EXHIBIT 99.1
STOCK OPTION PLAN
FOR:
LEXINGTON RESOURCES, INC.
February 2, 2004
7473 West Lake Mead Road, Las Vegas, Nevada 89128
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LEXINGTON RESOURCES, INC.
STOCK OPTION PLAN
This stock option plan (the "PLAN") is adopted in consideration of
services rendered and to be rendered by key personnel to Lexington Resources,
Inc., its subsidiaries and affiliates.
1. DEFINITIONS.
The terms used in this Plan shall, unless otherwise indicated or
required by the particular context, have the following meanings:
BOARD: The Board of Directors of Lexington
Resources, Inc.
COMMON STOCK: The U.S. $0.00025 par value common stock of
Lexington Resources, Inc.
COMPANY: Lexington Resources, Inc., a corporation
incorporated under the laws of the State of
Nevada, U.S.A., 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.
DATE OF GRANT: The date on which an Option(see hereinbelow)
is granted under the Plan.
FAIR MARKET VALUE: The Fair Market Value of the Option Shares.
Such Fair Market Value as of any date shall
be reasonably determined by the Board;.
INCENTIVE STOCK
OPTION: An Option as described in Section 9
hereinbelow intended to qualify under
section 422 of the United States INTERNAL
REVENUE CODE OF 1986, as amended.
KEY PERSON: A person designated by the Board upon whose
judgment, initiative and efforts the Company
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or a Related Company may rely, who shall
include any Director, Officer, employee or
consultant of the Company. A Key Person may
include a corporation.
OPTION: The rights granted to a Key Person to
purchase Common Stock pursuant to the terms
and conditions of an Option Agreement (see
hereinbelow).
OPTION AGREEMENT: The written agreement (and any amendment or
supplement thereto) between the Company and
a Key Person designating the terms and
conditions of an Option.
OPTION SHARES: The shares of Common Stock underlying an
Option granted to a Key Person.
OPTIONEE: A Key Person who has been granted an Option.
RELATED COMPANY: Any subsidiary or affiliate of the Company
or of any subsidiary of the Company. The
determination of whether a corporation
is a Related Company shall be made without
regard to whether the entity or the
relationship between the entity and the
Company now exists or comes into existence
hereafter.
2. PURPOSE AND SCOPE.
(a) The purpose of the Plan is to advance the interests of the
Company and its stockholders by affording Key Persons, upon
whose judgment, initiative and efforts the Company may rely
for the successful conduct of their businesses an opportunity
for investment in the Company and the incentive advantages
inherent in stock ownership in the Company.
(b) This Plan authorizes the Board to grant Options to purchase
shares of Common Stock to Key Persons selected by the Board
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.
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The Plan shall be administered by the Board. The Board shall have the
authority granted to it under this section and under each other section of the
Plan.
In accordance with and subject to the provisions of the Plan, the Board
is hereby authorized to provide for the granting, vesting, exercise and method
of exercise of any Options all on such terms (which may vary between Options and
Optionees granted from time to time) as the Board shall determine. In addition,
and without limiting the generality of the foregoing, the Board shall select the
Optionees and shall determine: (i) the number of shares of Common Stock to be
subject to each Option, however, in no event may the maximum number of shares
reserved for any one individual exceed 15% of the issued and outstanding share
capital of the Company; (ii) the time at which each Option is to be granted;
(iii) the purchase price for the Option Shares; (iv) the Option period; and (v)
the manner in which the Option becomes exercisable or terminated. In addition,
the Board shall fix such other terms of each Option as it may deem necessary or
desirable. The Board may determine the form of Option Agreement to evidence each
Option.
The Board 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 subject to the rules and policies of any exchange or
over-the-counter market which is applicable to the Company.
The Board may from time to time make such changes in and additions to
the Plan as it may deem proper, subject to the prior approval of any exchange or
over-the-counter market which is applicable to the Company, and in the best
interests of the Company; provided, however, that no such change or addition
shall impair any Option previously granted under the Plan. If the shares are not
listed on any exchange, then such approval is not necessary.
Each determination, interpretation or other action made or taken by the
Board shall be final, conclusive and binding on all persons, including without
limitation, the Company, the stockholders, directors, officers and employees of
the Company and the Related Companies, and the Optionees and their respective
successors in interest.
4. THE COMMON STOCK.
Save and except as may be determined by the Board at a duly constituted
meeting of the Board as set forth hereinbelow, the Board is presently authorized
to appropriate, grant Options, issue and sell for the purposes of the Plan, a
total number of shares of the Company's Common Stock not to exceed 4,000,000, or
the number and kind of shares of Common Stock or other securities which in
accordance with Section 10 shall be substituted for the shares or into which
such shares shall be adjusted. Save and except as may otherwise be determined by
the disinterested approval of the shareholders of the Company at any duly called
meeting of the shareholders of the Company, at any duly constituted Board
meeting the Board may determine that the total number of shares of the Company's
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Common Stock which may be reserved for issuance for Options granted and to be
granted under this Plan, from time to time, may be to the maximum extent of up
to 100% of the Company's issued and outstanding Common Stock as at the date of
any such meeting of the Board. In this regard, and subject to the prior
disinterested approval of the shareholders of the Company at any duly called
meeting of the shareholders of the Company, the total number of shares of the
Company's Common Stock which may be reserved for issuance for Options granted
and to be granted under this Plan, from time to time, may be increased to
greater than 100% of the Company's issued and outstanding Common Stock as at the
date of notice of any such meeting of the shareholders of the Company whereat
such disinterested shareholders' approval is sought and obtained by the Company.
All or any unissued shares subject to an Option that for any reason expires or
otherwise terminates may again be made subject to Options under the Plan.
5. ELIGIBILITY.
Options will be granted only to Key Persons. Key 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.
6. OPTION PRICE AND NUMBER OF OPTION SHARES.
The Board shall, at the time an Option is granted under this Plan, fix
and determine the exercise price at which Option Shares may be acquired upon the
exercise of such Option; provided, however, that any such exercise price shall
not be less than that, from time to time, permitted under the rules and policies
of any exchange or over-the-counter market which is applicable to the Company.
The number of Option Shares that may be acquired under an Option
granted to an Optionee under this Plan shall be determined by the Board as at
the time the Option is granted; provided, however, that the aggregate number of
Option Shares reserved for issuance to any one Optionee under this Plan, or any
other plan of the Company, shall not exceed 28% of the total number of issued
and outstanding Common Stock of the Company.
7. DURATION, VESTING AND EXERCISE OF OPTIONS.
(a) The option period shall commence on the Date of Grant and
shall be up to 10 years in length subject to the limitations
in this Section 7 and the Option Agreement.
(b) During the lifetime of the Optionee the Option shall be
exercisable only by the Optionee. Subject to the limitations
in paragraph (a) hereinabove, any Option held by an Optionee
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at the time of his death may be exercised by his estate within
one year of his death or such longer period as the Board may
determine.
(c) The Board may determine whether an Option shall be exercisable
at any time during the option period as provided in paragraph
(a) of this Section 7 or whether the Option shall be
exercisable in installments or by vesting only. If the Board
determines the latter it shall determine the number of
installments or vesting provisions and the percentage of the
Option exercisable at each installment or vesting date. In
addition, all such installments or vesting shall be
cumulative. In this regard the Company will be subject, at all
times, to any rules and policies of any exchange or
over-the-counter market which is applicable to the Company and
respecting any such required installment or vesting provisions
for certain or all Optionees.
(d) In the case of an Optionee who is a director or officer of the
Company or a Related Company, if, for any reason (other than
death or removal by the Company or a Related Company), the
Optionee ceases to serve in that position for either the
Company or a Related Company, any option held by the Optionee
at the time such position ceases or terminates may, at the
sole discretion of the Board, be exercised within up to 90
calendar days after the effective date that his position
ceases or terminates (subject to the limitations at paragraph
(a) hereinabove), but only to the extent that the option was
exercisable according to its terms on the date the Optionee's
position ceased or terminated. After such 90-day period any
unexercised portion of an Option shall expire.
(e) In the case of an Optionee who is an employee or consultant of
the Company or a Related Company, if, for any reason (other
than death or termination for cause by the Company or a
Related Company), the Optionee ceases to be employed by either
the Company or a Related Company, any option held by the
Optionee at the time his employment ceases or terminates may,
at the sole discretion of the Board, be exercised within up to
60 calendar days (or up to 30 calendar days where the Optionee
provided only investor relations services to the Company or a
Related Company) after the effective date that his employment
ceased or terminated (that being up to 60 calendar days (or up
to 30 calendar days) from the date that, having previously
provided to or received from the Company a notice of such
cessation or termination, as the case may be, the cessation or
termination becomes effective; and subject to the limitations
at paragraph (a) hereinabove), but only to the extent that the
option was exercisable according to its terms on the date the
Optionee's employment ceased or terminated. After such 60-day
(or 30-day) period any unexercised portion of an Option shall
expire.
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(f) In the case of an Optionee who is an employee or consultant of
the Company or a Related Company, if the Optionee's employment
by the Company or a Related Company ceases due to the
Company's termination of such Optionee's employment for cause,
any unexercised portion of any Option held by the Optionee
shall immediately expire. For this purpose "cause" shall mean
conviction of a felony or continued failure, after notice, by
the Optionee to perform fully and adequately the Optionee's
duties.
(g) Neither the selection of any Key Person as an Optionee nor the
granting of an Option to any Optionee under this Plan shall
confer upon the Optionee any right to continue as a director,
officer, employee or consultant of the Company or a Related
Company, as the case may be, or be construed as a guarantee
that the Optionee will continue as a director, officer,
employee or consultant of the Company or a Related Company, as
the case may be.
(h) Each Option shall be exercised in whole or in part by
delivering to the office of the Treasurer of the Company
written notice of the number of shares with respect to which
the Option is to be exercised and by paying in full the
purchase price for the Option Shares purchased as set forth in
Section 8.
8. PAYMENT FOR OPTION SHARES.
The Board of Directors shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. Such
consideration may consist entirely of: (i) cash; (ii) check; (iii) promissory
note; (iv) other shares which (A) in the case of shares acquired upon exercise
of an option, have been owned by the optionee for more than six months on the
date of surrender, and (B) have a fair market value on the date of surrender
equal to the aggregate exercise price of the shares as to which said option
shall be exercised; (v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; (vi) a
reduction in the amount of any Company liability to the optionee; (vii) such
other consideration and method of payment for the issuance of shares to the
extent permitted by applicable laws; or (viii) any combination of the foregoing
methods of payment.
Notwithstanding the foregoing, any method of payment other than in cash
may be used only with the consent of the Board of Directors of if and to the
extent so provided in an Agreement.
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9. INCENTIVE STOCK OPTIONS.
(a) The Board may, from time to time, and subject to the
provisions of this Plan and such other terms and conditions as
the Board may prescribe, grant to any Key Person who is an
employee eligible to receive Options one or more Incentive
Stock Options to purchase the number of shares of Common Stock
allotted by the Board.
(b) The Option price per share of Common Stock deliverable upon
the exercise of an Incentive Stock Option shall be no less
than the Fair Market Value of a share of Common Stock on the
Date of Grant of the Incentive Stock Option.
(c) The Option term of each Incentive Stock Option shall be
determined by the Board and shall be set forth in the Option
Agreement, provided that the Option term shall commence no
sooner than from the Date of Grant and shall terminate no
later than 10 years from the Date of Grant and shall be
subject to possible early termination as set forth in Section
7 hereinabove.
10. CHANGES IN COMMON STOCK, ADJUSTMENTS, ETC.
In the event that each of the outstanding shares of Common Stock (other
than shares held by dissenting stockholders 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
there shall be substituted for each share of Common Stock that is subject to the
Plan, the number and kind of shares of stock or other securities into which each
outstanding share of Common Stock (other than shares held by dissenting
stockholders which are not changed or exchanged) shall be so changed or for
which each outstanding share of Common Stock (other than shares held by
dissenting stockholders) shall be so changed or for which each such share shall
be exchanged. Any securities so substituted shall be subject to similar
successive adjustments.
In the event of any such changes or exchanges, the Board shall
determine whether, in order to prevent dilution or enlargement of rights, an
adjustment should be made in the number, kind, or option price of the shares or
other securities then subject to an Option or Options granted pursuant to the
Plan and the Board shall make any such adjustment, and such adjustments shall be
made and shall be effective and binding for all purposes of the Plan.
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11. RELATIONSHIP OF EMPLOYMENT.
Nothing contained in the Plan, or in any Option granted pursuant to the
Plan, shall confer upon any Optionee any right with respect to employment by the
Company, or interfere in any way with the right of the Company to terminate the
Optionee's employment or services at any time.
12. NON-TRANSFERABILITY OF OPTION.
No Option granted under the Plan shall be transferable by the Optionee,
either voluntarily or involuntarily, except by will or the laws of descent and
distribution, and any attempt to do so shall be null and void.
13. RIGHTS AS A STOCKHOLDER.
No person shall have any rights as a stockholder 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 10, no adjustments shall be
made for dividends or other distributions or other rights as to which there is
an earlier record date.
14. SECURITIES LAWS REQUIREMENTS.
No Option Shares shall be issued unless and until, in the opinion of
the Company, any applicable registration requirements of the United States
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.
15. DISPOSITION OF OPTION 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: (i)
that all Option Shares are being acquired solely for his own account and not on
behalf of any other person or entity; (ii) that no Option Shares will be sold or
otherwise distributed in violation of the United States SECURITIES ACT OF 1933,
as amended, or any other applicable federal or state securities laws; (iii) that
if he is subject to reporting requirements under Section 16(a) of the United
States SECURITIES EXCHANGE ACT OF 1934, as amended, he will (a) furnish the
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Company with a copy of each Form 4 filed by him and (b) timely file all reports
required under the federal securities laws; and (iv) that he will report all
sales of Option Shares to the Company in writing on a form prescribed by the
Company.
16. EFFECTIVE DATE OF PLAN; TERMINATION DATE OF PLAN.
The Plan shall be deemed effective as of June 23, 2003. The Plan shall
terminate at midnight on June 23, 2013 except as to Options previously granted
and outstanding under the Plan at the time. No Options 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 then
outstanding under the Plan.
17. OTHER PROVISIONS.
The following provisions are also in effect under the Plan:
(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. The adoption of the Plan
by the Board shall not 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; and
(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 Nevada, U.S.A.
This Plan is dated and made effective as approved by the board of
directors and the shareholders of the Company on August 7, 2003 and as amended
and approved by the Board of Directors on November 19, 2003 and December 31,
2003.
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BY ORDER OF THE BOARD OF DIRECTORS OF
LEXINGTON RESOURCES, INC.
Per:
"GRANT ATKINS"
GRANT ATKINS
President and a Director
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