EXHIBIT 10.3
FORM OF NQSO AGREEMENT FOR NON-EMPLOYEE DIRECTORS
GATEWAY ENERGY CORPORATION
2007 EQUITY INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
Date of Grant:
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Number of Shares of Common Stock to
Which Option Relates:
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Option Exercise Price per Share: $
(Representing 100% of the Fair Market Value ---------------
on the Date of Grant)
This Agreement dated ____________________, is made by and between
Gateway Energy Corporation, a Delaware corporation (the "Company"), and
________________ (the "Optionee").
RECITALS:
A. Effective May 23, 2007, the Company's shareholders approved the
Gateway Energy Corporation 2007 Equity Incentive Plan (the "Plan") pursuant to
which the Company may, from time to time, grant options to key employees and
non-employee directors of the Company to purchase shares of common stock in the
Company.
B. The Optionee is an non-employee director of the Company and the
Company desires to grant to the Optionee a nonqualified share option to purchase
shares of common stock in the Company on the terms and conditions reflected in
this Option Agreement, the Plan and as otherwise established by the Committee.
AGREEMENT:
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties agree as follows:
1. Incorporation of Plan. All provisions of this Option Agreement and
the rights of the Optionee are subject in all respects to the provisions of the
Plan and the powers of the Committee therein provided. Capitalized terms used in
this Option Agreement but not defined will have the meaning set forth in the
Plan.
2. Grant of Nonqualified Share Option. As of the Date of Grant
identified above, the Company grants the Optionee, subject to this Agreement and
the Plan, the right, privilege and option (the "Option") to purchase, in one or
more exercises, all or any part of that number of Shares identified above
opposite the heading "Number of Shares to Which Option Relates" (the "Option
Shares"), at the per Share price specified above opposite the heading "Option
Exercise Price per Share".
3. Consideration to the Company. In consideration of the granting of
this Option by the Company, the Optionee agrees to render faithful and efficient
services as a non- employee director of the Company. Nothing in this Agreement
or in the Plan will confer upon the Optionee any right to continue as a
non-employee director of the Company.
4. Exercisability of Option. During the Optionee's lifetime, this
Option may be exercised only by the Optionee. This Option, except as
specifically provided elsewhere under the terms of the Plan, shall vest and
become exercisable as follows:
Years Elapsed from Date of Grant Percentage Exercisable
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[insert vesting schedule]
For purposes of this Section 4, a year shall mean a period of 365 days
(or 366 days in the event of a leap year). Notwithstanding the above Option
vesting schedule, this Option will become fully exercisable upon the Optionee's
death or Disability provided the Option has not otherwise expired, been
cancelled or terminated.
5. Method of Exercise. Provided this Option has not expired, been
terminated or cancelled in accordance with the terms of the Plan, the portion of
this Option which is otherwise exercisable pursuant to Section 4 may be
exercised in whole or in part, from time to time by delivery to the Company or
its designee a written notice which will:
(a) set forth the number of Shares with respect to which the Option is
to be exercised;
(b) if the person exercising this Option is not the Optionee, be
accompanied by satisfactory evidence of such person's right to exercise
this Option; and
(c) be accompanied by payment in full of the Option Exercise Price in
the form of cash, or a certified bank check made payable to the order of
the Company or any other means allowable under the Plan which the Company
in its sole discretion determines will provide legal consideration for the
Shares.
6. Expiration of Option. Unless terminated earlier in accordance with
the terms of this Option Agreement or the Plan, the Option granted herein will
expire at 5:00 P.M., Central Standard Time, on the 5th Anniversary of the Date
of Grant (the "Expiration Date"). If the Expiration Date is a day on which the
Company is not open for business, then the Option granted herein will expire,
unless earlier terminated in accordance with the terms of this Option Agreement
or the Plan, at 5:00 P.M., Central Standard Time, on the first business day
before such Expiration Date.
7. Effect of Separation from Service. If the Optionee ceases to be a
member of the Board of Directors of the Company for any reason, including
cessation by death or Disability, the effect of such termination on all or any
portion of this Option is as provided below. Notwithstanding anything below to
the contrary, in no event may the Option be exercised after the Expiration Date.
(a) If the Optionee ceases to be a member of the Board of Directors
within the Option Period for Cause, the Option will immediately be
forfeited as of the time of such termination.
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(b) Except as provided in Section 7(d) below, if the Optionee ceases
to be a member of the Board of Directors due to the Optionee's voluntary
resignation before expiration of the Optionee's term as a member of the
Board of Directors, the Option may be exercised by the Optionee at any time
prior to 5:00 P.M., Central Standard Time, on the ninetieth (90th) calendar
day following the Optionee's cessation as a member of the Board of
Directors. If such ninetieth (90th) day shall not be a business Day, then
the Option shall expire at 5:00 P.M., Central Standard Time, on the first
(1st) business day immediately following such ninetieth (90th) day
(c) If the Optionee ceases to be a member of the Board of Directors
due to the expiration of the term of office for such Optionee and such
Optionee is not then re-elected as a member of the Board of Directors, or
is removed as a member of the Board of Directors during such Optionee's
term without Cause, the Option may be exercised by the Optionee at any time
prior to 5:00 P.M., Central Standard Time, on the third (3rd) anniversary
of the last date of the Optionee's term of office. If such day shall not be
a business day, then the Option shall expire at 5:00 P.M., Central Standard
Time, on the first (1st) business day immediately following such third
(3rd) anniversary.
(d) If the Optionee dies or becomes Disabled (A) while he or she is a
member of the Board of Directors, or (B) within the ninety (90) day period
referred to in Section 7(b) above, or (C) within the three-year period
referred to in Section 7(c) above, the Option may be exercised by the
Optionee or the Optionee's Beneficiaries entitled to do so at any time
prior to 5:00 P.M., Central Standard Time, on the 365th calendar day
following the date of the Optionee's death or Disability, if (in the case
of (C) above) such date is later than the date provided for in Section
6.1.3 If the 365th day is not a business day, then the Option shall expire
at 5:00 P.M., Central Standard Time, on the first (1st) business day
immediately following such 365th day.
8. Notices. Any notice to be given under the terms of this Agreement
to the Company will be addressed to the Secretary of the Company at ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and any notice to be
given to the Optionee will be addressed to him or her at the address given
beneath his or her signature hereto. By a notice given pursuant to this Section
8, either party may hereafter designate a different address for notices to be
given to him or her. Any notice which is required to be given to the Optionee
will, if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
or her status and address by written notice under this Section 8. Any notice
will be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
9. Nontransferability. Except as otherwise provided in this Agreement
or in the Plan, the Option and the rights and privileges conferred hereby will
not be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and will not be subject to execution, attachment,
or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Option, or of any right or privilege conferred hereby,
or upon the levy of any attachment or similar process upon the rights and
privileges conferred hereby, contrary to the provisions hereby, this Option and
the rights and privileges conferred hereby will immediately become null and
void.
10. Status of Optionee. The Optionee shall not be deemed a shareholder
of the Company with respect to any of the Shares subject to this Option, except
for those Shares that have been purchased and issued to him or her. The Company
shall not be required to issue or transfer any certificates for Shares purchased
upon exercise of this Option until all applicable requirements of law have been
complied with and, if applicable, such Shares shall have been duly listed on any
securities exchange on which the Shares may then be listed.
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11. Titles. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of this Agreement.
12. Amendment. This Agreement may be amended only by a writing
executed by the parties hereto which specifically states that it is amending
this Agreement.
13. Governing Law. The laws of the State of Delaware will govern the
interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.
14. Binding Effect. Except as expressly stated herein to the contrary,
this Agreement will be binding upon and inure to the benefit of the respective
heirs, legal representatives, successors and assigns of the parties hereto.
This Agreement has been executed and delivered by the parties hereto.
The Company: The Optionee:
GATEWAY ENERGY CORPORATION
By: /s/
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Name:
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Title: Address of the Optionee:
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