EXHIBIT 10.3

 

INCENTIVE STOCK OPTION AGREEMENT

 

THIS INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”) is entered into and
effective as of [                   ] (the “Grant Date”) by and between
RestorGenex Corporation, a Delaware corporation (the “Company”), and
[                    ] (“Optionee”).

 

A.                                    The Company has adopted the RestorGenex
Corporation 2015 Equity Incentive Plan (as such plan may be amended from time to
time, the “Plan”) authorizing the Board of Directors (the “Board”) of the
Company, or a committee as provided for in the Plan (the Board or such a
committee to be referred to as the “Committee”), to grant stock options, among
other incentive awards, to certain individuals.

 

B.                                    The Company desires to grant an incentive
stock option to purchase shares of common stock, par value $0.001 per share, of
the Company (the “Common Stock”) to Optionee pursuant to the Plan.

 

C.                                    All of the capitalized terms used in this
Agreement not otherwise defined in this Agreement have the same respective
meanings as defined in the Plan.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the Company and Optionee agree as follows:

 

1.                                      Grant of Option; Exercise Price.  The
Company hereby grants to Optionee, upon the terms and subject to the conditions
set forth in this Agreement and the Plan, and effective as of the Grant Date, an
option (the “Option”) to purchase all or any portion of [              ] shares
(the “Option Shares”) of the Company’s Common Stock, at an exercise price of
$[       ] per share, which represents 100% of the Fair Market Value of a share
of Common Stock on the Grant Date, as determined in accordance with the Plan
(such exercise price, as adjusted from time to time pursuant to Section 5 of
this Agreement and Section 4.3 of the Plan, the “Exercise Price”).  The Option
is intended to be an “incentive stock option,” as that term is used in
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

2.                                      Vesting.  The Option shall vest and
become exercisable in [12 quarterly/                        ] equal (or as
nearly equal as possible) installments on [the last calendar day of each
calendar quarter/              ] over a [three-year/        ] period, beginning
on [              ].  [Optionee shall receive a full quarter of vesting for the
[         ] calendar quarter of [     ].]

 

[OR, IN THE CASE OF PERFORMANCE-BASED VESTING]

 

[The Option shall vest and become exercisable [                      ]].

 

3.                                      Exercise of Option.

 

3.1.                            Notice; Payment.  Subject to the terms and
conditions set forth in this Agreement, including vesting of the Option in
Section 2 of this Agreement and termination of

 

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the Option in Section 4 of this Agreement, and the Plan, the Option may be
exercised, in whole or in part, at any time and from time to time, by delivery
to the Company of written notice of the exercise of the Option, in substantially
the form as provided by the Company, stating the number of Option Shares being
purchased (the “Purchased Shares”), and accompanied by payment in full of the
total aggregate Exercise Price of the Purchased Shares.  The Exercise Price
shall be payable in full in any one of the following alternative forms:

 

(a)                                 Full payment in cash, personal check or
certified bank or cashier’s check;

 

(b)                                 Any broker assisted cashless exercise
procedure which is acceptable to the Company; or

 

(c)                                  Cashless net exercise.

 

Upon a cashless net exercise, Optionee shall receive the number of shares of
Common Stock equal to a number (as determined below) of shares of Common Stock
computed using the following formula:

 

 

X

=

 

 

Y – [

(A)(Y)

]

 

 

B

 

 

 

 

 

Where

X

=

 

the number of shares of Common Stock to be issued to Optionee.

 

 

 

 

 

 

Y

=

 

the number of Purchased Shares.

 

 

 

 

 

 

A

=

 

the Exercise Price.

 

 

 

 

 

 

B

=

 

the Fair Market Value of one share of Common Stock on the date of exercise.

 

3.2.                            Issuance of Purchased Shares; No Fractional
Shares.  Following receipt of the exercise notice and the payment referred to
above, the Company shall, as soon as reasonably practicable thereafter, cause
certificates (or book-entry notations) representing the Purchased Shares (or
such fewer number of Purchased Shares if a cashless net exercise is used) to be
delivered to Optionee either at Optionee’s address set forth in the records of
the Company or at such other address as Optionee may designate in writing to the
Company or issue and deposit the Purchased Shares for Optionee’s benefit with
any broker with which Optionee has an account relationship or the Company has
engaged to provide such services under the Plan; provided, however, that the
Company shall not be obligated to issue a fraction or fractions of a share
otherwise issuable upon exercise of the Option, and may pay to Optionee, in cash
or cash equivalent, the Fair Market Value of any such fraction or fractions of a
share as of the date of exercise. If requested by the Company in connection with
any exercise of the Option, Optionee shall also deliver this Agreement to the
Company, which shall endorse hereon a notation of the exercise and, and if the
Option is exercised in part, shall return this Agreement to Optionee.  The date
of exercise of an Option that is validly exercised shall be deemed to be the
date on which there shall have been delivered to the Company the notice referred
to in Section 3.1 of this

 

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Agreement and full payment of the Exercise Price of the Purchased Shares. 
Optionee shall not be deemed to be a holder of any Purchased Shares pursuant to
exercise of the Option until the date of issuance of a stock certificate or
book-entry notation to Optionee for such shares following payment in full for
the Purchased Shares.

 

3.3.                            Tax Withholding.  The Company is entitled to
(a) withhold and deduct from future wages of Optionee (or from other amounts
that may be due and owing to Optionee from the Company or a Subsidiary), or make
other arrangements for the collection of, all amounts the Company reasonably
determines are necessary to satisfy any and all federal, foreign, state and
local withholding and employment related tax requirements attributable to the
Option, including, without limitation, the grant, exercise or vesting of, the
Option; (b) withhold cash paid or payable or shares of Common Stock from the
shares issued or otherwise issuable to Optionee in connection with the Option;
or (c) require Optionee promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to the Option.  Shares of Common Stock issued or otherwise issuable
to Optionee in connection with the Option that gives rise to the tax withholding
obligation that are withheld for purposes of satisfying Optionee’s withholding
or employment-related tax obligation will be valued at their Fair Market Value
on the Tax Date.

 

3.4.                            Remaining Option Shares.  Option Shares will no
longer be outstanding under the Option (and will therefore not thereafter be
exercisable) following the exercise of the Option to the extent of (a) shares
used to pay the Exercise Price of an Option under the “cashless net exercise”
method (b) shares actually delivered to Optionee as a result of such exercise
and (c) any shares withheld for purposes of tax withholding.

 

4.                                      Termination of Option.

 

4.1.                            Time of Termination.  Except as provided in this
Section 4 and Section 5 of this Agreement, the Option shall terminate, no longer
be exercisable and expire at 5:00 p.m., Eastern Time, on [                  ]
(the “Time of Termination”).

 

4.2.                            Termination for Cause.  In the event Optionee’s
employment with the Company and all Subsidiaries is terminated by the Company
for Cause, the Option will immediately terminate without notice of any kind, and
the Option will no longer be exercisable.

 

4.3.                            Termination Due to Death, Disability or
Retirement .  In the event Optionee’s employment with the Company and all
Subsidiaries is terminated by reason of Optionee’s death, Disability or
Retirement, the Option will remain exercisable, to the extent exercisable as of
the date of such termination, for a period of one (1) year after such
termination (but in no event after the Time of Termination).

 

4.4.                            Termination for Other Reasons.  In the event
Optionee’s employment with the Company and all Subsidiaries is terminated for
any other reason, the Option will, to the extent exercisable as of such
termination, remain exercisable for a period of three (3) months after such
termination (but in no event after the Time of Termination).

 

4.5.                            Effect of Actions Constituting Cause or Adverse
Action.  Notwithstanding anything in this Agreement to the contrary and in
addition to the rights of the Committee under

 

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Sections 13.5 and 13.6 of the Plan, if Optionee is determined by the Committee,
acting in its sole discretion, to have taken any action that would constitute
Cause or an Adverse Action during or after the termination of employment with
the Company or a Subsidiary, irrespective of whether such action or the
Committee’s determination occurs before or after termination of Optionee’s
employment with the Company or any Subsidiary and irrespective of whether or not
Optionee was terminated as a result of such Cause or Adverse Action, (a) all
rights of Optionee under the Option and this Agreement will terminate and be
forfeited without notice of any kind, and (b) the Committee in its sole
discretion will have the authority to rescind the exercise, vesting, settlement
or issuance of, or payment in respect of, the Option that was exercised, vested,
settled or issued, or as to which such payment was made, and to require Optionee
to pay to the Company, within ten (10) days of receipt from the Company of
notice of such rescission, any amount received or the amount of any gain
realized as a result of such rescinded exercise, vesting, settlement, issuance
or payment (including any dividends paid or other distributions made with
respect to any shares of Common Stock subject to the Option).  The Company may
defer the exercise of the Option for a period of up to six (6) months after
receipt of Optionee’s written notice of exercise or the issuance of Purchased
Shares upon the vesting of the Option for a period of up to six (6) months after
the date of such vesting in order for the Committee to make any determination as
to the existence of Cause or an Adverse Action.  The Company will be entitled to
withhold and deduct from future wages of Optionee (or from other amounts that
may be due and owing to Optionee from the Company or a Subsidiary) or make other
arrangements for the collection of all amounts necessary to satisfy such payment
obligations.  This Section 4.5 will not apply to the Option following a Change
in Control.

 

4.6.                            Clawback/Forfeiture.  The Option and Option
Shares issued or issuable pursuant to the Option are subject to forfeiture or
clawback by the Company to the extent required and allowed by law, including the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the
Sarbanes Oxley Act of 2002 and any implementing rules and regulations
promulgated thereunder, and pursuant to any forfeiture, clawback or similar
policy of the Company, as such laws, rules, regulations and policy may be in
effect from time to time.

 

5.                                      Adjustments.  In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off), or any
other similar change in the corporate structure or shares of the Company, the
Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation), will make
appropriate adjustment (which determination will be conclusive) as to the number
and kind of securities or other property (including cash) subject to, and the
Exercise Price of, the Option in order to prevent dilution or enlargement of the
rights of Optionee.

 

6.                                      Change in Control.  The Option shall
become immediately vested and exercisable upon completion of a Change in Control
and remain exercisable through the Time of Termination regardless of whether
Optionee remains in the employment of the Company.  Notwithstanding any of the
foregoing, in connection with a Change in Control, the Committee, in its sole
discretion, at any time after the grant of the Option, may take whatever action
it deems appropriate pursuant to Section 15.3 of the Plan.

 

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7.                                      Rights as a Stockholder.  Optionee will
have no rights as a stockholder of the Company unless and until all conditions
to the effective exercise of the Option (including, without limitation, the
conditions set forth in Section 3 of this Agreement) have been satisfied and
Optionee has become the holder of record of such shares.  No adjustment will be
made for dividends or distributions with respect to the Option as to which there
is a record date preceding the date Optionee becomes the holder of record of
such shares, except as may otherwise be provided in the Plan or determined by
the Committee in its sole discretion.

 

8.                                      Restrictions on Transfer.  Except
pursuant to testamentary will or the laws of descent and distribution or as
otherwise expressly permitted by the Plan, no right or interest of Optionee in
the Option prior to exercise may be assigned or transferred, or subjected to any
lien, during the lifetime of Optionee, either voluntarily or involuntarily,
directly or indirectly, by operation of law or otherwise.  Optionee, however,
will be entitled to designate a beneficiary to receive the Option upon
Optionee’s death, and, in the event of Optionee’s death, exercise of the Option
(to the extent permitted pursuant to Sections 2 and 4 of this Agreement) may be
made by Optionee’s legal representatives, heirs and legatees.

 

9.                                      Market Stand-off.  Optionee, if so
requested by the Company or any representative of the underwriters in connection
with a firmly underwritten public offering of securities by the Company pursuant
to a registration statement under the Securities Act following the date of this
Agreement, shall not sell or otherwise transfer any Option Shares during the
180-day period following the effective date of such registration statement.  The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restriction until the end of such 180-day period.  This
Section 9 will not apply to the sale of any Option Shares to an underwriter
pursuant to an underwriting agreement and shall only be applicable to Optionee
if all then current executive officers and directors of the Company enter into
similar agreements.

 

10.                               Employment.  Nothing in this Agreement or the
Plan will interfere with or limit in any way the right of the Company or any
Subsidiary to terminate the employment of Optionee at any time, nor confer upon
Optionee any right to continue in the employment with the Company or any
Subsidiary.

 

11.                               Option Subject to Plan.  The Option and the
Option Shares granted and issued pursuant to this Agreement have been granted
and issued under, and are subject to the terms of, the Plan.  The terms of the
Plan are incorporated by reference in this Agreement in their entirety, and
Optionee, by execution of this Agreement, acknowledges having received a copy of
the Plan.  The provisions of this Agreement will be interpreted as to be
consistent with the Plan, and any ambiguities in this Agreement will be
interpreted by reference to the Plan.  In the event that any provision of this
Agreement is inconsistent with the terms of the Plan, the terms of the Plan will
prevail.  All of the capitalized terms used in this Agreement not otherwise
defined in this Agreement have the same respective meanings as defined in the
Plan.

 

12.                               Incentive Stock Option Limitations.

 

12.1.                     Limitation on Amount.  To the extent that the
aggregate Fair Market Value (determined as of the Grant Date) of the shares of
Common Stock with respect to which

 

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incentive stock options (within the meaning of Section 422 of the Code) are
exercisable for the first time by the Optionee during any calendar year (under
the Plan and any other incentive stock option plans of the Company or any
subsidiary or parent corporation of the Company (within the meaning of the
Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code
from time to time), such excess incentive stock options will be treated as
non-statutory stock options in the manner set forth in the Plan.

 

12.2.                     Limitation on Exercisability; Disposition of Option
Shares.  Any incentive stock option that remains unexercised more than one year
following termination of employment by reason of death or disability or more
than three months following termination for any reason other than death or
disability will thereafter be deemed to be a non-statutory stock option.  In
addition, in the event that a disposition (as defined in Section 424(c) of the
Code) of shares of Common Stock acquired pursuant to the exercise of an
incentive stock option occurs prior to the expiration of two years after its
date of grant or the expiration of one year after its date of exercise (a
“disqualifying disposition”), such incentive stock option will, to the extent of
such disqualifying disposition, be treated in a manner similar to a
non-statutory stock option.

 

12.3.                     No Representation or Warranty.  Section 422 of the
Code and the rules and regulations thereunder are complex, and neither the Plan
nor this Agreement purports to summarize or otherwise set forth all of the
conditions that need to be satisfied in order for this Option to qualify as an
incentive stock option.  In addition, this Option may contain terms and
conditions that allow for exercise of this Option beyond the periods permitted
by Section 422 of the Code, including, without limitation, the periods described
in Sections 2 and 4 of this Agreement.  Accordingly, the Company makes no
representation or warranty regarding whether the exercise of this Option will
qualify as the exercise of an incentive stock option, and the Company recommends
that the Optionee consult with the Optionee’s own advisors before making any
determination regarding the exercise of this Option or the sale of the Option
Shares.

 

13.                               General Provisions.

 

13.1.                     Governing Law; Venue.  This Agreement and all rights
and obligations under this Agreement will be governed by and construed
exclusively in accordance with the laws of the State of Delaware,
notwithstanding the conflicts of laws principles of any jurisdictions.  By
acceptance of the Option, Optionee is deemed to submit to the exclusive
jurisdiction and venue of the federal or state courts of the State of Illinois
to resolve any and all issues that may arise out of or relate to the Option or
this Agreement.

 

13.2.                     Entire Agreement.  This Agreement and the Plan set
forth the entire agreement and understanding of the parties to this Agreement
with respect to the grant and exercise of the Option and the administration of
the Plan and supersede all prior agreements, arrangements, plans and
understandings relating to the grant and exercise of the Option and the
administration of the Plan.

 

13.3.                     Failure to Enforce Not a Waiver.  The failure of the
Company or Optionee to enforce at any time any provision of this Agreement shall
in no way be construed to be a waiver of such provision or of any other
provision hereof.

 

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13.4.                     Notices.  All notices, requests, demands and other
communications (collectively, “Notices”) given pursuant to this Agreement shall
be in writing, and shall be delivered by personal service, courier, facsimile
transmission, email transmission of a pdf format data file or by United States
first class, registered or certified mail, postage prepaid, addressed to the
party at the address set forth on the signature page of this Agreement.  Any
Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails.  Any
party may from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this Section 13.5.

 

13.5.                     Successors and Assigns.  Except to the extent
specifically limited by the terms and provision of this Agreement, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, heirs and personal representatives.

 

13.6.                     Execution.  This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by email delivery of a “pdf” format data
file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “pdf” signature page were an original
thereof.

 

13.7.                     Titles, Captions and Sections.  Titles and captions
contained in this Agreement are inserted for convenience of reference only and
do not constitute a part of this Agreement for any other purpose.  References to
Sections in this Agreement refer to Sections of this Agreement unless otherwise
stated.

 

13.8.                     Nature of the Grant.  In accepting the Option and by
execution of this Agreement, Optionee acknowledges that:

 

(a)                                 The Plan is established voluntarily by the
Company, it is discretionary in nature and it may be modified, amended,
suspended or terminated by the Company in its sole discretion at any time,
unless otherwise provided in the Plan.

 

(b)                                 The grant of the Option is voluntary and
occasional and does not create any contractual or other right to receive future
Option grants, or benefits in lieu of Option grants, even if Option grants have
been granted repeatedly in the past.

 

(c)                                  All decisions with respect to future Option
grants, if any, will be at the sole discretion of the Company.

 

(d)                                 Optionee is voluntarily participating in the
Plan.

 

(e)                                  The Option grant is not part of normal or
expected compensation or salary for any purposes, including, but not limited to,
calculating any severance, resignation,

 

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termination, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments and in no event shall be
considered as compensation for, or relating in any way to, past services for the
Company.

 

(f)                                   In the event that Optionee is not an
employee of the Company, the Option will not be interpreted to form an
employment contract or relationship with the Company.

 

(g)                                  The future value of the Common Stock is
unknown and cannot be predicted with certainty and if the Option vests and
Optionee exercises the Option in accordance with the terms of this Agreement and
is issued Purchased Shares, the value of those shares may increase or decrease.

 

(h)                                 In consideration of the grant of the Option,
no claim or entitlement to compensation or damages shall arise from termination
of the Option or diminution in value of the Option or Purchased Shares acquired
upon exercise of the Option resulting from termination of Optionee’s employment
or service by the Company (for any reason whatsoever and whether or not in
breach of local labor laws) and Optionee irrevocably releases the Company and
its Subsidiaries, and their respective directors, officers, employees and
agents, from any such claim that may arise; if, notwithstanding the foregoing,
any such claim is found by a court of competent jurisdiction to have arisen,
then, by acceptance of the Option and execution of this Agreement, Optionee
shall be deemed irrevocably to have waived his or her entitlement to pursue such
claim.

 

(i)                                     The Company is not providing any tax,
legal or financial advice, nor is the Company making any recommendations
regarding Optionee’s participation in the Plan, or Optionee’s purchase or sale
of the underlying Option Shares.

 

(j)                                    Optionee is hereby advised to consult
with his or her own personal tax, legal and financial advisors regarding his or
her participation in the Plan before taking any action related to the Plan or
the Option.

 

[Remainder of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
effective as of the Grant Date.

 

OPTIONEE:

RESTORGENEX CORPORATION

 

 

 

 

 

 

By:

 

[Signature]

 

Name:

 

 

 

Title:

 

Name:

 

 

 

 

 

 

 

Address:

 

Address:

2150 East Lake Cook Road, Suite 750

 

 

Buffalo Grove, IL 60089

 

 

By execution of this Agreement, Optionee acknowledges having received a copy of
the Plan.

 

 

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