forms8061708ex4-2.htm


    Exhibit
4.2

    


    POWER
OIL & GAS INC.

    


    STOCK
OPTION AGREEMENT

    


      


      This
Stock Option Agreement (this “Agreement”) is entered into as of _______ by and
between Power Oil & Gas Inc., a Canadian corporation (the “Corporation”),
and _______ (the “Optionee”).

      


      WHEREAS,
the Corporation desires to afford the Optionee an opportunity to purchase
certain shares of the Corporation’s common stock so as to acquire a proprietary
interest as a shareholder of the Corporation and to provide the Optionee with an
incentive to use his best efforts in the service of the
Corporation.

      


      NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
below, the parties agree as follows:

      


      (1)           Grant of
Option.

      


      The
Corporation hereby grants to Optionee the right to purchase up to the aggregate
number of Shares set forth in Exhibit A attached hereto at the exercise price
per Share stated therein.  The right to purchase such Shares shall be
subject to all of the provisions, terms and conditions set forth in this
Agreement and in the Power Oil & Gas Inc. 2007 Stock Option (the “Plan”), a
copy of which is annexed hereto and made a part hereof.  Unless
defined in this Agreement, capitalized terms used herein shall have the meaning
ascribed to them in the Plan.

      


      This
Option is intended to be and shall be treated as an Incentive Stock Option under
Section 422 of the Code unless this sentence has been manually crossed out and
its deletion is followed by the signature of the corporate officer who signed
this Option on behalf of the Corporation ______X______(check if
applicable).

      


      (2)           Vesting Schedule and
Expiration.

      


      This
Option shall not be exercisable prior to the vesting date set forth in Exhibit A
attached hereto or subsequent to the expiration date set forth therein unless
extended by the Board of Directors or the Option Committee.  During
the exercise period, the Option may be exercised by the Optionee (or such other
person or persons authorized to exercise Options under the Plan), in whole or in
part, from time to time, subject to the maximum percentage of Options then
exercisable in accordance with the schedule set forth in Exhibit A attached
hereto.  The Corporation agrees to maintain during such exercise
period a sufficient number of Shares (which may be authorized and unissued
Shares or issued Shares that have been reacquired by the Corporation)
corresponding to the number of unexercised Options granted to the Optionee after
taking into account any Share adjustment under the Plan.

      


      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (3)           Restrictions on
Transferability of Options.

      


      This
Option may not be transferred by the Optionee other than by will or the laws of
descent and distribution and may be exercised during the Optionee’s lifetime
only by the Optionee or the Optionee’s guardian or legal
representative.  A transfer of an Option by will or the laws of
descent and distribution shall not be effective unless the Option Committee
shall have been furnished with such evidence as it may deem necessary to
establish the validity and effectiveness of the transfer.

      


      (4)           Termination
Provisions.

      


      Except as
provided in paragraphs (2), and (3) below, if an Optionee’s employment by, or
relationship with, the Corporation is terminated voluntarily or, by the
Corporation, whether such termination is for Cause or for no reason whatsoever,
any Option heretofore granted which remains unexercised at the time of such
termination shall expire immediately, provided, however, that the Option
Committee may, in its sole and absolute discretion, within thirty (30) days of
such termination, waive the expiration of any Option awarded under the Plan, by
giving written notice of such waiver to the Optionee at such Optionee’s last
known address.  In the event of such waiver, the Optionee may exercise
any such Options only to such extent, for such time, and upon such terms and
conditions set forth in subparagraph (i) above.  The determination as
to whether a termination is voluntary or for Cause shall be made by the Option
Committee, whose decision shall be final and conclusive.

      


      If an
Optionee ceases to be employed by or ceases to perform services to the
Corporation by reason of death or Disability, the aggregate amount of
unexercised Options granted hereunder shall thereupon become fully vested and
immediately exercisable and shall expire no later than one (1) year thereafter
unless such Options by their terms expire before such date.  During
such one (1) year period, the Optionee, or, in the case of death, the Optionee’s
estate or the person or persons to whom the Option was transferred by will or
the laws of descent and distribution, may exercise any such Options, and if not
exercised, shall expire at the end of such one (1) year period unless such
Options by their terms expire before such date.

      


      If the
Optionee ceases to be employed by, or ceases to provide services to the
Corporation by reason of Retirement, the aggregate amount of unexercised Options
granted hereunder shall thereupon become fully vested and immediately
exercisable and shall expire, in the case of an Incentive Stock Option, no later
than three (3) months following such Retirement, or in the case of a
Nonqualifying Stock Option one (1) year following Retirement, unless, in either
case, the Options by their terms expire prior to such date.

      


      (5)           Exercise, Payment for and
Delivery of Stock.

      


      This
Option may be exercised by the Optionee or other person then entitled to
exercise it by delivery of a written notice to the Secretary of the Corporation
together with this Option Agreement specifying the number of Options intended to
be exercised and the exercise price and accompanied by payment in full of the
exercise price for the number of Shares with respect to which the Option is
exercised.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      If the
Corporation is required to withhold any federal, state or local tax as a result
of such exercise, the notice shall also be accompanied by a check payable to the
Corporation in payment of the applicable amount required to be withheld, unless
alternate arrangements have been agreed to between the parties to satisfy any
applicable withholding obligations.

      


      Payment
for Shares may be made in cash, or with the approval of the Option Committee
(which may be withheld in its sole discretion) with Shares having a fair market
value on the date of exercise equal to the exercise price, or a combination of
cash and Shares.  In addition, subject to the approval of the Option
Committee (which may be withheld in its sole discretion), payment may be
effected wholly or partly by monies borrowed from the Corporation pursuant to
the terms of a promissory note, the terms and conditions of which shall be
determined from time to time by the Option Committee.  An Optionee may
purchase less than the total numbers of Shares for which Options are then
exercisable, provided, however, that any partial exercise shall not be for less
than 100 Shares and shall not include any fractional Shares.  No
Optionee, legal representative of such Optionee, as the case may be, shall be,
or shall be deemed to be, the owner of any Shares covered by an Option unless
and until certificates for the Shares are issued to the Optionee or such
Optionee’s representative under the Plan.

      


      (6)           Adjustments.

      


      In the
event that there is any change in the Shares of the Corporation arising through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split or combination thereof, the Board of Directors shall make such adjustments
in the aggregate number of Options subject to this Agreement and/or the price
per share of such Options in order to prevent dilution or enlargement of the
Optionee’s rights and of the value represented by the Options; provided however,
no such adjustments will be made to the extent that such adjustments cause the
Plan to be treated as a “nonqualified deferred compensation plan” within the
meaning of Code Section 409A or any Options issued thereunder as being issued
under a “nonqualified deferred compensation plan” within the meaning of Code
Section 409A.  Upon any adjustment in the number or exercise price of
Shares subject to an Option, a new Option may be granted in place of such Option
which has been so adjusted.  In the event of a dissolution or
liquidation of the Corporation or a merger, consolidation, sale of all or
substantially all of the Corporation’s assets, or other corporate reorganization
in which the Corporation is not the surviving corporation, or any merger in
which the Corporation is the surviving corporation but the holders of Shares
receive securities of another corporation, outstanding Options shall terminate,
provided that the holder of each Option shall, in such event, if no provision
has been made for the substitution of a new option for such outstanding option,
have the right immediately prior to such event to exercise the holder’s Options
in whole or in part without regard to the date on which the Options otherwise
would be first exercisable.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (7)           Compliance with Laws and
Regulations.

      


      The
Optionee represents and warrants to the Corporation that the services rendered
by him to the Corporation shall under no circumstance include (a) any activities
which could be deemed by the Securities and Exchange Commission (“SEC”) to
constitute investment banking or any other activities requiring the Optionee to
register as a broker-dealer under the Securities Exchange Act of 1934; (b) any
activities which could be deemed by the SEC to be in connection with the offer
or sale of securities; or (c) any activities which directly or indirectly
promote or maintain a market for the Corporation’s securities.

      


      By
accepting this Option, the Optionee represents and agrees for himself and
his  transferees by will or the laws of descent and distribution that,
unless a registration statement under Securities Act of 1933 is in effect as to
Shares purchased upon any exercise of this  Option, (a) any and all
Shares so purchased shall be acquired for his personal account and not with a
view to or for sale in connection with distribution, and (b) each notice of
exercise of all or any portion of this Option shall, if the Option Committee so
requests, be accompanied by a representation and warranty in writing, signed by
the person entitled to exercise the same, that the Shares are being so acquired
in good faith for his or her personal account and not with a view to or for sale
in connection with any distribution.

      


      No
certificates for Shares purchased upon exercise of this Option shall be issued
and delivered unless and until, in the opinion of legal counsel for the
Corporation, such securities may be issued and delivered without causing the
Corporation to be in violation of or incur any liability under any federal,
state or other securities law or any other requirement of law or of any
regulatory body having jurisdiction over the Corporation.  Without
limiting the generality of the foregoing, the Optionee acknowledges and
understands that the Shares subject to the Options granted hereunder have not
been registered under the Securities Act of 1933, as amended, or under the blue sky or
securities laws of any state, that the Corporation has no obligation to so
register any of such Shares and that, except to the extent the Shares are so
registered, the Shares will be restricted securities and may be sold,
transferred or otherwise disposed of only if an exemption from such registration
is available.  Unless the Shares have been so registered, there shall
be noted conspicuously upon each stock certificate representing such Shares, the
following statement:

      


      “The
shares of stock represented by this certificate have not been registered under
the Securities Act of 1933 (1933 Act) nor under any applicable state securities
act and may not be offered or sold except pursuant to (i) an effective
registration statement relating to such stock under the 1933 Act and any
applicable state securities act, (ii) to the extent applicable, Rule 144 under
the 1933 Act (or any similar rule under such act or acts relating to the
disposition of securities), or (iii) an opinion of counsel satisfactory to the
Corporation that an exemption from registration under Act or Acts is
available.”

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (8)           Invalidity;
Severability.

      


      If any
clause or provision of this Agreement shall be adjudged invalid, the same shall
not affect the validity of any other clause or provision of this Agreement, or
of any other document pertaining to the subject matter thereof, or constitute by
reason thereof, any claim or cause of action in favor of Optionee as against the
Corporation.  In addition, the provisions of this Agreement shall be
read and construed and shall have effect as separate, severable and independent
provisions or restrictions, and shall be enforceable accordingly.

      


      (9)           Entire Agreement; No Waiver;
Remedies.

      


      This
Agreement contains the entire agreement of the parties and incorporates and
supersedes any and all prior or contemporaneous oral or written agreements with
respect to the matters referred to in it.  No waiver of any breach or
default hereunder shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature.  No
failure on the part of any party to exercise, and no delay in exercising any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
no waiver whatever shall be valid unless in writing signed by the party or
parties to be charged and then only to the extent specifically set forth in such
writing.  All remedies, rights, powers and privileges, either under
this Agreement or by law or otherwise afforded the parties to this Agreement,
shall be cumulative and shall not be exclusive of any remedies, rights, powers
and privileges provided by law.

      


      (10)           Successors and
Assigns.

      


      The
rights and obligations of the Corporation under this Agreement shall inure to
the benefit of and shall be binding upon the successors and assigns of the
Corporation.

      


      (11)           Headings; Counterparts;
Governing Law.

      


      The
headings in this Agreement are for convenience of reference only and are not
intended to define or limit the contents of any section or
paragraph.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement
shall in all respects be governed by the laws (without reference to conflicts of
laws principles) of Canada applicable to contracts made and performed within
Canada.

      


      (12)           Execution.

      


      The grant
of the Option hereunder shall be binding and effective only if this Agreement is
duly executed by or on behalf of the Corporation and by the Optionee, and a
signed copy is returned to the Corporation.

      


      The
Optionee acknowledges that no assurances or representations are made by the
Corporation as to the present or future market value of the Shares or as to the
business, affairs, financial condition or prospects of the
Corporation.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      (13)           Governing
Provisions.

      


      In the
event of any conflict between the terms and provisions contained in this
Agreement and the terms and provisions contained in the Plan, the terms,
provisions and conditions set forth in the Plan shall govern.

      


      (14)           Optionee Bound by
Plan.

      


      OPTIONEE
ACKNOWLEDGES RECEIPT OF THE ATTACHED COPY OF THE POWER OIL & GAS INC. 2007
STOCK OPTION PLAN AND AGREES TO BE BOUND BY ALL THE TERMS AND PROVISIONS
THEREOF.

      


      AGREED
AND ACCEPTED:

      


      


      


      


      Optionee

      Name:
___________

      Title:

      


      POWER OIL
& GAS INC.

      


      


      


      


      By:           

      Name:
__________

      Title:
_________

      


      


      


      


      




      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
A

      


      TO

      


      AGREEMENT
dated as of __________

      


      PURSUANT
TO THE POWER OIL & GAS INC.

      


      2007
STOCK OPTION PLAN

      


      with

      


      _________
(the OPTIONEE)

      


      


      


      
        	
                 
      

              	
                _______(check
      if applicable) The Option awarded under this Agreement is intended to be a
      Nonqualifying Stock Option.

              


      

      


      
        	
                 
      

              	
                ___X____(check
      if applicable) The Option awarded under this Agreement is intended to
      qualify as an Incentive Stock Option pursuant to Section 422 of the
      Code.

              


      

      


      
        	
                 
      

              	
                Number
      of shares of the Common Stock covered by the Option: ______
      Shares

              


      

      


      Exercise
price per share:  ________

      


      
        	
                 
      

              	
                Vesting
      Schedule:

              


      

      


      
        	
                Number
      Vested

              	
                Vesting
      Date