Filed by sedaredgar.com - Royalite Petroleum Company Inc. - Exhibit 10.16






DIRECTOR / OFFICER INCENTIVE STOCK OPTION AGREEMENT OF

ROYALITE PETROLEUM COMPANY INC. 
A Nevada Corporation 

THIS AGREEMENT is made between ROYALITE PETROLEUM
COMPANY INC., a Nevada corporation (hereinafter referred to as the
"Company"), and «NAME» of «ADDRESS», «citystate» (hereinafter referred to
as the “Optionee”), a director or officer of the Company, or a director or
officer of the Company’s subsidiary, effective as of the «IssueDay» day of
«IssueMonth», «IssueYear». 

1.          
Option Granted 

The Company hereby grants the Optionee incentive stock options
to purchase «SHARES» («NUMBEROPTIONS») shares of the Company’s Common
Stock at a purchase price of «EXERCISEPRICE» US per share for a term
commencing on the effective date of this Agreement and expiring at 5:00 pm
(Pacific Time) on the «ExpiryDay» day of «ExpiryMonth», «ExpiryYear» (the
“Expiration Date”), subject to termination as set forth herein. All options will
be fully vested upon execution of this Agreement.

2.          
Time of Exercise of Option 

The Optionee may exercise the options granted herein at any
time after the effective date of this Agreement until the date of termination of
the options as provided herein. 

3.          
Method of Exercise 

The options granted herein shall be exercised by written notice
delivered to the Company at its principal place of business, stating the number
of shares for which the options are being exercised. The notice must be
accompanied by a check or other methods of payment acceptable to the Plan
Administrator for the amount of the purchase price, and comply with all the
requirements of the Company’s 2008 Stock Option Plan dated October 15, 2008, as
approved by the Board of Directors of the Company on October 15, 2008, a copy of
which has been provided to the Optionee. 

4.          
Capital Adjustments 

The existence of the options granted herein shall not affect in
any way the right or power of the Company or its stockholders to: (1) make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company's capital structure or its business; (2) enter into any
merger or consolidation; (3) issue any bonds, debentures, preferred or prior
preference stocks ahead of or affecting the common stock or the rights thereof,
(4) issue any securities convertible into any common stock, (5) issue any
rights, options, or warrants to purchase any common stock, (6) dissolve or
liquidate the Company, (7) sell or transfer all or any part of its assets or
business, or (8) take any other corporate act or proceedings, whether of a
similar character or otherwise. 

5.          
Reorganization, Merger, Amalgamation and Consolidation 

If there shall, prior to the exercise of any of the options
provided for by this Agreement, be any reorganization of the authorized capital
of the Company by way of consolidation, merger, subdivision, amalgamation or
otherwise, or the payment of any stock dividends, then there shall automatically
be an adjustment in either or both of the number of shares which may be
purchased pursuant hereto or the price at which such shares may be purchased so
that the rights evidenced hereby shall thereafter as reasonably as possible be
equivalent to those originally granted hereby. The Company shall have the sole
and exclusive power to make such adjustments as it considers necessary and
desirable. 




- 2 -

In the event of a complete liquidation of the Company or a
merger, reorganization, or consolidation of the Company with any other
corporation in which the Company is not the surviving corporation, or the
Company becomes a wholly-owned subsidiary of another corporation, any
unexercised options granted under this Agreement shall be deemed cancelled
unless the surviving corporation in any such merger, reorganization, or
consolidation elects to assume the options under this Agreement or to issue
substitute options in place thereof; provided, however, that notwithstanding the
foregoing, if such options would be cancelled in accordance with the foregoing,
the Optionee shall have the right exercisable during a ten-day period ending on
the fifth day prior to such liquidation, merger, or consolidation to exercise
such option in whole or in part without regard to any installment exercise
provisions in this Agreement. 

6.          
Transfer of this Option 

During the Optionee's lifetime, the options granted herein
shall be exercisable only by the Optionee. The options shall not be transferable
by the Optionee other than by the laws of descent and distribution upon the
Optionee's death. In the event of the Optionee's death during the term of this
Agreement, the Optionee's personal representatives may exercise any portion of
the options granted herein that remain vested and unexercised at the time of the
Optionee's death, provided that any such exercise must be made, if at all,
during the period within six (6) months after the Optionee's death, and subject
to the option termination date specified in Paragraph 7(d) below. 

7.          
Termination of Option 

The Optionee’s right to exercise any options shall terminate on
the earliest of the following dates: 

	 	(a) 	
      The Expiration Date;

	 	 	 
	 	(b) 	
      Subject to subsections (c) and (d) below, the date which
      is thirty (30) days from the date on which the Optionee ceases to act as a
      director or officer of the Company or any subsidiary of the
  Company;

	 	 	 
	 	(c) 	
      In the event of the termination of the Optionee as a
      director or officer of the Company or any subsidiary of the Company as a
      result of a breach of the Optionee’s obligations to the Company or any
      subsidiary of the Company, whether or not such obligations arise under the
      terms of his or her management services agreement or otherwise, or as a
      result of any dishonesty, fraud, misconduct, the unauthorized use or
      disclosure of confidential information or trade secrets, or conviction or
      confession of a crime punishable by law (except minor violations) (each of
      which being a termination for “Cause”), the earliest date on which the
      Optionee is notified by the Company of such termination; and

	 	 	 
	 	(d) 	
      The date which is six (6) months from the date of the
      Optionee’s death or the date the Optionee is determined by the Company to
      be unable to perform his or her duties as a director or officer of the
      Company or any subsidiary of the Company as a result of any mental or
      physical disability that is expected to result in death or that is
      expected to last for a continuous period of twelve (12) months or more
      (the “Disability Determination Date”).



Notwithstanding the foregoing, the Optionee will be deemed not
to have ceased to act as a director or officer of the Company or any subsidiary
of the Company (the “Original Position”) if the Optionee continues to act as an
employee, officer, director or consultant of the Company or a subsidiary of the
Company in some other capacity immediately upon ceasing to act in the Original
Position. 

Also notwithstanding the foregoing, if the Optionee dies after
he or she ceases to be a director or officer of the Company or any subsidiary of
the Company for reasons other than a termination for Cause or for disability in
accordance with the above, the Optionee’s right to exercise any options
exercisable on the date the Optionee ceases to be a director or officer of the
Company or any subsidiary of the Company shall terminate on the earliest of the
Expiration Date and the date which is six (6) months after the date of death.





- 3 -

8.          
Rights as Shareholder 

The Optionee will not be deemed to be a holder of any shares
pursuant to the exercise of this option until he or she pays the option price
and a stock certificate is delivered to him or her for those shares. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date the stock certificate is delivered. 

9.          
Integration with the Company’s 2008 Stock Option Plan 

All of the terms and conditions of the Company’s 2008 Stock
Option Plan, a copy of which has been provided to the Optionee, are specifically
made a part of this Agreement and shall control with regard to the
interpretation or construction of any provision that is inconsistent herewith.
This Agreement will be governed by and construed in accordance with the laws of
the State of Nevada. 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the «IssueDay» day of «IssueMonth», «IssueYear». 

ROYALITE PETROLEUM COMPANY INC. 
by its authorized
signatory: 

 

_______________________________________
LOGAN B.
ANDERSON, PRESIDENT 

OPTIONEE: 

 

________________________________________
SIGNATURE OF
DIRECTOR / OFFICER 

«NAME»                                                                           

NAME OF DIRECTOR / OFFICER 

«ADDRESS»

«CITYSTATE»                                                                 
ADDRESS


 

«NUMBEROPTIONS»                                                   

NUMBER OF OPTIONS