Exhibit 10.13

 

STOCK OPTION AGREEMENT

 

This STOCK OPTION AGREEMENT (this “Agreement”) is made and entered into
effective as of                                by and between RestorGenex
Corporation, a Nevada corporation (the “Company”), and
                                 (“Optionee”) with reference to the following
facts:

 

The board of directors of the Company (the “Board”) has authorized the granting
to Optionee of the option represented by this Agreement on the terms set forth
herein.

 

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

 

1.                                      Grant of Option.  The Company hereby
grants to Optionee, upon the terms and subject to the conditions set forth in
this Agreement, an option (the “Option”) to purchase all or any portion of
                             shares (the “Option Shares”) of the Company’s
Common Stock (the “Common Stock”), at an exercise price of $               per
share, which represents 100% of the fair market value of a share of Common Stock
on                            (such exercise price, as adjusted from time to
time pursuant to Section 5, the “Exercise Price”).

 

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 and may be exercised at any time prior to the termination or expiration
of the Option.  Optionee shall receive a full quarter of vesting for the
             calendar quarter of         .

 

3.                                      Exercise of the Option.

 

3.1.                            Subject to the vesting in Section 2, the Option
may be exercised, in whole or in part, at any time and from time to time, only
by delivery to the Company of written notice of the exercise of the Option in
form identical to Exhibit “A” attached to this Agreement stating the number of
Option Shares being purchased (the “Purchased Shares”) (and the representation
and warranties in the notice of exercise must be true and correct).  The
Exercise Price shall be payable in full in any one of the following alternative
forms:

 

(a)                                 Full payment in cash 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

 

 

 

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Where

 

X

=

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

 

 

 

 

 

 

 

 

 

Y

=

the number of shares of Common Stock purchasable upon exercise of all of the
Option or, if only a portion of the Option is being exercised, the portion of
the Option being exercised.

 

 

 

 

 

 

 

 

 

A

=

the exercise price.

 

 

 

 

 

 

 

 

 

B

=

the Per Share Market Value of one share of Common Stock on the trading day
immediately preceding the date of such election.

 

 

“Per Share Market Value” means on any particular date (a) the closing sales
price per share of the Common Stock on such date on any registered national
stock exchange on which the Common Stock is then listed, or if there is no such
closing sales price on such date, then the closing sales price on such exchange
on the date nearest preceding such date, or (b) if the Common Stock is not then
listed on a registered national stock exchange, the closing sales price for a
share of Common Stock in the over-the-counter market, as reported by the OTC
Bulletin Board or the OTC Markets Group, or (c) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock as determined
in good faith by the Board; provided, however, that all determinations of the
Per Share Market Value shall be appropriately adjusted for any stock dividends,
stock splits or other similar transactions during such period.

 

3.2.                            Following receipt of the exercise notice and the
payment referred to above, the Company shall, as soon as reasonably practicable
thereafter, cause certificates representing the Purchased Shares 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;
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.

 

3.3.                            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 instruments
referred to in this Section 3.  Optionee shall not be deemed to be a holder of
any Option Shares pursuant to exercise of the Option until the date of issuance
of a stock certificate to Optionee for such shares following payment in full for
the Option Shares purchased.

 

3.4.                            As a condition to exercise of the Option, the
Company may require Optionee to pay to the Company all applicable federal, state
and local taxes that the Company is required to withhold with respect to the
exercise of the Option.  At the discretion of the Company and upon the request
of Optionee, the minimum statutory withholding tax requirements may be satisfied
by the withholding of Option Shares otherwise issuable to Optionee upon the
exercise of the Option.

 

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4.                                      Termination of Option.

 

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

 

4.2.                            In the event the Optionee’s employment or other
service with the Company and all subsidiaries is terminated by reason of the
Optionee’s death, 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).

 

4.3.                            In the event the Optionee’s employment or other
service with the Company and all subsidiaries is terminated other than by reason
of the Optionee’s death, the Option will remain exercisable, to the extent
exercisable as of the date of such termination, for a period of three (3) months
after such termination (but in no event after the Time of Termination).

 

4.4.                            In the event the Optionee’s employment or other
service with the Company and all subsidiaries is terminated for “cause” (as
determined by the Board in its sole discretion), the Option will terminate in
its entirety without notice of any kind and no longer be exercisable.

 

5.                                      Changes in Capital Structure.

 

5.1.                            If outstanding shares of the Common Stock shall
be subdivided into a greater number of shares, or a dividend in Common Stock
shall be paid in respect of the Common Stock, the Exercise Price of the Option
prior to such subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend, be proportionately reduced, and conversely, if
outstanding shares of the Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price of the Option prior to such
combination shall, simultaneously with the effectiveness of such combination, be
proportionately increased.  This Section 5.1 shall only be effective if and to
the extent such change will not be treated as a modification of the Option under
Treas. Reg. Sec. 1.409A-1(b)(5)(v)(H).

 

5.2.                            When any adjustment is required to be made in
the Exercise Price, the number of Option Shares purchasable upon the exercise of
the Option shall be adjusted to that number of Option Shares determined by
dividing (a) an amount equal to the number of Option Shares purchasable upon the
exercise of the Option immediately prior to such adjustment, multiplied by the
Exercise Price in effect immediately prior to such adjustment, by (b) the
Exercise Price in effect immediately after such adjustment.

 

5.3.                            Except as provided in Section 5.4, following any
capital reorganization, any reclassification of the Common Stock of the Company
(other than recapitalization described in Section 5.1), or the consolidation or
merger of the Company, upon exercise of the Option the Optionee shall receive
the securities or property (including cash) that the Optionee would have
received had the Optionee exercised the Option immediately prior to such
reorganization, reclassification, consolidation or merger, and in any such case
appropriate adjustments shall be made in the application of the provisions set
forth in this Agreement with respect to the rights

 

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and interests thereafter of the Optionee, to the end that the provisions set
forth in this Agreement (including the specified changes and other adjustments
to the Exercise Price) shall thereafter be applicable in relation to any
securities or other property thereafter issuable upon exercise of the Option.

 

5.4.                            The Option shall become immediately vested and
exercisable immediately prior to (but conditioned upon completion of) a Change
of Control (as defined below) and remain exercisable through the Time of
Termination.  Notwithstanding any of the foregoing, in connection with a Change
of Control, the Board in its sole discretion, at any time after the grant of the
Option, may determine that the Option, whether or not exercisable or vested, as
the case may be, will be canceled and terminated and that in connection with
such cancellation and termination the Optionee will receive for each Option
Share a cash payment (or the delivery of shares of stock, other securities or a
combination of cash, stock and securities with a fair market value (as
determined by the Board in good faith) equivalent to such cash payment) equal to
the difference, if any, between the consideration received by stockholders of
the Company in respect of a share of Common Stock in connection with such Change
of Control and the Exercise Price per share under the Option, multiplied by the
number of Option Shares; provided, however, that if such product is zero ($0) or
less, the Option may be canceled and terminated without payment therefor.  If
any portion of the consideration pursuant to a Change of Control may be received
by holders of shares of Common Stock on a contingent or delayed basis, the Board
may, in its sole discretion, determine the fair market value per share of such
consideration as of the time of the Change of Control on the basis of the
Board’s good faith estimate of the present value of the probable future payment
of such consideration.  Notwithstanding the foregoing, any Option Shares issued
pursuant to the Option prior to the effectiveness of the Change of Control will
be deemed to be outstanding shares of Common Stock and receive the same
consideration as other outstanding shares of Common Stock in connection with the
Change of Control.

 

5.5.                            Notwithstanding any other provisions of this
Agreement, if any “payments” (including, without limitation, any benefits or
transfers of property or the acceleration of the vesting of any benefits) in the
nature of compensation under any arrangement that is considered contingent on a
Change of Control for purposes of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), together with any other payments that the
Optionee has the right to receive from the Company or any corporation that is a
member of an “affiliated group” (as defined in Section 1504(a) of the Code
without regard to Section 1504(b) of the Code) of which the Company is a member,
would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the
Code), such “payments” may, at the Optionee’s sole election, be reduced to the
largest amount as will result in no portion of such “payments” being subject to
the excise tax imposed by Section 4999 of the Code.  The type of payments to be
electively reduced under this Section 5.5, if any, will be at the discretion of
the Optionee; provided, however, if any such payments are subject to
Section 409A of the Code, such payments shall be reduced first, by first
reducing any cash severance payments and then reducing all other payments and
benefits, in each case, with the amounts having later payment dates being
reduced first.

 

5.6.                            For purposes of this Agreement, “Change of
Control” shall mean the occurrence of any one or more of the following: (i) the
accumulation (if over time, in any consecutive twelve (12) month period),
whether directly, indirectly, beneficially or of record, by

 

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any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended) of 50.1% or more of
the shares of the outstanding common stock of the Company, whether by merger,
consolidation, sale or other transfer of shares of Common Stock (other than a
merger or consolidation where the stockholders of the Company prior to the
merger or consolidation are the holders of a majority of the voting securities
of the entity that survives such merger or consolidation), (ii) a sale of all or
substantially all of the assets of the Company or (iii) during any period of
twelve (12) consecutive months, the individuals who, at the beginning of such
period, constitute the Board, and any new director whose election by the Board
or nomination for election by the Company’s stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the 12-month period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board; provided, however, that the
following acquisitions shall not constitute a Change of Control for the purposes
of this Agreement: (A) any acquisitions of Company common stock or securities
convertible, exercisable or exchangeable into Company common stock directly from
the Company or (B) any acquisition of Company common stock or securities
convertible, exercisable or exchangeable into Company common stock by any
employee benefit plan (or related trust) sponsored by or maintained by the
Company.

 

6.                                      Optionee’s Representations.  Optionee
represents and warrants to and agrees with the Company as follows:

 

6.1.                            Optionee is acquiring the Option for Optionee’s
own account, for investment purposes only and not with a view to or for sale in
connection with a distribution of the Option.

 

6.2.                            Optionee understands that an investment in the
Option involves a high degree of risk, and Optionee has the financial ability to
bear the economic risk of this investment, including a complete loss of such
investment.  Optionee has adequate means for providing for Optionee’s current
financial needs and has no need for liquidity with respect to this investment.

 

6.3.                            Optionee has such knowledge and experience in
financial and business matters that Optionee is capable of evaluating the merits
and risks of an investment in the Option and in protecting Optionee’s own
interest in connection with this transaction.

 

6.4.                            Optionee has had the opportunity to ask
questions of, and to receive answers from, appropriate officers of the Company
with respect to the terms and conditions of the transactions contemplated hereby
and with respect to the business, affairs, financial condition and results of
operations of the Company.  Optionee has had access to such financial and other
information as is necessary in order for Optionee to make a fully informed
decision as to investment in the Company, and has had the opportunity to obtain
any additional information necessary to verify any of such information to which
Optionee has had access.

 

6.5.                            Optionee acknowledges that if at the time of
exercise of this Option by Optionee there is no effective registration statement
registering the issuance of the Option Shares upon exercise of this Option under
the Securities Act of 1933, as amended (the “Securities Act”), any certificate
evidencing the Option Shares will have a legend to the following effect:

 

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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

 

6.6.                            Optionee has consulted with Optionee’s own tax
counsel and advisors as to the federal, state and other tax consequences to
Optionee of the grant and exercise of the Option and the sale of Option Shares,
and acknowledges that the Company makes no representation or warranty to the
Optionee regarding such tax consequences.

 

7.                                      Modification.  The Option may not be
amended or modified except by a written instrument executed by the Company and
the Optionee.

 

8.                                      Market Stand-off.  The Optionee, if so
requested by the Company or any representative of the underwriters in connection
with the first 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 8 will not apply to the sale of any Option Shares to an underwriter
pursuant to an underwriting agreement and shall only be applicable to the
Optionee if all then current executive officers and directors of the Company
enter into similar agreements.

 

9.                                      General Provisions.

 

9.1.                            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.

 

9.2.                            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.

 

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9.3.                            Failure to Enforce Not a Waiver.  The failure of
the Company or the 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.

 

9.4.                            Governing Law.  This Agreement shall be governed
by and construed in accordance with the laws of the State of Nevada applicable
to contracts made in, and to be performed within, that State.

 

9.5.                            Option Non-transferable.  Optionee may not sell,
transfer, assign or otherwise dispose of the Option other than (a) by will or by
the laws of descent and distribution or (b) to a Family Member (within the
meaning given such term in Form S-8 under the Securities Act) provided such
transfer is made as a gift without consideration and such transfer complies with
applicable securities laws.  The person or persons, if any, to whom this Option
is transferred shall be treated after Optionee’s death the same as Optionee
under this Agreement.

 

9.6.                            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.

 

9.7.                            Advice from Independent Counsel.  The parties
hereto understand that this Agreement is a legally binding agreement that
affects such party’s rights and imposes obligations on such party.  Each party
represents to the other that it has received legal advice from counsel of its
choice regarding the meaning and legal significance of this Agreement and that
it is satisfied with its legal counsel and the advice received from it.

 

9.8.                            Miscellaneous.  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.  Except as specifically provided herein, neither this Agreement nor any
right pursuant hereto or interest herein shall be assignable by any of the
parties hereto without the prior written consent of the other party hereto.

 

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

 

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IN WITNESS WHEREOF, the Company has granted to Optionee the Option effective as
of the date set forth above.

 

OPTIONEE:

 

RESTORGENEX CORPORATION

 

 

 

 

 

 

By:

 

 

 

 

Stephen M. Simes, Chief Executive Officer

 

 

 

 

Address:

 

 

Address:

2150 East Lake Cook Road, Suite 750

 

 

 

 

 

Buffalo Grove, Illinois 60089

 

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EXHIBIT “A”

 

NOTICE OF EXERCISE

 

(To be signed only upon exercise of the Option)

 

TO:                           RestorGenex Corporation

 

The undersigned, the holder of the enclosed Stock Option Agreement (“Optionee”),
hereby irrevocably elects to exercise the purchase right represented by the
Option and to purchase thereunder             * shares (the “Option Shares”) of
Common Stock of RestorGenex Corporation (the “Company”) and herewith encloses
payment of $                   or pursuant to the cashless exercise provisions
set forth in Section 3.1 in full payment of the purchase price of such shares
being purchased.

 

The Optionee represents and warrants to the Company as follows:

 

1.                                      Optionee is acquiring the Option Shares
for Optionee’s own account, for investment purposes only and not with a view to
or for sale in connection with a distribution of the Option Shares.

 

2.                                      Optionee understands that an investment
in the Option Shares involves a high degree of risk, and Optionee has the
financial ability to bear the economic risk of this investment, including a
complete loss of such investment.  Optionee has adequate means for providing for
Optionee’s current financial needs and has no need for liquidity with respect to
this investment.

 

3.                                      Optionee has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of an investment in the Option Shares and in protecting
Optionee’s own interest in connection with this transaction.

 

4.                                      Optionee understands that if at the time
of exercise of the Option by Optionee there is no effective registration
statement registering the issuance of the Option Shares upon exercise of the
Option under the Securities Act of 1933, as amended (the “Securities Act”), the
Option Shares have not been registered under the Securities Act, the California
Corporate Securities Law of 1968, as amended (the “California Law”) or other
state securities laws.  Optionee is familiar with the provisions of the
Securities Act and Rule 144 thereunder, and the California Law and understands
that such restrictions on transfer of the Option Shares may result in Optionee
being required to hold the Option Shares for an indefinite period of time.

 

5.                                      Optionee agrees not to transfer or
encumber (“Transfer”) any of the Option Shares except pursuant to an effective
registration statement under the Securities Act or an exemption from
registration.  As a further condition to any such Transfer, except in the event
that such Transfer is made pursuant to an effective registration statement under
the Securities Act, if, in the reasonable opinion of counsel to the Company, any
Transfer of the Option Shares by the contemplated transferee thereof would not
be exempt from the registration and prospectus delivery requirements of the
Securities Act, the Company may require the contemplated

 

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transferee to furnish the Company with an investment letter setting forth such
information and agreements as may be reasonably requested by the Company to
ensure compliance by such transferee with the Securities Act.

 

6.                                      Optionee has had the opportunity to ask
questions of, and to receive answers from, appropriate officers of the Company
with respect to the terms and conditions of the transactions contemplated hereby
and with respect to the business, affairs, financial condition and results of
operations of the Company.  Optionee has had access to such financial and other
information as is necessary in order for Optionee to make a fully informed
decision as to investment in the Company, and has had the opportunity to obtain
any additional information necessary to verify any of such information to which
Optionee has had access.

 

7.                                      Optionee acknowledges that if at the
time of exercise of the Option by Optionee there is no effective registration
statement registering the issuance of the Option Shares upon exercise of the
Option under the Securities Act any certificate evidencing the Option Shares
will have a legend to the following effect:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.”

 

8.                                      Optionee understands that the issuance
of the Option Shares to Optionee may generate income, taxable at ordinary rates,
equal to the value of the Shares less the exercise price and that the Options
when they are exercised or at an earlier time may result in income, taxable at
ordinary rates or greater (if a penalty rate is applicable), pursuant to
Sections 83 or 409A of the Internal Revenue Code of 1986, as amended, and the
regulations or proposed regulations thereunder.

 

Dated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Address)

 

 

 

 

 

 

 

 

Social Security Number

 

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*Insert here the number of shares being exercised making all adjustments for
cashless exercise pursuant to Section 3 or for stock splits, stock dividends or
other additional Common Stock of the Company, other securities or property
which, pursuant to the adjustment provisions of Section 5 of the Option, may be
deliverable upon exercise.

 

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