Contract
Exhibit
10.38
THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE
OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE
IS
SO EXEMPT.
THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933
STOCK
OPTION AGREEMENT
Non-Plan
Option
Surge
Global Energy, Inc., a Delaware corporation, has granted to the individual
(the
"Optionee")
named
in the Notice
of Grant of Stock Option
(the
"Notice")
to
which this Stock Option Agreement (the "Option
Agreement")
is
attached an option (the "Option")
to
purchase certain shares of Stock upon the terms and conditions set forth in
the
Notice and this Option Agreement. By signing the Notice, the Optionee:
(a) represents that the Optionee has read and is familiar with the terms
and conditions of the Notice and this Option Agreement, including the Effect
of
Termination of Service set forth in Section 7, (b) accepts the Option
subject to all of the terms and conditions of the Notice and this Option
Agreement, (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under
the
Notice or this Option Agreement, and (d) acknowledges receipt of a copy of
the Notice and this Option Agreement.
1. Definitions
and Construction.
1.1 Definitions.
Whenever used herein, the following terms shall have their respective meanings
set forth below:
(a) "Board"
means
the Board of Directors of the Company, or a committee of the Board duly
appointed to administer this Option and having such powers as shall be specified
by the Board.
(b) "Code"
means
the Internal Revenue Code of 1986, as amended, and any applicable regulations
promulgated thereunder.
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(c) "Company"
means
Surge Global Energy, Inc., a Delaware corporation, or any successor corporation
thereto.
(d) "Consultant"
means a
person engaged to provide consulting or advisory services (other than as an
Employee or a Director) to a Participating Company, provided that the identity
of such person, the nature of such services or the entity to which such services
are provided would not preclude the Company from offering or selling securities
to such person pursuant to this Agreement in reliance on either the exemption
from registration provided by Rule 701 under the Securities Act or, if the
Company is required to file reports pursuant to Section 13 or 15(d) of the
Exchange Act, registration on a Form S-8 Registration Statement under the
Securities Act.
(e) "Director"
means a
member of the Board or of the board of directors of any other Participating
Company.
(f) "Disability"
means
the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionee's
position with the Participating Company Group because of the sickness or injury
of the Optionee.
(g) "Employee"
means
any person treated as an employee (including an officer or a Director who is
also treated as an employee) in the records of a Participating Company;
provided, however, that neither service as a Director nor payment of a
director's fee shall be sufficient to constitute employment for purposes of
this
Agreement. The Company shall determine in good faith and in the exercise of
its
discretion whether an individual has become or has ceased to be an Employee
and
the effective date of such individual's employment or termination of employment,
as the case may be.
(h) "Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
(i) "Fair
Market Value"
means,
as of any date, the value of a share of Stock or other property as determined
by
the Board, in its discretion, or by the Company, in its discretion, if such
determination is expressly allocated to the Company herein, subject to the
following:
(i) If,
on
such date, the Stock is listed on a national or regional securities exchange
or
market system, the Fair Market Value of a share of Stock shall be the closing
price of a share of Stock (or the mean of the closing bid and asked prices
of a
share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq
National Market, The Nasdaq SmallCap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in The
Wall Street Journal
or such
other source as the Company deems reliable. If the relevant date does not fall
on a day on which the Stock has traded on such securities exchange or market
system, the date on which the Fair Market Value shall be established shall
be
the last day on which the Stock was so traded prior to the relevant date, or
such other appropriate day as shall be determined by the Board, in its
discretion.
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(ii) If,
on
such date, the Stock is not listed on a national or regional securities exchange
or market system, the Fair Market Value of a share of Stock shall be as
determined by the Board in good faith without regard to any restriction other
than a restriction which, by its terms, will never lapse.
(j) "Incentive
Stock Option"
means
an Option intended to be (as set forth in the Option Agreement) and which
qualifies as an incentive stock option within the meaning of
Section 422(b) of the Code.
(k) "Insider"
means
an officer or a Director of the Company or any other person whose transactions
in Stock are subject to Section 16 of the Exchange Act.
(l) "Nonstatutory
Stock Option"
means
an Option not intended to be (as set forth in the Option Agreement) or which
does not qualify as an Incentive Stock Option.
(m) "Parent
Corporation"
means
any present or future "parent corporation" of the Company, as defined in
Section 424(e) of the Code.
(n) "Participating
Company"
means
the Company or any Parent Corporation or Subsidiary Corporation.
(o) "Participating
Company Group"
means,
at any point in time, all corporations collectively which are then Participating
Companies.
(p) "Securities
Act"
means
the Securities Act of 1933, as amended.
(q) "Service"
means
the Optionee's employment or service with the Participating Company Group,
whether in the capacity of an Employee, a Director or a Consultant. The
Optionee's Service shall not be deemed to have terminated merely because of
a
change in the capacity in which the Optionee renders Service to the
Participating Company Group or a change in the Participating Company for which
the Optionee renders such Service, provided that there is no interruption or
termination of the Optionee's Service. Furthermore, the Optionee's Service
with
the Participating Company Group shall not be deemed to have terminated if the
Optionee takes any military leave, sick leave, or other bona fide leave of
absence approved by the Company; provided, however, that if any such leave
exceeds ninety (90) days, on the ninety-first (91st) day of such leave the
Optionee's Service shall be deemed to have terminated unless the Optionee's
right to return to Service with the Participating Company Group is guaranteed
by
statute or contract. Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated
as
Service for purposes of determining vesting under this Option Agreement. The
Optionee's Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Optionee performs
Service ceasing to be a Participating Company. Subject to the foregoing, the
Company, in its discretion, shall determine whether the Optionee's Service
has
terminated and the effective date of such termination.
(r) "Stock"
means
the common stock of the Company, as adjusted from time to time in accordance
with Section 9.
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(s) "Subsidiary
Corporation"
means
any present or future "subsidiary corporation" of the Company, as defined in
Section 424(f) of the Code.
1.2 Construction.
Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Option Agreement.
Except when otherwise indicated by the context, the singular shall include
the
plural and the plural shall include the singular. Use of the term "or" is not
intended to be exclusive, unless the context clearly requires
otherwise.
2. Tax
Status of Option.
This
Option is intended to be a Nonstatutory Stock Option and shall not be treated
as
an Incentive Stock Option within the meaning of Section 422(b) of the
Code.
3. Administration.
All
questions of interpretation concerning this Option Agreement shall be determined
by the Board. All determinations by the Board shall be final and binding upon
all persons having an interest in the Option. Any officer of a Participating
Company shall have the authority to act on behalf of the Company with respect
to
any matter, right, obligation, or election which is the responsibility of or
which is allocated to the Company herein, provided the officer has apparent
authority with respect to such matter, right, obligation, or
election.
4. Exercise
of the Option.
4.1 Right
to Exercise.
Except
as otherwise provided herein, the Option shall be exercisable on and after
the
Initial Exercise Date and prior to the termination of the Option (as provided
in
Section 6) in an amount not to exceed the Number of Vested Shares
(determined in accordance with the Notice) less the number of shares previously
acquired upon exercise of the Option.
4.2 Method
of Exercise.
Exercise of the Option shall be by written notice to the Company in the form
of
Exhibit A hereto (the "Exercise
Notice")
which
must state the election to exercise the Option, the number of whole shares
of
Stock for which the Option is being exercised and such other representations
and
agreements as to the Optionee's investment intent with respect to such shares
as
may be required pursuant to the provisions of this Option Agreement. The written
notice must be signed by the Optionee and must be delivered in person, by
certified or registered mail, return receipt requested, by confirmed facsimile
transmission, or by such other means as the Company may permit, to the Chief
Financial Officer of the Company, or other authorized representative of the
Participating Company Group, prior to the termination of the Option as set
forth
in Section 6, accompanied by full payment of the aggregate Exercise Price
for the number of shares of Stock being purchased. The Option shall be deemed
to
be exercised upon receipt by the Company of such written notice, the aggregate
Exercise Price, and, if required by the Company, such executed
agreement.
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4.3 Payment
of Exercise Price.
Except
as otherwise provided below, payment of the aggregate Exercise Price for the
number of shares of Stock for which the Option is being exercised shall be
made
(i) in cash, by check, or cash equivalent, (ii) by means of a Cashless
Exercise, as defined below, or (iii) by any combination of the foregoing.
Optionee shall be responsible for filing any reports of remittance or other
foreign exchange filings required in order to pay the exercise price. A
"Cashless
Exercise"
means
the delivery of a properly executed notice together with irrevocable
instructions to a broker in a form acceptable to the Company providing for
the
assignment to the Company of the proceeds of a sale or loan with respect to
some
or all of the shares of Stock acquired upon the exercise of the Option pursuant
to a program or procedure approved by the Company (including, without
limitation, through an exercise complying with the provisions of Regulation
T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System). The Company reserves, at any and all times, the right, in the Company's
sole and absolute discretion, to decline to approve or terminate any such
program or procedure.
4.4 Tax
Withholding.
At the
time the Option is exercised, in whole or in part, or at any time thereafter
as
requested by the Company, the Optionee hereby authorizes withholding from
payroll and any other amounts payable to the Optionee, and otherwise agrees
to
make adequate provision for (including by means of a Cashless Exercise to the
extent permitted by the Company), any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Participating
Company Group, if any, which arise in connection with the Option, including,
without limitation, obligations arising upon (i) the exercise, in whole or
in part, of the Option, (ii) the transfer, in whole or in part, of any
shares acquired upon exercise of the Option, or (iii) the operation of any
law or regulation providing for the imputation of interest. The Option is not
exercisable unless the tax withholding obligations of the Participating Company
Group are satisfied. Accordingly, the Company shall have no obligation to
deliver shares of Stock until the tax withholding obligations of the
Participating Company Group have been satisfied by the Optionee.
4.5 Certificate
Registration.
Except
in the event the Exercise Price is paid by means of a Cashless Exercise, the
certificate for the shares as to which the Option is exercised shall be
registered in the name of the Optionee, or, if applicable, in the names of
the
heirs of the Optionee.
4.6 Restrictions
on Grant of the Option and Issuance of Shares.
The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange
or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (ii) in the
opinion of legal counsel to the Company, the shares issuable upon exercise
of
the Option may be issued in accordance with the terms of an applicable exemption
from the registration requirements of the Securities Act. THE OPTIONEE IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS
ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company
to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance
and
sale of any shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the
exercise of the Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance
with
any applicable law or regulation and to make any representation or warranty
with
respect thereto as may be requested by the Company. Any shares which are issued
will be "restricted securities" as that term is defined in Rule 144 under the
Securities Act, as further described in Section 7 of the Exercise Notice,
unless they are registered under the Securities Act. The Company is under no
obligation to register the shares of Stock issuable upon exercise of this
Option.
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4.7 Fractional
Shares.
The
Company shall not be required to issue fractional shares upon the exercise
of
the Option.
5. Nontransferability
of the Option.
The
Option may be exercised during the lifetime of the Optionee only by the Optionee
or the Optionee's guardian or legal representative and may not be assigned
or
transferred in any manner except by will or by the laws of descent and
distribution. Following the death of the Optionee, the Option, to the extent
provided in Section 7, may be exercised by the Optionee's legal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
6. Termination
of the Option.
The
Option shall terminate and may no longer be exercised on the first to occur
of
(a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee's Service as described in
Section 7, or (c) a Change in Control to the extent provided in
Section 8.
7. Effect
of Termination of Service.
7.1 Option
Exercisability.
(a) Disability.
If the
Optionee's Service with the Participating Company Group terminates because
of
the Disability of the Optionee, the Option, to the extent unexercised and
exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee (or the Optionee's guardian or legal representative)
at any time prior to the expiration of six (6) months after the date on which
the Optionee's Service terminated, but in any event no later than the Option
Expiration Date.
(b) Death.
If the
Optionee's Service with the Participating Company Group terminates because
of
the death of the Optionee, the Option, to the extent unexercised and exercisable
on the date on which the Optionee's Service terminated, may be exercised by
the
Optionee's legal representative or other person who acquired the right to
exercise the Option by reason of the Optionee's death at any time prior to
the
expiration of six (6) months after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration Date. The
Optionee's Service shall be deemed to have terminated on account of death if
the
Optionee dies within three (3) months after the Optionee's termination of
Service.
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(c) Other
Termination of Service.
If the
Optionee's Service with the Participating Company Group terminates for any
reason, except Disability or death, the Option, to the extent unexercised and
exercisable by the Optionee on the date on which the Optionee's Service
terminated, may be exercised by the Optionee at any time prior to the expiration
of three (3) months (or such other longer period of time as determined by the
Board, in its discretion) after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration
Date.
7.2 Extension
if Exercise Prevented by Law.
Notwithstanding the foregoing, if the exercise of the Option within the
applicable time periods set forth in Section 7.1 is prevented by the
provisions of Section 4.6, the Option shall remain exercisable until three
(3) months after the date the Optionee is notified by the Company that the
Option is exercisable, but in any event no later than the Option Expiration
Date.
7.3 Extension
if Optionee Subject to Section 16(b).
Notwithstanding the foregoing, if a sale within the applicable time periods
set
forth in Section 7.1 of shares acquired upon the exercise of the Option
would subject the Optionee to suit under Section 16(b) of the Exchange
Act, the Option shall remain exercisable until the earliest to occur of
(i) the tenth (10th) day following the date on which a sale of such shares
by the Optionee would no longer be subject to such suit, (ii) the one
hundred and ninetieth (190th) day after the Optionee's termination of Service,
or (iii) the Option Expiration Date.
8. Change
In Control.
8.1 Definitions.
(a) An
"Ownership
Change Event"
shall
be deemed to have occurred if any of the following occurs with respect to the
Company: (i) the direct or indirect sale or exchange in a single or series
of related transactions by the shareholders of the Company of more than fifty
percent (50%) of the voting stock of the Company; (ii) a merger or
consolidation in which the Company is a party; (iii) the sale, exchange, or
transfer of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A
"Change
in Control"
shall
mean an Ownership Change Event or a series of related Ownership Change Events
(collectively, a "Transaction")
wherein the shareholders of the Company immediately before the Transaction
do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership
of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations
to
which the assets of the Company were transferred (the "Transferee
Corporation(s)"),
as
the case may be. For purposes of the preceding sentence, indirect beneficial
ownership shall include, without limitation, an interest resulting from
ownership of the voting stock of one or more corporations which, as a result
of
the Transaction, own the Company or the Transferee Corporation(s), as the case
may be, either directly or through one or more subsidiary corporations. The
Board shall have the right to determine whether multiple sales or exchanges
of
the voting stock of the Company or multiple Ownership Change Events are related,
and its determination shall be final, binding and conclusive.
7
8.2 Effect
of Change in Control on Option.
In the
event of a Change in Control, the surviving, continuing, successor, or
purchasing corporation or parent corporation thereof, as the case may be (the
"Acquiring
Corporation"),
may
either assume the Company's rights and obligations under the Option or
substitute for the Option a substantially equivalent option for the Acquiring
Corporation's stock. In the event the Acquiring Corporation elects not to assume
the Company's rights and obligations under the Option or substitute for the
Option in connection with the Change in Control, and provided that the
Optionee's Service has not terminated prior to such date, the Vested Ratio
shall
be deemed to be 1/1 as of the date ten (10) days prior to the date of the Change
in Control. Any vesting of the Option that was permissible solely by reason
of
this Section 8.2 shall be conditioned upon the consummation of the Change
in Control. The Option shall terminate and cease to be outstanding effective
as
of the date of the Change in Control to the extent that the Option is neither
assumed or substituted for by the Acquiring Corporation in connection with
the
Change in Control nor exercised as of the date of the Change in Control.
Notwithstanding the foregoing, shares acquired upon exercise of the Option
prior
to the Change in Control and any consideration received pursuant to the Change
in Control with respect to such shares shall continue to be subject to all
applicable provisions of this Option Agreement except as otherwise provided
herein. Furthermore, notwithstanding the foregoing, if the corporation the
stock
of which is subject to the Option immediately prior to an Ownership Change
Event
described in Section 8.1(a)(i) constituting a Change in Control is the
surviving or continuing corporation and immediately after such Ownership Change
Event less than fifty percent (50%) of the total combined voting power of its
voting stock is held by another corporation or by other corporations that are
members of an affiliated group within the meaning of
Section 1504(a) of the Code without regard to the provisions of
Section 1504(b) of the Code, the Option shall not terminate unless the
Board otherwise provides in its discretion.
9. Adjustments
For Changes In Capital Structure.
In
the
event of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification, or similar change in the capital structure of
the
Company, appropriate adjustments shall be made in the number, Exercise Price
and
class of shares of stock subject to the Option. If a majority of the shares
which are of the same class as the shares that are subject to the Option are
exchanged for, converted into, or otherwise become (whether or not pursuant
to
an Ownership Change Event) shares of another corporation (the "New
Shares"),
the
Board may unilaterally amend the Option to provide that the Option is
exercisable for New Shares. In the event of any such amendment, the Number
of
Option Shares and the Exercise Price shall be adjusted in a fair and equitable
manner, as determined by the Board, in its discretion. Notwithstanding the
foregoing, any fractional share resulting from an adjustment pursuant to this
Section 9 shall be rounded down to the nearest whole number, and in no
event may the Exercise Price be decreased to an amount less than the par value,
if any, of the stock subject to the Option. The adjustments determined by the
Board pursuant to this Section 9 shall be final, binding and
conclusive.
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10. Rights
as a Shareholder, Employee or Consultant.
The
Optionee shall have no rights as a shareholder with respect to any shares
covered by the Option until the date of the issuance of a certificate for the
shares for which the Option has been exercised (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of
the
Company). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 9. If the Optionee is an Employee,
the Optionee understands and acknowledges that, except as otherwise provided
in
a separate, written employment agreement between a Participating Company and
the
Optionee, the Optionee's employment is "at will" and is for no specified term.
Nothing in this Option Agreement shall confer upon the Optionee any right to
continue in the Service of a Participating Company or interfere in any way
with
any right of the Participating Company Group to terminate the Optionee's Service
as an Employee or Consultant, as the case may be, at any time.
11. Lock-Up
Agreement.
The
Optionee hereby agrees that in the event of any underwritten public offering
of
stock, including but not limited to an initial public offering of stock, made
by
the Company pursuant to an effective registration statement filed under the
Securities Act, the Optionee shall not offer, sell, contract to sell, pledge,
hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for
such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering. The foregoing
limitation shall not apply to shares registered in the public offering under
the
Securities Act.
12. Legends.
The
Company may at any time place legends referencing and any applicable federal,
state or foreign securities law restrictions on all certificates representing
shares of stock subject to the provisions of this Option Agreement. The Optionee
shall, at the request of the Company, promptly present to the Company any and
all certificates representing shares acquired pursuant to the Option in the
possession of the Optionee in order to carry out the provisions of this Section.
Unless otherwise specified by the Company, legends placed on such certificates
may include, but shall not be limited to, the following:
"THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144
UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACT."
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13. Restrictions
on Transfer of Shares.
No
shares
acquired upon exercise of the Option may be sold, exchanged, transferred
(including, without limitation, any transfer to a nominee or agent of the
Optionee), assigned, pledged, hypothecated or otherwise disposed of, including
by operation of law, in any manner which violates any of the provisions of
this
Option Agreement and any such attempted disposition shall be void. The Company
shall not be required (a) to transfer on its books any shares which will
have been transferred in violation of any of the provisions set forth in this
Option Agreement or (b) to treat as owner of such shares or to accord the
right to vote as such owner or to pay dividends to any transferee to whom such
shares will have been so transferred.
14. Miscellaneous
Provisions.
14.1 Binding
Effect.
Subject
to the restrictions on transfer set forth herein, this Option Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
14.2 Termination
or Amendment.
The
Board may terminate or amend the Option at any time; provided, however, that
except as provided in Section 8.2 in connection with a Change in Control,
no such termination or amendment may adversely affect the Option or any
unexercised portion hereof without the consent of the Optionee unless such
termination or amendment is necessary to comply with any applicable law or
government regulation. No amendment or addition to this Option Agreement shall
be effective unless in writing.
14.3 Notices.
Any
notice required or permitted hereunder shall be given in writing and shall
be
deemed effectively given (except to the extent that this Option Agreement
provides for effectiveness only upon actual receipt of such notice) upon
personal delivery or upon deposit in the United States Post Office, by
registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address shown below that party's signature or at such other
address as such party may designate in writing from time to time to the other
party.
14.4 Integrated
Agreement.
The
Notice and this Option Agreement constitute the entire understanding and
agreement of the Optionee and the Participating Company Group with respect
to
the subject matter contained herein or therein and supersedes any prior
agreements, understandings, restrictions, representations, or warranties among
the Optionee and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein or therein. To
the
extent contemplated herein or therein, the provisions of the Notice and the
Option Agreement shall survive any exercise of the Option and shall remain
in
full force and effect.
14.5 Applicable
Law.
This
Option Agreement shall be governed by the laws of the State of California as
such laws are applied to agreements between California residents entered into
and to be performed entirely within the State of California.
14.6 Counterparts.
The
Notice may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
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EXHIBIT
A
Optionee:
_________________
Date:
________________________
STOCK
OPTION EXERCISE NOTICE
Non-Plan
Option
Attention:
Chief Financial Officer
00000
Xx
Xxxxxx Real
Suite
410
San
Diego, CA 92103
Ladies
and Gentlemen:
1. Option.
I was
granted an option (the "Option")
to
purchase shares of the common stock (the "Shares")
of
Surge Global Energy, Inc., a Delaware corporation (the "Company"),
pursuant to my Notice of Grant of Stock Option (the "Notice")
and my
Stock Option Agreement (the "Option
Agreement")
as
follows:
|
Grant
Number:
|
|||
|
Date
of Option Grant:
|
_________
|
||
|
Number
of Option Shares:
|
_________
|
||
|
Exercise
Price per Share:
|
_________
|
2. Exercise
of Option.
I
hereby elect to exercise the Option to purchase the following number of
Shares:
|
Total
Shares Purchased:
|
___________
|
||
|
Total
Exercise Price (Total Shares X Price per Share)
|
$
__________
|
3. Payments.
I
enclose payment in full of the total exercise price for the Shares in the
following form(s), as authorized by my Option Agreement:
|
¨
Cash:
|
$
____________
|
||
|
¨
Check:
|
$
____________
|
4. Tax
Withholding.
I
enclose payment in full of my withholding taxes, if any, as
follows:
11
(Contact
Chief Financial Officer for amount of tax due.)
|
¨
Cash:
|
$
____________
|
||
|
¨
Check:
|
$
____________
|
5. Optionee
Information.
5. Optionee
Information.
|
My
address is:
______________________________________________________________________________
|
|
|
My
Social Security Number is:
__________________________________________________________________
|
6. Binding
Effect.
I agree
that the Shares are being acquired in accordance with and subject to the terms,
provisions and conditions of the Option Agreement, to all of which I hereby
expressly assent. This Agreement shall inure to the benefit of and be binding
upon the my heirs, executors, administrators, successors and
assigns.
7. Transfer.
I
understand and acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities
Act"),
and
that consequently the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act, an exemption from such
registration is available, or they are sold in accordance with Rule 144
under the Securities Act. I further understand and acknowledge that the Company
is under no obligation to register the Shares. I understand that the certificate
or certificates evidencing the Shares will be imprinted with legends which
prohibit the transfer of the Shares unless they are registered or such
registration is not required in the opinion of legal counsel satisfactory to
the
Company.
I
am
aware that Rule 144 under the Securities Act, which permits limited public
resale of securities acquired in a nonpublic offering, is not currently
available with respect to the Shares and, in any event, is available only if
certain conditions are satisfied. I understand that any sale of the Shares
that
might be made in reliance upon Rule 144 may only be made in limited amounts
in accordance with the terms and conditions of such rule and that a copy of
Rule 144 will be delivered to me upon request.
12
I
understand that I am purchasing the Shares pursuant to the terms of the Notice
and my Option Agreement, copies of which I have received and carefully read
and
understand.
|
Very
truly yours,
___________________________________
(Signature)
|
|
|
Receipt
of the above is hereby acknowledged.
|
|
|
By: _______________________________
Title: _______________________________
Dated: _______________________________
|
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