ZULU ENERGY CORP.
This
2008
Equity Incentive Plan (the "Plan") is adopted in consideration for services
rendered and to be rendered to Zulu Energy Corp.
1. Definitions.
The
terms
used in this Plan shall, unless otherwise indicated or required by the
particular context, have the following meanings:
Agreement:
The
written agreement (and any amendment or supplement thereto) between the Company
and an Eligible Person designating the terms and conditions of an
Award.
Award:
Any
Option, Restricted Stock or Restricted Stock Unit, together with any other
right
or interest granted to a Participant pursuant to this Plan.
Board:
The
Board of Directors of Zulu Energy Corp.
Change
in Control:
(i) The
acquisition, directly or indirectly, by any person or group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934) of the beneficial
ownership of more than fifty percent of the outstanding securities of the
Company, (ii) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is
to
change the state in which the Company is incorporated, (iii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company
(other than a transfer to a subsidiary of the Company), (iv) a complete
liquidation or dissolution of the Company, or (v) any reverse merger in which
the Company is the surviving entity but in which securities possessing more
than
fifty percent of the total combined voting power of the Company’s outstanding
securities are transferred to a person or persons different from the persons
holding those securities immediately prior to such merger.
Code:
The
Internal Revenue Code of 1986, as amended, from time to time, including
regulations thereunder and successor provisions and regulations
thereto.
Common
Stock:
The
Common Stock of Zulu Energy Corp.
Company:
Zulu
Energy Corp., a corporation incorporated under the laws of Colorado, and any
successors in interest by merger, operation of law, assignment or purchase
of
all or substantially all of the property, assets or business of the
Company.
Continuous
Status:
The
employment by, or relationship with, the Company or any Related Company is
not
interrupted or terminated. The Board, at its sole discretion, may determine
whether Continuous Status shall be considered interrupted due to personal or
other mitigating circumstances, including leaves of absence.
Date
of Grant:
The
date on which an Option is granted under the Plan.
Eligible
Person:
Officers and Employees and other persons who provide services to the Company
or
any Related Company, including directors of the Company or any Related
Company.
Employee:
An
Employee is an employee of the Company or any Related Company.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended from time to time, including rules
thereunder and successor provisions and rules thereto.
Exercise
Price:
The
price per share of Common Stock payable upon exercise of an Option.
Fair
Market Value:
Fair
Market Value of a share of Common Stock shall be the closing price of a share
on
the date of calculation (or on the last preceding trading day if shares were
not
traded on such date) if the shares are readily tradable on a national securities
exchange or other market system, and if the shares are not readily tradable,
Fair Market Value shall be determined, in good faith, by the Option
Committee.
Immediate
Family Members:
Except
as otherwise determined by the Option Committee, a Participant’s spouse,
ancestors and descendants.
Incentive
Stock Options ("ISOs"):
An
Option granted with the intention that it qualify as an incentive stock option
within the meaning of Section 422 of the Code or any successor provision
thereto.
Non-Incentive
Stock Options ("Non-ISOs"):
Options
which are not intended to qualify as "Incentive Stock Options" under Section
422
of the Code or any successor provision thereto.
Option:
The
rights granted to an Eligible Person to purchase Common Stock pursuant to the
terms and conditions of an Agreement.
Option
Committee:
The
Plan shall be administered by the Option Committee which shall consist of the
Board or a committee of the Board as the Board may time to time designate.
Option
Shares:
The
shares of Common Stock underlying an Option granted to an Eligible
Person.
Optionee:
An
Eligible Person who has been granted an Option.
Participant:
A
person who has been granted an Option, Restricted Stock or a Restricted Stock
Unit which remains outstanding, including a person who is no longer an Eligible
Person.
Related
Company:
Any
subsidiary of the Company and any other business venture in which the Company
has a significant interest as determined in the discretion of the Option
Committee.
Restricted
Stock:
An
Award of shares of Common Stock granted to a Participant pursuant to Section
16,
subject to any restrictions and conditions as are established pursuant to such
Section 16.
Restricted
Stock Unit:
A
right, granted to a Participant pursuant to Section 16, to receive Common Stock,
cash or a combination thereof at the end of a specified deferral
period.
Rule
16b-3:
Rule
16b-3, promulgated by the SEC under Section 16 of the Exchange Act, as from
time
to time in effect and applicable to this Plan.
Securities
Act:
The
Securities Act of 1933, as amended from time to time, including rules thereunder
and successor provisions and rules thereto.
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2. Purpose
and Scope.
(a) The
purpose of this Plan is to advance the interests of the Company and its
stockholders by affording Eligible Persons an opportunity for investment in
the
Company and the incentive advantages inherent in stock ownership in this
Company.
(b) This
Plan
authorizes the Option Committee to grant Options to purchase shares of Common
Stock to Eligible Persons selected by the Option Committee while considering
criteria such as employment position or other relationship with the Company,
duties and responsibilities, ability, productivity, length of service or
association, morale, interest in the Company, recommendations by supervisors,
and other matters.
3. Administration
of the Plan.
The
Plan shall be administered by the Option Committee. The Option Committee shall
have the authority granted to it under this section and under each other section
of the Plan. The Option Committee shall have the authority, in its sole
discretion, to determine the type or types of Awards to be granted pursuant
to
the Plan. Such Awards may be granted either alone, in addition to, or in tandem
with, any other type of Award.
In
accordance with and subject to the provisions of the Plan and Rule 16b-3, the
Option Committee shall select the Eligible Persons to receive Awards, shall
determine (i) the number of shares of Common Stock, Restricted Stock or
Restricted Stock Units to be subject to each Award, (ii) the time at which
each
Award is to be granted, (iii) the extent to which the transferability of shares
of Common Stock issued or transferred pursuant to any Award is restricted,
(iv)
the Fair Market Value of the Common Stock, (v) whether to accelerate the time
of
exercisability of any Award that has been granted, (vi) the period or periods
and extent of exercisability of the Options, and (vii) the manner in which
an
Option becomes exercisable. In addition, the Option Committee shall fix such
other terms of each Option, Restricted Stock Award and Restricted Stock Units
as
the Option Committee may deem necessary or desirable. The Option Committee
shall
determine the form, terms and provisions of each Agreement to evidence each
Award (which need not be identical).
The
Option Committee from time to time may adopt such rules and regulations for
carrying out the purposes of the Plan as it may deem proper and in the best
interests of the Company. The Option Committee shall keep minutes of its
meetings and those minutes shall be available to every member of the
Board.
All
actions taken and all interpretations and determinations made by the Option
Committee in good faith (including determinations of Fair Market Value) shall
be
final and binding upon all Participants, the Company and all other interested
persons. No member of the Option Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to
the
Plan, and all members of the Option Committee shall, in addition to rights
they
may have if Directors of the Company, be fully protected by the Company with
respect to any such action, determination or interpretation.
4. The
Common Stock.
The
Board is authorized to appropriate, issue and sell for the purposes of the
Plan,
and the Option Committee is authorized to grant Options, Restricted Stock and
Restricted Stock Units with respect to, a total number, not in excess of
20,000,000 shares of Common Stock, either treasury or authorized but unissued,
as adjusted pursuant to Section 17. All or any unsold shares subject to an
Option, Restricted Stock or Restricted Stock Units that for any reason expires
or otherwise terminates may again be made subject to Options, Restricted Stock
or Restricted Stock Units under the Plan.
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5. Eligibility.
Options
which are intended to qualify as ISOs will be granted only to Employees.
Eligible Persons may hold more than one Option under the Plan and may hold
Options under the Plan and options granted pursuant to other plans or otherwise,
and may hold Restricted Stock and Restricted Stock Units under the
Plan.
6. Option
Price.
The
Exercise Price for the Option Shares shall be established by the Option
Committee or shall be determined by a method established by the Option
Committee; provided that the Exercise Price to be paid by Optionees for the
Option Shares that are intended to qualify as ISOs, shall not be less than
100
percent of the Fair Market Value of the Option Shares on the Date of Grant
(or,
in the case of an individual who owns stock possessing more than 10 percent
of
the total combined voting power of all classes of stock of the Company, 110
percent of the Fair Market Value of the Option Shares on the Date of Grant).
7. Duration
and Exercise of Options.
(a) The
option period shall commence on the Date of Grant and shall be as set by the
Option Committee, but not to exceed 10 years in length.
(b) The
Option Committee may determine whether any Option shall be exercisable in
installments only; if the Option Committee determines that an Option shall
be
exercisable in installments, it shall determine the number of installments
and
the percentage of the Option exercisable at each installment date. All such
installments shall be cumulative.
(c) The
Option Committee shall establish and set forth in each Agreement that evidences
an Option whether the Option shall continue to be exercisable, and the terms
and
conditions of such exercise, after a termination of Continuous Status, any
of
which provisions may be waived or modified by the Option Committee at any time,
provided that any such waiver or modification shall satisfy the requirements
for
exemption under Section 409A of the Code.
(d) Each
Option shall be exercised in whole or in part by delivering to the Company
(or
to a brokerage firm designated or approved by the Company) of written notice
of
the number of shares with respect to which the Option is to be exercised and
by
paying in full the Exercise Price for the Option Shares purchased as set forth
in Section 8; provided, that an Option may not be exercised in part unless
the
aggregate purchase price for the Option Shares purchased is at least
$5,000.
(e) No
Option
may be exercised under this Plan until the Plan is approved by the holders
of a
majority of the securities present, or represented, and entitled to vote at
a
meeting of shareholders duly held in accordance with the laws of the State
of
Colorado.
8. Payment
for Option Shares.
If the
aggregate purchase price of the Option Shares purchased by any Optionee at
one
time exceeds $5,000, the Option Committee may permit all or part of the Exercise
Price for the Option Shares to be paid by delivery to the Company for
cancellation shares of the Company's Common Stock owned by the Optionee with
an
aggregate Fair Market Value as of the date of payment equal to the portion
of
the Exercise Price for the Option Shares that the Optionee does not pay in
cash.
In the case of all other Option exercises, the Exercise Price shall be paid
in
cash or check upon exercise of the Option, except that the Option Committee
may
permit an Optionee to elect to pay the Exercise Price upon the exercise of
an
Option by authorizing a third party broker-dealer in securities approved by
the
Option Committee to sell some or all of the Option Shares acquired upon exercise
of an Option and remit to the Company a sufficient portion of the sale proceeds
to pay the entire Exercise Price and any tax withholding resulting from such
exercise.
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9. Relationship
to Employment or Position.
Nothing
contained in the Plan, or in any Option, Restricted Stock Award or Restricted
Stock Units granted pursuant to the Plan, shall confer upon any Participant
any
right with respect to continuance of employment by, or other relationship with,
the Company, or interfere in any way with the right of the Company to terminate
the Participant’s employment as an Employee or other position or relationship,
at any time.
10. Nontransferability
of Option.
Except
as otherwise determined by the Option Committee, with respect to the
transferability of non-ISO’s by a Participant to his Immediate Family Members
(or to trust or partnerships or limited liability companies established for
such
family members), no Award shall be assignable or transferable by the
Participant, either voluntarily or involuntarily, except by will or the laws
of
descent and distribution.
11. Rights
as a Stockholder.
No
person shall have any rights as a shareholder with respect to any share covered
by an Option until that person shall become the holder of record of such share
and, except as provided in Section 17, no adjustments shall be made for
dividends or other distributions or other rights as to which there is an earlier
record date.
12. Governmental
Compliance.
Each
Award under the Plan shall be subject to the requirement that if at any time
the
Option Committee shall determine that the listing, registration or qualification
of any shares issuable or deliverable thereunder upon any securities exchange
or
under any Federal or state law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition thereof, or in
connection therewith, no such grant or award may be exercised or shares issued
or delivered unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Option Committee.
13. Securities
Laws Requirements.
No
Option Shares shall be issued unless and until, in the opinion of the Company,
any applicable registration requirements of the Securities Act of 1933, as
amended, any applicable listing requirements of any securities exchange on
which
stock of the same class is then listed, and any other requirements of law or
of
any regulatory bodies having jurisdiction over such issuance and delivery,
have
been fully complied with. Each Option and each Option Share certificate may
be
imprinted with legends reflecting federal and state securities laws,
restrictions and conditions, and the Company may comply therewith and issue
"stop transfer" instructions to its transfer agent and registrar in good faith
without liability.
14. Disposition
of Shares.
Each
Optionee, as a condition of exercise, shall represent, warrant and agree, in
a
form of written certificate approved by the Company, as follows: (a) that all
Option Shares are being acquired solely for his own account and not on behalf
of
any other person or entity; (b) that no Option Shares will be sold or otherwise
distributed in violation of the Securities Act of 1933, as amended, or any
other
applicable federal or state securities laws; and (c) that he will report all
sales of Option Shares to the Company in writing on a form prescribed by the
Company; and (d) that if he is subject to reporting requirements under Section
16(a) of the Exchange Act, (i) he will not violate Section 16(b) of the
Exchange Act, (ii) he will furnish the Company with a copy of each Form 4
and Form 5 filed by him or her, and (iii) he will timely file all reports
required under the federal securities laws.
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Each
Optionee shall immediately notify the Company in writing of any sale, transfer,
assignment or other disposition (or action constituting a disqualifying
disposition within the meaning of Section 421 of the Code) of any shares of
Common Stock acquired through exercise of an ISO, within two years after the
grant of such ISO or within one year after the acquisition of such shares,
setting forth the date and manner of disposition, the number of shares disposed
of and the price at which such shares were disposed. The Company shall be
entitled to withhold from any compensation or other payments then or thereafter
due to the Optionee such amounts as may be necessary to satisfy any withholding
requirements of federal or state law or regulation and, further, to collect
from
the Optionee any additional amounts which may be required for such purpose.
The
Company may, in its discretion, require shares of Common Stock acquired by
an
Optionee upon exercise of an ISO to be held in an escrow arrangement for the
purpose of enabling compliance with the provisions of this section.
15. Incentive
Stock Options.
To the
extent that the aggregate Fair Market Value of Common Stock with respect to
which ISO’s are exercisable for the first time by a Participant during any
calendar year exceeds $100,000 or, if different, the maximum limitation in
effect at the Date of Grant under the Code (the Fair Market Value being
determined as of the Date of Grant for the Option), such portion in excess
of
$100,000 shall be treated as Non-ISO’s.
16. Restricted
Stock and Restricted Stock Units.
(a) Restricted
Stock. The Option Committee is authorized to grant Restricted Stock to
Participants on the following terms and conditions:
x. Xxxxx
and
Restrictions. Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the
Option Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances (including based on
achievement of performance goals and/or future service requirements), in such
installments or otherwise, as the Option Committee may determine at the date
of
grant or thereafter. During the restricted period applicable to the Restricted
Stock, the Restricted Stock may not be sold, transferred, pledged, hypothecated,
margined or otherwise encumbered by the Participant.
ii. Certificates
for Stock. Restricted Stock granted under this Plan may be evidenced in such
manner as the Option Committee shall determine. If certificates representing
Restricted Stock are registered in the name of the Participant, the Option
Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions of the certificates, and
that the Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.
iii. Dividends
and Splits. As a condition to the grant of an Award of Restricted Stock, the
Option Committee may require or permit a Participant to elect that any cash
dividends paid on a share of Restricted Stock be automatically reinvested in
additional shares of Restricted Stock or applied to the purchase of additional
Awards under this Plan. Unless otherwise determined by the Option Committee,
stock distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a
risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such stock or other property has been distributed.
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(b) Restricted
Stock Units. The Option Committee is authorized to grant Restricted Stock Units
to Participants, which are rights to receive Common Stock at the end of a
specified deferral period, subject to the following terms and
conditions:
i. Award
and
Restrictions. Settlement of an Award of Restricted Stock Units shall occur
upon
expiration of the deferral period specified for such Restricted Stock Unit
by
the Option Committee (or, if permitted by the Option Committee, as elected
by
the Participant). In addition, Restricted Stock Units shall be subject to such
restrictions (which may include a risk of forfeiture) as the Option Committee
may impose, if any, which restrictions may lapse at the expiration of the
deferral period or at earlier specified times (including based on achievement
of
performance goals and/or future service requirements), separately or in
combination, in installments or otherwise, as the Option Committee may
determine. Restricted Stock Units shall be satisfied by the delivery of cash
or
Common Stock in the amount equal to the Fair Market Value for the specified
number of shares of Common Stock covered by the Restricted Stock Units, or
a
combination thereof, as determined by the Option Committee at the date of grant
or thereafter.
ii. Dividend
Equivalents. Unless otherwise determined by the Option Committee at date of
grant, Dividend Equivalents on the specified number of shares of Common Stock
covered by an Award of Restricted Stock Units shall be either (a) paid with
respect to such Restricted Stock Units on the dividend payment date in cash
or
in shares of unrestricted Common Stock having a Fair Market Value equal to
the
amount of such dividends, or (b) deferred with respect to such Restricted Stock
Units and the amount or value thereof automatically deemed reinvested in
additional Restricted Stock Units, other Awards or other investment vehicles,
as
the Option Committee shall determine or permit the Participant to
elect.
(c) Waiver
of
Restrictions. The Option Committee, in its sole discretion, may waive the
repurchase or forfeiture period and any other terms, conditions, or restrictions
on any Restricted Stock or Restricted Stock Units under such circumstances
and
subject to such terms and conditions as the Option Committee shall deem
appropriate; provided, however, that the Option Committee may not adjust
performance goals for any Restricted Stock or Restricted Stock Units intended
to
be exempt under Section 162(m) of the Code for the year in which the Restricted
Stock or Restricted Stock Unit is settled in such a manner as would increase
the
amount of compensation otherwise payable to a Participant.
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17. Change
in Stock, Adjustments, Etc.
In the
event that each of the outstanding shares of Common Stock (other than shares
held by dissenting shareholders which are not changed or exchanged) should
be
changed into, or exchanged for, a different number or kind of shares of stock
or
other securities of the Company, or, if further changes or exchanges of any
stock or other securities into which the Common Stock shall have been changed,
or for which it shall have been exchanged, shall be made (whether by reason
of
merger, consolidation, reorganization, recapitalization, stock dividends,
reclassification, split-up, combination of shares or otherwise), then
appropriate adjustment shall be made by the Option Committee to the aggregate
number and kind of shares subject to this Plan, and the number and kind of
shares and the price per share subject to outstanding Options, Restricted Stock
and Restricted Stock Units as provided in the respective Agreements in order
to
preserve, as nearly as practical, but not to increase, the benefits to
Participants.
18. Effective
Date of Plan; Termination Date of Plan.
The
Plan shall be deemed effective on April 28, 2008. The Plan shall terminate
at midnight on April 28, 2018, except as to Awards previously granted and
outstanding under the Plan at that time. No Options, Restricted Stock and
Restricted Stock Units shall be granted after the date on which the Plan
terminates. The Plan may be abandoned or terminated at any earlier time by
the
Board, except with respect to any Options, Restricted Stock and Restricted
Stock
Units then outstanding under the Plan.
19. Withholding
Taxes.
The
Company, or any Related Company, may take such steps as it may deem necessary
or
appropriate for the withholding of any taxes which the Company, or any Related
Company, is required by any law or regulation or any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with any Award including, but not limited to, the withholding of all or any
portion of any payment or the withholding of issuance of Option Shares or
Restricted Stock.
20. Change
in Control.
In the
event of a Change in Control of the Company, (a) the Option Committee, in its
discretion, may, at any time an Award is granted, or at any time thereafter,
accelerate the time period relating to the exercise or realization of any
Options, Restricted Stock and Restated Stock Units, and (b) with respect to
Options, Restricted Stock and Restricted Stock Units, the Option Committee
in
its sole discretion may, at any time an Award is granted, or at any time
thereafter, take one or more of the following actions, which may vary among
individual Participants: (i) provide for the purchase of an Option, Restricted
Stock and Restricted Stock Units for an amount of cash or other property that
could have been received upon the exercise of the Option, Restricted Stock
and
Restricted Stock Unit had the Option been currently exercisable, (ii) adjust
the
terms of the Awards in a manner determined by the Option Committee to reflect
the Change in Control, (iii) cause the Awards to be assumed, or new rights
substituted therefor, by another entity, through the continuance of the Plan
and
the assumption of outstanding Options, Restricted Stock and Restricted Stock
Units, or the substitution for such Options, Restricted Stock and Restricted
Stock Units of comparable value covering shares of a successor corporation,
with
appropriate adjustments as to the number and kind of shares and exercise prices,
in which event the Plan and such Options, Restricted Stock and Restricted Stock
Units, or the new options and rights substituted therefor, shall continue in
the
manner and under the terms so provided, (iv) accelerate the time at which
Options then outstanding may be exercised so that such Options may be exercised
for a limited period of time on or before a specified date fixed by the Option
Committee, after which specified date, all unexercised Options and all rights
of
Optionees thereunder shall terminate, or (v) make such other provision as the
Committee may consider equitable.
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21. Amendment.
(a) The
Board
may amend, alter or discontinue the Plan, but no amendment, alteration or
discontinuation shall be made which would impair the right of a Participant
under an outstanding Agreement. In addition, no such amendment shall be made
without the approval of the Company's shareholders to the extent such approval
is required by law or agreement.
(b) The
Committee may amend the terms of any Award theretofore granted, prospectively
or
retroactively, but no such amendment shall impair the rights of any Participant
without the Participant's consent.
(c) Subject
to the above provisions, the Board shall have authority to amend the Plan to
take into account changes in law and tax and accounting rules as well as other
developments, and to grant Awards which qualify for beneficial treatment under
such rules without shareholder approval.
22. Other
Provisions.
(a) The
use
of a masculine gender in the Plan shall also include within its meaning the
feminine, and the singular may include the plural, and the plural may include
the singular, unless the context clearly indicates to the contrary.
(b) Any
expenses of administering the Plan shall be borne by the Company.
(c) This
Plan
shall be construed to be in addition to any and all other compensation plans
or
programs. Neither the adoption of the Plan by the Board nor the submission
of
the Plan to the shareholders of the Company for approval shall be construed
as
creating any limitations on the power or authority of the Board to adopt such
other additional incentive or other compensation arrangements as the Board
may
deem necessary or desirable.
(d) The
validity, construction, interpretation, administration and effect of the Plan
and of its rules and regulations, and the rights of any and all personnel having
or claiming to have an interest therein or thereunder shall be governed by
and
determined exclusively and solely in accordance with the laws of the State
of
Colorado.
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