AMERICAN ETHANOL, INC.
AMERICAN
ETHANOL, INC.
2007
STOCK PLAN
Unless
otherwise defined herein, the terms defined in the 2007 Stock Plan shall
have
the same defined meanings in this Stock Option Agreement.
I. NOTICE
OF STOCK OPTION GRANT
Name:
Address:
The
undersigned Optionee has been granted an Option to purchase Common Stock
of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
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Date
of Grant
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Vesting
Commencement Date
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Exercise
Price per Share
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$
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Total
Number of Shares Granted
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Total
Exercise Price
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$
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Type
of Option:
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Incentive
Stock Option
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Nonstatutory
Stock Option
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Term/Expiration
Date:
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Vesting
Schedule:
This
Option shall be exercisable, in whole or in part, according to the following
vesting schedule:
[25%
of the Shares subject to the Option shall vest on the one (1) year anniversary
of the Vesting Commencement Date, and 1/48 of the Option shall vest each
month
thereafter, subject to Optionee continuing to be a Service Provider on such
dates.]
Termination
Period:
This
Option shall be exercisable for [three
(3) months]
after
Optionee ceases to be a Service Provider. Upon Optionee’s death or Disability,
this Option may be exercised for [one
(1) year] after
Optionee ceases to be a Service Provider. In no event may Optionee exercise
this
Option after the Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant
of Option.
The
Plan Administrator of the Company hereby grants to the Optionee named in
the
Notice of Grant (the “Optionee”), an option (the “Option”) to purchase the
number of Shares set forth in the Notice of Grant, at the exercise price
per
Share set forth in the Notice of Grant (the “Exercise Price”), and subject to
the terms and conditions of the Plan, which is incorporated herein by reference.
Subject to Section 15(c) of the Plan, in the event of a conflict between
the terms and conditions of the Plan and this Option Agreement, the terms
and
conditions of the Plan shall prevail.
If
designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code. Nevertheless, to the extent that it exceeds the
$100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option (“NSO”).
2. Exercise
of Option.
(a) Right
to Exercise.
This
Option shall be exercisable during its term in accordance with the Vesting
Schedule set out in the Notice of Grant and with the applicable provisions
of
the Plan and this Option Agreement.
(b) Method
of Exercise.
This
Option shall be exercisable by delivery of an exercise notice in the form
attached as Exhibit A
(the
“Exercise Notice”) which shall state the election to exercise the Option, the
number of Shares with respect to which the Option is being exercised, and
such
other representations and agreements as may be required by the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price
as to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied
by the
aggregate Exercise Price.
No
Shares
shall be issued pursuant to the exercise of an Option unless such issuance
and
such exercise complies with Applicable Laws. Assuming such compliance, for
income tax purposes the Shares shall be considered transferred to the Optionee
on the date on which the Option is exercised with respect to such
Shares.
3. Optionee’s
Representations.
In the
event the Shares have not been registered under the Securities Act of 1933,
as
amended, at the time this Option is exercised, the Optionee shall, if required
by the Company, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his or her Investment Representation Statement
in
the form attached hereto as Exhibit B.
4. Lock-Up
Period.
Optionee hereby agrees that Optionee shall not offer, pledge, sell, contract
to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any Common Stock (or other
securities) of the Company or enter into any swap, hedging or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of any Common Stock (or other securities) of the Company held
by
Optionee (other than those included in the registration) for a period specified
by the representative of the underwriters of Common Stock (or other securities)
of the Company not to exceed one hundred eighty (180) days following the
effective date of any registration statement of the Company filed under the
Securities Act.
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Optionee
agrees to execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriter which are consistent with the
foregoing or which are necessary to give further effect thereto. In addition,
if
requested by the Company or the representative of the underwriters of Common
Stock (or other securities) of the Company, Optionee shall provide, within
ten
(10) days of such request, such information as may be required by the Company
or
such representative in connection with the completion of any public offering
of
the Company’s securities pursuant to a registration statement filed under the
Securities Act. The obligations described in this Section shall not apply
to a
registration relating solely to employee benefit plans on Form S-1 or Form
S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or
other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period. Optionee agrees that any transferee of the
Option or shares acquired pursuant to the Option shall be bound by this
Section.
5. Method
of Payment.
Payment
of the aggregate Exercise Price shall be by any of the following, or a
combination thereof, at the election of the Optionee:
(a) cash
or
check;
(b) consideration
received by the Company under a formal cashless exercise program adopted
by the
Company in connection with the Plan; or
(c) surrender
of other Shares which, (i) in the case of Xxxxxx acquired from the Company,
either directly or indirectly, have been owned by the Optionee for more than
six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
6. Restrictions
on Exercise.
This
Option may not be exercised until such time as the Plan has been approved
by the
stockholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any Applicable Law.
7. Non-Transferability
of Option.
This
Option may not be transferred in any manner otherwise than by will or by
the
laws of descent or distribution and may be exercised during the lifetime
of
Optionee only by Optionee. The terms of the Plan and this Option Agreement
shall
be binding upon the executors, administrators, heirs, successors and assigns
of
the Optionee.
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8. Term
of Option.
This
Option may be exercised only within the term set out in the Notice of Grant,
and
may be exercised during such term only in accordance with the Plan and the
terms
of this Option.
9. Tax
Obligations.
(a) Withholding
Taxes.
Optionee agrees to make appropriate arrangements with the Company (or the
Parent
or Subsidiary employing or retaining Optionee) for the satisfaction of all
Federal, state, local and foreign income and employment tax withholding
requirements applicable to the Option exercise. Optionee acknowledges and
agrees
that the Company may refuse to honor the exercise and refuse to deliver Shares
if such withholding amounts are not delivered at the time of
exercise.
(b) Notice
of Disqualifying Disposition of ISO Shares.
If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the
date one year after the date of exercise, the Optionee shall immediately
notify
the Company in writing of such disposition. Optionee agrees that Optionee
may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.
10. Entire
Agreement; Governing Law.
The
Plan is incorporated herein by reference. The Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws but not the choice of law rules
of
[STATE].
11. No
Guarantee of Continued Service.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT
THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES
THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE
OF
CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR
THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER
AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee
acknowledges receipt of a copy of the Plan and represents that he or she
is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof. Optionee has reviewed
the
Plan and this Option in their entirety, has had an opportunity to obtain
the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator
upon
any questions arising under the Plan or this Option. Optionee further agrees
to
notify the Company upon any change in the residence address indicated
below.
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OPTIONEE
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AMERICAN
ETHANOL, INC.
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Signature
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By
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Print
Name
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Title
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Residence
Address
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EXHIBIT
A
2007
STOCK PLAN
EXERCISE
NOTICE
AMERICAN
ETHANOL, INC.
Address:______________
Attention:
_____________
1. Exercise
of Option.
Effective as of today, _____________, _____, the undersigned (“Optionee”) hereby
elects to exercise Optionee’s option to purchase _________ shares of the Common
Stock (the “Shares”) of AMERICAN
ETHANOL, INC. (the
“Company”) under and pursuant to the 2007 Stock Plan (the “Plan”) and the
Stock Option Agreement dated ____________, ____ (the “Option
Agreement”).
2. Delivery
of Payment.
Optionee herewith delivers to the Company the full purchase price of the
Shares,
as set forth in the Option Agreement, and any and all withholding taxes due
in
connection with the exercise of the Option.
3. Representations
of Optionee.
Optionee acknowledges that Optionee has received, read and understood the
Plan
and the Option Agreement and agrees to abide by and be bound by their terms
and
conditions.
4. Rights
as Stockholder.
Until
the issuance of the Shares (as evidenced by the appropriate entry on the
books
of the Company or of a duly authorized transfer agent of the Company), no
right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Shares shall be issued to the Optionee as soon as practicable after the
Option is exercised in accordance with the Option Agreement. No adjustment
shall
be made for a dividend or other right for which the record date is prior
to the
date of issuance except as provided in Section 13 of the Plan.
5. Company’s
Right of First Refusal
Before
any Shares held by Optionee or any transferee (either being sometimes referred
to herein as the “Holder”) may be sold or otherwise transferred (including
transfer by gift or operation of law), the Company or its assignee(s) shall
have
a right of first refusal to purchase the Shares on the terms and conditions
set
forth in this Section (the “Right of First Refusal”).
(a) Notice
of Proposed Transfer.
The
Holder of the Shares shall deliver to the Company a written notice (the
“Notice”) stating: (i) the Holder’s bona fide intention to sell or
otherwise transfer such Shares; (ii) the name of each proposed purchaser or
other transferee (“Proposed Transferee”); (iii) the number of Shares to be
transferred to each Proposed Transferee; and (iv) the bona fide cash price
or other consideration for which the Holder proposes to transfer the Shares
(the
“Offered Price”), and the Holder shall offer the Shares at the Offered Price to
the Company or its assignee(s).
(b) Exercise
of Right of First Refusal.
At any
time within thirty (30) days after receipt of the Notice, the Company
and/or its assignee(s) may, by giving written notice to the Holder, elect
to
purchase all, but not less than all, of the Shares proposed to be transferred
to
any one or more of the Proposed Transferees, at the purchase price determined
in
accordance with subsection (c) below.
(c) Purchase
Price.
The
purchase price (“Purchase Price”) for the Shares purchased by the Company or its
assignee(s) under this Section shall be the Offered Price. If the Offered
Price
includes consideration other than cash, the cash equivalent value of the
non-cash consideration shall be determined by the Board of Directors of the
Company in good faith.
(d) Payment.
Payment
of the Purchase Price shall be made, at the option of the Company or its
assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of
repurchase by an assignee, to the assignee), or by any combination thereof
within thirty (30) days after receipt of the Notice or in the manner and at
the times set forth in the Notice.
(e) Xxxxxx’s
Right to Transfer.
If all
of the Shares proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company and/or its assignee(s) as provided
in this Section, then the Holder may sell or otherwise transfer such Shares
to
that Proposed Transferee at the Offered Price or at a higher price, provided
that such sale or other transfer is consummated within 120 days after the
date
of the Notice, that any such sale or other transfer is effected in accordance
with any applicable securities laws and that the Proposed Transferee agrees
in
writing that the provisions of this Section shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described
in the
Notice are not transferred to the Proposed Transferee within such period,
a new
Notice shall be given to the Company, and the Company and/or its assignees
shall
again be offered the Right of First Refusal before any Shares held by the
Holder
may be sold or otherwise transferred.
(f) Exception
for Certain Family Transfers.
Anything to the contrary contained in this Section notwithstanding, the transfer
of any or all of the Shares during the Optionee’s lifetime or on the Optionee’s
death by will or intestacy to the Optionee’s immediate family or a trust for the
benefit of the Optionee’s immediate family shall be exempt from the provisions
of this Section. “Immediate Family” as used herein shall mean spouse, lineal
descendant or antecedent, father, mother, brother or sister. In such case,
the
transferee or other recipient shall receive and hold the Shares so transferred
subject to the provisions of this Section, and there shall be no further
transfer of such Shares except in accordance with the terms of this
Section.
(g) Termination
of Right of First Refusal.
The
Right of First Refusal shall terminate as to any Shares upon the earlier
of (i)
the first sale of Common Stock of the Company to the general public, or (ii)
a
Change in Control in which the successor corporation has equity securities
that
are publicly traded.
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6. Tax
Consultation.
Optionee understands that Optionee may suffer adverse tax consequences as
a
result of Optionee’s purchase or disposition of the Shares. Optionee represents
that Optionee has consulted with any tax consultants Optionee deems advisable
in
connection with the purchase or disposition of the Shares and that Optionee
is
not relying on the Company for any tax advice.
7. Restrictive
Legends and Stop-Transfer Orders.
(a) Legends.
Optionee understands and agrees that the Company shall cause the legends
set
forth below or legends substantially equivalent thereto, to be placed upon
any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN
THE
OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON
TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S)
AS
SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF
THE
ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING
ON
TRANSFEREES OF THESE SHARES.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER
FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE EFFECTIVE DATE OF THE
UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT THE CONSENT OF THE COMPANY OR
THE
MANAGING UNDERWRITER.
(b) Stop-Transfer
Notices.
Optionee agrees that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in
its own records.
(c) Refusal
to Transfer.
The
Company shall not be required (i) to transfer on its books any Shares that
have been sold or otherwise transferred in violation of any of the provisions
of
this Exercise Notice or (ii) to treat as owner of such Shares or to accord
the right to vote or pay dividends to any purchaser or other transferee to
whom
such Shares shall have been so transferred.
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8. Successors
and Assigns.
The
Company may assign any of its rights under this Exercise Notice to single
or
multiple assignees, and this Exercise Notice shall inure to the benefit of
the
successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth, this Exercise Notice shall be binding upon Optionee and
his or
her heirs, executors, administrators, successors and assigns.
9. Interpretation.
Any
dispute regarding the interpretation of this Exercise Notice shall be submitted
by Optionee or by the Company forthwith to the Administrator which shall
review
such dispute at its next regular meeting. The resolution of such a dispute
by
the Administrator shall be final and binding on all parties.
10. Governing
Law; Severability.
This
Exercise Notice is governed by the internal substantive laws but not the
choice
of law rules, of [STATE].
In the
event that any provision hereof becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Option Agreement
will
continue in full force and effect.
11. Entire
Agreement.
The
Plan and Option Agreement are incorporated herein by reference. This Exercise
Notice, the Plan, the Option Agreement and the Investment Representation
Statement constitute the entire agreement of the parties with respect to
the
subject matter hereof and supersede in their entirety all prior undertakings
and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee.
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Submitted
by:
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Accepted
by:
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OPTIONEE
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AMERICAN
ETHANOL, INC.
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Signature
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By
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Print
Name
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Title
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Address:
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Address:
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Date
Received
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EXHIBIT
B
INVESTMENT
REPRESENTATION STATEMENT
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OPTIONEE:
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COMPANY:
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AMERICAN
ETHANOL, INC.
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SECURITY:
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COMMON
STOCK
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AMOUNT:
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DATE:
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In
connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee
is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Optionee is acquiring these
Securities for investment for Optionee’s own account only and not with a view
to, or for resale in connection with, any “distribution” thereof within the
meaning of the Securities Act of 1933, as amended (the “Securities
Act”).
(b) Optionee
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Optionee’s investment
intent as expressed herein. In this connection, Optionee understands that,
in
the view of the Securities and Exchange Commission, the statutory basis for
such
exemption may be unavailable if Optionee’s representation was predicated solely
upon a present intention to hold these Securities for the minimum capital
gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period
of
one year or any other fixed period in the future. Optionee further understands
that the Securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration
is
available. Optionee further acknowledges and understands that the Company
is
under no obligation to register the Securities. Optionee understands that
the
certificate evidencing the Securities will be imprinted with any legend required
under applicable state securities laws.
(c) Optionee
is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited
public
resale of “restricted securities” acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under
Rule 701 at the time of the grant of the Option to the Optionee, the
exercise will be exempt from registration under the Securities Act. In the
event
the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter
(or such longer period as any market stand-off agreement may require) the
Securities exempt under Rule 701 may be resold, subject to the satisfaction
of certain of the conditions specified by Rule 144, including: (1) the
resale being made through a broker in an unsolicited “broker’s transaction” or
in transactions directly with a market maker (as said term is defined under
the Securities Exchange Act of 1934); and, in the case of an affiliate,
(2) the availability of certain public information about the Company,
(3) the amount of Securities being sold during any three month period not
exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.
In
the
event that the Company does not qualify under Rule 701 at the time of grant
of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the
date the Securities were sold by the Company or the date the Securities were
sold by an affiliate of the Company, within the meaning of Rule 144; and,
in the case of acquisition of the Securities by an affiliate, or by a
non-affiliate who subsequently holds the Securities less than two years,
the
satisfaction of the conditions set forth in sections (1), (2), (3) and (4)
of the paragraph immediately above.
(d) Optionee
further understands that in the event all of the applicable requirements
of
Rule 701 or 144 are not satisfied, registration under the Securities Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rules 144 and 701 are not
exclusive, the Staff of the Securities and Exchange Commission has expressed
its
opinion that persons proposing to sell private placement securities other
than
in a registered offering and otherwise than pursuant to Rules 144 or 701
will have a substantial burden of proof in establishing that an exemption
from
registration is available for such offers or sales, and that such persons
and
their respective brokers who participate in such transactions do so at their
own
risk. Optionee understands that no assurances can be given that any such
other
registration exemption will be available in such event.
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Signature
of Optionee:
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Date:
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