EXHIBIT 10.19

NONQUALIFIED STOCK OPTION AGREEMENT

 

Empire Minerals Corp. 2007 Stock Incentive Plan

 

AGREEMENT (“Agreement”), dated _____________ by and between Empire Minerals
Corp., a Delaware corporation (the “Company”), and ____________ (the
“Participant”).

 

Preliminary Statement

 

The Board of Directors of the Company (the “Board”) or a committee appointed by
the Board (the “Committee”) to administer the Empire Minerals Corp. 2007 Stock
Incentive Plan (the “Plan”), has authorized this grant of a non-qualified stock
option (the “Option”) on ____________ (the “Grant Date”) to purchase the number
of shares of the Company’s common stock, par value $.00001 per share (the
“Common Stock”) set forth below to the Participant, as a Eligible Employee of
the Company or an Affiliate (collectively, the Company and all Subsidiaries and
Parents of the Company shall be referred to as the “Employer”).

 

Unless otherwise indicated, any capitalized term used but not defined herein
shall have the meaning ascribed to such term in the Plan. For the convenience of
the Participant, capitalized terms used but not defined herein and defined in
the Plan have been set forth hereto in Exhibit A. A copy of the Plan has been
delivered to the Participant. By signing and returning this Agreement, the
Participant (i) acknowledges having received and read a copy of the Plan and
this Agreement, (ii) agrees to comply with the Plan, this Agreement and all
applicable laws and regulations, (iii) acknowledges that the Company has not
provided any tax advice to the Participant regarding the grant or future
exercise of the Option or the subsequent sale or transfer of shares of Common
Stock issuable hereunder, and (iv) understands that the Participant should
consult with the Participant’s personal financial, accounting and tax advisors
regarding the same to the extent the Participant deems necessary.

 

Accordingly, the parties hereto agree as follows:

 

1.

 Tax Matters. No part of the Option granted hereby is intended to qualify as an
“incentive stock option” under Section 422 of the Code.

 

2.

 Grant of Option. Subject in all respects to the Plan and the terms and
conditions set forth herein and therein, the Participant is hereby granted an
Option to purchase from the Company _________ shares of Common Stock, at a price
per share of $0.50, which is the Fair Market Value of a share of Common Stock on
the Grant Date (the “Option Price”).

3.

 Vesting and Exercise.

 

(a) General. Subject to the provisions of Sections 3(b), 3(c) and 4 hereof, the
Option shall vest and become exercisable as follows, provided that the
Participant has not incurred a Termination prior to each such vesting date:

 

Vesting Date

 

Number of Shares

 

 

 

_________________

 

___________

 

 

 

The Options shall vest proportionately in the periods prior to each vesting
date. To the extent that the Option has become vested and exercisable with
respect to a number of shares of Common Stock as provided herein, the Option may
thereafter be exercised by the Participant, in whole or in part, at any time or
from time to time prior to the expiration of the Option as provided herein and
in accordance with Sections 6.3(c) and 6.3(d) of the Plan, including, without
limitation, by the filing of any written form of exercise notice as may be
required by the Committee and payment in full of the Option Price multiplied by
the number of shares of Common Stock underlying the portion of the Option
exercised. Upon expiration of the Option, the Option shall be canceled and no
longer exercisable.

(b) Committee Discretion to Accelerate Vesting. Notwithstanding the foregoing,
the Committee may, in its sole discretion, provide for accelerated vesting of
the Option at any time.

(c)  (i)  At  the election of the Optionee, all or any part of the Options that
have vested and have not been earlier terminated may be exercised in lieu of
making the cash payment to the Company of the aggregate Option Exercise Price by
electing instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (“Cashless
Exercise”):

Net Number = (A x (B - C))/B

(ii)

For purposes of the foregoing formula:

A= the total number shares with respect to which the Option is then being
exercised.

B= the lesser of: the last reported sale price (as reported by Bloomberg) of the
Common Stock on the trading day immediately preceding the date of the date of
receipt by the Company of the notice of exercise or the last sale price of the
Common Stock in the Company’s last capital financing.  Such financing must have
been completed no more than ninety (90) days prior to the exercise date.

C= the Option Exercise Price then in effect at the time of such exercise.

4.

Option Term. The term of the Option shall be five (5) years from the Grant Date,
subject to earlier termination in the event of the Participant’s Termination as
specified in Section 5 hereof; provided, however, that the Option shall
terminate and be of no further force or effect on the second anniversary of the
Grant Date if the Registration Date does not occur prior to the second
anniversary of the Grant Date.

5.

Termination.

Notwithstanding any provision to the contrary in the Plan.  Any portion of the
Option that is not vested as of the date of the Participant’s Termination for
any reason shall vest as of the date of such Termination.

6.

 Restriction on Transfer of Option. No part of the Option shall be Transferred
other than by will or by the laws of descent and distribution and during the
lifetime of the Participant, may be exercised only by the Participant or the
Participant’s guardian or legal representative. In addition, the Option shall
not be assigned, negotiated, pledged or hypothecated in any way (except as
provided by law or herein), and the Option shall not be subject to execution,
attachment or similar process. Upon any attempt to Transfer the Option or in the
event of any levy upon the Option by reason of any execution, attachment or
similar process contrary to the provisions hereof, such transfer shall be void
and of no effect and the Company shall have the right to disregard the same on
its books and records and to issue “stop transfer” instructions to its transfer
agent.

 

7.

Rights as a Stockholder. The Participant shall have no rights as a stockholder
with respect to any shares covered by the Option unless and until the
Participant has become the holder of record of the shares, and no adjustments
shall be made for dividends in cash or other property, distributions or other
rights in respect of any such shares, except as otherwise specifically provided
for in the Plan.

 

8.

Provisions of Plan Control. This Agreement is subject to all of the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference. If and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly. This Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof (other than any exercise notice or other documents expressly contemplated
herein or in the Plan) and supersedes any prior agreements between the Company
and the Participant with respect to the subject matter hereof.

 

9.

Notices. Any notice hereunder by the Participant shall be given to the Company
in writing and such notice shall be deemed duly given only upon receipt thereof
by the Chief Financial Officer of the Company. Any notice hereunder by the
Company shall be given to the Participant in writing and such notice shall be
deemed duly given only upon receipt thereof at such address as the Participant
may have on file with the Company.

 

10.

No Obligation to Continue Service. This Agreement is not an agreement of
service. This Agreement does not guarantee the Participant’s position as a
Non-Employee Director of the Employer for any specific time period, nor does it
modify in any respect the Employer’s right to terminate or modify the
Participant’s service or compensation at any time.

 

11.

Section 409A Compliance. To the extent applicable, the Board or the Committee
may at any time and from time to time amend, in whole or in part, any or all of
the provisions of this Agreement (in a manner determined by the Board or
Committee in its sole discretion) solely to comply with Section 409A of the Code
and the regulations promulgated thereunder, subject to the terms and conditions
of the Plan.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.

 

 

 

EMPIRE MINERALS CORP.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

Diego E. Roca

 

 

 

 

Title:

Executive VP & CFO

 

 

 

 

 

 

 

 

Participant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A

 

The following terms used but not defined in the Agreement and defined in the
Plan have been provided below for the convenience of the Participant but are
qualified in their entirety by the full text of such terms in the Plan.

 

A.

“Acquisition Event” means a merger or consolidation in which the Company is not
the surviving entity, any transaction that results in the acquisition of all or
substantially all of the Company’s outstanding Common Stock by a single person
or entity or by a group of persons and/or entities acting in concert, or the
sale or transfer of all or substantially all of the Company’s assets.

B.

“Affiliate” means each of the following:  (a) any Subsidiary; (b) any Parent;
(c) any corporation, trade or business (including, without limitation, a
partnership or limited liability company) which is directly or indirectly
controlled 50% or more (whether by ownership of stock, assets or an equivalent
ownership interest or voting interest) by the Company; (d) any corporation,
trade or business (including, without limitation, a partnership or limited
liability company) which directly or indirectly controls 50% or more (whether by
ownership of stock, assets or an equivalent ownership interest or voting
interest) of the Company; and (e) any other entity in which the Company or any
of its Affiliates has a material equity interest and which is designated as an
“Affiliate” by resolution of the Committee; provided that the Common Stock
subject to any Award constitutes “service recipient stock” for purposes of
Section 409A of the Code or otherwise does not subject the Award to Section 409A
of the Code.

C.

“Appreciation Award” means any Award under this Plan of any Stock Option, Stock
Appreciation Right or Other Stock-Based Award, provided that such Other
Stock-Based Award is based on the appreciation in value of a share of Common
Stock in excess of an amount equal to at least the Fair Market Value of the
Common Stock on the date such Other Stock-Based Award is granted.

D.

“Award” means any award under this Plan of any Stock Option, Stock Appreciation
Right, Restricted Stock, Performance Share, Other Stock-Based Award or
Performance-Based Cash Awards.  All Awards shall be granted by, confirmed by,
and subject to the terms of, a written agreement executed by the Company and the
Participant.

E.

“Board” means the Board of Directors of the Company.

F.

“Cause” means with respect to a Participant’s Termination of Employment or
Termination of Consultancy from and after the date hereof, the following:  (a)
in the case where there is no employment agreement, consulting agreement, change
in control agreement or similar agreement in effect between the Company or an
Affiliate and the Participant at the time of the grant of the Award (or where
there is such an agreement but it does not define “cause” (or words of like
import)), termination due to: (i) a Participant’s conviction of, or plea of
guilty or nolo contendere to, a felony; (ii) perpetration by a Participant of an
illegal act, or fraud which could cause significant economic injury to the
Company; (iii) continuing willful and deliberate failure by the Participant to
perform the Participant’s duties in any material respect, provided that the
Participant is given notice and an opportunity to effectuate a cure as
determined by the Committee; or (iv) a Participant’s willful misconduct with
regard to the Company that could have a material adverse effect on the Company;
or (b) in the case where there is an employment agreement, consulting agreement,
change in control agreement or similar agreement in effect between the Company
or an Affiliate and the Participant at the time of the grant of the Award that
defines “cause” (or words of like import), “cause” as defined under such
agreement; provided, however, that with regard to any agreement under which the
definition of “cause” only applies on occurrence of a change in control, such
definition of “cause” shall not apply until a change in control actually takes
place and then only with regard to a termination thereafter.  With respect to a
Participant’s Termination of Directorship, “cause” means an act or failure to
act that constitutes cause for removal of a director under applicable Delaware
law.

G.

“Change in Control” has the meaning set forth in Section 13.2.

H.

“Change in Control Price” has the meaning set forth in Section 13.1.

I.

“Code” means the Internal Revenue Code of 1986, as amended.  Any reference to
any section of the Code shall also be a reference to any successor provision and
any Treasury Regulation promulgated thereunder.  

J.

“Committee” means:  (a) with respect to the application of this Plan to Eligible
Employees and Consultants, a committee or subcommittee of the Board appointed
from time to time by the Board, which committee or subcommittee shall consist of
two or more non-employee directors, each of whom shall be (i) a “non-employee
director” as defined in Rule 16b-3; (ii) to the extent required by Section
162(m) of the Code, an “outside director” as defined under Section 162(m) of the
Code; and (iii) an “independent director” for purposes of the applicable stock
exchange rules; and (b) with respect to the application of this Plan to
Non-Employee Directors, the Board.  To the extent that no Committee exists that
has the authority to administer this Plan, the functions of the Committee shall
be exercised by the Board.  If for any reason the appointed Committee does not
meet the requirements of Rule 16b-3 or Section 162(m) of the Code, such
noncompliance shall not affect the validity of Awards, grants, interpretations
or other actions of the Committee.

K.

“Common Stock” means the common stock, $0.0001 par value per share, of the
Company.

L.

“Company” means Empire Minerals Corp., a Delaware corporation, and its
successors by operation of law.

M.

“Consultant” means any individual or entity who provides bona fide consulting or
advisory services to the Company or its Affiliates pursuant to a written
agreement, which are not in connection with the offer and sale of securities in
a capital-raising transaction.

N.

“Disability” means with respect to a Participant’s Termination, a permanent and
total disability as defined in Section 22(e)(3) of the Code.  A Disability shall
only be deemed to occur at the time of the determination by the Committee of the
Disability.  Notwithstanding the foregoing, for Awards that are subject to
Section 409A of the Code, Disability shall mean that a Participant is disabled
under Section 409A(a)(2)(C)(i) or (ii) of the Code.

O.

“Effective Date” means the effective date of this Plan as defined in Article
XVII.

P.

“Eligible Employees” means each employee of the Company or an Affiliate.

Q.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.  Any
references to any section of the Exchange Act shall also be a reference to any
successor provision.

R.

“Fair Market Value” means, unless otherwise required by any applicable provision
of the Code or any regulations issued thereunder, as of any date and except as
provided below, the last sales price reported for the Common Stock on the
applicable date: (a) as reported on the principal national securities exchange
in the United States on which it is then traded, or (b) if the Common Stock is
not traded, listed or otherwise reported or quoted, the Committee shall
determine in good faith the Fair Market Value in whatever manner it considers
appropriate taking into account the requirements of Section 409A of the Code.
 For purposes of the grant of any Award, the applicable date shall be the
trading day immediately prior to the date on which the Award is granted.  For
purposes of the exercise of any Award, the applicable date shall be the date a
notice of exercise is received by the Committee or, if not a day on which the
applicable market is open, the next day that it is open.  

S.

“Family Member” means “family member” as defined in Section A.1.(5) of the
general instructions of Form S-8.

T.

“GAAP” has the meaning set forth in Section 11.2(c)(ii).

U.

“Incentive Stock Option” means any Stock Option awarded to an Eligible Employee
of the Company, its Subsidiaries and its Parent (if any) under this Plan
intended to be and designated as an “Incentive Stock Option” within the meaning
of Section 422 of the Code.

V.

“Non-Employee Director” means a director of the Company who is not an active
employee of the Company or an Affiliate.

W.

“Non-Qualified Stock Option” means any Stock Option awarded under this Plan that
is not an Incentive Stock Option.

X.

“Other Stock-Based Award” means an Award under Article X of this Plan that is
valued in whole or in part by reference to, or is payable in or otherwise based
on, Common Stock, including, without limitation, a restricted stock unit or an
Award valued by reference to an Affiliate.

Y.

“Parent” means any parent corporation of the Company within the meaning of
Section 424(e) of the Code.

Z.

“Participant” means an Eligible Employee, Non-Employee Director or Consultant to
whom an Award has been granted pursuant to this Plan.

AA.

“Performance-Based Cash Award” means a cash Award under Article XI of this Plan
that is payable or otherwise based on the attainment of certain pre-established
performance goals during a Performance Period.

BB.

“Performance Goals” mean such performance goals as determined in writing by the
Committee.

CC.

“Performance Period” means the duration of the period during which receipt of an
Award is subject to the satisfaction of performance criteria, such period as
determined by the Committee in its sole discretion.

DD.

“Performance Share” means an Award made pursuant to Article IX of this Plan of
the right to receive Common Stock or cash of an equivalent value at the end of a
specified Performance Period.

EE.

“Person” means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint-stock company, trust,
incorporated organization, governmental or regulatory or other entity.

FF.

“Plan” means this Empire Minerals Corp. 2007 Stock Incentive Plan, as amended
from time to time.

GG.

“Reference Stock Option” has the meaning set forth in Section 7.1.

HH.

“Restricted Stock” means an Award of shares of Common Stock under this Plan that
is subject to restrictions under Article VIII.

II.

“Restriction Period” has the meaning set forth in Subsection 8.3(a).

JJ.

“Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act as then in
effect or any successor provision.

KK.

“Section 162(m) of the Code” means the exception for performance-based
compensation under Section 162(m) of the Code and any applicable Treasury
regulations thereunder.

LL.

“Section 409A of the Code” means the nonqualified deferred compensation rules
under Section 409A of the Code and any applicable Treasury regulations
thereunder.

MM.

“Securities Act” means the Securities Act of 1933, as amended and all rules and
regulations promulgated thereunder.  Any reference to any section of the
Securities Act shall also be a reference to any successor provision.

NN.

“Stock Appreciation Right” means the right pursuant to an Award granted under
Article VII.  A Tandem Stock Appreciation Right shall mean the right to
surrender to the Company all (or a portion) of a Stock Option in exchange for
cash or a number of shares of Common Stock (as determined by the Committee, in
its sole discretion, on the date of grant) equal to the difference between
(a) the Fair Market Value on the date such Stock Option (or such portion
thereof) is surrendered, of the Common Stock covered by such Stock Option (or
such portion thereof), and (b) the aggregate exercise price of such Stock Option
(or such portion thereof).  A Non-Tandem Stock Appreciation Right shall mean the
right to receive cash or a number of shares of Common Stock (as determined by
the Committee, in its sole discretion, on the date of grant) equal to the
difference between (i) the Fair Market Value of a share of Common Stock on the
date such right is exercised, and (ii) the aggregate exercise price of such
right, otherwise than on surrender of a Stock Option.

OO.

“Stock Option” or “Option” means any option to purchase shares of Common Stock
granted to Eligible Employees, Non-Employee Directors or Consultants granted
pursuant to Article VI.

PP.

“Subsidiary” means any subsidiary corporation of the Company within the meaning
of Section 424(f) of the Code.

QQ.

“Ten Percent Stockholder” means a person owning stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company, its
Subsidiaries or its Parent.

RR.

“Termination” means a Termination of Consultancy, Termination of Directorship or
Termination of Employment, as applicable.

SS.

“Termination of Consultancy” means: (a) that the Consultant is no longer acting
as a consultant to the Company or an Affiliate; or (b) when an entity which is
retaining a Participant as a Consultant ceases to be an Affiliate unless the
Participant otherwise is, or thereupon becomes, a Consultant to the Company or
another Affiliate at the time the entity ceases to be an Affiliate.  In the
event that a Consultant becomes an Eligible Employee or a Non-Employee Director
upon the termination of his or her consultancy, unless otherwise determined by
the Committee, in its sole discretion, no Termination of Consultancy shall be
deemed to occur until such time as such Consultant is no longer a Consultant, an
Eligible Employee or a Non-Employee Director.  Notwithstanding the foregoing,
the Committee may, in its sole discretion, otherwise define Termination of
Consultancy in the Award agreement or, if no rights of a Participant are
reduced, may otherwise define Termination of Consultancy thereafter.

TT.

“Termination of Directorship” means that the Non-Employee Director has ceased to
be a director of the Company; except that if a Non-Employee Director becomes an
Eligible Employee or a Consultant upon the termination of his or her
directorship, his or her ceasing to be a director of the Company shall not be
treated as a Termination of Directorship unless and until the Participant has a
Termination of Employment or Termination of Consultancy, as the case may be.

UU.

“Termination of Employment” means: (a) a termination of employment (for reasons
other than a military or personal leave of absence granted by the Company) of a
Participant from the Company and its Affiliates; or (b) when an entity which is
employing a Participant ceases to be an Affiliate, unless the Participant
otherwise is, or thereupon becomes, employed by the Company or another Affiliate
at the time the entity ceases to be an Affiliate.  In the event that an Eligible
Employee becomes a Consultant or a Non-Employee Director upon the termination of
his or her employment, unless otherwise determined by the Committee, in its sole
discretion, no Termination of Employment shall be deemed to occur until such
time as such Eligible Employee is no longer an Eligible Employee, a Consultant
or a Non-Employee Director.  Notwithstanding the foregoing, the Committee may,
in its sole discretion, otherwise define Termination of Employment in the Award
agreement or, if no rights of a Participant are reduced, may otherwise define
Termination of Employment thereafter.

VV.

“Transfer” means: (a) when used as a noun, any direct or indirect transfer,
sale, assignment, pledge, hypothecation, encumbrance or other disposition
(including the issuance of equity in a Person), whether for value or no value
and whether voluntary or involuntary (including by operation of law), and (b)
when used as a verb, to directly or indirectly transfer, sell, assign, pledge,
encumber, charge, hypothecate or otherwise dispose of (including the issuance of
equity in a Person) whether for value or for no value and whether voluntarily or
involuntarily (including by operation of law).  “Transferred” and
“Transferrable” shall have a correlative meaning.