Exhibit 4.1 Stock and Stock Option Plan, as amended
AMENDMENT TO HYPERDYNAMICS CORPORATION
STOCK AND STOCK OPTION PLAN
1. Purpose. The purpose of the Stock Option Plan (this "Plan") is to
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provide a means whereby selected employees, directors, officers,
agents, consultants, attorneys and advisors of HyperDynamics Corporation
(the "Company"), or of any parent or subsidiary thereof, may be granted
shares of common stock; or incentive stock options and/or nonqualified
stock options to purchase the Common Stock of the Company, provided that
bona fide services shall be rendered by consultants attorneys or advisors
and such services must not be in connection with the offer or sale of
securities in a capital-raising transaction. Further this Plan is to
provide a means to attract and retain the services or advice of such
employees, directors, officers, agents, consultants, advisors and
independent contractors and to provide added incentive to such persons by
encouraging stock ownership in the Company.
2. Definitions. The following definitions shall apply to this Plan:
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(a) "Board" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee consisting of
three or more persons appointed by the Board. If no Committee is
appointed, the term "Committee" means the Board, except in those
instances where the text clearly indicated otherwise.
(d) "Common Stock" means the Common Stock, par value $0.001 per share of
the Company or such other class of shares or securities as to which
the Plan may be applicable, pursuant to Section 12 herein.
(e) "Company" means HyperDynamics Corporation, a Delaware Corporation.
(f) "Continuous Service" means the absence of any interruption or
termination of employment with or service to the Company or any parent
or subsidiary of the Company that now exists or hereafter is organized
or acquired by or acquires the Company. Continuous Service shall not
be considered interrupted in the case of sick leave, military leave,
or any other leave of absence approved by the Company or in the case
of transfers between locations of the Company or between the Company,
its parent, its subsidiaries or its successors.
(g) "Date of Grant" means the date on which the Committee grants an Option.
(h) "Director" means any member of the Board of Directors of the
Company or any parent or subsidiary of the Company that now exists or
hereafter is organized or acquired by or acquires the Company.
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(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(j) "Employee" means any person employed on an hourly or salaried
basis by the Company or any parent or subsidiary of the Company that
now exists or hereafter is organized or acquired by or acquires the
Company or any Consultant or Advisor who contributes materially to the
success and profitability of the Company, provided that the services
rendered by the Consultant or Advisor must not be in connection with
the offer or sale of securities in a capital-raising transaction.
(k) "Fair Market Value" means (i) if the Common Stock is not
listed or admitted to trade on a national securities exchange and if
bid and ask prices for the Common Stock are not furnished through
NASDAQ or a similar organization, the value established by the
Committee, in its sole discretion, for purposes of the Plan; (ii) if
the Common Stock is listed or admitted to trade on a national
securities exchange or a national market system, the closing price of
the Common Stock, as published in the Wall Street Journal, so listed
or admitted to trade on such date or, if there is no trading of the
Common Stock on such date, then the closing price of the Common Stock
on the next preceding day on which there was trading in such shares;
or (iii) if the Common Stock is not listed or admitted to trade on a
national securities exchange or a national market system, the mean
between the bid and ask price for the Common Stock on such date, as
furnished by the National Association of Securities Dealers, Inc.
through NASDAQ or a similar organization if NASDAQ is no longer
reporting such information. If trading in the stock or a price
quotation does not occur on the Date of Grant, the next preceding date
on which the stock was traded or a price was quoted will determine the
fair market value.
(l) "Incentive Stock Option" means a stock option, granted
pursuant to either this Plan or any other plan of the Company, that
satisfies the requirements of Section 422 of the Code and that
entitles the Optionee to purchase stock of the Company or in a
corporation that at the time of grant of the option was a parent or
subsidiary of the Company or a predecessor corporation of any such
corporation.
(m) "Nonstatutory Option" shall have the meaning as used in Section 8
herein.
(n) "Option" means a stock option granted pursuant to the Plan.
(o) "Option Period" means the period beginning on the Date of
Grant and ending on the day prior to the fifth anniversary of the Date
of Grant or such shorter termination date as set by the Committee.
(p) "Optionee" means an Employee or Director who receives an Option.
(q) "Parent" means any corporation which owns 50% or more of the voting
securities of the Company.
(r) "Plan" means this Stock Option Plan.
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(s) "Share" means the Common Stock, as adjusted in accordance with
Paragraph 12 of the Plan.
(t) "Subsidiary" means any corporation 50% or more of the voting securities
of which are owned directly or indirectly by the Company at any time
during the existence of this Plan.
3. Administration. This Plan will be administered by the Committee. A
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majority of the full Committee constitutes a quorum for purposes of
administering the Plan, and all determinations of the Committee shall
be made by a majority of the members present at a meeting at which a
quorum is present or by the unanimous, written consent of the Committee.
If no Committee has been appointed, members of the Board who are
either eligible for shares of common stock, or Options or have been granted
shares of common stock, or Options may vote on any matters affecting the
administration of the Plan or the grant of any shares of common stock, or
Option pursuant to the Plan, except that no such member shall act on the
granting of any shares of common stock, or Option to himself, but any such
member may be counted in determining the existence of a quorum at any
meeting of the Board during which action is taken with respect to the
granting of shares of common stock, or Options to him.
The Committee has the exclusive power to select the participants in
this Plan, to establish the terms of the shares of common stock, or Options
granted to each participant, and to make all other determinations necessary
or advisable under the Plan. The Committee has the sole and absolute
discretion to determine whether the performance of an eligible Employee
warrants an award under this Plan, and to determine the amount of the
award. The Committee has full and exclusive power to construe and interpret
this Plan, to prescribe and rescind rules and regulations relating to this
Plan, and take all actions necessary or advisable for the Plan's
administration. Any such determination made by the Committee will be final
and binding of all persons. A member of the Committee will not be liable
for performing any act or making any determination in good faith.
4. Shares and Shares Subject to Option. Subject to the provisions of
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aggregate number of Shares that may be issued or optioned and sold under
the Plan shall be 10,000,000. Such shares may be authorized but unissued,
or may be treasury shares. If an Option shall expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares that were subject to the Option shall, unless the Plan
has then terminated, be available for other Options under the Plan.
5. Participants.
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(a) Eligible Employees and Directors. Every Employee and Director and
the -------------------------------- other persons set forth in Section 1,
as the Committee in its sole discretion designates, is eligible to
participate in this Plan. The Committee's award of shares of common stock,
or an Option to a participant in any year does not require the Committee to
award shares of common stock, or an Option to that participant in any other
year. Furthermore, the Committee may award different shares
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of common stock, or Options to different participants. The Committee
may consider such factors as it deems pertinent in selecting participants
and in determining the amount of their shares of common stock, or Option,
including, without limitation; (i) the financial condition of the Company
or its Subsidiaries; (ii) expected profits for the current or future years;
(iii) the contributions of a prospective participants to the profitability
and success of the Company or its Subsidiaries; and (iv) the adequacy of
the prospective participant's other compensation. Participants may include
persons to whom stock, stock options, or other benefits previously were
granted under this or another plan of the Company or any Subsidiary,
whether or not the previously granted benefits have been fully exercised.
(b) No Right of Employment. An Optionee's right, if any, to continue to
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serve the Company and its Subsidiaries as an Employee will not be enlarged
or otherwise affected by his designation as a participant under this Plan,
and such designation will not in any way restrict the right of the Company
or any Subsidiary, as the case may be, to terminate at any time the
employment of any participant.
(c) Eligible Consultants. From time to time the Committee may select
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certain consultants as eligible for the Plan.
6. Option Requirements. Each Option granted under this Plan shall satisfy
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the following requirements.
(a) Written Option. An Option shall be evidenced by a written instrument
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specifying (i) the number of Shares that may be purchased by its
exercise, (ii) the intent of the Committee as to whether the Option is to
be an Incentive Stock Option or a Nonstatutory Option, and (iii) such terms
and conditions consistent with the Plan as the Committee shall determine.
(b) Duration of Option. Each Option may be exercised only during the Option
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Period designated for the Option by the Committee. At the end of the
Option Period the Option shall expire.
(c) Option Exercisability. Unless otherwise provided by the Committee on
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the grant of an Option, each Option shall be exercisable only as
to no more than one-fourth of the total number of shares covered by
the Option during each twelve-month period commencing immediately
after the date the Option is granted. Notwithstanding the foregoing,
an Option is exercisable only if the issuance of Shares pursuant to
the exercise would be in compliance with applicable securities laws,
as contemplated by Section 10 of this Plan. To the extent an Option is
either unexercisable or unexercised, the unexercised portion shall
accumulate until the Option both becomes exercisable and is exercised
but in no case beyond the date that is five years from the date the
Option is granted.
(d) Acceleration of Vesting. Subject to the provisions of Section 7(b), the
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Committee may, in its discretion, provide for the exercise of Options
either as to an increased percentage of shares per year or as to all
remaining shares. Such acceleration of vesting may be declared by the
Committee at any time before the end of the Option Period, including,
if applicable, after termination of the Optionee's Continuous Service
by reason of death,
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disability, retirement or termination of employment.
(e) Option Price. Except as provided in Section 7(a) and 8, the Option
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price of each Share subject to the Option shall equal the Fair
Market Value of the Share on the Option's Date of Grant, amd except
further that for Options granted to consultants, advisors and
independent contractors, the exercise price of each option may be less
than Fair Market Value as determined by the Committee.
(f) Termination of Services. If the Optionee ceases Continuous Service for
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any reason other than death, disability, or retirement on or
after age 65 of the Optionee, all Options held by the Optionee shall
lapse immediately following the last day that the Optionee is employed
by the Company, on the effective date of the termination of his
services to the Company. On the grant of an Option, the Committee may,
in its discretion, extend the time during which the Option may be
exercised after termination of services. Any such Option shall lapse
at the end of the period established by the Committee for exercise
after termination of services. The Option may be exercised on such
termination date, subject to any adjustment under Section 6(d) and 12.
(g) Death. In the case of death of the Optionee, the beneficiaries
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designated by the Optionee shall have one year from the
Optionee's demise or to the end of the Option Period, whichever is
earlier, to exercise the Option, provided, however, the Option may be
exercised only for the number of Shares for which it could have been
exercised at the time the Optionee died, subject to any adjustment
under Sections 6(d) and 12.
(h) Retirement. If the Optionee retires on or after attaining age 65, the
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Option shall lapse at the earlier of the end of the Option Period
or three months after the date of retirement; provided, however, the
Option can be exercised only for the number of Shares for which it
could have been exercised on the retirement date, subject to any
adjustment under Sections 6(b) and 12.
(i) Disability. In the event of termination of Continuous Service due to
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total and permanent disability (within the meaning of Section 422
of the Code), the Option shall lapse at the earlier of the end of the
Option Period or twelve months after the date of such termination,
provided, however, the Option can be exercised at the time the
Optionee became disabled, subject to any adjustment under Sections
6(d) and 12.
7. Incentive Stock Options. Any Options intended to qualify as an Incentive
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Stock Option shall satisfy the following requirements in addition to the
other requirements of the Plan:
(a) Ten Percent Shareholders. An Option intended to qualify as an Incentive
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Stock Option granted to an individual who, on the Date of Grant,
owns stock possessing more than ten (10) percent of the total combined
voting power of all classes of stock of either the Company or any
parent or Subsidiary, shall be granted at a price of 110 percent of
Fair Market Value on the Date of Grant and shall be exercised only
during the five-year period immediately following the Date of Grant.
In calculating stock ownership of any person, the attribution rules of
Section 425(d) of the Code will apply. Furthermore, in
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calculating stock ownership, any stock that the individual may
purchase under outstanding options will not be considered.
(b) Maximum Option Grants. The aggregate Fair Market Value, determined on
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the date of Grant, of stock in the Company exercisable for the
first time by any Optionee during any calendar year, under the Plan
and all other plans of the Company or its parent or Subsidiaries
(within the meaning of Subsection (d) of Section 422 of the Code) in
any calendar year shall not exceed $100,000.00.
(c) Exercise of Incentive Stock Options. No disposition of the shares
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underlying an Incentive Stock Option may be made within two years
from the Date of Grant nor within one year after the exercise of such
Incentive Stock Option.
8. Nonstatutory Options. Any Option not intended to qualify as an Incentive
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Stock Option shall be a nonstatutory Option. Nonstatutory Options shall
satisfy each of the requirements of Section 6 of the Plan.
9. Method of Exercise. An Option granted under this Plan shall be deemed
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exercised when the person entitled to exercise the Option (i) delivers
written notice to the President of the Company of the decision to exercise,
(ii) concurrently tenders to the Company full payment for the Shares to be
purchased pursuant to the exercise, and (iii) complies with such other
reasonable requirements as the Committee establishes pursuant to paragraph
11 of the Plan. During the lifetime of the Employee to whom an Option is
granted, such Option may be exercised only by him. Payment for Shares with
respect to which an Option is exercised may be in cash, or by certified
check, or wholly or partially in the form of Common Stock having a fair
market value equal to the Option Price. No person will have the rights of a
shareholder with respect to Shares subject to an Option granted under this
Plan until a certificate or certificates for the Shares have been delivered
to him.
An Option granted under this Plan may be exercised in increments of
not less than 10% of the full number of Shares as to which it can be
exercised. A partial exercise of an Option will not effect the holder's
right to exercise the Option from time to time in accordance with this Plan
as to the remaining Shares subject to the Option.
10. Taxes, Compliance with Law; Approval of Regulatory Bodies. The Company, if
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necessary or desirable, may pay or withhold the amount of any tax
attributable to any Shares deliverable or amounts payable under this Plan,
and the Company may defer making delivery or payment until it is
indemnified to its satisfaction for the tax. Options are exercisable, and
Shares can be delivered and payments made under this Plan, only in
compliance with all applicable federal and state laws and regulations,
including, without limitation, state and federal securities laws, and the
rules of all stock exchanges on which the Company's stock is listed at any
time. An Option is exercisable only if either (i) a registration statement
pertaining to the Shares to be issued upon exercise of the Option has been
filed with and declared effective by the Securities and Exchange Commission
and remains effective on the date of exercise, or (ii) an exemption from
the registration requirements of applicable securities laws is available.
This plan does not require the Company, however, to file such registration
statement or to
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assure the availability of such exemptions. Any certificate issued to
evidence Shares issued under the Plan may bear such legends and statements,
and shall be subject to such transfer restrictions, as the Committee deems
advisable to assure compliance with federal and state laws and regulations
and with the requirements of this Section 10 of the Plan. Each Option may
not be exercised, and Shares may not be issued under this Plan, until the
Company has obtained the consent or approval of every regulatory body,
federal or state, having jurisdiction over such matter as the Committee
deems advisable.
Each Person who acquires the right to exercise an Option by bequest or
inheritance may be required by the Committee to furnish reasonable evidence
of ownership of the Option as a condition to his exercise of the Option. In
addition, the Committee may require such consents and release of taxing
authorities as the Committee deems advisable.
11. Assignability. An Option granted under this Plan is not transferable except
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by will or the laws of descent.
12. Adjustment Upon Change of Shares. If a reorganization, merger,
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consolidation, reclassification, recapitalization, combination or
exchange of shares, stock split, stock dividend, rights offering, or other
expansion or contraction of the Common Stock of the Company occurs, the
number and class of Shares for which Options are authorized to be granted
under this Plan, the number and class of Shares then subject to Options
previously granted under this Plan, and the price per Share payable upon
exercise of each Option outstanding under this Plan shall be equitably
adjusted by the Committee to reflect such changes. To the extent deemed
equitable and appropriate by the Board, subject to any required action by
shareholders, in any merger, consolidation, reorganization, liquidation or
dissolution, any Option granted under the Plan shall pertain to the
securities and other property to which a holder of the number of Shares of
stock covered by the Option would have been entitled to receive in
connection with such event.
13. Liability of the Company. The Company, its parent and any Subsidiary that
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is in existence or hereafter comes into existence shall not be liable to
any person for any tax consequences expected but not realized by an
Optionee or other person due to the exercise of an Option.
14. Expenses of Plan. The Company shall bear the expenses of administering the
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Plan.
15. Duration of Plan. shares of common stock, or Options may be granted under
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this Plan only within 10 years from the effective date of this Plan.
16. Amendment of Plan. This Plan may be amended by the Committee in accordance
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with the provisions of Paragraph 3.
17. Applicable Law. The validity, interpretation, and enforcement of this Plan
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are governed in all respects by the laws of Delaware and the United States
of America.
18. Effective Date. The effective date of this Plan shall be May 7, 1997.
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