EXHIBIT 4.1
FRONTIER ENERGY CORPORATION
2005 STOCK OPTION PLAN
Amended June 29, 2006
Amended July 31, 2007
1. Purposes of the Plan. The purposes of this Stock Option Plan
are to attract and retain the best available personnel for positions
of substantial responsibility, to provide additional incentive
to the Employees and Consultants of the Company and to promote
the success of the Company's business. Options granted under
the Plan may be either "incentive stock options," as defined in
Section 422 of the Internal Revenue Code of 1986, as amended, or
"nonstatutory stock options," at
the discretion of the Board and as reflected in the terms
of the written Option Agreement.
2. Definitions. The following definitions shall apply
to terms capitalized in this Plan:
(a) "Board" shall mean the Committee, if one has been
appointed, or the Board of Directors
of the Company, if no Committee is appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Frontier Energy, Inc., a Nevada corporation.
(e) "Committee" shall mean the Committee appointed by the Board of
Directors under paragraph (a) of Section 4 of the Plan, if one is appointed.
(f) "Consultant" shall mean any person who is engaged by the
Company or any subsidiary to render consulting services and is
compensated for such consulting services, and any non-
employee member of the Board whether compensated for such services or not.
(g) "Continuous Status as an Employee or Consultant" shall mean
the absence of any interruption or termination of service as an
Employee or Consultant. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case
of sick leave, military
leave, or any other leave of absence approved by the Board; provided
that such leave is for a period of not more than 90 days or
reemployment upon the expiration of such leave is guaranteed
by contract or statute.
(h) "Employee" shall mean any person, including officers
and directors, employed by the Company or any Parent or
Subsidiary of the Company. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the Company.
(i) "Incentive Stock Option" shall mean an Option
intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code.
(j) "Option" shall mean a Stock Option granted pursuant to the Plan.
(k) "Option Stock" shall mean the Common Stock subject to an Option.
(l) "Optionee" shall mean an Employee or Consultant who receives
an Option.
(m) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as
defined in Section 425(e) of the Code.
(n) "Plan" shall mean this 2005 Stock Option Plan.
(o) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with
Section 11 of the Plan.
(p) "Subsidiary" shall mean a subsidiary corporation,
whether now or hereafter existing, as
defined in Section 425(f) of the Code.
(q) "Unvested Portion" shall mean any Option with respect
to the number of shares of
Common Stock for that Option that are not exercisable as of
the date of the closing of a
Transaction resulting in a Change in Control. In the case of
a Change in Control which occurs as
the results of a series of transactions, the closing date shall
be deemed to be the closing date of the
final Transaction affecting the Change in Control.
3. Stock Subject to the Plan. Subject to the provisions
of Section 11 of the Plan, the
maximum aggregate number of shares which the Committee may
grant as options and sell under
the Plan is 20,000,000 shares of Common Stock, which includes
125,000 shares granted as options
before June 29, 2006, and an additional 4,875,000 added to
the Plan by amendment on June 29,
2006, of which a total of options for 3,000,000 shares have
been granted as of July 31, 2007,
which may be authorized, but unissued, Common Stock. If an
Option should expire or become
unexercisable for any reason without the holder exercising
such Option in full, the unpurchased
Shares will become available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the
Board of Directors; provided,
however, that (i) the Board of Directors may appoint a
Committee to administer the Plan; and (ii)
shall appoint a Committee to administer the Plan, if necessary,
to provide the officers and directors
of the Company with the benefits of Rule 16b-3 promulgated
by the SEC. If appointed, the
Committee shall continue to serve until otherwise directed
by the Board of Directors. Subject to
the foregoing, from time-to-time the Board of Directors
may increase the size of the Committee
and appoint additional members in substitution therefor,
fill vacancies however caused, or remove
all members of the Committee and thereafter directly
administer the Plan.
(b) Powers of the Board. Subject to the provisions
of the Plan, the Board shall have the
authority, in its discretion: (i) to grant Incentive Stock
Options, in accordance with Section 422 of
the Code, or "nonstatutory stock options;" (ii) to determine,
upon review of relevant information
and in accordance with Section 8(b) of the Plan, the
fair market value of the Common Stock; (iii)
to determine the exercise price per share of Options
to be granted, which exercise price shall be
determined in accordance with Section 8(a) of the
Plan; (iv) to determine the Employees or
Consultants to whom, and the time or times at which,
Options shall be granted and the number of
shares to be represented by each Option; (v) to interpret
the Plan; (vi) to prescribe, amend and
rescind rules and regulations relating to the Plan; (vii)
to determine the terms and provisions of
each Option granted (which need not be identical) and,
with the consent of the holder thereof,
modify or amend each Option; (viii) to accelerate or
defer (with the consent of the Optionee as to
any deferral) the exercise date of any Option consistent
with the provisions of Section 5 of the
Plan; (ix) to authorize any person to execute on behalf
of the Company any instrument required to
effectuate the grant of an Option previously granted by
the Board; and (x) to make all other
determinations deemed necessary or advisable for the
administration of the Plan.
(c) Effect of Board"s Decision. All decisions,
determinations and interpretations of the
Board or its Committee shall be final and binding on all
Optionees and any other holders of any
Options granted under the Plan.
5. Eligibility.
(a) The Committee may grant Options only to Employees
and Consultants. The
Committee may only grant Incentive Stock Options to
Employees. An Employee or Consultant
who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option
or Options.
(b) The Committee may not grant an Incentive
Stock Option to an Employee which, when
aggregated with all other Incentive Stock Options
granted to such Employee by the Company or
any Parent or Subsidiary, would result in Shares
having an aggregate fair market value
(determined for each Share as of the date of grant
of the Option covering such Share) in excess of
$100,000 becoming first available for purchase upon
exercise of one or more Incentive Stock
Options during any calendar year.
(c) Section 5(b) of the Plan shall apply only
to an Incentive Stock Option evidenced by a
written Option agreement which shall expressly
identify the Option as an Incentive Stock Option.
Section 5(b) of the Plan shall not apply to any
Option evidenced by an Option agreement which
sets forth the intention of the Company and the
Optionee that such Option shall be a nonstatutory
Stock Option.
(d) The Plan shall not confer upon any Optionee
any right with respect to continuation of
employment or consulting relationship with the Company,
nor shall it interfere in any way with his
right or the Company's right to terminate his employment
or consulting relationship at any time.
6. Term of Plan. The Plan shall become effective
upon the earlier to occur of its adoption
by the Board of Directors or its approval by the
Stockholders of the Company as described in
Section 17 of the Plan. It shall continue in
effect for a term of ten (10) years unless sooner
terminated under Section 13 of the Plan.
7. Term of Option. The term of each Incentive
Stock Option shall be ten (10) years from
the date of grant thereof or such shorter term as
may be provided in the Stock Option agreement.
The term of each Option that is not an Incentive
Stock Option shall be (10) years and one (1) day
from the date of grant thereof or such shorter term
as may be provided in the Stock Option
agreement. However, in the case of an Option
granted to an Optionee who, at the time the Option
is granted, owns stock representing more than
ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary,
(a) if the Option is an Incentive Stock
Option, the term of the Option shall be five (5) years
from the date of grant thereof or such shorter
time as may be provided in the Stock Option agreement,
or (b) if the Option is not an Incentive
Stock Option, the term of the Option shall be five (5)
years and one (1) day from the date of grant
thereof or such shorter term as may be provided in the
Stock Option agreement.
8. Exercise Price and Consideration.
(a) The Board shall determine the per Share
exercise price for the Shares to be issued
pursuant to exercise of an Option, subject to the
following: (i) In the case of an Incentive Stock
Option: (A) granted to an Employee who, at the time
of the grant of such Incentive Stock Option,
owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110%
of the fair market value per Share on the date of
grant, (B) granted to an Employee, the per Share
exercise price shall be no less than 100% of the
fair market value per Share on the date of grant;
(ii) In the case of a nonstatutory Stock Option,
the per Share exercise price shall be no less than the
price per Share set by the Board on the date of grant.
(b) The fair market value shall be determined
in the following manner. If the Common
Stock is unlisted, the Board shall determine the fair
market value, in its discretion. If listed, the
value shall be the Closing Sales Price of the Company's
Common Stock as reported on the
automated quotation service or stock exchange on which
the common Stock is quoted or listed on
the business day immediately preceding the date of grant.
(c) The consideration to be paid for the Shares
to be issued upon exercise of an Option,
including the method of payment shall be determined by
the Board and may consist entirely of
cash, check, promissory note, other Shares of Common
Stock having 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, or any combination of such methods
of payment, or such other consideration and
method of payment for the issuance of Shares to
the extent permitted under Nevada Corporation
Law. In making its determination as to the type of
consideration to accept, the Board shall consider
if acceptance of such consideration may be reasonably
expected to benefit the Company.
9. Exercise of Options.
(a) Procedure for Exercise; Rights as a Stockholder.
Any Option granted hereunder shall
be exercisable at such times and under such conditions as
determined by the Board, including
performance criteria with respect to the Company and/or
the Optionee, and as shall be permissible
under the terms of the Plan. A holder many not exercise
an Option for a fraction of a Share. An
Option shall be deemed to be exercised when the person
entitled to exercise the Option has given
written notice of such exercise to the Company in
accordance with the terms of the Option and has
made full payment for the Shares with respect to
which the Option is exercised. Full payment
may, as authorized by the Board, consist of any
consideration and method of payment allowable
under Section 8(c) of the Plan. Until the issuance
(as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer
agent of the Company) of the Stock
Certificate evidencing such shares, no right to vote
or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the
Option. 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
provided in Section 11 of the Plan. Exercise
of an Option in any manner shall result in a decrease
in the number of Shares which thereafter
may be available, both for purposes of the Plan and
for sale under the Option, by the number of
Shares as to which the Option is exercised.
(b) Termination of Status as an Employee or
Consultant. If an Employee or Consultant
ceases to serve as an Employee or Consultant (as
the case may be), he may, but only within thirty
(30) days (or such other period of time not
exceeding three (3) months as is determined by the
Board at the time of grant of the Option) after
the date he ceases to be an Employee or Consultant
(as the case may be) of the Company, exercise
his Option to the extent that he was entitled to
exercise it at the date of such termination.
To the extent that he was not entitled to exercise the
Option at the date of such termination, or if
he does not exercise such Option (which he was
entitled to exercise) within the time specified
herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding
the provisions of Section 9(b) above, in the
event an Employee or Consultant is unable to continue
his employment or consulting relationship
(as the case may be) with the Company as a result
of his total and permanent disability (as defined
in Section 22(e) (3) of the Internal Revenue Code),
he may, but only within six (6) months (or
such other period of time not less than six (6)
months (or such other period of time not less then
six (6) months nor more than twelve (12) months
as is determined by the Board at the time of
grant of the Option) from the date of termination,
exercise his Option to the extent he was entitled
to exercise it at the date of such termination (or
to such greater extent as the Board may provide).
To the extent that he was not entitled to exercise
the Option at the date of termination, or if he does
not exercise such Option (which he was entitled to
exercise) within the time specified herein, the
Option shall terminate.
(d) Death of Optionee. In the event of
the death of an Optionee: (i) during the term of the
Optionee who is at the time of his death an
Employee or Consultant of the Company and who
shall have been in Continuous Status as an
Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any
time within twelve (12) months following the date of
death, by the Optionees estate or by a person
who acquired the right to exercise the Option by
bequest or inheritance, but only to the extent
of the right to exercise that has accrued as of the date
of death (or to such greater extent as the Board
may provide); or (ii) within thirty (30) days (or
such other period of time not exceeding three
(3) months as is determined by the Board at the time
of grant of the Option) after the termination
of Continuous Status as an Employee or Consultant,
the Option may be exercised, at any time within six
(6) months following the date of death, by the
Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or
inheritance, but only to the extent of the right
to exercise that had accrued at the date of
termination (or to such greater extent as the
Board may provide).
10. Nontransferability of Options. The Option
may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of
descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the
Optionee.
11. Adjustments Upon Certain Changes.
(a) Stock Split or Reclassification. Subject
to any required action by the Stockholders of
the Company, the number of Shares of Common Stock
covered by each outstanding Option, and
the number of shares of Common Stock which have
been authorized for issuance under the Plan
but as to which no Options have yet been granted
or which have been returned to the Plan upon
cancellation or expiration of an Option, as well
as the price per Share of Common Stock covered
by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in
the number of shares of Common Stock resulting
from a stock split, reverse stock split, stock
dividend, combination or reclassification of the
Common Stock, or any other increase or decrease
in the number of issued shares of Common Stock
effected without receipt of consideration by the
Company; provided, however, that conversion of
any convertible securities of the Company shall
not be deemed to have been "effected without
receipt of consideration." The Board, whose
determination in that respect shall be final,
binding and conclusive, shall make such adjustment.
Except as expressly provided herein, no issuance
by the Company of shares of stock of any class,
or securities convertible into Shares of stock of
any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number
or price of Shares of Common Stock subject to
an Option.
(b) Change in Control. In the event of a Change
of Control, then to the extent permitted
by applicable law, with respect to half (50%) of the
unvested Options (the "Primary Accelerated
Amount") held by persons then performing services as
Employees, Directors, or Consultants, then
immediately prior to the consummation of such
Change of Control such Primary Accelerated
Amount shall be fully vested and exercisable
and such Options shall be terminated if not
exercised prior to the consummation of the Change
of Control. With respect to the remaining
portion of such unvested Options (the "Remaining
Amount"), any surviving corporation or an
Affiliate of such surviving corporation shall
assume or continue the Remaining Amount, or
substitute similar Options for the Remaining
Amount. If the surviving corporation or an Affiliate
of such surviving corporation refuses to assume
or continue the Remaining Amount, or substitute
similar Options for the Remaining Amount, then
with respect to any person who was providing
services as an Employee, Director or Consultant
immediately prior to the consummation of the
Change of Control, then immediately prior to the
consummation of the Change of Control such
Remaining Amount shall be fully vested and
exercisable and such Options shall be terminated if
not exercised prior to the consummation of the
Change of Control. If, following a Change of
Control, the surviving corporation or its
Affiliates choose to assume or continue the Remaining
Amount, or substitute similar Options for the
remaining amount and any person then performing
services as an Employee, Director, or Consultant
is involuntarily terminated for reason other than
Cause or voluntary terminates for Good Reason
within one (1) year of such Change of Control,
then upon such termination any Options still
outstanding shall be fully vested and exercisable and
such Options shall be terminated if not exercised
within thirty (30) days of such termination.
For the purposes of this plan: (i) "Change in Control"
means: (1) a dissolution, liquidation or sale
of substantially all of the assets of the Company;
(2) a merger or consolidation in which the
Company is not the surviving corporation (other
than a merger solely for the purpose of changing
the state of incorporation); or (3) a reverse
merger in which the Company is the surviving
corporation but the shares of the Company's common
stock outstanding immediately preceding
the merger are converted by virtue of the merger
into other property, whether in the form of
securities, cash or otherwise; (ii) "Cause" means:
(1) an Optionee"s willful dishonesty towards,
fraud upon, crime against, deliberate or attempted
injury or bad faith action with respect to the
Company; or (2) Optionee's conviction for any felony
crime; (iii) "Good Reason" means: (1) a
material reduction in compensation; (2) a relocation of
the Optionee's principal worksite to a
location more than sixty (60) miles from Optionee's
pre-Change of Control worksite; or (3) for an
executive officer, a material reduction in
responsibilities or authority as in effect before the
Change in Control.
12. Time of Granting Options. The date of grant
of an Option shall, for all purposes, be the
date on which the Board makes the determination
granting such Option. Notice of the
determination shall be given to each Employee or
Consultant to whom an Option is so granted
within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may
amend or terminate the Plan from time-
to-time in such respects as the Board may deem
advisable; provided that, the following revisions
or amendments shall require approval of the
Stockholders of the Company in the manner
described in Section 17 of the Plan: (i) any increase
in the number of Shares subject to the Plan,
other than in connection with an adjustment under
Section 11 of the Plan; (ii) any change in the
designation of the class of Employees or Consultants
eligible to be granted Options; (iii) any
material increase in the benefits accruing to
participate under the Plan.
(b) Stockholder Approval. In the event any
amendment requiring Stockholder approval
under Section 13(a) of the Plan is made, such
Stockholder approval shall be solicited as described
in Section 17 of the Plan.
(c) Effect of Amendment or Termination. Any such
amendment or termination of the Plan
shall not affect Options already granted
and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated, unless mutually
agreed otherwise between the
Optionee and the Board, which agreement must be in writing
and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares
shall not be issued pursuant to the
exercise of an Option unless the exercise of such
Option and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant
provisions of law, including, without
limitation, the Securities Act of 1933, as amended,
the Securities and Exchange Act of 1934, as
amended, the rules and regulations promulgated
thereunder, state securities laws, and the
requirements of any stock exchange upon which the
Shares may then be listed, and shall be
further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company
may require the person exercising such
Option to render to the Company a written statement
containing such representations and
warranties as, in the opinion of counsel for the
Company, may be required to ensure compliance
with any of the aforementioned relevant provisions
of law, including a representation that the
Shares are being purchased only for investment and
without any present intention to sell or
distribute such Shares, if, in the opinion of counsel
for the Company, such representation is
required.
15. Reservation of Shares. The Company, during
the term of this Plan, will at all times
reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements
of the Plan.
16. Option Agreement. Options shall be evidenced
by written option agreements in such
form as the Board shall approve.
17. Stockholder Approval. Continuance of the
Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months
before or after the date the Plan is
adopted. If such Stockholder approval is obtained at
a duly held Stockholders' Meeting, it may be
obtained by the affirmative vote of the holders of a
majority of the Share of the Company present
or represented and entitled to vote thereon. In the
case of approval by written consent, it must be
obtained by the written consent of all stockholders
of the Company, or by written consent of a
smaller percentage of stockholders but only if the
Board determines, on the basis of advice of the
Company's legal counsel, that the written consent of
such a smaller percentage of stockholders will
comply with all applicable laws and will not adversely
affect the qualifications of the Plan under
Section 422 of the Code.
18. Information to Optionees. The Company shall
provide to each Optionee, during the
period for which such Optionee has one or more Options
outstanding, copies of all annual reports
and other information which are provided to all
stockholders of the Company. The Company shall
not be required to provide such information if the
issuance of Options under the Plan is limited to
key employees whose duties in connection with the
Company assure their access to equivalent
information.
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