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EXHIBIT 4.2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER
THE U.S. SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE
OR FOREIGN
JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND
QUALIFIED
PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE OR
APPLICABLE
FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF
COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION
UNDER U.S.
FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS IS NOT
REQUIRED.
BLACKWATER MIDSTREAM CORP.
2008 INCENTIVE PLAN
NOTICE OF INCENTIVE STOCK OPTION GRANT
BLACKWATER
MIDSTREAM CORP. (the "Company") hereby grants you the following
Option to purchase shares of its common stock ("Shares"). The terms
and
conditions of this Option are set forth in the Incentive Stock
Option Agreement
("Incentive Option Agreement") that follows and the BLACKWATER
MIDSTREAM CORP.
2008 Incentive Plan (the "Plan"), both of which are attached to and
made a part
of this document. This page is meant to be a cover page for
informational
purposes only, in the event any of the terms hereon are in conflict
with the
Incentive Option Agreement and/or the Plan, the terms of the
Incentive Option
Agreement and/or the Plan shall supersede the information on this
page.
DATE OF GRANT:
NAME OF OPTIONEE:
NUMBER OF OPTION SHARES:
EXERCISE PRICE PER SHARE: $
VESTING START DATE:
TYPE OF OPTION:
/X/ Incentive Stock / / Nonqualified
Stock
Option
Option
VESTING SCHEDULE:
Decided by resolution of the Board of Directors.
PAYMENT FORMS:
By cash, cash equivalents, or Shares owned by
the Optionee for at least six months, and if the
Company's Shares become publicly traded, by
"cashless" exercise, as set forth in the Stock
Option Agreement.
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BLACKWATER MIDSTREAM CORP.
INCENTIVE STOCK OPTION AGREEMENT
OPTIONEE:
1. GRANT
OF STOCK OPTION. As of the DATE OF GRANT (identified in Section
19
below),
Blackwater Midstream Corp., a California corporation (the
"COMPANY"), hereby grants an Incentive Stock Option (the "OPTION")
to the
Optionee
(identified above), an employee of the Company, to purchase the
number of
shares of the Company's common stock, $0.50 par value per share
(the
"COMMON STOCK"), identified in Section 19 below (the "SHARES"),
subject to
the terms and conditions of this agreement (the "AGREEMENT")
and the
Company's 2008 Incentive Plan effective May 7, 2008 (the
"PLAN"),
which is
hereby incorporated herein in its entirety by reference. The
Shares,
when issued to the Optionee upon the exercise of the Option,
shall
be fully paid
and nonassessable. The Option is an "incentive stock option"
as defined
in Section 422 of the Internal Revenue Code.
2.
DEFINITIONS. All capitalized terms used herein shall have the
meanings set
forth in
the Plan unless otherwise specifically provided herein. Section
19 below
sets forth meanings for various capitalized terms used in this
Agreement.
3. OPTION
TERM. The Option shall commence on the Date of Grant (identified
in
Section 19
below) and terminate on the date immediately prior to the tenth
(10th)
anniversary of the Date of Grant. The period during which the
Option is
in effect and may be exercised is referred to herein as the
"OPTION
PERIOD".
4. OPTION
PRICE. The Option Price per Share is identified in Section 19
below.
5.
VESTING. The total number of Shares subject to this Option shall
vest in
accordance
with the VESTING SCHEDULE (identified in Section 19 below). The
Shares may
be purchased at any time after they become vested, in whole or
in part,
during the Option Period; provided, however, the Option may
only
be
exercisable to acquire whole Shares. The right of exercise
provided
herein
shall be cumulative so that if the Option is not exercised to
the
maximum
extent permissible after vesting, the vested portion of the
Option
shall be
exercisable, in whole or in part, at any time during the Option
Period.
6. METHOD
OF EXERCISE. The Option is exercisable by delivery of a written
notice to
the attention of the Chief Financial Officer of the Company at
the
address for notices to the Company provided below, signed by
the
Optionee,
specifying the number of Shares to be acquired on, and the
effective
date of, such exercise. The Optionee may withdraw notice of
exercise
of this Option, in writing, at any time prior to the close of
business
on the business day preceding the proposed exercise date.
7. METHOD
OF PAYMENT. The Option Price upon exercise of the Option shall
be
payable to
the Company in full either: (i) in cash or its equivalent, or
(ii)
subject to prior approval by the Committee in its discretion,
by
tendering
previously acquired Shares having an aggregate Fair Market
Value
(as
defined in the Plan) at the time of exercise equal to the total
Option
Price
(provided that the Shares must have been held by the Optionee for
at
least six
(6) months prior to their tender to satisfy the Option Price),
or (iii)
subject to prior approval by the Board of Directors or
Compensation Committee in its discretion, by withholding Shares
which
otherwise
would be acquired on exercise having an aggregate Fair Market
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Value at
the time of exercise equal to the total Option Price (as
determined
pursuant to Section 2.3 of the Plan), or (iv) subject to prior
approval
by the Board of Directors or Compensation Committee in its
discretion, by a combination of (i), (ii), and (iii) above. Any
payment in
shares of
Common Stock shall be effected by the delivery of such shares
to
the Chief
Financial Officer of the Company, duly endorsed in blank or
accompanied by stock powers duly executed in blank, together with
any
other
documents as the Chief Financial Officer may require. If the
payment
of the
Option Price is remitted partly in Shares, the balance of the
payment of
the Option Price shall be paid in either cash, certified check,
bank
cashiers' check, or by wire transfer.
The Board
of Directors or Compensation Committee, in its discretion, may
allow (i)
a "cashless exercise" as permitted under Federal Reserve
Board's
Regulation
T, 12 CFR Part 220 (or its successor), and subject to
applicable
securities law restrictions and tax withholdings, or (ii) any
other
means of exercise which the Board of Directors or Compensation
Committee,
in its discretion, determines to be consistent with the Plan's
purpose
and applicable law.
As soon as
practicable after receipt of a written notification of exercise
and full
payment, the Company shall deliver to or on behalf of the
Optionee,
in the name of the Optionee or other appropriate recipient,
Share
certificates for the number of Shares purchased under the
Option.
Such
delivery shall be effected for all purposes when a stock
transfer
agent of
the Company shall have deposited such certificates in the
United
States
mail, addressed to Optionee or other appropriate recipient.
8.
RESTRICTIONS ON EXERCISE. The Option may not be exercised if the
issuance
of such
Shares or the method of payment of the consideration for such
Shares
would constitute a violation of any applicable federal or state
securities
or other laws or regulations, including any such laws or
regulations or Company policies respecting blackout periods, or any
rules
or
regulations of any stock exchange on which the Common Stock may
be
listed.
9.
TERMINATION OF EMPLOYMENT. Voluntary or involuntary termination
of
Employment
and the death or Disability of Optionee shall affect Optionee's
rights
under the Option as follows:
(a)
TERMINATION FOR
CAUSE. The vested and non-vested portions of the
Option shall expire on 12:01 am. (PT) on the date of termination
of
Employment and shall not be exercisable to any extent if
Optionee's
Employment with the Company is terminated for Cause (as defined
in
the Plan at the time of such termination of Employment).
(b)
OTHER
INVOLUNTARY TERMINATION OR VOLUNTARY TERMINATION. If
Optionee's Employment with the Company is terminated for any
reason
other than for Cause, retirement, death or Disability
