LEXINGTON
ENERGY SERVICES INC.
2008
RESTRICTED STOCK/OPTION PLAN
1.
Purpose of the Plan
The purpose
of the Lexington Energy Services Inc. 2008 Restricted Stock/Option
Plan is to provide for a plan pursuant to which the Board of
Directors of Lexington Energy Services Inc., a Nevada corporation,
can issue stock as compensation for services rendered or to be
rendered by eligible Participants (as defined below).
2.
Definitions
Wherever the
following capitalized terms are used in this Plan, they shall have
the meanings specified below:
(a) "Award"
means a grant of Common Stock to a Participant under the Plan
including, without limitation, an Option and a Restricted Stock
Award.
(b) "Award
Agreement" means an agreement entered into between the Corporation
and a Participant setting forth the terms and conditions of an
Award granted to a Participant. The form of Award Agreement
for Options (“Option Agreement”) is attached as Exhibit
I.
(c) "Board"
means the Board of Directors of the Corporation.
(d) "Common
Stock" or “Shares” means the common stock, par value
$.0001 per share, of the Corporation.
(e)
"Corporation" means Lexington Energy Services Inc., a Nevada
corporation.
(f) "Date of
Grant" means the date on which an Award under the Plan is made by
the Board, or such later date as the Board may specify to be the
effective date of the Award.
(g)
"Effective Date" means the Effective Date of this Plan, as defined
in Section 9.1 hereof.
(h) "Eligible
Person" means any person who is an employee of or consultant or
advisor to the Corporation and who provides bona fide services for
the Corporation, where the services are not in connection with the
offer or sale of securities in a capital raising transaction and
where the services do not directly or indirectly promote or
maintain a market for the Corporation’s Common Stock.
In no case shall an Award be made under the Plan where the
Common Stock granted in the Award is not eligible for registration
pursuant to Form S-8 (or any successor form promulgated for the
same general purposes by the Securities and Exchange Commission)
under the Securities Act of 1933, as amended.
(i) "Fair
Market Value" of a share of Common Stock as of a given date means
the value as determined by the Board based on the recent trading
history of the Common Stock in the over-the-counter market or, if
the Common Stock is not traded in the over-the-counter market, the
value as determined in good faith by the Board.
(j) “Option”
means a right to purchase Common Stock of the Company granted
under this Plan at a stated price for a specified period of
time, as provided in Section 6 hereof.
(k)
"Participant" means any Eligible Person who holds an outstanding
Award under the Plan.
(l) "Plan"
means the Lexington Energy Services Inc. 2008 Restricted
Stock/Option Plan as set forth herein, as it may be amended from
time to time.
(m)
"Restricted Stock Award" means an award of restricted stock under
Section 7 hereof entitling a Participant to shares of Common Stock
that are nontransferable and subject to forfeiture until specific
conditions established by the Board are satisfied.
3. Shares of
Common Stock Subject to the Plan
3.1. Number
of Shares. Subject to the following provisions of this Section 3,
the aggregate number of shares of Common Stock that may be issued
pursuant to all Awards under the Plan is 6,000,000 shares of Common
Stock, 3,000,000 shares of which shares are reserved for issuance
pursuant to the exercise of Options, and 3,000,000 shares of which
are reserved for Restricted Stock Awards. The shares of Common
Stock to be delivered under the Plan will be made available from
authorized but unissued shares of Common Stock or issued shares
that have been reacquired by the Corporation. To the extent that
any Option or Restricted Stock Award exercisable or payable in
Common Stock is forfeited, cancelled, returned to the Corporation
for failure to satisfy vesting requirements or upon the occurrence
of other forfeiture events, or otherwise terminates without
exercise or payment being made thereunder, shares of Common Stock
covered thereby will no longer be charged against the foregoing
maximum share limitations and may again be made subject to Awards
under the Plan pursuant to such limitations.
3.2.
Adjustments. If there shall occur any recapitalization,
reclassification, stock dividend, stock split, reverse stock split,
or other distribution with respect to the shares of Common Stock,
or other change in corporate structure affecting the Common Stock,
the Board may, in the manner and to the extent that it deems
appropriate and equitable to the Participants and consistent with
the terms of this Plan, cause an adjustment to be made in (i) the
maximum number and kind of shares provided in Section 3.1 hereof
and in outstanding Awards, (ii) the performance targets or goals
applicable to any outstanding Awards or (iii) any other terms of an
Award that are affected by the event.
4.
Administration of the Plan
The Plan
shall be administered by the Board. Subject to the express
limitations of the Plan, the Board shall have authority in its
discretion to determine the Eligible Persons to whom, and the time
or times at which, Awards may be granted, the number of shares
subject to each Award, the time or times at which an Award will
become vested, the performance criteria, business or performance
goals or other conditions of an Award, and all other terms of the
Award. The Board shall also have discretionary authority to
interpret the Plan, to make all factual determinations under the
Plan, and to make all other determinations necessary or advisable
for Plan administration. The Board may prescribe, amend, and
rescind rules and regulations relating to the Plan. All
interpretations, determinations, and actions by the Board shall be
final, conclusive, and binding upon all parties.
5. Eligibility
and Awards
All Eligible
Persons are eligible to be designated by the Board to receive an
Award under the Plan. The Board has authority, in its sole
discretion, to determine and designate from time to time those
Eligible Persons who are to be granted Awards, the types of Awards
to be granted and the number of shares subject to the Awards that
are granted under the Plan. To the extent not documented in a
separate agreement, each Award will be evidenced by an Award
Agreement between the Corporation and the Participant that shall
include such terms and conditions (consistent with the Plan) as the
Board may determine; provided, however, that failure to issue an
Award Agreement shall not invalidate an Award.
6.
Stock Options
6.1. Grant of
Options. An Eligible Participant may be granted one or more
Options. Options granted under the Plan will be Non-Statutory
Options.
6.2. Option
Agreements. Each Option granted under the Plan will be evidenced
by a written Option Agreement in the form of Exhibit I hereto
that will be entered into by the Company and the Eligible
Participant to whom the Option is granted (the “Option
Holder”), and will be deemed to contain the following
terms and conditions, unless other terms and conditions
inconsistent therewith have been entered into the Option
Agreement. In the event of inconsistency between the provisions
of the Plan and any Option Agreement entered into, the
provisions of the Option Agreement will be considered to have
been determined to be exceptional from the below and such Option
Agreement shall govern where not inconsistent with law. However,
the provisions of the Plan will govern where the Option
Agreement omits to provide for a matter governed by the Plan and
the Option Agreement will not be incomplete nor unenforceable if
it fails to provide for a matter provided by the terms of this
Plan as such shall be incorporated by reference:
(a) Number of Shares. Each Option Agreement will
state that it covers a specified number of Shares, as determined
by the Board and the Option Agreement. If the Option Agreement
fails to state the number then it shall be the number set forth
in the minutes of the Board.
(b) Price. The price (“Option
Price”) at which each Share covered by an Option may be
purchased will be determined by the Board and set forth in the
Option Agreement. Where the price shall be omitted the price
shall be the Fair Market Value of the Common Stock on the date
set forth at the beginning of the Option Agreement.
(c) Vesting Period. Each Option will state the
time and the amount of the Shares of the Option which vest, and
are exercisable thereafter, at specified times during the Option
Period.
(d) Duration of Options. Each Option Agreement
will state the period of time within which the Option may be
exercised by the Option Holder (the “Option
Period”). The Option Period shall expire not more than
five years from the date an Option is granted. Unless otherwise
stated, director and senior officer Options shall be the lesser
of five years or the term of their office plus 90 days, Employee
Options the lesser of five years or the term of their
employment plus 30 days, and other Option
Holders the lesser of five years or the term of the engagement
agreement plus 30 days.
(e) Termination of Employment, Death, Disability
Etc. Except as otherwise determined by the Board, each Option
Agreement will provide as follows with respect to the exercise
of the Option upon termination of the employment or the death of
the Option Holder:
(i) Termination.
If the Option Holder’s employment or office with the
Company is terminated within the Option Period for cause, as
determined by the Company in its sole discretion, or if the
Option Holder resigns without appropriate or agreed notice and
agreed termination terms, the Option will be void for all
purposes immediately upon notice of termination or resignation,
as the case may be, unless otherwise agreed solely at the
discretion of the Company. Unless specified in an engagement
agreement, “cause” means a material violation, as
determined by the Company, of the Company’s established
policies and procedures and the terms of engagement and a
failure to rectify within 15 days of notice. If the Option
Holder is terminated for another reason, not provided for below
or in the engagement agreement or the Option agreement, then the
Option shall be exercisable, as to the vested portion only on
the date of termination, for a period of 30 days after
termination, except as otherwise permitted by the sole
discretion of the Board but not to exceed the Option Period. The
effect of this Section will be limited to determining the
consequences of a termination and nothing in this Section will
restrict or otherwise interfere with the Company’s
discretion with respect to the termination of any Employee.
(ii) Death or
Disability. If the Option Holder’s employment with the
Company is terminated within the Option Period because of the
Option Holder’s death or disability the Option will remain
exercisable, to the extent that it was vested and exercisable on
the date of the Option Holder’s death or disability, for a
period of six months after such date; provided, however, that in
no event may the Option be exercised after the expiration of the
Option Period.
(iii) Non-Employees or
non-Office Holders. For all purposes under this Section, an
Eligible Person who is not an Employee or office holder of the
Company will be considered to have a termination at the
conclusion of the relevant contract or upon notice by the
Company of termination for default or breach of agreement. If
the contract is terminated for breach or default then the Option
shall terminate immediately. Otherwise the Option shall
terminate in accordance with its terms or Section 6.2(d)
above.
(f) Transferability of Option. Each Option
Agreement will provide that the Option and exercise rights
granted therein are not transferable or subject to assignment or
lien for security purposes by the Option Holder except to the
Option Holder’s legal representative, his estate, a family
corporation or personal holding corporation, a bona fide lender
or in such other circumstance as the Board may approve in its
sole discretion, which may be exercised contrary without reason.
Each assignment of an interest in an Option must be approved
before such will be enforceable.
(g) Exercise, Payments, Etc. Unless otherwise
provided by the Option Agreement the method for exercising the
Option granted will be by delivery to the office of the Company
of written notice specifying the particular Option (or
portion
thereof) that is being exercised and the number
of Shares with respect to which such Option is exercised,
together with payment of the Option Price. The exercise of the
Option will be deemed effective upon actual receipt of such
notice and payment to the Company of the Option Price in a form
satisfactory to the Company, acting reasonably. The purchase of
such Stock will take place at the principal offices of the
Company upon delivery of such notice. A properly executed
certificate or certificates representing the Stock will be
issued by the Company and delivered to the Option Holder with
reasonable dispatch. Unless restricted by the Option Agreement,
the exercise price shall be paid by any of the following methods
or any combination of the following methods:
(i) in cash;
(ii) by
cashier’s check, certified cheque, or other acceptable
banker’s note payable to the order of the Company;
(iii) by delivery
to the Company of a properly executed notice of exercise
together with irrevocable instructions (referred to in the
industry as ‘delivery
