Exhibit 4.2
LITHIUM CORP.
NOTICE OF GRANT
Capitalized but otherwise undefined terms in this Notice of Grant and the
attached Stock Option Agreement shall have the same defined meanings as in the
2009 Stock Plan.
Name: Address:
----------------------------- --------------------------------
You have been granted an option (the "Option") to purchase Common Stock of the
Corporation, subject to the terms and conditions of the Plan and the attached
Stock Option Agreement, as follows:
Date of Grant:
-----------------------------------
Vesting Commencement Date:
-----------------------------------
Option Price per Share: $
-----------------------------------
Total Number of Shares Granted:
-----------------------------------
Total Option Price: $
-----------------------------------
Type of Option: Incentive Stock Option
--------------
Nonqualified Stock Option
--------------
Term/Expiration Date: Five (5) years after Date of Grant
Vesting Schedule:
The Option shall vest, in whole or in part, in accordance with the following
schedule:
LITHIUM CORP.
2009 STOCK PLAN
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Agreement"), dated as of the ___ day of
________, 2009 is made by and between LITHIUM CORP., a Nevada corporation (the
"Corporation"), and ____________________ (the "Optionee," which term as used
herein shall be deemed to include any successor to the Optionee by will or by
the laws of descent and distribution, unless the context shall otherwise
require).
BACKGROUND
Pursuant to the Corporation's 2009 Stock Plan (the "Plan"), the
Corporation, acting through the Committee of the Board of Directors (if a
committee has been formed to administer the Plan) or its entire Board of
Directors (if no such committee has been formed) responsible for administering
the Plan (in either case, referred to herein as the "Committee"), approved the
issuance to the Optionee, ___________________ share options at $_____ per share,
effective as of the date set forth above, of a stock option to purchase shares
of Common Stock of the Corporation at the price (the "Option Price") set forth
in the attached Notice of Grant (which is expressly incorporated herein and made
a part hereof, the "Notice of Grant"), upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual premises and undertakings
hereinafter set forth, the parties hereto agree as follows:
1. OPTION; OPTION PRICE. On behalf of the Corporation, the Committee hereby
grants to the Optionee the option (the "Option") to purchase, subject to the
terms and conditions of this Agreement and the Plan (which is incorporated by
reference herein and which in all cases shall control in the event of any
conflict with the terms, definitions and provisions of this Agreement), that
number of shares of Common Stock of the Corporation set forth in the Notice of
Grant, at an exercise price per share equal to the Option Price as is set forth
in the Notice of Grant (the "Optioned Shares"). If designated in the Notice of
Grant as an "incentive stock option," the Option is intended to qualify for
Federal income tax purposes as an "incentive stock option" within the meaning of
Section 422 of the Code. A copy of the Plan as in effect on the date hereof has
been supplied to the Optionee, and the Optionee hereby acknowledges receipt
thereof.
2. TERM. The term (the "Option Term") of the Option shall commence on the date
of this Agreement and shall expire on the Expiration Date set forth in the
Notice of Grant unless such Option shall theretofore have been terminated in
accordance with the terms of the Notice of Grant, this Agreement or of the Plan.
2
3. TIME OF EXERCISE.
(a) Unless accelerated in the discretion of the Committee or as otherwise
provided herein, the Option shall become exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant. Subject to
the provisions of Sections 5 and 8 hereof, shares as to which the Option becomes
exercisable pursuant to the foregoing provisions may be purchased at any time
thereafter prior to the expiration or termination of the Option.
(b) Anything contained in this Agreement to the contrary notwithstanding,
to the extent the Option is intended to be an Incentive Stock Option, the Option
shall not be exercisable as an Incentive Stock Option, and shall be treated as a
Non-Statutory Option, to the extent that the aggregate Fair Market Value on the
date hereof of all stock with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
the Plan and all other plans of the Corporation, its parent and its
subsidiaries, if any) exceeds $100,000.
4. TERMINATION OF OPTION.
(a) The Optionee may exercise the Option (but only to the extent the Option
was exercisable at the time of termination of the Optionee's Business
Relationship with the Corporation, its parent or any of its subsidiaries) at any
time within three (3) months following the termination of the Optionee's
Business Relationship with the Corporation, its parent or any of its
subsidiaries, but not later than the scheduled expiration date. If the
termination of the Optionee's employment is for cause or is otherwise
attributable to a breach by the Optionee of an employment, non-competition,
non-disclosure or other material agreement, the Option shall expire immediately
upon such termination. If the Optionee is a natural person who dies while in a
Business Relationship with the Corporation, its parent or any of its
subsidiaries, this option may be exercised, to the extent of the number of
shares with respect to which the Optionee could have exercised it on the date of
his death, by his estate, personal representative or beneficiary to whom this
option has been assigned pursuant to Section 9 of the Plan, at any time within
the twelve (12) month period following the date of death. If the Optionee is a
natural person whose Business Relationship with the Corporation, its parent or
any of its subsidiaries is terminated by reason of his disability, this Option
may be exercised, to the extent of the number of shares with respect to which
the Optionee could have exercised it on the date the Business Relationship was
terminated, at any time within the twelve (12) month period following the date
of such termination, but not later than the scheduled expiration date. At the
expiration of such three (3) or twelve (12) month period or the scheduled
expiration date, whichever is the earlier, this Option shall terminate and the
only rights hereunder shall be those as to which the Option was properly
exercised before such termination.
(b) Anything contained herein to the contrary notwithstanding, the Option
shall not be affected by any change of duties or position of the Optionee
(including a transfer to or from the Corporation, its parent or any of its
subsidiaries) so long as the Optionee continues in a Business Relationship with
the Corporation, its parent or any of its subsidiaries.
3
5. PROCEDURE FOR EXERCISE.
(a) The Option may be exercised, from time to time, in whole or in part
(but for the purchase of whole shares only), by delivery of a written notice in
the form attached as Exhibit A hereto (the "Notice") from the Optionee to the
Secretary of the Corporation, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares with respect to which the Option is
being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned Shares pursuant to
Section 5(b);
(iv) state the date upon which the Optionee desires to consummate the
purchase of the Optioned Shares (which date must be prior to the termination of
such Option and no later than 30 days from the delivery of such Notice);
(v) include any representations of the Optionee required under Section
8(b);
(vi) if the Option shall be exercised in accordance with Section 9 of
the Plan by any person other than the Optionee, include evidence to the
satisfaction of the Committee of the right of such person to exercise the
Option; and
(b) Payment of the Option Price for the Optioned Shares shall be made
either (i) by delivery of cash or a check to the order of the Corporation in an
amount equal to the Option Price, (ii) if approved by the Committee, by delivery
to the Corporation of shares of Common Stock of the Corporation having a Fair
Market Value on the date of exercise equal in amount to the Option Price of the
options being exercised, (iii) by any other means which the Board of Directors
determines are consistent with the purpose of the Plan and with applicable laws
and regulations (including, without limitation, the provisions of Rule 16b-3 and
Regulation T promulgated by the Federal Reserve Board), or (iv) by any
combination of such methods of payment.
(c) The Corporation shall issue a stock certificate in the name of the
Optionee (or such other person exercising the Option in accordance with the
provisions of Section 9 of the Plan) for the Optioned Shares as soon as
practicable after receipt of the Notice and payment of the aggregate Option
Price for such shares.
6. NO RIGHTS AS A STOCKHOLDER. The Optionee shall not have any privileges of a
stockholder of the Corporation with respect to any Optioned Shares until the
date of issuance of a stock certificate pursuant to Section 5(c).
7. ADJUSTMENTS. The Plan contains provisions covering the treatment of options
in a number of contingencies such as stock splits and mergers. Provisions in the
Plan for adjustment with respect to stock subject to options and the related
provisions with respect to successors to the business of the Corporation are
4
hereby made applicable hereunder and are incorporated herein by reference. In
general, the Optionee should not assume that options would survive the
acquisition of the Corporation.
8. ADDITIONAL PROVISIONS RELATED TO EXERCISE.
(a) The Option shall be exercisable only on such date or dates and during
such period and for such number of shares of Common Stock as are set forth in
this Agreement.
(b) To exercise the Option, the Optionee shall follow the procedures set
forth in Section 5 hereof. Upon the exercise of the Option at a time when there
is not in effect a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the shares of Common Stock issuable
upon exercise of the Option, the Committee in its discretion may, as a condition
to the exercise of the Option, require the Optionee (i) to execute an Investment
Representation Statement substantially in the form set forth in Exhibit B hereto
and (ii) to make such other representations and warranties as are deemed
appropriate by counsel to the Corporation.
(c) Stock certificates representing shares of Common Stock acquired upon
the exercise of Options that have not been registered under the Securities Act
shall, if required by the Committee, bear an appropriate restrictive legend
referring to the Securities Act. No shares of Common Stock shall be issued and
delivered upon the exercise of the Option unless and until the Corporation
and/or the Optionee shall have complied with all applicable Federal or state
registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.
9. NO EVIDENCE OF EMPLOYMENT OR SERVICE. Nothing contained in the Plan or this
Agreement shall confer upon the Optionee any right to continue in a Business
Relationship with the Corporation, its parent or any of its subsidiaries or
interfere in any way with the right of the Corporation, its parent or its
subsidiaries (subject to the terms of any separate agreement to the contrary) to
terminate the Optionee's Business Relationship or to increase or decrease the
Optionee's compensation at any time.
10. RESTRICTION ON TRANSFER. The Option may not be transferred, pledged,
assigned, hypothecated or otherwise disposed of in any way by the Optionee,
except by will or by the laws of descent and distribution, and may be exercised
during the lifetime of the Optionee only by the Optionee. If the Optionee dies,
the Option shall thereafter be exercisable, during the period specified in
Section 4, by his executors or administrators to the full extent to which the
Option was exercisable by the Optionee at the time of his death. The Option
shall not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect. The
words "transfer" and "dispose" include without limitation the making of any
sale, exchange, assignment, gift, security interest, pledge or other
encumbrance, or any contract therefor, any voting trust or other agreement or
arrangement with respect to the transfer of any interest, beneficial or
5
otherwise, in the Option, the creation of any other claim thereto or any other
transfer or disposition whatsoever, whether voluntary or involuntary, affecting
the right, title, interest or possession with respect to the Option.
11. SPECIFIC PERFORMANCE. Optionee expressly agrees that the Corporation will be
irreparably damaged if the provisions of this Agreement and the Plan are not
specifically enforced. Upon a breach or threatened breach of the terms,
covenants and/or conditions of this Agreement or the Plan by the Optionee, the
Corporation shall, in addition to all other remedies, be entitled to a temporary
or permanent injunction, without showing any actual damage, and/or decree for
specific performance, in accordance with the provisions hereof and thereof. The
Board of Directors shall have the power to determine what constitutes a breach
or threatened breach of this Agreement or the Plan. Any such determinations
shall be final and conclusive and binding upon the Optionee.
12. DISQUALIFYING DISPOSITIONS. To the extent the Option is intended to be an
Incentive Stock Option, and if the Optioned Shares are disposed of within two
years following the date of this Agreement or one year following the issuance
thereof to the Optionee (a "Disqualifying Disposition"), the Optionee shall,
immediately prior to such Disqualifying Disposition, notify the Corporation in
writing of the date and terms of such Disqualifying Disposition and provide such
other information regarding the Disqualifying Disposition as the Corporation may
reasonably require.
13. NOTICES. All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if (i) personally delivered or sent
by telecopy, (ii) sent by nationally-recognized overnight courier or (iii) sent
by registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Optionee, to the address (or telecopy number) set forth on the
Notice of Grant; and
if to the Corporation, to its principal executive office as specified in
any report filed by the Corporation with the Securities and Exchange Commission
or to such address as the Corporation may have specified to the Optionee in
writing, Attention: Corporate Secretary.
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, or when telecopied, if telecopied, (ii) on the first
Business Day (as hereinafter defined) after dispatch, if sent by
nationally-recognized overnight courier and (iii) on the third Business Day
following the date on which the piece of mail containing such communication is
posted, if sent by mail. As used herein, "Business Day" means a day that is not
a Saturday, Sunday or a day on which banking institutions in the city to which
the notice or communication is to be sent are not required to be open.
14. NO WAIVER. No waiver of any breach or condition of this Agreement shall be
deemed to be a waiver of any other or subsequent breach or condition, whether of
like or different nature.
6
15. OPTIONEE UNDERTAKING. The Optionee hereby agrees to take whatever additional
actions and execute whatever additional documents the Corporation may in its
reasonable judgment deem necessary or advisable in order to carry out or effect
one or more of the obligations or restrictions imposed on the Optionee pursuant
to the express provisions of this Agreement.
16. MODIFICATION OF RIGHTS. The rights of the Optionee are subject to
modification and termination in certain events as provided in this Agreement and
the Plan.
17. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Nevada applicable to contracts made
and to be wholly performed therein, without giving effect to its conflicts of
laws principles.
18. COUNTERPARTS; FACSIMILE EXECUTION. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument. Facsimile execution
and delivery of this Agreement is legal, valid and binding execution and
delivery for all purposes.
19. ENTIRE AGREEMENT. This Agreement (including the Notice of Grant) and the
Plan, and, upon execution, the Notice and Investment Representation Statement,
constitute the entire agreement between the parties with respect to the subject
matter hereof, and supersede all previously written or oral negotiations,
commitments, representations and agreements with respect thereto.
20. SEVERABILITY. In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
21. WAIVER OF JURY TRIAL. THE OPTIONEE HEREBY EXPRESSLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
[signature page follows]
7
IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement
as of the date first written above.
LITHIUM CORP.
By:
--------------------------------------------
Name:
Title:
Optionee:
-----------------------------------------------
Name:
8
NOTE RE: EXHIBITS
EXHIBITS A AND B ARE TO BE SIGNED
WHEN OPTIONS ARE EXERCISED,
NOT WHEN OPTION AGREEMENT IS SIGNED.
9
EXHIBIT A
LITHIUM CORP.
2009 STOCK PLAN
EXERCISE NOTICE
LITHIUM CORP.
Attention: Chief Executive Officer
1. Exercise of Option. Effective as of today, _______________________, 20__
, the undersigned (the "Optionee") hereby elects to exercise the Optionee's
option to purchase ________________ shares of the Common Stock (the "Shares") of
LITHIUM CORP. (the "Corporation") under and pursuant to the 2009 Stock Plan (the
"Plan") and the Stock Option Agreement dated _________ (the "Stock Option
Agreement"), with the purchase of the Shares to be consummated on ______________
___, ____ (the "Effective Date"), which date is prior to the termination of the
Option and no later than 30 days from the date of delivery of this Notice.
2. Representations of the Optionee. The Optionee acknowledges that the
Optionee has received, read and understood the Plan and the Stock Option
Agreement and agrees to abide by and be bound by their terms and conditions.
3. Rights as Shareholder; Shares Subject to Stockholders Agreement. Until
the stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Corporation or of a duly authorized
transfer agent of the Corporation), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Corporation shall issue (or
cause to be issued) such stock certificate promptly after the Effective Date,
provided the applicable price has been paid and the required documents have been
received. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
otherwise provided in the Plan. Unless waived by the Corporation in writing, the
Shares shall automatically become subject to the terms and conditions of any
stockholders agreement or similar agreement to which a majority of the
outstanding capital stock of the Corporation is subject at the time of exercise
and the Optionee shall sign as a condition to the issuance of the Shares such
joinder agreement, signature pages or other documents in order to evidence the
Optionee's agreement to be so bound.
4. Tax Consultation. The Optionee understands that the Optionee may suffer
adverse tax consequences as a result of the Optionee's purchase or disposition
of the Shares. The Optionee represents that the Optionee has consulted with any
tax consultants the Optionee deems advisable in connection with the purchase or
disposition of the Shares and that the Optionee is not relying on the
Corporation for any tax advice.
5. Successors and Assigns. The Corporation may assign any of its rights
under the Stock Option Agreement to single or multiple assignees (who may be
10
stockholders, officers, directors, employees or consultants of the Corporation),
and this Agreement shall inure to the benefit of the successors and assigns of
the Corporation. Subject to the restrictions on transfer set forth in the Stock
Option Agreement, this Agreement shall be binding upon the Optionee and his or
her heirs, executors, administrators, successors and assigns.
6. Interpretation. Any dispute regarding the interpretations of this
Agreement shall be submitted by the Optionee or by the Corporation forthwith to
the Committee, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and binding on the
Corporation and on the Optionee.
7. Governing Laws: Severability. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts made and to be wholly performed therein, without giving effect to its
conflicts of laws principles. Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.
8. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given if given in the manner specified
in the Stock Option Agreement.
9. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
10. Delivery of Payment. The Optionee herewith delivers to the Corporation
the full Option Price for the Shares.
11. Entire Agreement. The Plan, the Notice of Grant, and the Stock Option
Agreement are incorporated herein by reference. This Agreement, the Plan, the
Notice of Grant, the Stock Option Agreement, and the Investment Representation
Statement constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Corporation and the
Optionee with respect to the subject matter hereof.
Submitted by: Accepted by:
OPTIONEE: LITHIUM CORP.
By:
--------------------------------------
Its:
-------------------------------------
- --------------------------------------
Name:
---------------------------------
11
EXHIBIT B
2009 STOCK PLAN
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE : _____________________
CORPORATION : LITHIUM CORP.
SECURITY : Common Stock
AMOUNT : ___________________________________
DATE : ___________________________________
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Corporation the following:
(a) The Optionee is aware of the Corporation's business affairs and
financial condition and has acquired sufficient information about the
Corporation to reach an informed and knowledgeable decision to acquire the
Securities. The Optionee is acquiring these Securities for investment for the
Optionee's own account only and not with a view to, or for resale in connection
with, a "distribution" thereof within the meaning of the Securities Act of 1933,
as amended (the "Securities Act").
(b) The 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 the Optionee's investment intent as expressed herein. In this
connection, the Optionee understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if the 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. The 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. The Optionee
further acknowledges and understands that the Corporation is under no obligation
to register the Securities. The Optionee understands that the certificate
evidencing the Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or such registration is
not required in the opinion of counsel satisfactory to the Corporation and other
legends required under the applicable state or federal securities laws.
Signature of Optionee: _____________________________
Date:__________________
12