Unassociated Document


    STOCK
OPTION AGREEMENT

     

    THIS
STOCK OPTION AGREEMENT (“Agreement”) dated as
of March 16, 2010 (the “Effective Date”), is
made by and between Global Clean Energy Holdings, Inc., a Utah corporation (the
“Company”), and
Richard Palmer (the “Optionee”).  Capitalized
terms used herein but not otherwise defined shall have the meaning ascribed to
them in or Section 14 of this Agreement or the Employment Agreement (as defined
below).

     

    NOW,
THEREFORE, in consideration of the mutual benefit to be derived herefrom, the
Company and Optionee agree as follows:

     

    1.           Grant of Renewal
Option.  The Company hereby grants to Optionee the right,
privilege and option (“Renewal Option”) to
purchase 12,000,000 shares of the Company’s common stock (“Common Stock”) at an
exercise price of $0.02 per share of Common Stock. The Option shall expire on
the tenth anniversary of the Effective Date (the “Expiration
Date”).

     

    2.           Vesting of
Option.  In the event that Optionee is still employed by the
Company under the Employment Agreement at such times as set forth below, the
Renewal Option (as appropriately adjusted for stock splits, stock dividends,
etc.) shall vest and become exercisable as follows:

     

    a.           At
such time as when the Company’s Market Capitalization first reaches $30 million,
the Option shall vest with respect to initial 6,000,000 shares of the Company’s
common stock subject thereunder; and

     

    b.           At
such time as when the Company’s Market Capitalization first reaches or exceeds
$60 million, the Option shall vest with respect to the remaining 6,000,000
shares of the Company’s common stock subject thereunder.

     

    3.           Termination of
Option.  Except as otherwise provided in this Agreement, to the
extent not previously exercised, the Renewal Option shall terminate as
follows:

     

    a.           If
the Company terminates Optionee’s engagement under the Employment Agreement for
“Cause”, the Renewal Option, to the extent not vested, shall terminate and
Optionee shall immediately and automatically cease to have any ownership right
in any and all such Renewal Option and any Common Stock subject
thereto;

     

    b.           If
the Company terminates Optionee’s engagement under the Employment Agreement
other than for “Cause” prior to September 30, 2012 or any successive one-year
period for which the Employment Agreement is automatically renewed under Section
1.3 of the Employment Agreement, the Renewal Option shall vest with respect to
all of the Common Stock subject thereto and not already vested; or

     

    c.           Upon
the dissolution or liquidation of the Company, the Renewal Option, to the extent
not vested as of such date, shall terminate, and Optionee shall immediately and
automatically cease to have any ownership right in the Renewal Option and any
Common Stock subject thereto.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    4.           Method of
Exercise.  The Renewal Option, to the extent vested, shall be
exercised by written notice to the Company by the Optionee (or successor in the
event of death).  Such written notice shall state the number of shares
with respect to which the Renewal Option is being exercised and designate a
time, during normal business hours of the Company, for the delivery thereof
(“Exercise
Date”), which time shall be at least five (5) days after the giving of
such notice unless an earlier date shall have been mutually agreed
upon.  At the time specified in the written notice, the Company shall
deliver to the Optionee at the principal office of the Company, or such other
appropriate place as may be determined by the Board, a certificate or
certificates for such shares.  Notwithstanding the foregoing, the
Company may postpone delivery of any certificate or certificates after notice of
exercise for such reasonable period as may be required to comply with any
applicable listing requirements of any securities exchange.  In the
event the Renewal Option shall be exercisable by any person other than the
Optionee, the required notice under this Section shall be accompanied by
appropriate proof of the right of such person to exercise the Renewal
Option.  The exercise price for the vested portion of the Renewal
Options shall be payable in full on or before the Exercise Date in any one of
the following alternative forms:

     

    a.           Full
payment in cash or certified bank or cashier’s check; or

     

    b.           Any
other method of payment acceptable to the Board, including, but not limited to,
the delivery by Optionee of an irrevocable direction to a securities broker
approved by the Company to sell the Common Stock and to deliver all or part of
the sales proceeds to the Company in payment of all or part of the exercise
price and any withholding taxes.

     

    5.           Restrictions on Exercise and
Delivery.  The exercise of the Renewal Option shall be subject
to the condition that, if at any time the Board shall determine, in its sole and
absolute discretion,

     

    a.           the
satisfaction of any withholding tax or other withholding liabilities, is
necessary or desirable as a condition of, or in connection with, such exercise
or the delivery or purchase of Common Stock pursuant thereto,

     

    b.           the
listing, registration, or qualification of any Common Stock deliverable upon
such exercise is desirable or necessary, under any state or federal law, as a
condition of, or in connection with, such exercise or the delivery or purchase
of Common Stock pursuant thereto, or

     

    c.           the
consent or approval of any regulatory body is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase
of Common Stock pursuant thereto,

     

    then in
any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the
Board.  Optionee shall execute such documents and take such other
actions as are required by the Board to enable it to effect or obtain such
withholding, listing, registration, qualification, consent or
approval.  Neither the Company nor any officer or member of the Board
(or a committee thereof), shall have any liability with respect to the
non-issuance or failure to sell shares as the result of any suspensions of
exercisability imposed pursuant to this Section.

     

    
      
         

      

      
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    6.           Nonassignability.  The
Renewal Option may not be sold, pledged, assigned or transferred in any manner
other than by will or by the laws of intestate succession, and may be exercised
during the lifetime of Optionee only by Optionee (except as may be permitted by
this Agreement).  Any transfer by Optionee of the Renewal Option shall
void such option and the Company shall have no further obligation with respect
to the Renewal Option.  The Renewal Option shall not be pledged or
hypothecated in any way, or otherwise be subject to execution, attachment or
similar process.

     

    7.           Rights as
Shareholder.  Neither Optionee nor his executor, administrator,
heirs or legatees, shall be, or have any rights or privileges of a shareholder
of the Company in respect of the Common Stock issuable under the Renewal Option
unless and until certificates representing such Common Stock shall have been
issued in Optionee’s name.

     

    8.           No Right of
Employment.  Neither the grant nor exercise of the Renewal
Option nor anything in this Agreement shall impose upon the Company or any other
corporation any obligation to employ or continue to employ
Optionee.  The right of the Company to terminate Optionee, as provided
in the Employment Agreement, shall not be diminished or affected because the
Renewal Option has been granted to Optionee.

     

    9.           Changes in Capital
Structure.

     

    Adjustment
Provisions.

     

    a.           If
the shares of Common Stock of the Company are increased, decreased, changed into
or exchanged for a different number or kind of shares or other securities of the
Company through a reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split or exchanged with another company
pursuant to a Reverse Merger, an appropriate and proportionate adjustment shall
be made changing the number or kind of Common Stock allocated to any unexercised
portion of the Renewal Option.  All such adjustments shall be made
with a corresponding adjustment in the exercise price for each share of Common
Stock covered by the Renewal Option.

     

    b.           Upon
a reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation
(except for a Reverse Merger), the Company shall use its best efforts, but shall
be under no obligation, to cause the reorganization, merger or consolidation
agreement to include a provision for the assumption of the Renewal Option, or
the substitution for the Renewal Option of a new option covering the stock of a
successor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to number and kind of shares of common stock and prices, and if
the reorganization, merger or consolidation agreement so provides, the Renewal
Option granted hereunder shall continue in the manner and under the terms so
provided in such agreement.  Upon the dissolution or liquidation of
the Company, or upon a sale of substantially all of its property, or a
reorganization, merger or consolidation, which does not include a provision for
assumption of the Renewal Option, the Renewal Option shall
terminate.

     

    
      
         

      

      
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    10.           Representations and
Warranties of Optionee.  In connection with the grant of the
Options hereunder, Optionee hereby represents and warrants to the Company as
follows:

     

    a.           The
Renewal Option is, and any Common Stock Optionee may acquire pursuant to the
exercise of the Renewal Option (together with the Renewal Option, the “Securities”), will be
acquired, by Optionee for investment for his own account, not as a nominee or
agent, and not with a view to the sale or distribution of any part thereof, and
he has no present intention of selling, granting participation in, or otherwise
distributing the same, but subject nevertheless to any requirement of law that
the disposition of his property shall at all times be within his
control.

     

    b.           Optionee
understands that the Securities will not be, registered under the Securities Act
of 1933, as amended (the “Securities Act”), on
the basis that the sale of the Securities is exempt from registration under the
Securities Act under Section 4(2) thereof, and that the Company’s reliance
on such exemption is predicated on Optionee’s representations set forth
herein.

     

    c.           Optionee
understands and agrees that the Securities may not be sold, transferred, or
otherwise disposed of without registration under the Securities Act or an
exemption from such registration requirements, and that in the absence of an
effective registration statement covering such Securities or an available
exemption from registration under the Securities Act, such Securities must be
held indefinitely.

     

    d.             Optionee
has the ability to bear the economic risks of Optionee’s investment in the
Securities.  Optionee is able, without materially impairing Optionee’s
financial condition, to hold Optionee’s investment in the Company for an
indefinite period of time and to suffer a complete loss on Optionee’s
investment.  Optionee understands and has fully considered for
purposes of Optionee’s investment the risks of Optionee’s investment and
understands that (x) an investment in the Company is suitable only for an
investor who is able to bear the economic consequences of losing Optionee’s
entire investment, (y) the Company has no financial or operating history,
and (z) an investment in the Company represents an extremely speculative
investment which involves a high degree of risk of loss.

     

    e.             Optionee
acknowledges and agrees that all certificates evidencing the Common Stock
issuable hereunder shall bear substantially the following legend:

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF ANY EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR ANY OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.

     

    11.           Notices.  Any
notice to be given under the terms of this Agreement shall be addressed to the
Company in care of its Secretary at its principal office, and any notice to be
given to Optionee shall be addressed to such Optionee at the address maintained
by the Company for such person or at such other address as the Optionee may
specify in writing to the Company.

     

    
      
         

      

      
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    12.           Binding
Effect.  This Agreement shall be binding upon and inure to the
benefit of Optionee, his heirs and successors, and of the Company, its
successors and assigns.

     

    13.           Governing
Law.  This Agreement shall be governed by the laws of the State
of California.

     

    14.           Definitions.  The
terms below used herein shall have the following meanings:

     

    a.           “Board” means the
Company’s Board of Directors.

     

    b.           “Employment Agreement”
shall mean that certain Employment Agreement, effective as of September 7, 2007,
between the Company and Optionee, as amended by that certain amendment to the
Employment Agreement, dated as of March 16, 2010.

     

    c.           “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

     

    d.           “Person” shall mean
any individual, corporation, partnership, joint venture, limited liability
company, estate, trust, unincorporated association, any federal, state, county
or municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing, or other
entity.

     

    e.           “Reporting Company”
shall mean a Person subject to the reporting requirements under Section 13(a) or
15(d) of the Exchange Act.

     

    f.           “Reverse Merger” shall
mean the merger of the Company into a Subsidiary of a corporation that is a
Reporting Company (the “Resulting Parent”),
with the shareholders of the Company exchanging their shares of the Company for
shares in the Resulting Parent and the Company becoming a wholly owned
Subsidiary of the Resulting Parent.

     

    g.           “SEC” shall mean the
Securities and Exchange Commission, or any other federal agency at the time
administering the Securities Act.

     

    h.           “Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations of
the SEC promulgated thereunder.

     

    i.           “Subsidiary” when used
in reference to any particular party shall mean a Person with respect to which
the party either is (a) required to consolidate the reporting of its financial
information in accordance with generally accepted accounting principles, or (b)
a beneficial owner of either at least 20% of any class of the Person’s
securities or securities of the Person representing at least 20% of the voting
power of all the Person’s outstanding securities that are entitled to vote in
the election of its directors.

     

     

    [Signature page
follows]

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, this Agreement is effective as of, and the date of grant shall
be March 16, 2010.

     

    
      	
              “COMPANY”

            	
              Global
      Clean Energy Holdings, Inc.,

              a
      Utah corporation

               

            
	 	
              By:

            	
              /s/ DAVID
      WALKER

            
	 
      	 
      	
              Name:
      David Walker

              Title:  Chairman
      of the Board

            
	
              “OPTIONEE”

            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
              /s/ RICHARD
      PALMER

                     Name:  Richard
      Palmer