PERPETUAL INDUSTRIES INC.
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
2014 Stock Option Plan.

Optionee:

Address:

Fax and/or email:

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:

 

Option Price per Share:

 

Total Number of Shares Granted:

 

Total Option Price:

 

Type of Option: Nonqualified Stock Option

Term/Expiration Date: ______________________ years after Date of Grant

Vesting Schedule: The Option shall vest immediately.

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Optionee’s Initials

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PERPETUAL INDUSTRIES INC.
2014 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

The attached Notice of Grant (the “Notice of Grant”) is expressly incorporated
herein and made a part hereof.

This STOCK OPTION AGREEMENT (the “Agreement”), dated as of the Date of Grant set
forth in the Notice of Grant, is made by and between PERPETUAL INDUSTRIES INC.,
a Nevada corporation (the “Corporation”), and the Optionee set forth in the
attached Notice of Grant. The term Optionee 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 2014 Stock Option Plan (the “Plan”),
the Corporation, acting through the Administrator, approved the issuance to the
Optionee of the option to purchase shares of Common Stock in the Corporation,
upon the terms and conditions set forth hereinafter and in the Notice of Grant.

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 Administrator hereby
grants to the Optionee the Option set forth in the Notice of Grant 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
set forth in the Notice of Grant (the “Optioned Shares”). 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
Grant 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.

3.

Time of Exercise. Shares may be purchased at any time thereafter prior to the
expiration or termination of the Option.

4.

Procedure for Exercise.

(a)

The Option may be exercised in whole or in part but in any case in a quantity
that is a multiple of 1,000 shares, by delivery of a written notice in the form
attached as Exhibit A hereto (the “Notice”) from the Optionee to the
Administrator, which Notice shall be completed in accordance with the provisions
of the Plan, including without limitation the Plan’s sections 5, 6, and 7 and be
accompanied by an amount and form of payment approved in advance by the
Administrator.

(b)

The Corporation shall issue a Stock Certificate in the name of the Optionee, or
such other person exercising the Option as permitted under the Plan’s section
6.4(d), for the Optioned Shares as soon as practicable after receipt of the
Notice and payment. The Optionee may instruct that the shares be issued in the
name of a designated entity of Optionee’s choice, subject to the approval of the
Administrator, by so indicating in section 1 of the Notice.

(c)

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.

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(d)

At the Administrator’s discretion further to the Plan’s section 5.2 and in any
case 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 Administrator 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.

(e)

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 Administrator, 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.

(f)

Subject to the provisions of this Agreement and the Plan and subject to
compliance with any applicable securities laws and regulations, the Options
shall be exercisable, in full or in part, at any time after vesting, until
termination, provided that the Optionee shall be precluded from selling,
transferring or otherwise disposing of any Optioned Shares during the six months
immediately following the grant of the Options, and shall be limited to a resale
volume not exceeding 1% of the Company’s issued and outstanding stock in any
three month period. If less than all of the Optioned Shares included in the
vested portion of any Options are purchased, the remainder or a portion thereof
may be purchased at any subsequent time prior to the Expiration Date. Only
Optioned Shares in a multiple of 1,000 shares may be issued pursuant to the
exercise of any Options, and to the extent that any Option covers less than
1,000 Optioned Shares, it is not exercisable.

5.

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
Administrator 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.

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Optionee’s Initials

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6.

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 fax or email, (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 fax number or email address) 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 faxed or emailed, (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.

7.

Representations and Warranties. The Optionee hereby represents and warrants to
and covenants with the Corporation (which representations, warranties and
covenants shall survive the termination of this Agreement) that:

(a)

the Optionee is a director, officer, Employee or Consultant of the Corporation
or Subsidiary or Parent of the Corporation;

(b)

if the Optionee is a consultant and resident in Canada, the Optionee:

(i)

is engaged to provide services to the Corporation or a related entity of the
Corporation, other than services provided in relation to a distribution,

(ii)

provides the services under a written contract with the Corporation or a related
entity of the issuer, and

(iii)

spends or will spend a significant amount of time and attention on the affairs
and business of the issuer or a related entity of the issuer;

(c)

if an Employee or Consultant of the Corporation or Subsidiary or Parent of the
Corporation, the Optionee is a bona fide Employee or Consultant of the
Corporation or Subsidiary or Parent of the Corporation;

8.

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.

9.

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.

10.

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.

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11.

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.

12.

Counterparts; Fax or Email 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. Fax or email
execution and delivery of this Agreement is legal, valid and binding execution
and delivery for all purposes.

13.

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.

14.

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.

15.

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.

16.

Definitions. All terms capitalized but not defined herein or in the Notice of
Grant shall have the meaning ascribed to them in the Plan.

IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of
the date first written above.

PERPETUAL INDUSTRIES INC.

By:    _____________________________________________

          Name:

          Title:

Optionee:

______________________________

Name:

NOTE RE: EXHIBITS

EXHIBITS A AND B ARE TO BE SIGNED WHEN OPTIONS
ARE EXERCISED, NOT WHEN OPTION AGREEMENT IS SIGNED.

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EXHIBIT A

PERPETUAL INDUSTRIES INC.

2014 STOCK OPTION PLAN

EXERCISE NOTICE

PERPETUAL INDUSTRIES INC.

Attention:           Corporate Secretary

1.

Exercise of Option. Effective as of
 ___________________________________________, 20_______, the undersigned (the
“Optionee”) hereby elects to exercise the Optionee’s option to purchase:

___________________shares [quantity must be a multiple of 1,000]

of the Common Stock (the “Shares”) of PERPETUAL INDUSTRIES INC. (the
“Corporation”) under and pursuant to the 2014 Stock Option Plan (the “Plan”) and
the Stock Option Agreement between the Optionee and Corporation dated
_____________________, 20__(the “Stock Option Agreement”). The Shares shall be
issued in the name of
_________________________________________________________________.

2.

Representations of the Optionee. The Optionee acknowledges that the Optionee has
received, read and understood the Plan and the Stock Option Agreement (including
Notice of Grant) and agrees to abide by and be bound by their terms and
conditions.

3.

Tax Consultation. The Optionee has in particular reviewed the 2014 Stock Option
Plan’s section 7 captioned “Tax Effect on Optionee, and Stock Withholding to
Satisfy Withholding Tax Obligations” and 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.

4.

Successors and Assigns. The Corporation may assign any of its rights under the
Stock Option Agreement to single or multiple assignees (who may be 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.

5.

Interpretation. Any dispute regarding the interpretations of this Agreement
shall be submitted by the Optionee or by the Corporation forthwith to the
Administrator, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Administrator shall be final and binding on
the Corporation and on the Optionee.

6.

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.

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7.

Delivery of Payment.

(a)

The Optionee herewith delivers to the Corporation the full Option Price for the
Shares in accordance with 2014 Stock Option Plan section 6.2, in the following
manner:

(b)

The Optionee herewith delivers to the Corporation the full Withholding Tax in
accordance with 2014 Stock Option Plan section 7.2, in the following manner:

8.

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

 

PERPETUAL INDUSTRIES INC.

 

 

 

 

 

 

Signature

 

Signature

 

 

 

 

 

 

Printed Name

 

Printed Name

 

 

 

 

 

 

 

 

Printed Title

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EXHIBIT B

PERPETUAL INDUSTRIES INC.

2014 STOCK OPTION PLAN

INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:

 

CORPORATION:  PERPETUAL INDUSTRIES INC.

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 Stock 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.

(c)

Pursuant to section 5.2 of the 2014 Stock Option Plan and 4(d) of the Stock
Option Agreement, the Optionee makes the following additional representations:

Signature of Optionee: _____________________________

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