Exhibit 10.1
 
STOCK OPTION AGREEMENT
 
THIS STOCK OPTION AGREEMENT is made this ____ day of ________________, 200__ by
and between UNIVERSAL CAPITAL MANAGEMENT, INC., a Delaware corporation (the
"Company") and _________________________________________, an individual (the
"Optionee").
 
WITNESSETH:
 
Optionee is the ______________ of Company. Company desires to grant to Optionee
options to purchase shares of its common stock, par value $0.001 each
("Shares").
 
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, each intending
to be legally bound hereby, agree as follows:
 
1.  Definitions. As used in this Agreement, the following terms shall have the
following respective meanings:
 
(a)  The term "Affiliate" shall mean a corporation which is a parent corporation
or a subsidiary corporation with respect to Company within the meaning of
Section 425(e) or (f) of the Code.
 
(b)  The term "Code" shall mean the Internal Revenue Code of 1986, as amended.
 
(c)  The term "Expiration Date" shall mean 5:00 p.m., local time in Wilmington,
Delaware on ____________, 20__.
 
(d)  The term "ISO" shall mean an incentive stock option within the meaning of
the Code, for Federal income tax purposes.
 
(e)  The term "NSO" shall mean an option which is not an ISO.
 
(f)  The term the "Plan" shall mean that certain 2006 Equity Incentive Plan
adopted by the Board of Directors on April 4, 2006 and the stockholders on May
8, 2006.
 
(g)  The term "Termination Date" shall mean 5:00 p.m. local time in Wilmington,
Delaware on the day the Option terminates in accordance with the terms of
Paragraph 5.
 
 
 

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(h)  The term "transfer" shall mean any sale, assignment, transfer, gift,
donation, or other disposition, or any pledge, deposit, or placing of an
encumbrance upon.
 
(i)  The term "Fair Market Value" of Shares means (i) if the Shares are then
listed and traded on a registered national or regional securities exchange or
quoted on The National Association of Securities Dealers Automated Quotation
System, the average of the high and low sales price of a Share on such exchange
or quotation system on the date of a grant or issuance of an Option, or (ii) if
the Shares are not traded on a registered national or regional securities
exchange or quoted on such a quotation system, the fair market value as
determined by the Committee, based on such valuation methods as the Committee
determines to be appropriate as long as such methods are permitted by the
Investment Company Act of 1940, as amended; provided, however, that in no event
shall Fair Market Value be less than that determined under section 409A of the
Code.
 
(j)  The term "Committee" shall mean the Board of Directors or the Committee of
the Board of Directors designated by the Board to administer the Plan.
 
2.  Grant of Option. The Company hereby grants to Optionee the right and option
(the "Option") to purchase _________ Shares (the "Option Shares"), on the terms
and subject to the conditions hereinafter set forth in this Agreement. [All
Options are and shall be deemed to be ISOs issued under and pursuant to the
Plan.] In the event of any conflict between this Agreement and the terms of the
Plan, the terms of the Plan shall govern.
 
3.  Option Price. The purchase price to be paid, if the Option is exercised,
shall be ____________________ ($_______) per share (the "Option Price"), which
shall be paid at the Closing (as hereinafter defined) in the manner provided in
this Agreement.
 
4.  Exercise of Option. The following provisions shall apply to exercise of the
Option:
 
(a)  Optionee shall exercise the Option by sending a notice of election (the
"Notice of Election") to the Company in the form attached hereto and
incorporated herein by reference. The Notice of Election shall be in writing,
shall be sent to the Company at the address and in the manner set forth in
subparagraph 12(c) hereof (unless such address has been changed in the manner
set forth in such subparagraph), and shall contain the information about the
Closing set forth in subparagraph 10(a) hereof.
 
(b)  If exercised, the Option may be exercised as to some or all of the Option
Shares, and if with respect to some of the Option Shares, then the Option shall
continue until the Termination Date with respect to the remaining Option Shares.
 
 
(2)

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(c)  The Option may be exercised at any time prior to the Expiration Date;
provided, however, that the date and time of the exercise of the Option shall be
that day and time when the Notice of Election is actually received by the
Company.
 
(d)  Payment for Shares shall be made as provided in Section 7.1.3 of the Plan.
 
(e)  Subject to the provisions of this Agreement, Optionee will become obliged
to purchase the Option Shares on the terms and conditions set forth in this
Agreement and the Notice of Election upon the sending by Optionee of the Notice
of Election.
 
5.  Term.
 
(a)  Except as provided in subparagraph (b) of this Paragraph 5, the Option will
terminate at 5:00 p.m. local time in Wilmington, Delaware on the Expiration
Date.
 
(b)  In the event of Optionee’s death or disability or if Optionee is an
Employee (as defined in the Plan) of Company, the termination of Optionee’s
employment with Company, the provisions of Section 7.1.4 of the Plan shall
govern.
 
6.  Change or Exchange of Capital Stock.
 
(a)  In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure
affecting the Stock, the provisions of Section 4.1 of the Plan shall govern.
 
(b)  In connection with any event described in this Section 6 or a sale by the
Company of all or substantially all of its assets, the Committee may provide, in
its sole discretion, for the cancellation of this Award Agreement in exchange
for a payment in cash or other property equal to the Fair Market Value of the
Option issuable on exercise of this cancelled Award Agreement less the exercise
price or purchase price hereof.
 
(c)  No such adjustment shall be made, however, by reason of the issuance of
shares of common stock of the Company for cash, property, or services; by way of
stock options, stock warrants, subscription rights; or otherwise.
 
7.  Condition Precedent to Exercise. Notwithstanding anything to the contrary
contained in this Agreement, the Option shall first become exercisable with
respect to the following number of Shares on the dates indicated:
 
 
(3)

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Date  ISOs   NSOs  Total

 
Total
 
8.  Securities Laws Compliance Procedures. Optionee represents and acknowledges
that (i) he or she knows, or has had the opportunity to acquire, all information
concerning the business, affairs, financial condition and prospects of the
Company which he or she deems relevant to making a fully informed decision
regarding the consummation of the transactions contemplated hereby and (ii) he
or she has been supplied with copies of the Company's latest annual report on
Form 10-K, the Company's latest quarterly report on Form 10-Q, Company's latest
proxy statement, and Company's latest annual report to shareholders. Without
intending any limitation on the generality of the foregoing, Optionee
understands and acknowledges that neither the Company nor anyone acting on its
behalf has made any representations or warranties other than those contained
herein respecting the Company or the future conduct of Company's business, and
Optionee has not relied upon any representations or warranties other than those
contained herein in the belief that they were made on behalf of the Company.
Optionee further understands and acknowledges that, if Optionee is an Employee
(as defined in the Plan) of the Company, the Fair Market Value of the Shares,
and thus the value of the Option will depend, in part on the personal efforts
and skills of Optionee in working for the Company.
 
9.  Transfers. The Option is not assignable or otherwise transferable by the
Optionee except by will, by the laws of descent and distribution or pursuant to
a qualified domestic relations order. During the life of the Optionee, an Option
shall be exercisable only by the Optionee.
 
Any attempt at assignment, transfer, pledge or disposition of the Option
contrary to the provisions hereof or the levy of any execution, attachment or
similar process upon the Option shall be null and void and without force or
effect. Any exercise of the Option by a person other than Optionee shall be
accompanied by appropriate proofs, satisfactory in form and substance to the
Company, of the right of each person to exercise the Option.
 
10.  Closing.
 
(a)  The Closing shall be held at a date and time to be selected by Optionee in
the Notice of Election; provided, however, that the date specified in the Notice
of Election shall not be more than forty-five (45) days after the sending of
such Notice of Election.
 
(b)  Closing shall be held at the chief executive offices of the Company, or
such other place as shall be agreed upon by the parties.
 
 
(4)

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(c)  At Closing, the Company shall deliver or cause to be delivered to Optionee
certificates for all of the Option Shares to be purchased by Optionee pursuant
to the Notice of Election issued to and registered in the name of Optionee, and
with all required transfer tax stamps, if any, affixed.
 
(d)  At Closing Optionee shall pay to Company the full Option Price required to
be paid for all of the Option Shares to be purchased by Optionee pursuant to the
Notice of Election.
 
(e)  At Closing, at the request of the Company, Optionee shall deliver to the
Company a certificate signed by Optionee certifying to the truth and correctness
as of the date of Closing of each of the representations, warranties,
acknowledgments, agreements, and confirmations set forth in Paragraph 8 of this
Agreement.
 
11.  No Rights As Shareholder Pending Exercise. Optionee shall not have any
rights as a shareholder of the Company as a result of the existence of the
Option until and unless he or she shall acquire some or all of the Option
Shares. Without intending any limitation on the generality of the foregoing,
Optionee shall not be entitled to vote on any matter presented to the
Shareholders of the Company nor to receive any dividends or other distributions
made or declared by the Company, the record date or ex-dividend date of which,
respectively, precedes the date on which some or all of the Option Shares are
acquired pursuant hereto.
 
12.  Miscellaneous.
 
(a)  Indulgences, Etc. Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
 
(b)  Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement (including, without limitation,
provisions concerning limitations of actions), shall be governed by and
construed in accordance with the laws of the State of Delaware, notwithstanding
any conflict-of-laws doctrines of such jurisdiction to the contrary, and without
the aid of any canon, custom or rule of law requiring construction against the
draftsman.
 
 
(5)

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(c)  Notices. All notices, requests, demands and other communications required
or permitted under this Agreement shall be in writing and shall be deemed to
have been duly given, made and received when personally delivered or when
deposited in the United States mails, registered or certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
 
(i)  If to Optionee:
 
___________________________
___________________________
___________________________
Attention: _________________________

 
(ii)  If to Company:
 
Universal Capital Management, Inc.
2601 Annand Drive
Suite 16
Wilmington, DE 19808

 
In addition, notice by mail shall be by air mail if posted outside of the
continental United States. Either party may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this subparagraph (c) for the
giving of notice.
 
(d)  Binding Nature of Agreement; No Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representa-tives, successors and assigns, except that neither party may
assign or transfer its rights nor delegate its obligations under this Agreement
without the prior written consent of the other party hereto.
 
(e)  Provisions Separable. The provisions of this Agreement are independent of
and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
 
(f)  Entire Agreement. This Agreement contains the entire understanding between
the parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained. The
express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof. This Agreement may
not be modified or amended other than by an agreement in writing.
 
 
(6)

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(g)  Paragraph Headings. The Paragraph and subparagraph headings in this
Agreement have been inserted for convenience of reference only; they form no
part of this Agreement and shall not affect its interpretation.
 
(h)  Gender, Etc. Words used herein, regardless of the number and gender
specifically used, shall be deemed and con-strued to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
 
(i)  Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and Holidays;
provided, however, that if the final day of any time period falls on a Saturday,
Sunday or Holiday, then the final day shall be deemed to be the next day which
is not a Saturday, Sunday or Holiday. For purposes of this subparagraph (i), the
term "Holiday" shall mean a day, other than a Saturday or Sunday, on which
national banks with branches in the State of Delaware are or may elect to be
closed.
 
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
 

ATTEST:     UNIVERSAL CAPITAL MANAGEMENT, INC.               By:

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Secretary    

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Michael D. Queen, President         [Corporate Seal]               WITNESS:    
         

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(SEAL)

 
 
 
(7)

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NOTICE OF ELECTION
 
The undersigned and Universal Capital Management, Inc. (the "Company") are
parties to that certain Stock Option Agreement dated _____________________.
Pursuant to the terms thereof, the undersigned hereby exercises his/her option
to purchase ____________ shares of the common stock, (the "Shares") par value
$0.001 per Share of the "Company". Closing hereunder shall be held at the chief
executive offices of the Company at _____ _.m., on ____________________ ___,
________.
 
Please register the Shares in the name of the undersigned and use the address
set forth herein as the registered address of the undersigned.
 
[Cross out this paragraph if not applicable.]
 
I understand that the Shares have not been registered under the Securities Act
of 1933, as amended (the "Act") or under any state securities law, and the
Company is under no obligation to do so. I understand that the Shares may not be
resold or otherwise transferred in the absence of such applicable registrations
or exemptions from the registration requirements. I understand that I may have
to hold the Shares for the indefinite future. I understand that the Shares are
"restricted securities" within the meaning of Rule 144 promulgated under the Act
and the Company has no obligation to make any information available or to file
any reports to permit sales to be made under such rule. The undersigned
understands that the Share certificate shall bear a restrictive legend with
respect to the transferability of the Shares.
 
The undersigned represents and warrants to the Company that he or she (a) has
been advised and understands that the Shares may not be transferred without
compliance with all applicable Federal and state securities laws; and (b) has
had all material information about the Company's business and financial
condition made available to him prior to exercise of the Option, and that he or
she was afforded the opportunity to ask questions of and receive answers from
the officers and directors of the Company with respect to the Company's business
affairs and prospects.
 
The undersigned represents and warrants that he is acquiring the Shares for his
or her own account as principal for investment and not with a view to resale or
distribution, and that he has such knowledge and experience in financial and
business matters as will enable him or her to evaluate the merits and risks of
the proposed investment in the Shares.
 
 

       

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Name:               Address:

 
 
 
 

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