ex10-1.htm


    
      

      

    

    Exhibit
10.1

     

     

    
      JAYHAWK
ENERGY, INC.

      2009
STOCK INCENTIVE PLAN FOR EMPLOYEES,

      CONTRACTORS,
CONSULTANTS, ADVISERS, BOARD

      ADVISORS,
BOARD MEMBERS, AND OTHERS

       

       

      CONTENTS

       

      
        
          
            	
                    1.

                  	
                    Definitions:

                  	
                    2

                  
	
                    2.

                  	
                    Purpose
      of Plan:

                  	
                    3

                  
	
                    3.

                  	
                    Administration:

                  	
                    3

                  
	
                    4.

                  	
                    Indemnification
      of Committee Members:

                  	
                    3

                  
	
                    5.

                  	
                    Maximum
      Number of Shares Subject to Plan:

                  	
                    3

                  
	
                    6.

                  	
                    Participants:

                  	
                    4

                  
	
                    7.

                  	
                    Written
      Agreement:

                  	
                    4

                  
	
                    8.

                  	
                    Allotment
      of Shares:

                  	
                    4

                  
	
                    9.

                  	
                    Stock
      Option Price-

                  	
                    4

                  
	
                    10.

                  	
                    Stock
      Price:

                  	
                    4

                  
	
                    11.

                  	
                    Payment
      of Stock Option Price-

                  	
                    5

                  
	
                    11.

                  	
                    Granting
      and Exercising of Stock Options:

                  	
                    5

                  
	
                    12.

                  	
                    Non-transferability
      of Stock Options-

                  	
                    6

                  
	
                    13.

                  	
                    Term
      of Stock:

                  	
                    6

                  
	
                    14.

                  	
                    Reclassification,
      Consolidation Or Merger:

                  	
                    6

                  
	
                    15.

                  	
                    Non-transferability
      of Stock Rights:

                  	
                    6

                  
	
                    16.

                  	
                    Continuation
      of Employment-

                  	
                    6

                  
	
                    17.

                  	
                    Rights
      to Continued Employment:

                  	
                    7

                  
	
                    18.

                  	
                    Effectiveness
      of Plan:

                  	
                    7

                  
	
                    19.

                  	
                    Termination,
      Duration and Amendments of Plan:

                  	
                    7

                  


          

        

      

      


      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      1.             
Definitions:

       

      As used
herein, the following definitions shall apply:

       

      (a)           "Board of Directors" shall mean the Board of
Directors of the Corporation.

       

      (b)           "Committee" shall mean the Compensation
Committee designated by the Board
of Directors of the Corporation, or such other committee as shall be specified
by the Board of Directors to perform the functions and duties of the Committee
under the Plan; provided, however, that, the Committee shall comply with the
requirements of (i) Rule 16b-3 of the Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and (ii) Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder.

       

      (c)           "Corporation" shall mean JayHawk Energy, Inc.,
a Colorado corporation,
or any successor thereof.

       

      (d)           "Discretion" shall mean in the sole discretion
of the Committee, with no
requirement whatsoever that the Committee follow past practices, act in a manner
consistent with past practices, or treat an employee or consultant in a manner
consistent with the treatment afforded other employees or consultants with
respect to the Plan.

       

      (e)           "Participant" shall mean any
individual designated by the Committee under
Paragraph 6 for participation in the Plan.

       

      (f)    "Plan" shall mean this JayHawk Energy, Inc.
2009 Stock Incentive Plan for Employees and Consultants, as
amended.

       

      (g)           "Subsidiary" shall mean any corporation or
similar entity in which the Corporation
owns, directly or indirectly, stock or other equity interest ("Stock")
possessing more than 25% of the combined voting power of all classes of Stock;
provided, however, that an Incentive Option may be granted to an employee of a
Subsidiary only if the Subsidiary is a corporation and the Corporation owns,
directly or indirectly, 50% or more of the total combined voting power of all
classes of Stock of the Subsidiary.

       

      (h)           "Incentive Option" shall mean an option to
purchase Common Stock of the
Corporation which meets the requirements set forth in the Plan and also meets
the definition of an incentive stock option within the meaning of Section 422 of
the Code. The stock option agreement for an Incentive Option shall state that
the option is intended to be an Incentive Option.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (i)           "Nonqualified Option" shall mean an option to
purchase Common Stock of
the Corporation which meets the requirements set forth in the Plan but does not
meet the definition of an incentive stock option within the meaning of Section
422 of the Code. The stock option agreement for a Nonqualified Option shall
state that the option is intended to be a Nonqualified Option.

       

      2.            
Purpose of Plan:

       

      The
purpose of the Plan is to provide employees and consultants of the Corporation
and its Subsidiaries with an increased incentive to make significant and
extraordinary contributions to the long-term performance and growth of the
Corporation and its Subsidiaries, to join the interests of employees and
consultants with the interests of the shareholders of the Corporation, and to
facilitate attracting and retaining employees and consultants of exceptional
ability.

       

      Administration:

       

      The Plan
shall be administered by the Committee. Subject to the provisions of the Plan,
the Committee shall determine, from those eligible to be Participants under the
Plan, the persons to be granted stock or stock options, the amount of stock or
options to be granted to each such person, and the terms and conditions of any
grant. Subject to the provisions of the Plan, the Committee is authorized to
interpret the Plan, to make, amend and rescind rules and regulations relating to
the Plan and to make all other determinations necessary or advisable for the
Plan's administration. Interpretation and construction of any provision of the
Plan by the Committee shall, unless otherwise determined by the Board of
Directors of the Corporation, be final and conclusive. A majority of the
Committee shall constitute a quorum, and the acts approved by a majority of the
members present at any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be the acts of the
Committee.

       

      Indemnification
of Committee Members:

       

      In
addition to such other rights of indemnification as they may have, the members
of the Committee shall be indemnified by the Corporation in connection with any
claim, action, suit or proceeding relating to any action taken or failure to act
under or in connection with the Plan or any stock or option granted hereunder to
the full extent permitted by applicable law or provided for under the
Corporation's Articles of Incorporation or Bylaws with respect to
indemnification of directors of the Corporation.

       

      Maximum
Number of Shares Subject to Plan:

       

      The
maximum number of shares and/or stock options which may be granted under the
Plan shall be 4,000,000 shares in the aggregate of Common Stock of the
Corporation.

       

      The
number of shares subject to each outstanding stock option shall be subject to
such adjustment as the Committee, in its Discretion, deems appropriate to
reflect such events as stock dividends, stock splits, recapitalizations,
mergers, consolidations or reorganizations of or by the Corporation; provided,
however, that no fractional shares shall be issued pursuant to the
Plan, no rights may be granted under the Plan with respect to fractional shares,
and any fractional shares resulting from such adjustments shall be eliminated
from any outstanding stock option.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      Participants

       

      The
Committee shall determine and designate from time to time, in its Discretion,
those employees and consultants of the Corporation or any Subsidiary to receive
stock or options that, in the judgment of the Committee, are or will become
responsible for the direction and financial success of the Corporation or any
Subsidiary.

       

      Written
Agreement:

       

      Each
stock or option award shall be evidenced by a written agreement (each a
"Corporation-Participant Agreement") containing such provisions as may be
approved by the Committee. Each such Corporation-Participant Agreement shall
constitute a binding contract between the Corporation and the Participant and
every Participant, upon acceptance of such Agreement, shall be bound by the
terms and restrictions of the Plan and of such Agreement. The terms of each such
Corporation-Participant Agreement shall be in accordance with the Plan, but each
Corporation- Participant Agreement may include such additional provisions and
restrictions determined by the Committee, in its Discretion, provided that such
additional provisions and restrictions are not inconsistent with the terms of
the Plan.

       

      Allotment
of Shares:

       

      The
Committee shall determine and fix, in its Discretion, the number of shares of
Common Stock or options to purchase shares of Common Stock with respect to which
a Participant may be granted.

       

      Stock
Option Price:

       

      The
Committee, in its Discretion, shall establish the price per share for which the
shares covered by the option may be purchased.

       

      Stock
Price:

       

      The
initial and standard price per share of common stock to be issued directly shall
be the Fair Market Value per share, but may be changed in each case by the
Board, or its designee, from time to time. If the share price is changed, the
Board, or its designee, shall determine the share price no later than the date
of the issuance of the shares and at such other times as the Board, or its
designee, deems necessary. The Board shall have absolute final discretion to
determine the price of the common stock under the Plan. In the absence of such
specific determination, the share price will be the Fair Market Value per share.
"Fair Market Value" shall mean, if there is an established market for the
Company's Common Stock on a stock exchange, in an over-the-counter market or
otherwise, the Closing Bid Price of the Company's stock for the trading day
which is the valuation date, provided that the Board may, in its discretion
provide an alternative definition for Fair Market Value in the instrument
granting the right. Unless otherwise specified by the Board at the time of grant
(or in the
formula applicable to such grant), the valuation date for purposes of
determining the stock price shall be the date of grant. The Board may specify
that, instead of the date of grant, the valuation date shall be a valuation
period of up to ninety (90) days prior to the date of grant, and Fair Market
Value for purposes of such grant shall be the average over the valuation period
of the mean of the highest and lowest quoted selling prices on each date on
which sales were made in the valuation period. If there is no established market
for the Company's Common Stock, or if there were no sales during the applicable
valuation period, the determination of Fair Market Value shall be established by
the Board in its sole discretion, considering the criteria set forth in Treas.
Reg. Section 20.2031-2 or successor regulations.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      11.          Payment
of Stock Option Price:

       

      To
exercise in whole or in part any stock option granted hereunder, payment of the
option price in full in cash or, with the consent of the Committee, in Common
Stock of the Corporation or by a promissory note payable to the order of the
Corporation in a form acceptable to the Committee, shall be made by the
Participant for all shares so purchased. Such payment may, with the consent of
the Committee, also consist of a cash down payment and delivery of such
promissory note in the amount of the unpaid exercise price. In the Discretion of
and subject to such conditions as may be established by the Committee, payment
of the option price may also be made by the Corporation retaining from the
shares to be delivered upon exercise of the stock option that number of shares
having a fair market value on the date of exercise equal to the option price of
the number of shares with respect to which the Participant exercises the stock
option. Such payment may also be made in such other manner as the Committee
determines is appropriate, in its Discretion. No Participant shall have any of
the rights of a shareholder of the Corporation under any stock option until the
actual issuance of shares to said Participant, and prior to such issuance no
adjustment shall be made for dividends, distributions or other rights in respect
of such shares, except as provided in Paragraph 5.

       

      Granting
and Exercising of Stock Options:

       

      Subject
to the provisions of this Paragraph 12, each stock option granted hereunder
shall be exercisable at any such time or times or in any such installments as
may be determined by the Committee at the time of the grant. If the Common Stock
of the Corporation is publicly traded and if a Participant who is granted a
stock option is a person who is regularly required to report his or her
ownership and changes in ownership of Common Stock of the Corporation to the
Securities and Exchange Commission and is subject to short-swing profit
liability under the provisions of Section 16(b) of the Exchange Act, then any
election to exercise as well as any actual exercise of such Participant's stock
option shall be made only during the period beginning on the third business day
and ending on the twelfth business day following the release for publication by
the Corporation of quarterly or annual summary statements of sales and earnings.
Notwithstanding anything contained in the Plan to the contrary, if the Common
Stock of the Corporation is publicly traded, stock options shall always be
granted and exercised in such a manner as to conform to the provisions of Rule
16b-3(e), or any replacement rule, adopted pursuant to the provisions of the
Exchange Act.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      A
Participant may exercise a stock option, if then exercisable, in whole or in
part by delivery to the Corporation of written notice of the exercise, in such
form as the Committee may prescribe, accompanied, in the case of a stock option,
by (0 payment for the shares with respect to which the stock option is exercised
in accordance with Paragraph 11, or (ii) in the Discretion of the Committee,
irrevocable instructions to a stock broker to promptly deliver to the
Corporation full payment for the shares with respect to which the stock option
is exercised from the proceeds of the stock broker's sale of or loan against the
shares. Except as provided in Paragraph 17, stock options may be exercised only
while the Participant is an employee or consultant of the Corporation or a
Subsidiary.

       

      Successive
stock options may be granted to the same Participant, whether or not the stock
option(s) previously granted to such Participant remain unexercised. A
Participant may exercise a stock option, if then exercisable, notwithstanding
those stock options previously granted to such Participant remain
unexercised.

       

      Non-transferability
of Stock Options:

       

      No stock
option granted under the Plan to a Participant shall be transferable by such
Participant otherwise than by will or by the laws of descent and distribution,
and stock options shall be exercisable, during the lifetime of the Participant,
only by the Participant.

       

      Term
of Stock:

       

      If not
sooner terminated, each stock option granted hereunder shall expire not more
than five (5) years from the date of the granting thereof.

       

      Reclassification,
Consolidation Or Merger:

       

      If and to
the extent that the number of issued shares of common stock of the Company shall
be increased or reduced by change in par value, split-up reclassification,
distribution of a dividend payable in stock, or the like, the number of shares
subject to direct issuance held by a person and the price per share shall be
proportionately adjusted. If the Company is reorganized or consolidated or
merged with another corporation, the person shall be entitled to receive direct
issuance covering shares of such reorganized, consolidated, or merged company in
the same proportion, at an equivalent price, and subject to the same
conditions.

       

      Non-transferability
of Stock Rights:

       

      No stock
right granted under the Plan to a Participant shall be transferable by such
Participant otherwise than by will or by the laws of descent and distribution.
However, any stock issued shall be freely transferable after
issuance.

       

      Continuation
of Employment:

       

      The
Committee may require, in its Discretion, that any Participant under the Plan to
whom a stock or option shall be granted shall agree in writing as a condition of
the granting of such stock or option award to remain in the employ or to remain
as a consultant of the Corporation
or a Subsidiary for a designed minimum period from the date of the granting of
such stock or option award as shall be fixed by the Committee.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      Rights
to Continued Employment:

       

      Nothing
contained in the Plan or in any stock or option granted or awarded pursuant to
the Plan, nor any action taken by the Committee hereunder, shall confer upon any
Participant any right with respect to continuation of employment or consultancy
by the Corporation or a Subsidiary nor interfere in any way with the right of
the Corporation or a Subsidiary to terminate such person's employment or
consultancy at any time.

       

      Effectiveness
of Plan:

       

      The Plan
shall be effective on the date the Board of Directors of the Corporation adopts
the Plan.

       

      Termination,
Duration and Amendments of Plan:

       

      The Plan
may be abandoned or terminated at any time by the Board of Directors of the
Corporation. Unless sooner terminated, the Plan shall terminate on the date ten
years after its adoption by the Board of Directors, and no stock or option may
be granted or awarded thereafter. The termination of the Plan shall not affect
the validity of any stock or option grant outstanding on the date of
termination.

       

      For the
purpose of conforming to any changes in applicable law or governmental
regulations, or for any other lawful purpose, the Board of Directors shall have
the right, with or without approval of the shareholders of the Corporation, to
amend or revise the terms of the Plan at any time; provided, however, that no
such amendment or revision shall N without approval or ratification of the
shareholders of the Corporation (A) increase the maximum number of shares in the
aggregate which are subject to the Plan (subject, however, to the provisions of
Paragraph 5), (B) increase the maximum number of shares for which any
Participant may be granted stock or option under the Plan (except as
contemplated by Paragraph 5), (C) change the class of persons eligible to be
Participants under the Plan, or (D) materially increase the benefits accruing to
Participants under the Plan, or (ii) without the consent of the holder thereof,
change the stock price (except as contemplated by Paragraph 5) or alter or
impair any stock which shall have been previously granted or awarded under the
Plan.

       

      BOARD OF
DIRECTORS: