CAPITAL CITY ENERGY GROUP, INC. NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
EXHIBIT
10.1.1
2008
INCENTIVE PLAN
THIS
AWARD AGREEMENT (this “Agreement”) is made
as of ____________ (the “Grant Date”), between
Capital City Energy Group, Inc., a Nevada corporation (the “Company”), and
_________________ ( the “Participant”).
WHEREAS,
pursuant to the Company’s 2008 Incentive Plan (the “Plan”), a copy of
which is attached hereto as Exhibit A and made a
part hereof, the Company and the Participant desire to enter into this Agreement
whereby the Company will grant to the Participant a certain number of Options to
acquire Common Stock; and
NOW
THEREFORE, the parties hereto agree as follows:
1. Plan
Acknowledgement. The undersigned agrees that this Agreement
has been executed and delivered, and the Option has been granted hereunder, in
connection with and as a part of the compensation and incentive arrangements
between the Company and the Participant and pursuant to the terms and conditions
of the Plan. The Participant agrees to be bound by, and comply with,
the terms of the Plan. Capitalized terms used in this Agreement and not defined
herein shall have the meanings ascribed thereto in the Plan.
2. Option
Grant. Effective as of the Grant Date, the Company hereby
grants to the Participant an Option to purchase _______ shares of Common
Stock. The exercise price of the Option will be $____ per share (the
“Exercise
Price”). The Option is a non-qualified stock
option. Subject to the vesting and termination of service provisions
in Section 3, the Option will expire and cease to be exercisable on
_____________.
3. Vesting; Company Repurchase
Rights. Provided that the Participant remains employed as an
officer of the Company or any of its Subsidiaries or Affiliates as of
on the relevant date, or, serves as a director on the existing Board of
Directors, the Option shall vest and become exercisable as follows:
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Date
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Percent
of Option Vested and Exercisable
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Prior
to the first anniversary of the Grant Date:
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0%
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After
the first anniversary of the Grant Date
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100%
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If the
Participant ceases to be employed by the Company (and all of its Subsidiaries
and Affiliates) for any reason, any unexercised portion of the Option that has
not been forfeited by reason of the Participant’s termination of employment or
other service (the “Remaining Shares”)
and any Common Stock acquired through the exercise of the Option (the “Option Shares”) owned
by such Participant (or a Permitted Transferee, as such term is defined in the
Securities Holders Agreement) at the time of the Participant’s termination of
employment or other service shall be subject to repurchase by the Company
or its
designee in accordance with the terms of this Agreement. Upon
termination, the Company may elect to repurchase any such Remaining Shares and
Option Shares (all or a portion thereof) at the “Option Purchase
Price,” which shall be the fair market value of each such
share less the Exercise Price (as applicable); provided, further, that if
the Participant’s employment or other service with the Company (and all of its
Subsidiaries and Affiliates) is terminated for Cause and if the Company or its
designee repurchases any of such Participant’s Option Shares, the “Option Purchase
Price,” shall be the adjusted cost price. For the puposes of this Section
3, the "fair market value" of each share shall be based on the closing price of
the Company's common stock for the day immediately preceding the date the
Company determines to repurchase the participant's Remaining Shares or Option
Shares, as applicable.
4. Exercise of Option;
Payment. Upon a
termination of the Participant’s employment or other service with the Company
and all of its Subsidiaries and Affiliates for any reason other than for Cause,
the Participant shall forfeit any portion of the Option which has not vested and
the Participant, his or her Permitted Transferee, or, in the event of the
Participant’s death or Disability, the Participant’s heirs or other legal
representatives, as applicable, shall have until the earlier of (i) ninety (90)
days following the date of such termination or (ii) the expiration of the
Option, to exercise any vested portion of the Option. Subject to
vesting and other restrictions provided for hereunder, the Option may be
exercised, and payment in full of the aggregate Exercise Price made, by a
Participant (or, if applicable, by the Participant’s Permitted Transferee, heirs
or other legal representative) only by written notice (in the form prescribed by
the Committee) to the Company specifying the number of shares to be
purchased. The aggregate Exercise Price shall be paid in full upon
the exercise of the Option. Payment must be made by (i) cash or a
certified or bank cashier’s check; (ii) if approved by the Committee in its
discretion, shares of previously owned Common Stock having an aggregate Fair
Market Value on the date of exercise equal to the aggregate Exercise Price;
(iii) if approved by the Committee in its discretion, through the withholding by
the Company from the Common Stock otherwise to be received, with such withheld
Common Stock having an aggregate Fair Market Value on the date of exercise equal
to the aggregate Exercise Price; or (iv) by any combination of such methods of
payment or any other method acceptable to the Committee in its
discretion.
5. Restrictions on
Transfer. The Option granted hereunder are not transferable by
the Participant. The Participant acknowledges and agrees that the
Option may not be sold, transferred, gifted, donated, pledged, hypothecated,
disposed of or assigned by the Participant.
6. Securities Laws
Restrictions. The Participant represents that the Option and
the Option Shares are for the Participant’s own account and not on behalf of
others. The Participant understands and acknowledges that federal, state and
foreign securities laws govern and restrict the Participant’s right to offer,
sell or otherwise dispose of the Options and the Option Shares unless the
Participant’s offer, sale or other disposition thereof is registered under the
Securities Act and federal, state and foreign securities laws or, in the opinion
of the Company’s counsel, such offer, sale or other disposition is exempt from
registration thereunder. The Participant agrees that the Participant will not
offer, sell or otherwise dispose of the Options or the Option Shares in any
manner which would: (i) require the Company to file any registration statement
(or similar filing under applicable securities law) with the Securities and
Exchange Commission or to amend or supplement any such filing or (ii) violate or
cause the Company to violate the Securities Act, the rules and regulations
promulgated thereunder or any other applicable securities law. The
Participant further understands that the certificates for any Option Shares will
bear the legend set
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forth in
the Plan or such other legends as the Company deems necessary or desirable in
connection with the Securities Act or other rules, regulations or
laws.
7. Participant’s
Representations. The Participant hereby represents and
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by the Participant does not and will not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Participant is a party or by which the
Participant is bound and (ii) upon the execution and delivery of this Agreement
by the Company, this Agreement shall be the valid and binding obligation of the
Participant, enforceable in accordance with its terms. The Participant hereby
acknowledges and represents that the Participant has consulted with (or has had
an opportunity to consult with) independent legal counsel regarding the
Participant’s rights and obligations under this Agreement (including, without
limitation, the Plan and the Securities Holders Agreement) and that the
Participant fully understands the terms and conditions contained herein and
therein. The Participant further acknowledges that neither the
Company nor any other party will have any duty or obligation to disclose to the
Participant, and the Participant will have no right to be advised of, any
material information regarding the Company or any of its Subsidiaries or
Affiliates at any time prior to, upon or in connection with the repurchase of
any Option Shares or Remaining Shares upon the termination of the Participant’s
employment or other service with the Company (and all of its Subsidiaries and
Affiliates).
8. Rights of
Participants. Nothing in this Agreement shall interfere with
or limit in any way the right of the Company or any of its Subsidiaries or
Affiliates to terminate the Participant’s employment or other service at any
time (with or without Cause), nor confer upon the Participant any right to
continue in the employ of the Company or any of its Subsidiaries or Affiliates
for any period of time or to continue the Participant’s present (or any other)
rate of compensation. Nothing in this Agreement shall confer upon the
Participant any right to future Awards under the Plan, and nothing in this
Agreement shall provide for any adjustment to the number of Options granted
hereunder upon the occurrence of subsequent events except as provided in the
Plan.
9. Withholding of
Taxes. The Company shall be entitled, if necessary or
desirable, to withhold from any amounts due and payable by the Company or its
Subsidiaries or Affiliates to the Participant (or secure payment from the
Participant in lieu of withholding) the amount of any withholding or other tax
due with respect to the Option (including the Option Shares), and the Company
may defer the grant of the Option or the issuance of Common Stock thereunder
unless indemnified by the Participant to its satisfaction.
10. Restrictive
Covenants. In consideration of the receipt of this Award, the
Participant agrees to be bound by this Section 10.
(a) The
Participant shall not, at any time during his or her employment or other service
with the Company or any of its Subsidiaries or Affiliates or during the twelve
month period
immediately following such Participant’s termination of employment or other
service with the Company and all of its Subsidiaries and Affiliates (the “Restricted Period”),
directly or indirectly engage in, have any equity interest in, or manage or
operate any person, firm, corporation, partnership or business (whether as
director, officer, employee, agent, representative, partner, security holder,
consultant or otherwise (each, a “Position”)) that
engages in any business or activity (a “Competitive
Activity”) which competes with any services or products that, during the
period of the Participant’s employment or other service with the Company or any
of its Subsidiaries or Affiliates, the Company or any of its Subsidiaries or
Affiliates (i) sold, licensed or provided; or (ii) had taken affirmative
steps to commence selling, licensing or providing. Notwithstanding
the foregoing, the Participant shall be permitted to acquire a passive stock or
equity interest in such a business, provided that the stock or other equity
interest acquired
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is
registered under the Securities Exchange Act of 1934, as amended, and is not
more than one percent (1%) of the outstanding interest in such
business.
(b) During
the Restricted Period, the Participant will not, directly or indirectly, recruit
or otherwise solicit or induce any customer, subscriber or supplier of the
Company or its Subsidiaries or Affiliates to (i) terminate its arrangement with
the Company or its Subsidiaries or Affiliates, (ii) otherwise change its
relationship with the Company or its Subsidiaries or Affiliates or (iii)
establish any relationship with the Participant for any business purpose deemed
competitive with any services or products that, during the period of the
Participant’s employment or other service with the Company or any of its
Subsidiaries or Affiliates, the Company or any of its Subsidiaries or Affiliates
anywhere in North America sold or provided, or had taken affirmative steps to
commence selling or providing.
(c) During
the Restricted Period, the Participant will not directly or indirectly, (i) hire
any employee, consultant or independent contractor of the Company or any of its
Subsidiaries or Affiliates or (ii) recruit or otherwise solicit or induce any
employee, consultant or independent contractor of the Company or any of its
Subsidiaries or Affiliates to (x) terminate his or her employment or other
arrangement with the Company or any of its Subsidiaries or Affiliates or (y)
otherwise change his or her relationship with the Company or any of its
Subsidiaries or Affiliates.
(d) Except as
required in the faithful performance of the Participant’s duties and
responsibilities to the Company or its Subsidiaries or Affiliates, the
Participant shall, in perpetuity, maintain in confidence and shall not (i)
directly, indirectly or otherwise, use, disseminate, disclose or publish, or use
for his or her benefit or the benefit of any person, firm, corporation or other
entity any confidential or proprietary information or trade secrets of or
relating to the Company or any of its Subsidiaries or Affiliates, including,
without limitation, information with respect to the Company’s or any of its
Subsidiaries or Affiliates’ operations, processes, products, inventions,
business practices, finances, principals, vendors, suppliers, customers,
potential customers, marketing methods, costs, prices, contractual
relationships, regulatory status, compensation paid to employees or other terms
of employment or (ii) deliver to any person, firm, corporation or other entity
any document, record, notebook, computer program or similar repository of or
containing any such confidential or proprietary information or trade
secrets. The parties hereby stipulate and agree that as between them
the foregoing matters are important, material and confidential proprietary
information and trade secrets and affect the successful conduct of the
businesses of the Company and its Subsidiaries and Affiliates (and any successor
or assignee of the Company or any of its Subsidiaries or
Affiliates). Upon termination of the Participant’s employment or
other service with the Company and its Subsidiaries and Affiliates for any
reason, the Participant will promptly deliver to the Company all correspondence,
drawings, manuals, letters, notes, notebooks, reports, programs, plans,
proposals, financial documents, or any other documents concerning the Company’s
and its Subsidiaries’ and Affiliates’ customers, business plans, marketing
strategies, products or processes.
(e) Notwithstanding
Section 10(d) hereof, the Participant may respond to a lawful and valid subpoena
or other legal process but shall give the Company the earliest possible notice
thereof, and shall, as much in advance of the return date of such subpoena as
possible, make available to the Company and its counsel the documents and other
information sought and shall assist such counsel in resisting or otherwise
responding to such process.
(f) The
Participant agrees not to disparage the Company, any of its Subsidiaries or
Affiliates, any of their services, products or practices or any of their
directors, officers, agents, representatives, stockholders or affiliates, either
orally or in writing, at any time.
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(g) In the
event the terms of this Section 10 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its duration or geographic scope
or by reason of its being too extensive in any other respect, it will be
interpreted to extend only over the maximum period of time for which it may be
enforceable, over the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action.
(h) Notwithstanding
the foregoing, in any case in which the subject matter of any subsection of this
Section 10 is covered in a written employment or other agreement between the
Company or any of its Subsidiaries or Affiliates and the Participant, the terms
of that agreement shall govern with respect to such subject matter.
11. Notices. Any
notice required or permitted under this Agreement shall be in writing and shall
be either delivered by reputable overnight courier, personally delivered, or
mailed by first class mail, return receipt requested, to the Participant at the
address indicated in the Company’s records for such Participant, and to the
Company at the address below indicated:
Notices to the
Company:
0000
Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attention: Chief
Executive Officer
With a copy
to:
Xxxxxx
Xxxx & Xxxxxx, LLP
000 Xxxx
Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attention: Xxxxxxx X.
Xxxxxxxx, Esq.
or such
other address or to the attention of such other person as the recipient party
shall have specified by prior written notice to the sending
party. Any notice under this Agreement shall be deemed to have been
given when so delivered or mailed.
12. General
Provisions.
(a) Transfers in Violation of
Agreement. Any transfer or attempted transfer of the Option or
the Option Shares in violation of any provision of this Agreement, the Plan or
the Securities Holders Agreement shall be null and void and of no force and
effect, and the purported transferee shall have no rights or privileges in or
with respect to the Company.
(b) Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
(c) Remedies. Each
of the Company and the Participant will be entitled to enforce its rights under
the Plan and this Agreement specifically to recover damages and costs (including
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reasonable
attorneys’ fees) caused by any breach of any provision of the Plan and this
Agreement and to exercise all other rights existing in its favor. Each of the
Participant and the Company acknowledges and agrees that money damages may not
be an adequate remedy for any breach of the provisions of the Plan and this
Agreement and that any party may in its sole discretion apply to any court of
law or equity of competent jurisdiction (without posting any bond or deposit)
for specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of the Plan and this
Agreement.
(d) Complete
Agreement. This Agreement and the Plan and the other documents
expressly referred to herein and therein, including the Securities Holders
Agreement, embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements and representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
(e) Counterparts. This
Agreement may be executed in separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and the same
agreement.
(f) Successors and
Assigns. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of, and be enforceable by, the Participant
and the Company and their respective successors and assigns (including
subsequent holders of the Option or the Option Shares); provided, that the
rights and obligations of the Participant under this Agreement shall not be
assignable except in connection with a permitted transfer of the Option or the
Option Shares in accordance with the Plan, this Agreement and the Securities
Holders Agreement.
(g) Choice of
Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
Nevada (without reference to any choice of law rules that would require the
application of the laws of any other jurisdiction). Each of the
Company and the Participant waives the necessity for personal service of any and
all process upon it and consents that all such service of process may be made by
registered or certified mail (return receipt requested), in each case directed
to such party in accordance with the notice requirements set forth in this
Agreement, and service so made will be deemed to be completed on the date of
actual receipt. Each of the Company and the Participant consents to service of
process as aforesaid. Nothing in this Agreement or the Plan will
prohibit personal service in lieu of the service by mail contemplated
herein.
(h) Amendment and
Waiver. The provisions of this Agreement may be amended by the
Committee at any time; provided, that the Committee may not change any term of
this Agreement in a manner which would have a material adverse effect on the
Participant without the Participant’s approval, unless such amendment is
required by applicable law or rule. Notwithstanding the foregoing, to the extent
any amendment to the Securities Holders Agreement affects the terms of this
Agreement, the Participant and any Permitted Transferee shall be deemed to have
consented to such amendment.
13. Business Days. If
any time period for giving notice or taking action hereunder expires on a day
which is a Saturday, Sunday or legal holiday in the state in which the Company’s
principal office is located, the time period shall be automatically extended to
the business day immediately following such Saturday, Sunday or
holiday.
* * * * *
* * * * * * * * * *
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
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By:
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/s/ | |
| Name | |||
| Title: CEO | |||
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PARTICIPANT
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