disabled" shall mean the condition of being "disabled" within the meaning
Section 422(c)(6) of the Code or any successor provision.
shall mean an individual member of the Board.
Person” means a Non-Employee Director as defined in Rule 16b-3 of the Exchange
Act of 1934, as amended.
shall mean any salaried employee of the Company or its Affiliates, including
those employees who are officers of the Company or its Affiliates.
Market Value" of Stock on a given date shall mean an amount per share as
determined by the Board or its delegates by applying any reasonable valuation
method determined without regard to any restriction other than a restriction
that, by its terms, will never lapse. Notwithstanding the preceding, if the
Stock is traded upon an established stock exchange, then the "Fair Market Value"
of Stock on a given date per share shall be deemed to be the average of the
highest and lowest selling price per share of the Stock on the principal stock
exchange on which the Stock is then trading or, if there was no trading of
Stock on that day, on the next preceding day on which there was such trading;
the Stock is not traded upon an established stock exchange but is quoted on
quotation system, the "Fair Market Value" of Stock on a given date shall be
deemed to be the mean between the closing representative "bid" and "ask" prices
per share of the Stock on such date as reported by such quotation system or,
there was no trading of the Stock on that day, on the next preceding day on
which there was such trading.
Stock Option" shall mean an option granted pursuant to the Plan that is
designated by the Board or its delegates as an "Incentive Stock Option" and
which qualifies as an incentive stock option under Section 422 of the Code
any successor provision.
Stock Option" shall mean a stock option granted pursuant to the Plan that is
an Incentive Stock Option.
shall refer to either an Incentive Stock Option or Non-Statutory Stock Option,
or both, as the context shall indicate.
shall mean the recipient of an Incentive Stock Option or a Non-Statutory Stock
Price" shall mean the price per share of Stock to be paid by the Optionee upon
exercise of the Option.
Stock" shall mean the total number of shares of Stock the Optionee shall
to purchase pursuant to the Agreement.
Person" shall mean an Optionee who is required to file statements relating
his or her beneficial ownership of Stock with the SEC pursuant to Section 16(a)
of the Act.
16b-3" shall mean Rule 16b-3 (as amended from time to time), promulgated by
SEC under the Act, and any successor thereto.
shall mean the Securities and Exchange Commission.
shall mean the $0.001 par value Common Stock of the Company.
shall be administered by the Board; provided, however, that the Board may
delegate all or any part of its authority to administer the Plan in its entirety
or, with respect to any group or groups of persons eligible to receive Options
hereunder, to such committee as the Board shall in its sole discretion
determine. Such committee shall be composed of not fewer than two members (the
“Committee”), all of the members of which Committee shall be Disinterested
Persons, if required. Any Disinterested Person shall comply with the
requirements of Rule 16b-3. The Board or its Committee may adopt, amend and
rescind such rules and regulations for carrying out the Plan and implementing
agreements and take such actions as it deems proper. The interpretation,
construction and application by the Board or its Committee of any of the
provisions of the Plan or any Option granted thereunder shall be final and
binding on the Company, all Optionees, their legal representatives, and any
person who may acquire an Option directly from an Optionee by permitted
transfer, bequest or inheritance. Reference to administrative acts by the Board
in the Plan shall also refer to acts by its Committee, unless the context
otherwise indicates. Whether or not the Board has delegated administrative
authority, the Board has the final power to determine all questions of policy
expediency that may arise in administration of the Plan.
Employees are eligible to receive Incentive Stock Options under the Plan.
Employees, Officers, Directors, Consultants and Advisors of the Company or
Affiliates are eligible to receive Non-Statutory Stock Options under the
shall be eligible to receive an Option for a larger number of shares than is
recommended for him or her by the Board. Any Optionee may hold more than one
Option (whether Incentive Stock Options, Non-Statutory Stock Options, or both,
but only on the terms and conditions and subject to the restrictions set forth
Stock Options granted to an Employee who owns stock at the time the Incentive
Stock Option is granted, representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company and its Affiliates,
shall be granted at an
Price at least one hundred ten percent (110%) of the Fair Market Value of the
Stock at the time
Incentive Stock Option is granted. In determining ownership of Stock by an
Employee, the attribution standards set forth in Code Section 424(d) shall
Subject to the Plan.
granted under the Plan shall be for shares of the Company's authorized but
unissued or re-acquired Stock. The aggregate number of shares of Stock which
be subject to Options
pursuant to the Plan shall not exceed one million (1,000,000) shares, unless
adjusted by the Board pursuant to Paragraph 6(l). Stock issued under other
option plans of the Company shall not be counted against the maximum number
shares that can be issued under the Plan.
event that any outstanding Option expires or is terminated for any reason,
shares of Stock allocable to the unexercised portion of such Option may again
subject to an Option under the Plan.
Optionee pays all or part of any Option Price with shares of Stock, the number
of shares deemed to be issued to the Optionee (and counted against the maximum
number of shares that can be issued under the Plan) shall be the number of
shares transferred to the Optionee by the Company, less the number of shares
transferred by the Optionee to the Company as payment. Stock issued on the
exercise of an Option which is forfeited in accordance with the conditions
contained in the grant by the Optionee after issuance shall be deemed to have
never been issued under the Plan and, accordingly, shall not be counted against
the maximum number of shares that can be issued under the Plan. Notwithstanding
the terms of the previous two sentences, the maximum number of shares for which
Incentive Stock Options may be issued under the Plan shall be one million
(1,000,000) shares, subject to adjustment by the Board as provided under
Paragraph 6(l), regardless of the fact that under the terms of the preceding
sentences, a lesser number of shares is deemed
be issued pursuant to the exercise of Incentive Stock Options.
and Conditions of
or its delegates shall authorize the granting of all Options under the Plan
such Options to be evidenced by Incentive Stock Option Agreements or
Non-Statutory Stock Option Agreements, as the case may be. Each Agreement shall
be in such form as the Board may approve from time to time. Each Agreement
comply with and be subject to the following terms and conditions:
of Option; Number of Shares.
particular Option Agreement shall state the type of Options to be granted
(whether Incentive Stock Options or Non-Statutory Stock Options) and the number
of shares to which the Option pertains. Under no circumstances shall the
aggregate Fair Market Value of the Stock (determined as of the time the Option
is granted) with respect to which Incentive Stock Options are exercisable for
the first time by any Employee during any calendar year (under all incentive
stock option plans of the Company and its Affiliates) exceed
particular Option Agreement shall state the Option Price. The Option Price
an Incentive Stock Option shall not be less than one hundred percent (100%)
the Fair Market Value per share of Stock on the date the Incentive Stock Option
is granted. The Option Price for a Non-Statutory Stock Option shall be the
per share of Stock set by the Board or its delegates.
Certificates for shares of Stock issued and delivered to Reporting Persons
be legended, as the Board deems appropriate, if required by the provisions
any applicable rule or regulation.
and Time of Payment.
aggregate Option Price shall be payable upon the exercise of the Option and
shall be paid in any combination of:
States cash currency;
cashier's or certified check to the order of the Company;
personal check acceptable to the Company;
extent permitted by the Board, shares of Stock of the Company (including
previously owned Stock or Stock issuable in connection with the Option
exercise), properly endorsed to the Company, whose Fair Market Value on the
of exercise equals the aggregate Option Price of the Option being exercised;
extent permitted by the Board, the Optionee's entering into an agreement with
the Company, whereby a portion of the Optionee's Options are terminated and
where the "built-in gain" on any Options which are terminated as part of such
agreement equals the aggregate Option Price of the Option being exercised.
Company may establish, from time to time, procedures for a “cashless exercise”
of options. "Built-in gain" means the excess of the aggregate Fair Market Value
of any Stock otherwise issuable on exercise of a terminated Option, over the
aggregate Option Price otherwise due the Company on such exercise.
may permit deemed or constructive transfer of shares in lieu of actual transfer
and physical delivery of certificates. Except to the extent prohibited by
applicable law, the Board may take any necessary or appropriate steps in order
to facilitate the payment of any such Option Price. Without limiting the
foregoing, the Board may cause the Company to loan the Option Price to the
Optionee or to guarantee that any Stock to be issued will be delivered to a
broker or lender in order to allow the Optionee to borrow the Option Price.
Board, in its sole and exclusive discretion, may require satisfaction of any
rules or conditions in connection with payment of the Option Price at any
particular time, in any particular form, or with the Company's assistance.
Stock used to pay any Option Price is subject to any prior restrictions imposed
in connection with any plan of the Company (including this Plan), an equal
number of the shares of Stock acquired on exercise shall be made subject to
prior restrictions in addition to any further restrictions imposed on such
by the terms of the Optionee's Agreement or by the Plan.
total number of shares of Stock subject to an Option may, but need not, be
allotted in periodic installments (which may, but need not, be equal). The
Option Agreement may provide that from time to time during each of such
installment periods, the Option may become exercisable ("vest") with respect
some or all of the shares allotted to that period, and may be exercised with
respect to some or all of the shares allotted to such period and/or any prior
period as to which the Option became vested but was not fully exercised. During
the remainder of the term of the Option (if its term extends beyond the end
the installment periods), any unexercised Option Stock may be exercised from
time to time.
particular Option Agreement shall state the term of the Option; provided,
however, that all Incentive Stock Options granted under this Plan shall expire
and not be exercisable after the expiration of ten (10) years from the date
granted; provided, further, that any Incentive Stock Option granted to an
Employee who owns stock at the time the Incentive Stock Option is granted
representing more than ten percent (10%) of the total combined voting power
all classes of stock of the Company and its Affiliates shall expire and not
exercisable after the expiration of five (5)
from the date granted. Non-Statutory Stock Options shall expire and not be
exercisable after the date set by the Board or its delegates in the particular
Option Agreement, or on any later date subsequently approved by the Board or
particular Option Agreement shall state when the Optionee's right to purchase
Stock pursuant to the terms of an Option are exercisable in whole or in part,
provided, however, that Incentive Stock Options shall not be exercisable by
Employee more than 90 days after the date that the employment of such Employee
is voluntarily or involuntarily terminated. Subject
to the earlier termination of the right to exercise the Options as provided
under this Plan, Options shall be exercisable in whole or in part as the Board,
in its sole and exclusive discretion, may provide in the particular Option
Agreement, as amended. The Board may at any time increase the percentage of
Option that is otherwise exercisable under the terms of a particular Option
Agreement. The Board, in its sole and exclusive discretion, may permit the
issuance of Stock underlying an Option prior to the date the Option is otherwise
exercisable, provided such Stock is subject to repurchase rights which expire
pro rata as the Option would otherwise have become exercisable.
Optionee does not exercise in any one (1) year period the full number of shares
to which he or she is then entitled to exercise, the Optionee may exercise
shares in any subsequent year during the term of the Option.
shall not be transferable except by will or by the laws of decent and
be exercisable during the lifetime of the person to whom the Option is granted
only by such person, except as specifically provided for by the Board. An
attempted non-permitted transfer of an Option shall be void.
event an Optionee's Continuous Status as an Employee, Director or Consultant
terminates as a result of the Optionee's Disability, the Optionee may exercise
his or her Option, but only within twelve (12) months from the date of such
termination (or such shorter period specified in the Option Agreement), and
to the extent that the Optionee was entitled to exercise it at the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). If, at the date of termination,
the Optionee is not entitled to exercise his of her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to the Plan.
after termination, the Optionee does not exercise his or her Option within
time specified herein, the Option shall terminate, and the shares covered by
such Option shall revert to the Plan.
event of the death of an Optionee, the Option may be exercised, at any time
within sixteen (16) months following the date of death (or such other period
specified in the Option Agreement but in no event later than the expiration
the term of such Option as set forth in the Option Agreement), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee was entitled to exercise
Option at the date of death. If, at the time of death, the Optionee was not
entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after death,
the Optionee's estate or a person who acquired the right to exercise the Option
by bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the shares covered by such Option shall
revert to the Plan.
of Employment or Relationship as an Officer, Director, Consultant or
event that an Optionee who is an Employee, Officer, Director, Consultant or
Advisor of the Company or its Affiliates shall cease to be employed by or
perform services for the Company or its Affiliates prior to the Option's
than upon the Optionee's death or Disability),
exercise of Options held by such Optionee shall be subject to such limitations
on the periods of time during which such Options, except for Incentive Stock
Options limitations under section 6(g)(i) herein, may be exercised as may be
specified in the particular Option Agreement, as amended, between the Optionee
and the Company. Whether authorized leave of absence or absence for military
governmental service shall constitute termination of employment for purposes
the Plan shall be determined by the Board in their sole and exclusive
discretion. No provision of the Plan shall be construed so as to grant any
individual the right to remain in the employ or service of the Company for
period of specific duration.
number of shares issuable under the Plan and the number and amount of the Option
Stock and the Option Price of outstanding Options may be proportionately
adjusted by the Board, in its sole and exclusive discretion, for any increase
decrease in the number of issued shares of Stock resulting from a subdivision
consolidation of shares, or for the payment of a stock dividend, or any other
increase or decrease in the number of such shares effected without receipt
consideration by the Company in order to preclude the dilution or enlargement
benefits under the Plan.
Board, in its sole and exclusive discretion, may make such equitable adjustments
to the Plan and outstanding Options as it deems appropriate in order to preclude
the dilution or enlargement of benefits under the Plan, upon exchange of all
the outstanding stock of the Company for a different class or series of capital
stock or the separation of assets of the Company, including a spin-off or other
distribution of stock or property by the Company.
Company shall be the surviving corporation in any merger or consolidation,
outstanding Option shall pertain to and apply to the securities to which a
holder of the number of shares of Option Stock would have been entitled. A
dissolution or liquidation of the Company, a merger (other than a merger the
principal purpose of which is to change the state of the Company's
incorporation) or consolidation in which the Company is not the surviving
corporation, a reverse merger in which the Company is the surviving corporation
but the Company's Common Stock outstanding immediately preceding the merger
converted by virtue of the merger into other property, or other capital
reorganization in which more than fifty percent (50%) of the Company's Common
Stock is exchanged (unless the dissolution or liquidation plan, merger or
consolidation agreement or capital reorganization corporate documents expressly
provide to the contrary) shall cause each outstanding Option to terminate,
provided, that each Optionee shall, immediately prior to such event, have the
right to exercise his or her Option in whole or in part, unless the Option
connection with such event is either to be assumed by the successor corporation
or parent thereof, or to be replaced with a comparable option to purchase shares
of the capital stock of the successor corporation or parent thereof, or the
Option is to be replaced by a comparable cash incentive program of the successor
corporation based on the value of the Option on the date of such event.
Notwithstanding the preceding, if, within one (1) year from the date of such
event, an Employee's employment is involuntarily terminated, then the Employee's
outstanding Options, if any, shall become immediately exercisable.
adjustments required by the preceding paragraphs shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive,
provided, that adjustments shall not be made in a manner that causes an
Incentive Stock Option to fail to continue to qualify as an "incentive stock
option" within the meaning of Code Section 422.
expressly provided in this Paragraph 6(l), an Optionee shall have no rights
reason of any subdivision or consolidation of shares of stock of any class,
the payment of any stock dividend, or any other increase in the number of shares
of stock of any class by reason of any dissolution, liquidation, merger,
consolidation, reorganization, or separation of assets, and any issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or amount of the Option Stock or
Option Price of outstanding Options.
or existence of an Option shall not affect in any way the right or power of
Company to make adjustments, reclassifications, reorganizations or changes
its capital or business structure, or to merge, consolidate, dissolve, liquidate
or sell, or transfer all or any part of its business or assets.
as a Shareholder.
Optionee shall not have rights as a shareholder with respect to any shares
the date of the issuance of a stock certificate to him or her for such shares.
No adjustment shall be made for dividends (ordinary or extraordinary, whether
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date of issuance of such stock certificate,
except as provided in Paragraph 6(l) above.
Extension and Renewal of Options.
to the terms and conditions of the Plan, the Board may modify (including
lowering the Option Price or changing Incentive Stock Options into Non-Statutory
Stock Options), extend or renew outstanding Options granted under the Plan,
accept the surrender of outstanding Options under this Plan and/or other stock
option plans of the Company (to the extent not previously exercised) and
authorize the granting of new Options in substitution therefor. Notwithstanding
the foregoing, no modification of an Option shall, without the consent of the
Optionee, alter or impair any rights or obligations under any Option previously
granted under the Plan.
Company may require any Optionee, or
to whom an Option is transferred under subsection 6(d), as a condition of
exercising any such Option, (1) to give written assurances satisfactory to
Company as to the Optionee's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory
the Company who is knowledgeable and experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together with
purchaser representative, the merits and risks of exercising the Option; and
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the Option for such person's own account
not with any present intention
selling or otherwise distributing
the stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise of the Option has been registered under a then currently effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii) as to any particular requirement, a determination
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. Unless an Optionee
could otherwise exercise a Stock Option or dispose of Stock delivered upon
exercise of a Stock Option granted under the Plan without incurring liability
under Section 16(b) of the Exchange Act, at least six months shall elapse from
the date of acquisition of the Stock Option to the date of disposition of its
and Exercise of Options.
extent required by Code Section 422, each Incentive Stock Option shall state
that it is not transferable or assignable by Optionee otherwise than by will
the laws of descent and distribution, and that during an Optionee's lifetime,
such Incentive Stock Option shall be exercisable only by the
Option Agreement may contain
such other provisions, including without limitation, restrictions upon the
exercise or transferability
of the Option, as the Board may deem advisable. Any Incentive Stock Option
Agreement shall contain such limitations and restrictions upon the exercise
Stock Option as shall be necessary in order that such Incentive Stock Option
"incentive stock option" as defined in Code Section 422, or to conform
the Company becomes required to collect federal and state income and employment
taxes in connection with the exercise of an Option ("withholding taxes"), the
Optionee shall promptly pay to the Company the amount of such taxes in cash,
unless the Board permits or requires payment in another form. Subject to such
conditions as it may require, the Board, in its sole discretion, may allow
Optionee to reimburse the Company for payment of withholding taxes with shares
of Stock. If an Optionee is a Reporting Person at the time of exercise and
given an election to pay any withholding taxes with Stock, the Board shall
sole discretion to approve or disapprove such election.
may suspend or terminate the Plan at any time. Unless sooner terminated, the
Plan shall not extend beyond a date ten (10) years from the date of adoption
hereof by the Board. No Incentive Stock Options or Non-statutory Stock Options
may be granted under the Plan while the Plan is suspended or after it is
terminated. Rights and obligations under any Option granted while the Plan
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the Option was
respect to any shares at the time not subject to Options, the Board may from
time to time, insofar as permitted by law, suspend or discontinue the Plan
revise or amend the Plan in any respect whatsoever, except that, without
approval of the stockholders, no such revision or amendment shall change the
number of shares for which Options may be granted under the Plan, except as
provided in Section 6(l), change the designation of the class of persons
eligible to receive Options under the Plan, materially increase the benefits
accruing to Optionees under the Plan, or decrease the price at which Incentive
Stock Options may be granted. Furthermore, without the approval of the
stockholders, the Plan may not be amended in any manner that will cause
Incentive Stock Options issued under it to fail to meet the requirements of
"incentive stock options" as defined in Code Section 422. The Board may amend
the Plan from time to time to the extent necessary to comply with any applicable
law, rule or other regulatory requirement.
proceeds received by the Company from the sale of Stock pursuant to the exercise
of an Option will be used for general corporate purposes.
Obligation to Exercise Option.
granting of an Option shall impose no obligation upon the Optionee to exercise
addition to such other rights of indemnification as they may have as Directors,
Employees or agents of the Company, the Directors, or any individuals who are
delegated authority by the Board to administer the Plan, shall be indemnified
the Company against: (i) their reasonable expenses, including attorneys' fees
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they
any of them may be a party by reason of any action taken or failure to act
or in connection with the Plan or any Option granted thereunder; and (ii)
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company), or paid
them in satisfaction of a judgment in any such action,. suit or proceeding,
except in actions to matters as to which it shall be adjudged in such action,
suit or proceeding that such Director or individual is liable for negligence
misconduct in the performance of his duties; this indemnification is expressly
conditioned upon the indemnified party, within ninety (90) days after
institution of any such action, suit or proceeding, offering the Company in
writing the opportunity, at its own expense, to handle and defend the
portions of the Plan dealing with Incentive Stock Options shall not take effect
unless approved by the stockholders of the Company's preferred (if any) and
Common Stock, which approval must occur within a period commencing twelve (12)
months before and ending twelve (12) months after the date the Plan is adopted
by the Board. Nothing in the Plan shall be construed to limit the authority
the Company to exercise its corporate rights and powers, including the right
the Company to grant Non-Statutory Options for proper corporate