PEDEVCO CORP.
Exhibit 99.2
2021 EQUITY INCENTIVE PLAN
Unless
otherwise defined herein, the terms in the Stock Option Agreement
(the “Option
Agreement”) have the same meanings as defined in the
PEDEVCO CORP. 2021 Equity Incentive Plan (as amended from time to
time)(the “Plan”).
I.
NOTICE OF STOCK OPTION GRANT
Optionee: ________________
Address: ___________________________________
You
have been granted an Option to purchase Common Stock of the Company
(the “Option”),
subject to the terms and conditions of the Plan and this Option
Agreement, as follows:
Grant
Date: ________________
Vesting
Commencement Date: ________________
Exercise
Price per Share: $________________
Total
Number of Shares Granted: ________________
Total
Exercise Price: $________________
Type
of Option: ________________
Expiration Date: ________________
Vesting
Schedule: ________________.
To the
extent vested, this Option will be exercisable for three (3) months
after Optionee ceases to be a Service Provider, unless termination
is due to Optionee’s death or Disability, in which case this
Option will be exercisable for twelve (12) months after Optionee ceases to be a
Service Provider. In the event of termination due to
Optionee’s death, the Company shall use commercially
reasonable efforts to notify Optionee’s estate of the
exercisability of the Option following Optionee’s
death. Notwithstanding the foregoing sentence, in no
event may this Option be exercised after any termination of the
Optionee as a Service Provider determined by the Company’s
Board to be for Cause or after the Expiration Date as provided
above and this Option may be subject to earlier termination as
provided in the Plan.
“Cause”
has the meaning ascribed to such term or words of similar import in
Optionee’s written employment or service contract with the
Company or its Parent or any Subsidiary and, in the absence of such
agreement or definition, means Optionee’s (i) conviction
of, or plea of nolo contendere to, a felony or any other crime
involving moral turpitude; (ii) fraud on or misappropriation
of any funds or property of the Company or its subsidiaries, or any
affiliate, customer or vendor; (iii) personal dishonesty,
incompetence, willful misconduct, willful violation of any law,
rule or regulation (other than minor traffic violations or similar
offenses), or breach of fiduciary duty which involves personal
profit; (iv) willful misconduct in connection with
Optionee’s duties or willful failure to perform
Optionee’s responsibilities in the best interests of the
Company or its subsidiaries; (v) illegal use or distribution
of drugs; (vi) violation of any material rule, regulation,
procedure or policy of the Company or its subsidiaries, the
violation of which could have a material detriment to the Company;
or (vii) material breach of any provision of any employment,
non-disclosure, non-competition, non-solicitation or other similar
agreement executed by Optionee for the benefit of the Company or
its subsidiaries, all as reasonably determined by the
Company’s Board, which determination will be
conclusive.
Legends.
(a) All
certificates representing the Shares issued upon exercise of this
Option shall, prior to such date as the Plan and Common Stock
hereunder are covered by a valid Form S-8 or similar U.S. federal
registration statement, where applicable, have endorsed thereon the
following legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY BE
OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE
RELEVANT PROVISIONS OF U.S. FEDERAL, STATE AND FOREIGN SECURITIES
LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION
UNDER U.S. FEDERAL, STATE AND FOREIGN SECURITIES LAWS IS NOT
REQUIRED.
(b) If
the Option is an incentive stock option (ISO), then the following
legend will be included:
THE
SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED UPON EXERCISE OF
AN INCENTIVE STOCK OPTION, AND THE COMPANY MUST BE NOTIFIED IF THE
SHARES SHALL BE TRANSFERRED BEFORE THE LATER OF THE TWO (2) YEAR
ANNIVERSARY OF THE DATE OF GRANT OF THE OPTION OR THE ONE (1) YEAR
ANNIVERSARY OF THE DATE ON WHICH THE OPTION WAS EXERCISED. THE
REGISTERED HOLDER MAY RECOGNIZE ORDINARY INCOME IF THE SHARES ARE
TRANSFERRED BEFORE SUCH DATE.
II.
AGREEMENT
1.
Grant of Option.
The Administrator grants to the Optionee named in the Notice of
Stock Option Grant in Part I of this Option
Agreement, an Option to purchase the number of Shares set forth in
the Notice of Stock Option Grant, at the exercise price per Share
set forth in the Notice of Stock Option Grant (the
“Exercise
Price”), and subject to the terms and conditions of
the Plan, which is incorporated herein by reference. In the event
of a conflict between the terms and conditions of the Plan and this
Option Agreement, the terms and conditions of the Plan
prevail.
If
designated in the Notice of Stock Option Grant as an Incentive
Stock Option, this Option is intended to qualify as an Incentive
Stock Option as defined in Code section 422. Nevertheless, to
the extent that it exceeds the $100,000 rule of Code
section 422(d), this Option will be treated as a
Nonstatutory/Non-Qualified Stock Option.
2.
Exercise of
Option.
(a)
Right to Exercise.
This Option is exercisable during its term in accordance with the
Vesting Schedule set out in the Notice of Stock Option Grant and
with the applicable provisions of the Plan and this Option
Agreement.
(b)
Method of Exercise.
This Option is exercisable by (i) delivery of an exercise notice in
the form attached as Exhibit A (the
“Exercise
Notice”) or in a manner and pursuant to procedures as
the Administrator may determine, which will state the election to
exercise the Option, the number of Shares with respect to which the
Option is being exercised, and other representations and agreements
as may be required by the Company and (ii) paying the Company in
full the aggregate Exercise Price as to all Shares being acquired,
together with any applicable tax withholding.
This
Option will be deemed to be exercised upon receipt by the Company
of a fully executed Exercise Notice accompanied by the aggregate
Exercise Price, together with any applicable tax
withholding.
No
Shares will be issued pursuant to the exercise of an Option unless
the issuance and exercise of Shares complies with applicable state
and federal laws (“Applicable
Laws”). Assuming compliance, for income tax purposes
the Shares will be considered transferred to the Optionee on the
date on which the Option is exercised with respect to the
Shares.
3.
Method of Payment.
The aggregate Exercise Price may be paid by any of the following,
or a combination thereof, at the election of the
Optionee:
(a)
cash;
(b)
check;
(c) to
the extent not prohibited by Section 402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002, a promissory note;
(d)
other shares of Common Stock, provided Shares have a Fair Market
Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option will be
exercised;
(e) by
asking the Company to withhold Shares from the total Shares to be
delivered upon exercise equal to the number of Shares having a
value equal to the aggregate Exercise Price of the Shares being
acquired;
(f) any
combination of the foregoing methods of payment; or
(g) such other
consideration and method of payment for the issuance of Shares to
the extent permitted by Applicable Laws.
4. Restrictions
on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment
of consideration for such shares would constitute a violation of
any Applicable Laws. The Company will be relieved of any liability
with respect to any delayed issuance of shares or its failure to
issue shares if such delay or failure is necessary to comply with
Applicable Laws.
5.
Non-Transferability of
Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by
Optionee. The terms of the Plan and this Option Agreement are
binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
6.
Term of Option.
This Option may be exercised only within the term set out in the
Notice of Stock Option Grant, and may be exercised during the term
only in accordance with the Plan and the terms of this
Option.
7.
Tax
Obligations.
(a)
Withholding Taxes.
Optionee agrees to arrange for the satisfaction of all Federal,
state, local and foreign income and employment tax withholding
requirements applicable to the Option exercise. Optionee
acknowledges and agrees that the Company may refuse to honor the
exercise and refuse to deliver the Shares if withholding amounts
are not delivered at the time of exercise.
(b)
Notice of Disqualifying
Disposition of ISO Shares. If the Option granted to Optionee
is an Incentive Stock Option (“ISO”),
and if Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the
date two (2) years after the Grant Date, or (ii) the date one
(1) year after the date of exercise, the Optionee must immediately
notify the Company of the disposition in writing. Optionee agrees
that Optionee may be subject to income tax withholding by the
Company on the compensation income recognized by the
Optionee.
(c)
Code Section 409A.
Under Code section 409A, an Option that was granted with a per
Share exercise price that is determined by the Internal Revenue
Service (the “IRS”)
to be less than the Fair Market Value of a Share on the Grant Date
(a “discount
option”) may be considered deferred compensation. An
Option that is a discount option may result in (i) income
recognition by the Optionee prior to the exercise of the Option,
(ii) an additional twenty percent (20%) tax, and (iii) potential
penalty and interest charges. Optionee acknowledges that the
Company cannot and has not guaranteed that the IRS will agree that
the per Share Exercise Price of this Option equals or exceeds Fair
Market Value of a Share on the Grant Date in a later examination.
Optionee agrees that if the IRS determines that the Option was
granted with a per Share exercise price that was less than the Fair
Market Value of a Share on the Grant Date, Optionee will be solely
responsible for any and all resulting tax
consequences.
8.
No Guarantee of Continued
Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING
OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE
PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER. OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES THAT THIS OPTION AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS
A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND WILL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT
OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING
OR RETAINING OPTIONEE) TO TERMINATE OPTIONEE’S RELATIONSHIP
AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
9.
Notices. All
notices or other communications which are required or permitted
hereunder will 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:
(a) if
to the Optionee, to the address (or telecopy number) set forth on
the Notice of Stock Option Grant; and
(b) if
to the Company, to its principal executive office as specified in
any report filed by the Company with the Securities and Exchange
Commission or to such address as the Company may have specified to
the Grantee in writing, Attention: Corporate
Secretary;
or to
any 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 communication will 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 fourth Business Day following the date on which
the piece of mail containing the 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.
10.
Specific
Performance. Optionee expressly agrees that the Company will
be irreparably damaged if the provisions of this Option Agreement
and the Plan are not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this
Option Agreement or the Plan by the Optionee, the Company will, 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 Administrator has the power to determine
what constitutes a breach or threatened breach of this Option
Agreement or the Plan. The Administrator’s determinations
will be final and conclusive and binding upon the
Optionee.
11.
No Waiver. No
waiver of any breach or condition of this Option Agreement will be
deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.
12.
Optionee
Undertaking. The Optionee agrees to take whatever additional
actions and execute whatever additional documents the Company 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
Option Agreement.
13.
Modification of
Rights. The rights of the Optionee are subject to
modification and termination in certain events as provided in this
Option Agreement and the Plan.
14.
Governing Law. This
Agreement is governed by, and construed in accordance with, the
laws of the State of Texas, without giving effect to its conflict
or choice of law principles that might otherwise refer construction
or interpretation of this Agreement to the substantive law of
another jurisdiction.
15.
Counterparts; Facsimile
Execution. This Option Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original,
but all of which together constitute one and the same instrument.
Facsimile execution and delivery of this Option Agreement is legal,
valid and binding execution and delivery for all
purposes.
16.
Entire Agreement.
The Plan, this Option Agreement, and upon execution, the Exercise
Notice, constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified
adversely to the Optionee’s interest except by means of a
writing signed by the Company and Optionee.
17.
Severability. In
the event one or more of the provisions of this Option Agreement
should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect any other provisions of this
Option Agreement, and this Option Agreement will be construed as if
such invalid, illegal or unenforceable provision had never been
contained herein.
18.
WAIVER OF JURY
TRIAL. THE OPTIONEE EXPRESSLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS OPTION AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
[Remainder
of page left intentionally blank.]
Optionee
acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and
accepts this Option subject to all of the terms and provisions
thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Option and fully understands all provisions
of the Option. Optionee agrees to accept as binding, conclusive and
final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee
further agrees to notify the Company upon any change in the
residence address indicated below.
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OPTIONEE
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Signature
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By:
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Print Name:
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Print Name:
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Address:
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Address:
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Date Signed:
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Date Signed:
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EXHIBIT A
2021 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Houston,
Texas 77079
Attention:
PEDEVCO CORP., Corporate Secretary
1. Exercise
of Option. Effective as of today, _____________, _____, the
undersigned (“Optionee”)
elects to exercise Optionee’s option to purchase ___________
shares of the Common Stock (the “Shares”)
of PEDEVCO CORP. (the “Company”)
under and pursuant to the PEDEVCO CORP. 2021 Equity Incentive Plan
(as amended from time to time, the “Plan”)
and the Stock Option Agreement effective ______________ (the
“Option
Agreement”).
2. Delivery
of Payment. Optionee herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option
Agreement, and any and all withholding taxes due in connection with
the exercise of the Option.
3. Representations
of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and
agrees to abide by and be bound by their terms and
conditions.
4. Rights
as Stockholder. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder
exists with respect to the Optioned Stock, notwithstanding the
exercise of the Option. Subject to the requirements
of Section
6 below, the Shares will be issued to the Optionee as
soon as practicable after the Option is exercised in accordance
with the Option Agreement. No adjustment will be made for a
dividend or other right for which the record date is prior to the
date of issuance except as provided in the Plan.
5. Tax
Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee’s purchase
or disposition of the Shares. Optionee represents that Optionee has
consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that
Optionee is not relying on the Company for any tax
advice.
6. Refusal
to Transfer. The Company will not (i) transfer on its books
any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice, or (ii)
be required to treat as owner of such Shares or to accord the right
to vote or pay dividends to any purchaser or other transferee to
whom such Shares have been so transferred.
7. Successors
and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this
Exercise Notice inures to the benefit of the successors and assigns
of the Company. Subject to the restrictions on transfer herein set
forth, this Exercise Notice is binding upon Optionee and his or her
heirs, executors, administrators, successors and
assigns.
8. Interpretation.
Any dispute regarding the interpretation of this Exercise Notice
will be submitted by Optionee or by the Company forthwith to the
Administrator for review at its next regular meeting. The
resolution of disputes by the Administrator will be final and
binding on all parties.
9. Governing
Law; Severability. This Exercise Notice is governed by, and
construed in accordance with, the laws of the State of Texas,
without giving effect to its conflict or choice of law principles
that might otherwise refer construction or interpretation of this
Exercise to the substantive law of another jurisdiction. In the
event that any provision hereof becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable or void,
this Exercise Notice will continue in full force and
effect.
10.
Optionee
Representations.
(a)
With respect to a
transaction occurring prior to such date as the Plan and Common
Stock thereunder are covered by a valid Form S-8 or similar U.S.
federal registration statement, Optionee agrees that in no event
shall Optionee make a disposition of any of the Common Stock,
unless and until: (i) Optionee shall have notified the Company of
the proposed disposition and shall have furnished the Company with
a statement of the circumstances surrounding the proposed
disposition; and (ii) Optionee shall have furnished the Company
with an opinion of counsel satisfactory to the Company to the
effect that (A) such disposition will not require registration or
qualification of such Common Stock under applicable U.S. federal,
state or foreign securities laws or (B) appropriate action
necessary for compliance with the U.S. federal, state or foreign
securities laws has been taken; or (iii) the Company shall have
waived, expressly and in writing, its rights under clauses (i) and
(ii) of this Subsection.
(b)
Optionee
understands that if a registration statement covering the Common
Stock under the Securities Act is not in effect when Optionee
desires to sell the Common Stock, Optionee may be required to hold
the Common Stock for an indeterminate period. Optionee also
acknowledges that Optionee understands that any sale of the Common
Stock which might be made by Optionee in reliance upon Rule 144
under the Securities Act may be made only in limited amounts in
accordance with the terms and conditions of that Rule.
11. Other
Documents. Optionee hereby acknowledges receipt or the right
to receive a document providing the information required by Rule
428(b)(1) promulgated under the Securities Act of 1933, as amended,
including, but not limited to, the information required by Part I
of Form S-8, if applicable.
12.
Notices. Any notice required or
permitted hereunder will be provided in writing and deemed
effective if provided in the manner specified in the Option
Agreement.
13. Further
Instruments. The parties agree to execute any further
instruments and to take any further action as may be reasonably
necessary to carry out the purposes and intent of the Option
Agreement and this Exercise Notice.
14. Entire
Agreement. The Plan and Option Agreement are incorporated
herein by reference. This Exercise Notice, the Plan, and the Option
Agreement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee’s interest except by means
of a writing signed by the Company and Optionee.
[Signature
page follows.]
2021
Stock Option Agreement
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Submitted
by:
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Accepted
by:
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OPTIONEE
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Signature
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By:
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Print Name:
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Print Name:
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Address:
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Date Received:
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2021
Stock Option Agreement
Page 9 of
9