GREENHUNTER ENERGY, INC.
STOCK OPTION AGREEMENT
THIS ASSOCIATE
STOCK OPTION AGREEMENT (the “Agreement”) is made as
of the ___day of ___ 2007, between GreenHunter Energy, Inc., a
Delaware corporation (hereinafter referred to as the
“Company”), and ___(hereinafter referred to as
“Participant” or “Optionee”).
(a) The
Company grants a stock option to key associates and directors to
encourage such persons to continue to work for the Company and
obtain a larger ownership interest in the Company.
(b) The
Optionee is an associate and/or a director of the Company, and the
Company and the Optionee desire that Optionee be granted a stock
option.
Now,
Therefore , for and in consideration of the foregoing premises,
the mutual covenants herein contained, and for other good and
valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Optionee agree as
follows:
1. Grant
of Option . The Company hereby grants to Optionee an option to
purchase up to ___shares (the “Shares”) of the
Company’s Common Stock, $0.001 par value (“Common
Stock”), at a purchase price of $ per share (the
“Option”).
(a) Subject
to Section 3 below, Optionee, regardless of whether Optionee
is an employee or director of the Company or any subsidiary at the
time of exercise, shall have the right to purchase any or all of
the Shares at any time prior to ___, 2017 unless this Option is
sooner terminated or expires as provided in this
Agreement.
(b) Subject
to any required action by the stockholders of the Company, if the
Company shall be the surviving corporation in any merger,
consolidation or reorganization, the Option granted hereunder shall
pertain to and apply to the securities to which a holder of the
number of shares of stock subject to the Option would have been
entitled.
(c) If the
Optionee retires, dies or becomes totally and permanently disabled
prior to the expiration of this Option, the Optionee or his
representative, as applicable, may exercise the Option with respect
to any Shares which Optionee could have purchased on his date of
retirement, death or total and permanent disability. The exercise
of this Option under this paragraph (c) must occur prior to
the earlier of (i) twelve (12) months after the
Optionee’s retirement, death or disability or (ii) the
expiration of the term of this Option under paragraph (a). For
purposes of this Agreement, “retirement” shall mean
that the employee has voluntarily left the employment of the
Company or its affiliates and such employee is at least
65 years of age and has been employed by the Company or its
affiliates for at least ten (10) years prior to the date of
his retirement.
(d) If there
is a Change in Control, the Board of Directors shall cause the
Company as a condition to the consummation of the Change in
Control, to enter into an agreement to have the surviving,
resulting or offering corporation assume Optionee’s Option
and substitute shares of the surviving, resulting or offering
Company for the Shares of Common Stock subject to the Options, with
appropriate adjustment as to number and kind of securities and
exercise prices based upon the terms of the transaction resulting
in the Change of Control.
Change in Control
means any person who, as of the effective date of this Agreement is
unaffiliated with any current shareholder of the Corporation,
becomes the beneficial owner of equity securities of the Company
comprising 50% or more of the total fair market value or total
combined voting power of the Common Stock.
3.
Vesting of Options . The Option granted hereunder shall be
fully vested on the date of grant. No part of the Option may be
exercised after the date set forth in Section 2(a).
4. Manner
of Exercise and Payment for Stock Upon Exercise of Option .
Each exercise of this Option or a part of this Option shall be made
by notice in writing to the Company, specifying the number of
shares to be purchased and accompanied by (i) cash,
(ii) a certified or cashier’s check or (iii) any
other type of cleared funds in payment in full for the shares then
being purchased. In addition, any portion of the purchase price of
the shares to be issued may be paid by delivering to the Company a
properly executed exercise notice together with a copy of
irrevocable instructions to a stockbroker to sell immediately some
or all of the shares acquired by exercise of the Option and to
deliver promptly to the Company an amount of sales proceeds (or, in
lieu of or pending a sale, loan proceeds) sufficient to pay the
purchase price, including any taxes applicable thereto. The Company
shall cause certificates representing the shares so purchased to be
issued to the Optionee as soon as practicable thereafter, subject
to compliance with all laws which affect such issuance.
No Shares shall be
delivered to the Optionee, or any other person permitted to
exercise the Option, pursuant to the exercise of the Option until
the Optionee or such other person has made arrangements acceptable
to the Company or its designee for the satisfaction of all
applicable income tax, employment tax, and social security tax
withholding obligations, including obligations incident to the
receipt of Shares. Upon exercise of the Option, the Company or the
Optionee’s employer may offset or withhold (from any amount
owed by the Company or the Optionee’s employer to
the
Optionee) or
collect from the Optionee, or
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