EXHIBIT 10.1
2008 MOMENTUM BIOFUELS, INC.
STOCK OPTION AND AWARD PLAN
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SECTION 1: GENERAL PURPOSE OF PLAN
The name of this plan is the 2008 MOMENTUM BIOFUELS, INC. STOCK OPTION
AND AWARD PLAN (the
"Plan"). The purpose of the Plan is to enable
MOMENTUM
BIOFUELS, INC., a
Colorado corporation
(the "Company"), and
any Parent or any
Subsidiary to
obtain and retain the services of the types of Employees,
Consultants and
Directors who will contribute to the Company's long range
success and to provide
incentives which are
linked directly to
increases in
share value which will inure to the benefit of all stockholders of
the Company.
SECTION 2: DEFINITIONS
For purposes
of the Plan,
the following terms shall be defined as set
forth
below:
"Administrator" shall
have the meaning as set forth in Section 3,
hereof.
"Board" means the Board of Directors of the Company.
"Cause" means (i)
failure by an Eligible Person to substantially
perform his or her duties and obligations to the Company (other than any such
failure resulting from his or her incapacity due to physical or
mental illness);
(ii) engaging in
misconduct or a fiduciary breach which is or potentially is
materially injurious
to the Company or its stockholders; (iii) commission of a
felony; (iv)
the commission of a crime against the Company which is or
potentially is materially injurious to the Company; or (v) as
otherwise provided
in the Stock Option Agreement or Stock Purchase Agreement.
For purposes of
this
Plan, the existence of
Cause shall be determined by the Administrator in its
sole discretion.
"Change in Control" shall mean:
The consummation of a
merger or
consolidation of the
Company with or
into another entity or any other corporate reorganization, if more than 50% of
the combined voting
power (which voting
power shall be
calculated by assuming
the conversion of all
equity securities
convertible
(immediately
or at some
future time) into shares entitled to vote, but not assuming
the exercise of any
warrant or right to subscribe to or purchase those shares) of the continuing
or
Surviving Entity's
securities
outstanding
immediately
after such merger,
consolidation or other
reorganization
is owned, directly or indirectly, by
persons who were not
stockholders
of the Company immediately prior to such
merger, consolidation or other reorganization; provided, however,
that in making
the determination of
ownership by the stockholders of the Company, immediately
after the reorganization, equity securities which persons own
immediately before
the reorganization as
stockholders of another party to the transaction shall be
disregarded; or
The sale, transfer or
other disposition of all or substantially all of
the Company's assets.
A transaction
shall not constitute a Change in Control if its sole
purpose is to change
the state of the
Company's
incorporation or to
create a
holding company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such
transaction.
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"Code" means the Internal Revenue Code of 1986, as amended from
time to
time.
"Committee" means a
committee of the Board
designated by the Board to
administer the Plan.
"Company" means MOMENTUM BIOFUELS, INC., a corporation organized
under
the laws of the State of Colorado (or any successor
corporation).
"Consultant" means a consultant or advisor who is a natural person
or a
legal entity and who provides bona fide services to the Company,
a Parent or a
Subsidiary; provided
such services are not in connection with the offer or sale
of securities in a capital-raising transaction and do not directly
or indirectly
promote or maintain a market for the Company's securities.
"Date of Grant"
means the date on
which the Administrator adopts a
resolution expressly
granting a Right to a
Participant or, if a different date
is set forth in such
resolution as the Date of Grant, then such date as is set
forth in such resolution.
"Director" means a member of the Board.
"Disability" means
that the Optionee is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or
mental impairment; provided, however, for purposes of determining
the term of an
ISO pursuant to Section 6.6 hereof, the term Disability shall have the meaning
ascribed to it under Code Section 22(e)(3). The determination of whether an
individual has a Disability shall be determined under procedures
established by
the Plan Administrator.
"Eligible Person"
means an Employee, Consultant or Director of the
Company, any Parent or any Subsidiary.
"Employee" shall
mean any individual who is a common-law employee
(including officers) of the Company, a Parent or a Subsidiary.
"Exercise Price"
shall have the meaning set forth in Section 6.3
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market
Value" shall mean the fair market value of a Share,
determined as
follows: (i) if the Stock is listed
on any established stock
exchange or a national market system, including without limitation,
the NASDAQ
National Market, the
Fair Market Value of a share of Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of
trading in the
Stock) on the last market trading day prior to the day of
determination, as
reported in the Wall Street Journal or such other source as
the Administrator
deems reliable; (ii) if the Stock is quoted on the
NASDAQ
System (but not on the NASDAQ National Market) or any similar
system whereby the
stock is regularly
quoted by a recognized
securities
dealer but closing
sale
prices are not reported, the Fair Market Value of a share
of Stock shall be the
mean between the bid and asked prices for the Stock on the last
market trading
day prior to the day of determination, as reported in the Wall
Street Journal or
such other source as the Administrator deems reliable; or (iii) in the absence
of an established
market for the Stock, the Fair Market Value shall be
determined in good faith by the Administrator and such
determination
shall be
conclusive and binding on all persons.
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"First Refusal
Right" shall have the
meaning set forth in Section 8.7
hereof.
"ISO" means a Stock Option intended to qualify as an
"incentive stock
option" as that term is defined in Section 422(b) of the Code.
"Non-Employee
Director" means a
member of the Board who is not an
Employee of the Company, a Parent or Subsidiary, who satisfies the requirements
of such term as defined in Rule 16b-3(b)(3)(i) promulgated by the
Securities and
Exchange Commission.
"Non-Qualified Stock
Option" means a Stock Option not described in
Section 422(b) of the Code.
"Offeree" means a
Participant who is granted a Purchase Right pursuant
to the Plan.
"Optionee" means a
Participant who is
granted a Stock Option pursuant
to the Plan.
"Outside Director"
means a member of the
Board who is not an Employee
of the Company, a
Parent or Subsidiary,
who satisfies the requirements of such
term as defined in Treasury Regulations (26 Code of Federal
Regulation Section
1.162-27(e)(3)).
"Parent" means any corporation (other than the Company) in an
unbroken
chain of corporations ending with the Company, if each of the
corporations other
than the Company owns stock possessing 50% or more of the
total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that
attains the status of a Parent on a date after the adoption of
the Plan shall be considered a Parent commencing as of such
date.
"Participant" means
any Eligible Person selected by the Administrator,
pursuant to the
Administrator's
authority in Section
3, to receive grants
of
Rights.
"Plan" means this 2008 MOMENTUM BIOFUELS, INC. STOCK OPTION AND AWARD
PLAN, as the same may be amended or supplemented from time to
time.
"Purchase Price" shall have the meaning set forth in Section
7.3.
"Purchase Right" means
the right to purchase Stock granted pursuant to
Section 7.
"Rights" means Stock Options and Purchase Rights.
"Repurchase Right"
shall have the meaning
set forth in Section 8.8 of
the Plan.
"Service" shall mean service as an Employee, Director or
Consultant.
"Stock" means Common Stock of the Company.
"Stock Option" or "Option" means an option to purchase shares of Stock
granted pursuant to Section 6.
"Stock Option
Agreement"
shall have the meaning
set forth in Section
6.1.
"Stock Purchase
Agreement" shall have the meaning set forth in Section
7.1.
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"Subsidiary" means any
corporation
(other than the Company) in an
unbroken chain
of corporations beginning with the Company, if each of the
corporations other
than the last
corporation in the
unbroken chain owns stock
possessing 50% or more
of the total combined
voting power of all classes of
stock in one of the other corporations in such chain. A corporation
that attains
the status of a
Subsidiary on a date
after the adoption
of the Plan shall
be
considered a Subsidiary commencing as of such date.
"Surviving Entity"
means the Company if immediately following any
merger, consolidation
or similar transaction, the holders of outstanding voting
securities of the Company immediately prior to the merger or
consolidation own
equity securities
possessing
more than 50% of the voting power of the
corporation existing following the merger, consolidation or similar
transaction.
In all other cases,
the other entity to the transaction and not the Company
shall be the Surviving
Entity. In making the
determination of ownership by the
stockholders of an entity immediately after the merger,
consolidation or similar
transaction, equity
securities which the stockholders owned immediately before
the merger,
consolidation or
similar transaction as
stockholders
of another
party to the
transaction shall be
disregarded.
Further, outstanding voting
securities of an entity shall be calculated by assuming the conversion of all
equity securities
convertible
(immediately or at some future time) into shares
entitled to vote.
"Ten Percent Stockholder" means a person who on the Date of Grant
owns,
either directly or
through attribution as
provided in Section 424 of the Code,
Stock constituting
more than 10% of the
total combined voting power of all
classes of
stock of his or her employer corporation or of any Parent or
Subsidiary.
SECTION 3: ADMINISTRATION
3.1 Administrator.
The Plan shall be
administered
by either (i) the
Board, or (ii) a
Committee appointed by
the Board (the group that administers
the Plan is referred to as the "Administrator").
3.2 Powers in
General. The Administrator shall have the power and
authority to grant to Eligible Persons, pursuant to the terms of the Plan,
(i)
Stock Options, (ii) Purchase Rights or (iii) any combination of the
foregoing.
3.3 Specific Powers. In particular, the Administrator shall have the
authority: (i) to construe and interpret the Plan and apply its
provisions; (ii)
to promulgate,
amend and rescind rules and regulations relating to the
administration of the Plan; (iii) to authorize any person to
execute, on behalf
of the Company, any
instrument required to
carry out the purposes of the Plan;
(iv) to determine when Rights are to be granted under the Plan; (v)
from time to
time to select,
subject to the limitations set forth in this Plan, those
Eligible Persons to
whom Rights shall be granted; (vi) to determine the number
of shares of Stock to be made subject to each Right; (vii) to determine whether
each Stock Option is to be an ISO or a Non-Qualified Stock Option; (viii) to
prescribe the terms
and conditions
of each Stock Option
and Purchase
Right,
including, without limitation, the Purchase Price and medium of
payment, vesting
provisions and repurchase provisions, and to specify the provisions
of the Stock
Option Agreement or
Stock Purchase
Agreement relating to such grant or
sale;
(ix) to amend any
outstanding Rights for
the purpose of modifying the time or
manner of vesting, the
Purchase Price or
Exercise Price,
as the case may
be,
subject to applicable
legal restrictions and
to the consent of the other party
to such agreement;
(x) to determine the duration and purpose of leaves of
absences which may be granted to a Participant without constituting
termination
of their employment
for purposes of the Plan; (xi) to make decisions with
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respect to outstanding
Stock Options that may become necessary upon a change in
corporate control or an event that triggers anti-dilution
adjustments; and (xii)
to make any and all other determinations which it determines
to be necessary or
advisable for administration of the Plan.
3.4 Decisions Final. All decisions made by the Administrator pursuant
to the provisions of
the Plan shall be final and binding on the Company and the
Participants.
3.5 The Committee. The
Board may, in its sole and absolute discretion,
from time to time, and at any period of time during which the
Company's Stock is
registered pursuant to
Section 12 of the Exchange Act, delegate any or all of
its duties and authority with respect to the Plan to the Committee
whose members
are to be appointed by
and to serve at the pleasure of the Board. From time to
time, the Board may increase or decrease the size of the Committee, add
additional members to,
remove members (with or without cause) from, appoint new
members in substitution therefor, and fill vacancies, however caused, in the
Committee. The
Committee shall act pursuant to a vote of the majority
of its
members or,
in the case of a
committee comprised of only two members, the
unanimous consent of
its members, whether
present or not, or by
the unanimous
written consent of the
majority of its members and minutes shall be kept of all
of its meetings and copies thereof shall be provided to the Board.
Subject to
the limitations
prescribed
by the Plan and the Board, the Committee may
establish and follow such rules and regulations for the conduct of its
business
as it may determine to be advisable. During any period of time during
which the
Company's Stock is
registered
pursuant to Section 12
of the Exchange Act, all
members of the Committee shall be Non-Employee Directors and
Outside Directors.
3.6
Indemnification.
In addition
to such other rights of
indemnification as
they may have as Directors or members of the Committee,
and
to the extent allowed
by applicable
law, the Administrator and each of the
Administrator's
consultants shall be
indemnified
by the Company
against the
reasonable expenses,
including attorney's fees, actually incurred in connection
with any action, suit or proceeding or in connection with any
appeal therein, to
which the
Administrator or any of its consultants may be party by reason of
any
action taken or
failure to act under or in connection with the Plan or any
option granted under the Plan, and against all amounts paid by the
Administrator
or any of its
consultants in settlement thereof (provided that the settlement
has been approved by
the Company,
which approval shall not be unreasonably
withheld) or paid by the Administrator or any of its consultants in
satisfaction
of a judgment in any
such action,
suit or proceeding, except in relation to
matters as to which it shall be adjudged in such action, suit or
proceeding that
such Administrator or
any of its consultants did not act in good faith and in a
manner which such person reasonably believed to be in the best
interests of the
Company, or was grossly negligent, and in the case of a criminal
proceeding, had
no reason to believe
that the conduct
complained of was
unlawful; provided,
however, that
within 60 days after
institution
of any such
action, suit or
proceeding, such
Administrator
or any of its
consultants
shall, in writing,
offer the Company the
opportunity at its own
expense to handle and defend such
action, suit or proceeding.
SECTION 4: STOCK SUBJECT TO THE PLAN
4.1 Stock Subject to
the Plan. Subject to
adjustment
as provided in
Section 9, Five
Hundred Thousand
(500,000) shares of Common Stock shall be
reserved and available for issuance under the Plan. Stock reserved
hereunder may
consist, in whole or
in part, of
authorized
and unissued
shares or treasury
shares.
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4.2 Basic Limitation.
The number of shares
that are subject to Rights
under the Plan shall not exceed the number of shares that then
remain available
for issuance under the Plan. The Company, during the term of the Plan, shall
at
all times reserve and
keep available a
sufficient number of
shares to satisfy
the requirements of the Plan.
4.3 Additional
Shares. In the event that any outstanding Option or
other right for any reason expires or is canceled or otherwise
terminated,
the
shares allocable to the unexercised portion of such Option or other
right shall
again be available for the purposes of the Plan. In the event that
shares issued
under the Plan are
reacquired
by the Company pursuant to the terms of any
forfeiture provision, right of repurchase or right of first
refusal, such shares
shall again be available for the purposes of the Plan.
SECTION 5: ELIGIBILITY
Eligible Persons
who are selected by the Administrator shall be
eligible to be granted Rights hereunder subject to limitations set
forth in this
Plan; provided,
however, that only Employees shall be eligible to be
granted
ISOs hereunder.
SECTION 6: TERMS AND CONDITIONS OF OPTIONS.
6.1 Stock Option
Agreement.
Each grant of an Option under the Plan
shall be evidenced
by a Stock
Option Agreement between the Optionee and the
Company. Such Option
shall be subject to all applicable terms and conditions of
the Plan and may be
subject to any other
terms and conditions which are not
inconsistent with the
Plan and which the
Administrator deems
appropriate for
inclusion in a Stock
Option Agreement.
The provisions of the various Stock
Option Agreements entered into under the Plan need not be
identical.
6.2 Number of Shares.
Each Stock Option
Agreement shall
specify the
number of shares of Stock that are subject to the Option and shall
provide for
the adjustment of such
number in accordance
with Section 9, hereof. The Stock
Option Agreement
shall also specify whether the Option is an ISO or a
Non-Qualified Stock Option.
6.3 Exercise Price.
6.3.1 In General. Each
Stock Option Agreement shall state the
price at which shares subject to the Stock Option may be purchased
(the
"Exercise Price"),
which shall, with respect to Incentive Stock
Options, be not less than 100% of the Fair Market Value of the
Stock on
the Date of Grant. In
the case of
Non-Qualified Stock
Options, the
Exercise Price
shall be determined in the sole discretion of the
Administrator.
6.3.2 Payment.
The Exercise Price
shall be payable in a form
described in Section 8 hereof.
6.4 Withholding Taxes. As a condition to the exercise of an Option,
the
Optionee shall
make such arrangements as the Board may require for the
satisfaction of any federal, state, local or foreign withholding
tax obligations
that may arise in
connection with such
exercise or with the disposition of
shares acquired by exercising an Option.
6.5 Exercisability.
Each Stock Option Agreement shall specify the date
when all or any installment of the Option becomes exercisable. In
the case of an
Optionee who is not an officer of the Company, a Director or a Consultant, an
Option shall become
exercisable
at a rate of no more
than 25% per year over a
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four-year period
commencing
on January 1 following
the Date of Grant and
25%
each year thereafter
on January
1. Subject to the preceding sentence, the
exercise provisions
of any Stock Option
Agreement shall be determined by the
Administrator, in its sole discretion.
6.6 Term. The Stock
Option Agreement shall specify the term of the
Option. No Option shall be exercised after the expiration of ten
years after the
date the Option is
granted. Unless otherwise provided in the Stock Option
Agreement, no
Option may be exercised (i) three months after the date the
Optionee's Service with the Company, its Parent or its Subsidiaries
terminates
if such termination
is for any reason
other than death,
Disability or
Cause,
(ii) one year after the date the Optionee's Service with the
Company, its Parent
or its subsidiaries
terminates
if such termination is a result of death or
Disability, and (iii) if the Optionee's Service with the Company,
its Parent, or
its Subsidiaries
terminates for Cause, all outstanding Options granted to such
Optionee shall
expire as of the
commencement
of business on the
date of such
termination. The
Administrator
may, in its sole discretion, waive the
accelerated expiration provided for in (i) or (ii). Outstanding
Options that are
not exercisable
at the time of
termination of
employment for any reason shall
expire at the close of business on the date of such
termination.
6.7 Leaves of Absence. For purposes of Section 6.6 above, to the
extent
required by
applicable
law, Service shall be deemed to continue while the
Optionee is on a bona fide leave of absence. To the extent applicable law does
not require
such a leave to be
deemed to continue
while the Optionee is
on a
bona fide leave of absence, such leave shall be deemed to
continue if, and only
if, expressly
provided in writing by
the Administrator
or a duly authorized
officer of the Company, Parent, or Subsidiary for whom
Optionee provides his or
her services.
6.8 Modification,
Extension and Assumption of Options. Within the
limitations of the
Plan, the Administrator may modify, extend or assume
outstanding Options
(whether granted by the Company or another
issuer) or may
accept the
cancellation of outstanding Options (whether granted by the
Company
or another
issuer) in return
for the grant of new
Options for the same or a
different number
of shares and at the same or a different Exercise Price.
Without limiting the foregoing, the Administrator may amend a
previously granted
Option to fully accelerate the exercise schedule of such Option and
provide that
upon the exercise of such Option, the Optionee shall receive shares of
Restricted Stock that
are subject to
repurchase by the Company at the Exercise
Price paid for the Option in accordance with Section 8.8.1 with such
Company's
right to repurchase
at such price lapsing at the same rate as the
exercise
provisions set
forth in Optionee's Stock Option Agreement. The foregoing
notwithstanding, no
modification of an Option shall, without the consent of the
Optionee, impair the
Optionee's rights or
increase the Optionee's obligations
under such Option.
However, a termination
of the Option in which
the Optionee
receives a cash payment equal to the difference between the Fair Market Value
and the Exercise Price for all shares subject to exercise under any
outstanding
Option shall not be
deemed to impair any rights of the Optionee or increase the
Optionee's obligations under such Option.
SECTION 7: TERMS AND CONDITIONS OF AWARDS OR SALES
7.1 Stock Purchase
Agreement.
Each award or sale of
shares under the
Plan (other
than upon exercise of an Option)
shall be evidenced by a Stock
Purchase Agreement
between the Purchaser
and the Company.
Such award or sale
shall be subject to all applicable terms and conditions of the Plan
and may be
subject to any other terms and conditions which are not inconsistent with the
Plan and which the Board deems appropriate for inclusion in a Stock Purchase
Agreement. The
provisions of the various Stock Purchase Agreements entered
into
under the Plan need not be identical.
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7.2 Duration of Offers. Unless otherwise provided in the Stock
Purchase
Agreement, any right
to acquire shares
under the Plan
(other than an
Option)
shall automatically
expire if not
exercised by the
Purchaser within 15 days
after the grant of such right was communicated to the Purchaser by
the Company.
7.3 Purchase Price.
7.3.1 In General. Each
Stock Purchase
Agreement shall
state
the price at which the Stock subject to such Stock Purchase Agreement
may be purchased (the "Purchase Price"), which, with respect to Stock
Purchase Rights,
shall be determined in the sole discretion of the
Administrator.
7.3.2 Payment of Purchase Price. The Purchase Price shall be
payable in a form described in Section 8.
7.4 Withholding Taxes.
As a condition to the
purchase of shares,
the
Purchaser shall
make such arrangements as the Board may require for the
satisfaction of any federal, state, local or foreign withholding
tax obligations
that may arise in connection with such purchase.
SECTION 8: PAYMENT; RESTRICTIONS
8.1 General Rule. The
entire Purchase Price or Exercise Price of shares
issued under
the Plan shall be payable in full by, as applicable, cash or
certified check for an amount equal to the aggregate Purchase Price or Exercise
Price for the number of shares being purchased, or in the discretion of the
Administrator, upon
such terms as the Administrator shall approve, (i) in the
case of an Option and provided the Company's stock is publicly
traded, by a copy
of instructions
to a broker
directing such broker
to sell the Stock for which
such Option is
exercised, and to
remit to the Company the aggregate Exercise
Price of such Options (a "cashless exercise"), (ii) in the case of an Option
or
a sale of Stock, by
paying all or a portion of the Exercise Price or Purchase
Price for the number of shares being purchased by tendering
Stock owned by the
Optionee, duly endorsed for transfer to the Company, with a Fair
Market Value on
the date of delivery
equal to the aggregate
Purchase Price of the Stock with
respect to which such Option or portion thereof is thereby exercised or Stock
acquired (a "stock-for-stock exercise") or (iii) by a
stock-for-stock
exercise
by means of attestation whereby the Optionee identifies for delivery
specific
shares of Stock
already owned by
Optionee and
receives a number of
shares of
Stock equal to the difference between the Option shares
thereby exercised and
the identified attestation shares of Stock (an "attestation
exercise").
8.2 Withholding
Payment. The Purchase Price or Exercise Price shall
include payment of the
amount of all federal,
state, local or other income,
excise or employment taxes subject to withholding (if any) by the
Company or any
parent or subsidiary
corporation as a result of the exercise of a Stock Option.
The Optionee may pay
all or a portion of the tax withholding by cash or check
payable to the Company, or, at the discretion of the
Administrator,
upon such
terms as the Administrator shall approve, by (i) cashless exercise or
attestation exercise;
(ii) stock-for-stock
exercise; (iii) in the case of an
Option, by paying
all or a portion
of the tax
withholding
for the number of
shares being purchased by withholding shares from any transfer or
payment to the
Optionee ("Stock
withholding");
or (iv) a combination of one or more of the
foregoing payment
methods. Any shares issued pursuant to the exercise of an
Option and
transferred
by the Optionee to the Company for the purpose of
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satisfying any withholding obligation shall not again be
available for purposes
of the Plan. The Fair
Market Value of the number of shares subject to Stock
withholding shall not exceed an amount equal to the applicable
minimum required
tax withholding rates.
8.3 Services Rendered.
At the discretion of the Administrator, shares
may be awarded under
the Plan in
consideration of
services rendered to the
Company, a Parent or a Subsidiary prior to the award.
8.4 Promissory
Note. To the extent that a Stock Option
Agreement or
Stock Purchase
Agreement so provides,
in the discretion of the Administrator,
upon such terms as the
Administrator
shall approve, all or a portion of the
Exercise Price or Purchase Price (as the case may be) of shares
issued under the
Plan may be paid with a full-recourse promissory note. However, in the event
there is a stated par value of the shares and applicable
law requires,
the par
value of the shares, if newly issued, shall be paid in cash or cash
equivalents.
The shares shall be pledged as security for payment of the
principal amount of
the promissory
note and interest
thereon, and held in the possession of the
Company until said
amounts are repaid in full. The interest rate payable
under
the terms of the
promissory note shall
not be less than the
minimum rate (if
any) required to avoid the imputation of additional interest under the Code.
Subject to the
foregoing, the
Administrator
(at its sole
discretion)
shall
specify the term,
interest rate,
amortization
requirements (if any) and other
provisions of such note. Unless the Administrator determines otherwise, shares
of Stock having a Fair
Market Value at least equal to the principal amount of
the loan shall be pledged by the holder to the Company as
security for payment
of the unpaid balance of the loan and such pledge shall be
evidenced by a pledge
agreement, the terms
of which shall be determined by the Administrator, in its
discretion; provided,
however, that each
loan shall comply with all applicable
laws, regulations
and rules of the Board
of Governors of the
Federal Reserve
System and any other governmental agency having jurisdiction.
8.5 Exercise/Pledge.
To the extent that a
Stock Option
Agreement or
Stock Purchase
Agreement so allows and if Stock is
publicly traded, in the
discretion of the
Administrator,
upon such terms as the
Administrator
shall
approve, payment
may be made all or in part by the delivery (on a form
prescribed by the Administrator) of an irrevocable direction to
pledge shares to
a securities broker or
lender approved by the Company, as security for a loan,
and to deliver all or part of the loan proceeds to the Company in
payment of all
or part of the Exercise Price and any withholding taxes.
8.6 Written Notice. The purchaser shall deliver a written notice to
the
Administrator
requesting that the Company direct the transfer agent to issue
to
the purchaser (or to
his designee) a
certificate
for the number of
shares of
Common Stock being exercised or purchased or, in the case of a
cashless exercise
or share withholding exercise, for any shares that were not sold in
the cashless
exercise or withheld.
8.7 First Refusal Right. Each Stock Option Agreement and Stock
Purchase
Agreement may provide
that the Company
shall have the right
of first refusal
(the "First Refusal
Right"), exercisable
in connection with any proposed sale,
hypothecation or other
disposition
of the Stock
purchased by the
Optionee or
Offeree pursuant to a Stock Option Agreement or Stock Purchase
Agreement; and in
the event the holder
of such Stock desires
to accept a bona fide
third-party
offer for any or all of such Stock, the Stock shall first be offered to the
Company upon the same
terms and conditions as are set forth in the bona
fide
offer.
8.8 Repurchase Rights.
Following a
termination of the
Participant's
Service, the Company may repurchase the Participant's Rights as
provided in this
Section 8.8 (the "Repurchase Right").
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8.8.1 Repurchase
Price. Following a termination of the
Participant's Service
the Repurchase
Right shall be
exercisable at a
price equal to (i) the
Fair Market
Value of vested
Stock or, in the
case of exercisable
options, the Fair Market Value of the Stock
underlying such
unexercised
options less the
Exercise Price, or (ii)
the Purchase Price or Exercise Price, as the case may be, of
unvested
Stock; provided,
however, the right to repurchase
unvested stock as
described in Section 8.8.1(ii) shall lapse at a rate of at least
33.33%
per year over three years from the date the Right is granted.
8.8.2 Exercise of Repurchase Right. A Repurchase Right may
be
exercised only
within
90 days after the termination of the
Participant's Service
(or in the case of Stock issued upon exercise of
an Option or after the date of termination or the purchase of Stock
under a Stock Purchase Agreement after the date of termination,
within
90 days after the date of the exercise or Stock purchase,
whichever is
applicable) for cash or for cancellation of indebtedness incurred in
purchasing the shares.
8.9 Termination
of Repurchase
and First Refusal
Rights. Each Stock
Option Agreement and Stock Purchase Agreement shall provide that the
Repurchase
Rights and First
Refusal Rights shall
have no effect with respect to, or shall
lapse and cease to have effect when the issuer's securities become publicly
traded or a
determination
is made by counsel for the Company that such
Repurchase Rights and
First Refusal Rights are not permitted under applicable
federal or state securities laws.
8.10 No
Transferability.
Except as provided herein, a Participant may
not assign,
sell or transfer Rights, in whole or in part, other than by
testament or by operation of the laws of descent and
distribution.
8.10.1 Permitted
Transfer
of Non-Qualified Option. The
Administrator, in its
sole discretion
may permit the
transfer of a
Non-Qualified Option
(but not an ISO or Stock Purchase Right) as
follows: (i) by gift to a member of the Participant's immediate
family,
or (ii) by transfer by instrument to a trust providing that the Option
is to be passed to
beneficiaries upon
death of the Settlor (either or
both (i) or (ii) referred to as a "Permitted Transferee"). For
purposes
of this Section
8.10.1, "immediate
family" shall mean the
Optionee's
spouse (including
a former spouse subject to terms of a domestic
relations order); child, stepchild, grandchild, child-in-law; parent,
stepparent, grandparent, parent-in-law; sibling and sibling-in-law,
and
shall include adoptive relationships.
8.10.2 Conditions of Permitted Transfer. A transfer permitted
under this Section 8.10 hereof may be made only upon written
notice to
and approval thereof by Administrator. A Permitted Transferee may not
further assign, sell or transfer the transferred Option, in whole
or in
part, other than by
testament or by operation of the laws of
descent
and distribution. A
Permitted Transferee
shall agree in writing to be
bound by the
provisions of this Plan, which a copy of said agreement
shall be provided to the Administrator for approval prior to the
transfer.
SECTION 9: ADJUSTMENTS; MARKET STAND-OFF
9.1 Effect of Certain Changes.
9.1.1 Stock Dividends,
Splits, Etc. If there is any change in
the number of
outstanding shares of
Stock by reason of a stock split,
reverse stock split, stock dividend, recapitalization, combination or
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<PAGE>
reclassification, then
(i) the number of shares of Stock available for
Rights, (ii) the
number of shares of Stock covered by outstanding
Rights, and (iii) the
Exercise Price or Purchase Price of any Stock
Option or Purchase
Right, in effect
prior to such
change, shall be
proportionately
adjusted by the
Administrator to reflect any increase
or decrease in the number of issued shares of Stock; provided,
however,
that any fractional
shares resulting from the adjustment shall be
eliminated.
9.1.2 Liquidation,
Dissolution, Merger or
Consolidation. In
the event of a
dissolution
or liquidation of the Company, or any
corporate separation
or division, including, but not limited to, a
split-up, a split-off or a spin-off, or a sale of substantially all
of
the assets
of the Company; a merger or consolidation in which the
Company is not the Surviving Entity; or a reverse merger in which
the
Company is the
Surviving Entity, but the shares of Company stock
outstanding immediately preceding the merger are converted by
virtue of
the merger into other property, whether in the form of securities,
cash
or otherwise, then,
the Company, to the extent permitted by applicable
law, but otherwise in its sole discretion may provide for: (i) the
continuation of
outstanding
Rights by the Company
(if the Company is
the Surviving
Entity); (ii) the assumption of the Plan and such
outstanding Rights by
the Surviving
Entity or its parent;
(iii) the
substitution by the
Surviving Entity or its parent of Rights with
substantially the same
terms for such outstanding Rights; or (iv) the
cancellation of
such outstanding Rights without payment of any
consideration,
provided that if such
Rights would be canceled in
accordance with the foregoing, the Participant shall have the right,
exercisable during the
later of the ten-day period ending on the fifth
day prior to such merger or consolidation or ten days after the
Administrator provides
the Rights holder a notice of cancellation, to
exercise such
Rights in whole or in part without regard to any
installment exercise provisions in the Rights agreement.
9.1.3 Par Value Changes. In the event of a change in the Stock
of the Company as presently constituted which is limited to a
change of
all of its authorized
shares with par value,
into the same number
of
shares without
par value,
or a change in the par
value, the shares
resulting from any
such change shall be "Stock" within the meaning of
the Plan.
9.2 Decision of
Administrator Final.
To the extent that the foregoing
adjustments relate to stock or securities of the Company, such
adjustments shall
be made by the
Administrator, whose
determination
in that respect shall be
final, binding and conclusive; provided, however, that each ISO
granted pursuant
to the Plan shall not be adjusted in a manner that causes such Stock
Option to
fail to continue to qualify as an ISO without the prior
consent of the
Optionee
thereof.
9.3 No Other Rights. Except as hereinbefore expressly provided in this
Section 9, no Participant shall have any rights by reason of
any subdivision or
consolidation of
shares of Company
stock or the payment of any dividend or any
other increase or decrease in the number of shares of Company stock
of any class
or by reason of any of the events described in Section 9.1, above,
or any other
issue by the Company of shares of stock of any class, or securities
convertible
into shares of stock of any class; and, except as provided in this
Section 9,
none of the foregoing
events shall affect,
and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of
Stock subject to
Rights. The grant of a
Right pursuant
to the Plan shall not
affect in any way
the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structures or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all
or part of its
business or assets.
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<PAGE>
9.4 Market Stand-Off.
Each Stock Option
Agreement and Stock
Purchase
Agreement shall
provide that, in connection with any underwritten public
offering by the
Company of its equity securities pursuant to an effective
registration statement
filed under the Securities Act of 1933, as amended,
including the Company's initial public offering, the Participant
shall agree not
to sell, make any short sale of, loan, hypothecate, pledge, grant
any option for
the repurchase of, or otherwise dispose or transfer for value or
otherwise agree
to engage in any of the foregoing transactions with respect to any
Stock without
the prior written consent of the Company or its underwriters, for
such period of
time from and after the effective date of such registration
statement as may
be
requested by the Company or such underwriters (the "Market
Stand-Off").
SECTION 10: AMENDMENT AND TERMINATION
The Board may amend,
suspend or terminate the Plan at any time and for
any reason.
At the time of such
amendment,
the Board shall
determine,
upon
advice from counsel,
whether such amendment
will be contingent on
stockholder
approval.
SECTION 11: GENERAL PROVISIONS
11.1 General Restrictions.
11.1.1 No View to Distribute. The Administrator may require
each person acquiring shares of Stock pursuant to the Plan to
represent
to and agree with the Company in writing that such person is acquiring
the shares
without
a view towards distribution thereof. The
certificates for
such shares may include any legend that the
Administrator
deems
appropriate to
reflect any restrictions on
transfer.
11.1.2 Legends. All certificates for shares of Stock delivered
under the Plan shall be subject to such stop transfer orders and other
restrictions as the
Administrator may deem
advisable under the rules,
regulations and other
requirements
of the Securities and Exchange
Commission, any stock
exchange upon which the Stock is then listed and
any applicable federal
or state securities laws, and the Administrator
may cause a legend or
legends to be put on
any such certificates
to
make appropriate reference to such restrictions.
11.1.3 No Rights as Stockholder. Except as specifically
provided in this Plan, a Participant or a transferee of a Right
shall
have no rights as a stockholder with respect to any shares
covered by
the Rights until the date of the issuance of a Stock certificate to
him
or her for such shares, and no adjustment shall be made for dividends
(ordinary or
extraordinary,
whether in cash, securities or other
property) or distributions of other rights for which the record
date is
prior to the date such Stock certificate is issued, except as provided
in Section 9.1, hereof.
11.2 Other
Compensation
Arrangements. Nothing
contained in this Plan
shall prevent
the Board from adopting other or additional compensation
arrangements, subject
to stockholder approval if such approval is required; and
such arrangements
may be either
generally applicable or applicable only in
specific cases.
11.3 Disqualifying
Dispositions.
Any Participant who shall make a
"disposition" (as
defined in Section 424
of the Code) of all or any portion of
an ISO within
two years from the date of grant of such ISO
or within one year
after the issuance of
the shares of Stock
acquired upon
exercise of such
ISO
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<PAGE>
shall be required
to immediately advise the Company in writing as to the
occurrence of the sale
and the price realized
upon the sale of such
shares of
Stock.
11.4 Regulatory Matters. Each Stock Option Agreement and Stock
Purchase
Agreement shall
provide that no shares
shall be purchased or
sold thereunder
unless and until (i) any then applicable requirements of state or federal
laws
and regulatory
agencies shall have been fully complied with to the
satisfaction
of the Company and its counsel and (ii) if required to do so by the
Company, the
Optionee or Offeree shall have executed and delivered to the
Company a letter of
investment intent in
such form and containing such provisions as the Board or
Committee may require.
11.5 Recapitalizations. Each Stock Option Agreement and
Stock Purchase
Agreement shall contain provisions required to reflect the
provisions of Section
9.
11.6 Delivery.
Upon exercise of a
Right granted under this Plan, the
Company shall issue
Stock or pay any amounts due within a reasonable period of
time thereafter.
Subject to any statutory obligations the Company may otherwise
have, for purposes of
this Plan, thirty days
shall be considered a
reasonable
period of time.
11.7 Other Provisions.
The Stock Option
Agreements and Stock Purchase
Agreements authorized
under the Plan may
contain such other provisions not
inconsistent with this Plan, including, without limitation, restrictions upon
the exercise of the Rights, as the Administrator may deem
advisable.
SECTION 12: INFORMATION TO PARTICIPANTS
To the extent
necessary to comply with Colorado law, the Company each
year shall furnish to Participants its balance sheet and income
statement unless
such Participants
are limited to key
Employees whose duties with the Company
assure them access to equivalent information.
SECTION 13: STOCKHOLDERS AGREEMENT
As a condition to the
transfer of Stock
pursuant to a Right
granted
under this Plan, the
Administrator, in its
sole and absolute
discretion, may
require the
Participant to execute
and become a party to any agreement by and
among the Company and any of its stockholders which exists on or after the
Date
of Grant (the "Stockholders Agreement"). If the Participant becomes
a party to a
Stockholders
Agreement, in
addition to the terms of this Plan and the
Stock
Option Agreement or Stock Purchase Agreement (whichever is applicable)
pursuant
to which the Stock is transferred, the terms and conditions of the
Stockholders
Agreement shall govern Participant's rights in and to the Stock;
and if there is
any conflict between the provisions of the Stockholders
Agreement and this
Plan
or any conflict
between the provisions
of the Stockholders
Agreement and the
Stock Option Agreement
or Stock Purchase
Agreement (whichever is applicable)
pursuant to which the Stock is transferred, the provisions of the Stockholders
Agreement shall be controlling. Notwithstanding anything to the
contrary in this
Section 13, if the
Stockholders Agreement
contains any
provisions which would
violate the Colorado Corporations Code if applied to the
Participant, the
terms
of this Plan
and the Stock Option Agreement or Stock Purchase Agreement
(whichever is
applicable)
pursuant to which the Stock is transferred shall
govern the Participant's rights with respect to such
provisions.
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<PAGE>
SECTION 14: EFFECTIVE DATE OF PLAN
The effective date of this Plan is _______________, 2008. The adoption
of the Plan is subject to approval by the Company's stockholders,
which approval
must be obtained
within 12 months from the date the Plan is
adopted by the
Board. In the event
that the stockholders
fail to approve
the Plan within 12
months after its adoption by the Board, any grants of Options or
sales or awards
of shares that have
already occurred
shall be rescinded, and no additional
grants, sales or awards shall be made thereafter under the
Plan.
SECTION 15: TERM OF PLAN
The Plan shall terminate automatically on _______________, 2018,
but no
later than the tenth (10th) anniversary of the effective date. No
Right shall be
granted pursuant to the Plan after such date, but Rights
theretofore granted may
extend beyond that date. The Plan may be terminated on any earlier
date pursuant
to Section 10 hereof.
SECTION 16: EXECUTION
To record the adoption of the Plan by the Board, the Company has
caused
its authorized officer to execute the same as of
__________________, 2008.
MOMENTUM BIOFUELS, INC.
By: _______________________________
Gregory A. Enders, President and CEO
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<PAGE>
STOCK OPTION AGREEMENT
2008 MOMENTUM
BIOFUELS, INC. STOCK OPTION AND AWARD PLAN
Notice Of Stock Option Grant
You have been granted the following option to purchase Common Stock of
MOMENTUM
BIOFUELS, INC. (the "Company"):
Name of Optionee:
Total Number of Shares Granted:
Type of Option:
Exercise Price Per Share:
Date of Grant:
Vesting Commencement Date:
Vesting Schedule:
Expiration Date:
By your signature and the signature of the Company's authorized representative
below, you and the
Company agree that this option is granted under and governed
by the terms and conditions of the 2008 MOMENTUM BIOFUELS, INC.
STOCK OPTION AND
AWARD PLAN and the STOCK OPTION AGREEMENT, both of which are
attached hereto and
are incorporated
herein by reference.
Optionee hereby represents that both the
option and any shares
acquired upon exercise of the option have been or will be
acquired for
investment for his own
account and not with a view to or for sale
in connection with any distribution or resale of the security.
Optionee:
MOMENTUM BIOFUELS, INC.
By:
By:
-----------------------------------
-------------------------------------
Name:
Gregory A. Enders
President and CEO
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<PAGE>
ANNEX I
THE OPTION GRANTED
PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE
NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT
BE SOLD, PLEDGED,
OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE
COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
2008 MOMENTUM BIOFUELS, INC. STOCK OPTION AND AWARD PLAN:
STOCK OPTION AGREEMENT
SECTION 1: GRANT OF OPTION
1.1 Option.
On the terms and
conditions
set forth in the
notice of
stock option grant to which this agreement (the "Agreement") is attached (the
"Notice of Stock Option Grant") and this agreement, the Company grants to the
individual named in the Notice of Stock Option Grant (the
"Optionee") the option
to purchase at the exercise price specified in the Notice of Stock
Option Grant
(the "Exercise
Price") the number of Shares set forth in the
Notice of Stock
Option Grant.
This option is
intended to be either
an ISO or a
Non-Qualified
Stock Option, as provided in the Notice of Stock Option Grant.
1.2 Stock Plan and Defined Terms. This option is granted
pursuant to
and subject to the terms of the 2008 MOMENTUM BIOFUELS, INC. STOCK OPTION AND
AWARD PLAN, as in
effect on the date
specified in the
Notice of Stock
Option
Grant (which date shall be the later of (i) the date on which the
Board resolved
to grant this option,
or (ii) the first day of the Optionee's Service) and as
amended from time to time (the "Plan"), a copy of which is attached
hereto and
which the Optionee acknowledges having received. Capitalized terms
not otherwise
defined in this Agreement have the definitions ascribed to them in
the Plan.
SECTION 2: RIGHT TO EXERCISE
2.1 Exercisability. Subject to Sections 2.2 and 2.3 below and the
other
conditions set
forth in this Agreement, all or part of this option may be
exercised prior to its
expiration at the time
or times set forth in the Notice
of Stock Option Grant. Shares purchased by exercising this option
may be subject
to the Right of Repurchase under Section 7. In addition,
all of the
remaining
unexercised options shall become vested and fully exercisable if
(i) a Change in
Control occurs before the Optionee's Service terminates,
and (ii) the option
is
not assumed or an equivalent option is not substituted by the
successor entity
that employs
the Optionee immediately after the Change in Control or by
its
parent or subsidiary.
2.2 Limitation. If this option is designated as an ISO in the
Notice of
Stock Option Grant,
then to the extent (and only to the extent) the Optionee's
right to exercise this option causes this option (in whole or in
part) to not be
treated as an ISO by reason of the $100,000 annual limitation under Section
422(d) of the Code,
such options shall be treated as Non-Qualified Stock
Options, but shall be
exercisable by their terms. The determination of options
to be treated as
Non-Qualified Stock
Options shall be made
by taking options
into account in the order in which they are granted. If the terms
of this option
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<PAGE>
cause the $100,000
annual limitation
under Section 422(d) of the Code to be
exceeded, a pro rata
portion of each exercise shall be treated as the
exercise
of a Non-Qualified Stock Option.
2.3 Stockholder
Approval. Any other provision of this Agreement
notwithstanding, no
portion of this option
shall be exercisable at any time
prior to the approval of the Plan by the Company's
stockholders.
SECTION 3: NO TRANSFER OR ASSIGNMENT OF OPTION
Except as provided herein, an Optionee may not assign, sell or
transfer
the option, in whole
or in part, other than by testament or by operation of the
laws of descent and distribution. The Administrator, in its sole discretion may
permit the transfer of a Non-Qualified Option (but not an ISO) as
follows: (i)
by gift to a member of the Participant's immediate family, or (ii) by
transfer
by instrument
to a trust providing that the Option is to be passed to
beneficiaries upon
death of the Settlor (either or both (i) or (ii) referred to
as a "Permitted Transferee"). For purposes of this Section 3,
"immediate family"
shall mean the Optionee's spouse (including a former spouse
subject to terms of
a domestic relations order); child, stepchild, grandchild,
child-in-law; parent,
stepparent,
grandparent,
parent-in-law; sibling
and sibling-in-law, and shall
include adoptive relationships. A transfer permitted under this
Section 3 hereof
may be made only upon written notice to and approval thereof by
Administrator. A
Permitted Transferee
may not further
assign, sell or
transfer the transferred
option, in whole or in part, other than by testament or by
operation of the laws
of descent and distribution. A Permitted Transferee shall agree in
writing to be
bound by the provisions of this Plan, which agreement shall be submitted
to and
approved by the Administrator before the transfer.
SECTION 4: EXERCISE PROCEDURES
4.1 Notice of Exercise. The Optionee or the Optionee's
representative
may exercise this option by delivering a written notice in the form
of Exhibit A
attached hereto
("Notice of Exercise")
to the Company in the manner specified
pursuant to Section
14.4 hereof.
Such Notice of
Exercise shall specify the
election to exercise
this option, the number of Shares for which it
is being
exercised and the form of payment, which must comply with Section 5.
The Notice
of Exercise
shall be signed by the
person who is entitled
to exercise this
option. In the event
that this option is to be exercised by the Optionee's
representative, the
notice shall be accompanied by proof (satisfactory to the
Company) of the representative's right to exercise this option.
4.2 Issuance of Shares. After receiving a proper Notice of Exercise,
the Company
shall cause to be
issued a certificate
or certificates for the
Shares as to which this option has been exercised, registered in
the name of the
person exercising
this option (or in the names of such
person and his or
her
spouse as community
property or as joint
tenants with right of
survivorship).
The Company shall
cause such certificate
or certificates to be deposited in
escrow or delivered to or upon the order of the person exercising
this option.
4.3 Withholding Taxes. In the event that the Company determines
that it
is required to withhold any tax as a result of the exercise of this
option, the
Optionee, as a condition to the exercise of this option, shall make
arrangements
satisfactory to
the Company to enable it to satisfy all withholding
requirements. The
Optionee shall also
make arrangements
satisfactory
to the
Company to enable it to satisfy any withholding requirements that may arise in
connection with the
vesting or disposition
of Shares purchased by exercising
this option, and shall provide to the Company his/her/its social
security number
or employment identification number.
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<PAGE>
SECTION 5: PAYMENT FOR STOCK
5.1 General Rule. The entire Exercise Price of Shares issued
under the
Plan shall be payable in full by cash or cashier's check for an amount equal to
the aggregate
Exercise Price for the number of shares being purchased.
Alternatively, in the
sole discretion of the Plan Administrator and upon such
terms as the Plan
Administrator shall
approve, the Exercise
Price may be paid
by:
5.1.1 Cashless
Exercise. Provided the
Company's Common Stock
is publicly traded,
a copy of instructions
to a broker directing such
broker to sell the Shares for which this option is exercised, and to
remit to the Company
the aggregate Exercise Price of such option
("Cashless Exercise");
5.1.2 Stock-For-Stock Exercise. Paying all or a portion of the
Exercise Price for the
number of Shares being
purchased by
tendering
Shares owned
by the Optionee, duly endorsed for transfer to the
Company, with a Fair
Market Value on the date of delivery equal to the
Exercise Price multiplied by the number of Shares with respect to
which
this option is being exercised (the "Purchase Price") or the aggregate
Purchase Price of the
shares with
respect to which this option or
portion hereof is exercised ("Stock-for-Stock Exercise"); or
5.1.3 Attestation
Exercise. By a stock
for stock exercise by
means of attestation
whereby the
Optionee identifies for delivery
specific Shares
already owned by Optionee and receives a number of
Shares equal to the
difference
between the Option Shares thereby
exercised and
the identified attestation Shares ("Attestation
Exercise").
5.2 Withholding
Payment. The Exercise Price shall include
payment of
the amount of all federal, state, local or other income,
excise or
employment
taxes subject to withholding (if any) by the Company or any parent
or subsidiary
corporation as a result of the exercise of a Stock Option.
The Optionee may
pay
all or a portion of the tax withholding by cash or check payable to
the Company,
or, at the discretion of the Administrator, upon such terms as the
Administrator
shall approve,
by (i) Cashless Exercise or Attestation Exercise; (ii)
Stock-for-Stock
Exercise; (iii) in the
case of an Option,
by paying all or a
portion of the tax
withholding for the
number of shares
being purchased by
withholding shares
from any transfer or payment to the Optionee ("Stock
withholding"); or (iv)
a combination of one
or more of the
foregoing payment
methods. Any shares issued pursuant to the exercise of an Option
and transferred
by the Optionee to the
Company for the purpose of satisfying any withholding
obligation shall not
again be available
for purposes of the Plan. The fair
market value of the
number of shares
subject to Stock
withholding
shall not
exceed an amount equal to the applicable minimum required tax
withholding rates.
5.3 Promissory Note.
The Plan
Administrator, in its
sole discretion,
upon such terms as the Plan Administrator shall approve, may permit all or a
portion of the Exercise Price of Shares issued under the
Plan to be paid with a
full-recourse promissory note. However, in the event there is a
stated par value
of the shares and applicable law requires, the par value of the
shares, if newly
issued, shall be paid
in cash or cash equivalents. The Shares shall be pledged
as security
for payment of the
principal amount of the promissory note and
interest thereon,
and shall be held in
the possession of the Company until the
promissory note
is repaid in full. Subject to the foregoing, the Plan
Administrator (at its
sole discretion) shall
specify the term,
interest rate,
amortization requirements (if any) and other provisions of such
note.
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<PAGE>
5.4 Exercise/Pledge.
In the discretion of the Plan Administrator, upon
such terms as the Plan Administrator shall approve, payment may be made all or
in part by the delivery (on a form prescribed by the Plan
Administrator)
of an
irrevocable direction to pledge Shares to a securities broker or
lender approved
by the Company, as
security for a loan,
and to deliver all or part of the loan
proceeds to the Company in payment of all or part of the Exercise
Price and any
withholding taxes.
SECTION 6: TERM AND EXPIRATION
6.1 Basic Term. This
option shall expire and shall not be exercisable
after the expiration of the earliest of (i) the Expiration Date
specified in the
Notice of Stock Option
Grant, (ii) three
months after the date the Optionee's
Service with the Company and its Subsidiaries terminates if such termination
is
for any reason other than death, Disability or Cause, (iii) one year after the
date the Optionee's Service with the Company and its Subsidiaries
terminates if
such termination is a result of death or Disability, and (iv) if the Optionee's
Service with
the Company and its Subsidiaries terminates for Cause, all
outstanding Options granted to such Optionee shall expire as of the
commencement
of business on the date of such termination. Outstanding Options that are not
exercisable at the time of termination of employment for any reason
shall expire
at the close of business on the date of such termination. The Plan
Administrator
shall have the sole
discretion to determine when this option is to expire. For
any purpose under this Agreement, Service shall be deem
