Unassociated Document


    
      Exhibit
        10.3

       

      STOCK OPTION AGREEMENT

      FOR
        THE GRANT OF

      NON-QUALIFIED
        STOCK OPTIONS UNDER THE

      TRULITE,
        INC.

      STOCK
        OPTION PLAN

      


      THIS
        AGREEMENT
        is
        entered into as of October 17, 2005 by and between Trulite, Inc., a Delaware
        corporation (“Trulite” or the “Company”), and John Sifonis
        (“Optionee”).

      


      WHEREAS,
        Optionee
        is an employee
        and/or Director of
        the
        Company and the Company considers it desirable and in its best interest that
        Optionee be given an inducement to acquire a proprietary interest in the
        Company
        and an added incentive to advance the interests of the Company by possessing
        an
        option to purchase shares of the common stock, $.0001 par value per share
        (the
“Common Stock”) of the Company in accordance with the Trulite, Inc. Stock Option
        Plan (the “Plan”) which was adopted by the Board of Directors on April 11,
        2005.

      


      NOW,
        THEREFORE,
        in
        consideration of the premises, it is agreed as follows:

       

      1.  DEFINITIONS

      


      For
        purposes of this Agreement, any capitalized terms used herein and not defined
        herein shall have the meaning provided in the Plan and the following terms
        shall
        have the definitions indicated:

       

      
        	(a)  	
                Date
                  of Grant - the date of this Agreement, October 17,
                  2005.

              


      

       

      
        	(b)  	
                Exercise
                  Date - date that the Option or any portion thereof, as the context
                  requires, is exercised.

              


      

       

      2.  GRANT
        OF OPTION

      


      Subject
        to the provisions of the Plan, the Company hereby grants to Optionee the
        right,
        privilege and option to purchase (the “Option”) 42,218
        shares
        of Common Stock (the “Option Shares”) at a price of $0.88 per share (the “Grant
        Price”), which has been determined by the Board of Directors to be equal to the
        Fair Market Value of a share of Common Stock on the Date of Grant. The Option
        shall be exercisable in the amounts and at the times specified in Section
        3
        below. The number of Option Shares and the Grant Price have been adjusted
        to
        reflect a five-for-one stock split of the Trulite common stock to be effective
        in April 2005. The Option is a non-qualified stock option and shall not be
        treated as an incentive stock option.

      


      3.
        VESTING
        AND EXERCISE OF OPTIONS

       

      3.1
         The
        Option shall vest as provided below if Optionee continues to be employed
        by the
        Company on such dates:

       

      
        	 	
                With
                  respect to 18.5% of the Option Shares

              	
                One
                  year after the Date of Grant

              
	 	
                With
                  respect to an additional 22.5% of the Option Shares

              	
                Two
                  years after the Date of Grant

              
	 	
                With
                  respect to an additional 26.5% of the Option Shares

              	
                Three
                  years after the Date of Grant

              
	 	
                With
                  respect to an additional 32.5% of the Option Shares

              	
                Four
                  years after the Date of Grant

              


      

       

      3.2  The
        Option may not be exercised later than seven years after the Date of
        Grant.

       

      3.3 (a) If
        some
        or all of the shareholders of Trulite on the Date of Grant (the “Current
        Shareholders”) enter into a definitive agreement to sell to a third party (an
“Acquiring Party”) some or all of the shares of Common Stock held by the Current
        Shareholders and the proposed sale will result in the Current Shareholders
        having voting power with respect to less then 50% of the voting securities
        entitled to vote in the election of directors of Trulite, the Board may require
        the Optionee to exercise the vested portion of the Option and sell the Option
        Shares to the Acquiring Party or to the Current Shareholders, on the same
        terms
        and conditions, including prices, as the Acquiring Party is acquiring the
        shares
        from the Current Shareholders. Following the sale to the Acquiring Party,
        the
        unvested portion of the Option shall continue to be subject to the vesting
        terms
        provided herein.

      


      (b) In
        the
        event of (1)
        a sale
        of all or substantially all of the assets of the Company
        or (2)
        a
        merger, consolidation or reorganization involving Trulite, following which
        the
        Current Shareholders will have voting power with respect to less than 50%
        of the
        voting securities entitled to vote generally in the election of directors
        of the
        surviving entity, the Board can require that all vested Options be exercised
        at
        the time of effectiveness of the asset sale, merger, consolidation or
        reorganization and that, if not exercised, shall be forfeited. All Options
        not
        exercised at the time of the asset sale, merger, consolidation or reorganization
        and not required to be forfeited, shall be assumed by any acquiring or surviving
        entity on the same terms and shall become equivalent options to acquire
        securities of such acquiring or surviving entity.

      


      (c)  In
        the
        event of a “Change of Control” (that is, (i) a sale of all or substantially
        all of the assets or (ii) a merger, consolidation or reorganization involving
        Trulite, all options held by the employee and/or Director of
        the on
        record as of April 30, 2005 will be subject to accelerated vesting. Board
        approval will not be required under these terms and conditions. It should
        be
        noted that these terms and conditions do not include the purchase of Trulite
        by
        Synexus or vice versa nor does it include a public offering or reverse merger
        of
        Trulite/Synexus into a public entity. 

      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        3.4 Notwithstanding
          the foregoing, the Board may at any time in its sole discretion declare
          any
          outstanding Options to be fully vested and immediately exercisable in full
          or in
          part.

         

      

      4.  TERMINATION
        OF EMPLOYMENT

      


      The
        Option must be exercised while Optionee is employed and/or is a Director
        of the
        Company, except that, subject to Section 3.2, the Option may be exercised,
        to
        the extent vested, within 180 days of the date on which Optionee ceases to
        be an
        employee and/or a Director of
        the
        Company as a result of retirement on or after attaining the age of 65 or
        early
        retirement with approval of the Board (“Retirement”), as a result of disability
        within the meaning of Section 22(e)(3) of the Code or as a result of
        death.

      


      5.
        METHOD OF EXERCISE OF OPTION

      


      5.1 Optionee
        may exercise all or a portion of the Option by delivering to the Board a
        signed
        written notice of his/her intention to exercise the Option, specifying therein
        the number of shares to be purchased. Upon receiving such notice, and after
        the
        Board has received full payment of the Grant Price for the Option Shares
        being
        acquired and applicable withholding taxes, the Board shall direct the
        appropriate officer of the Company to transfer title to the Option Shares
        purchased to Optionee on the Company’s stock records and to issue to Optionee a
        stock certificate for the number of Option Shares being acquired. Optionee
        shall
        not have any rights as a shareholder until the stock certificate is issued
        to
        him.

      


      5.2 The
        Option may be exercised by the payment of the Grant Price in cash or by
        check.

       

      6.
        FORFEITURE OF OPTION GAIN

      


      6.1 Forfeiture
        of option gain and unexercised options if Optionee engages in certain
        activities.
        If, at
        any time within two years after termination of employment, Optionee engages
        in
        any activity in competition with any activity of the Company, or inimical,
        contrary or harmful to the interests of the Company, including, but not limited
        to (a) conduct related to Optionee’s employment for which either criminal or
        civil penalties against Optionee may be sought, (b) accepting employment
        with or
        serving as a consultant, advisor or in any other capacity to an employer
        that is
        in competition with or acting against the interests of the Company, including
        employing or recruiting any present, former or future employee of the Company,
        or (c) disclosing or misusing any confidential information or material
        concerning the Company, then (i) this Option shall terminate effective the
        date
        on which Optionee enters into such activity, unless terminated sooner by
        operation of another term or condition of this Option or the Plan, and (ii)
        any
        gain realized by Optionee from exercising all or a portion of this Option
        shall
        be paid by Optionee to the Company. The forfeiture described herein shall
        not be
        required if Optionee’s employment with the Company terminates following a
        transaction described in Section 3.3.

      


      6.2 Right
        of Set-off.
        By
        accepting this agreement, Optionee consents to a deduction from any amounts
        the
        Company owes Optionee from time to time (including amounts owed to Optionee
        as
        wages or other compensation, fringe benefits, or vacation pay, as well as
        any
        other amounts owed to Optionee by the Company), to the extent of the amounts
        Optionee owes the Company under paragraph 6.1 above. Whether or not the Company
        elects to make any set-off in whole or in part, if the Company does not recover
        by means of set-off the full amount Optionee owes it, calculated as set forth
        above, Optionee agrees to pay immediately the unpaid balance to the
        Company.

      


      6.3 Board
        Discretion.
        Optionee may be released from his obligations under this Section only if
        the
        Board determines in its sole discretion that such action is in the best
        interests of the Company.

      


      7.
        COMPLIANCE WITH APPLICABLE LAW

      


      No
        shares
        may be issued upon exercise of the Option unless such issuance is in compliance
        with the Delaware General Corporation Law, as in effect on the date of such
        issuance. It is the intention of the Company to effect full compliance with
        all
        securities and other applicable laws with respect to the sale of Option Shares
        pursuant to the exercise of Options hereunder and subsequent resales by the
        Optionee. The Company shall not be required to sell and deliver Option Shares
        hereunder upon exercise of these Options in whole or part until the Optionee
        shall have made such representations and agreed to the legending of stock
        certificates in a fashion as may reasonably be required by the Company's
        counsel
        to effect compliance with all applicable securities or other laws.

      


      8.
        RESTRICTION ON TRANSFER OF OPTION SHARES

      


      Unless
        the Common Stock is publicly traded, there will be no market for the Option
        Shares and the Option Shares will be subject to restrictions on transfer
        imposed
        by law, the Plan and this Agreement, as well as an Investors Rights Agreement
        and a Right of First Refusal and Co-Sale Agreement to which Optionee will
        be
        obligated to become a party upon exercise of the Option. By signing this
        Agreement, Optionee represents that any purchase of Option Shares upon exercise
        of an Option, prior to the Common Stock becoming publicly traded, will be
        for
        investment purposes without an intention to resell the Option Shares for
        a
        substantial period of time. No transfer of Option Shares will be recognized
        by
        the Company, unless in the opinion of counsel to the Company such transfer
        will
        not result in a violation of applicable securities laws.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9.
        TAXES

      


      The
        Company may make such provisions as it may deem appropriate for the withholding
        of any federal, state and local taxes that it determines are required to
        be
        withheld on the exercise of the Option.

      


      10.
        BINDING EFFECT

      


      This
        Agreement shall inure to the benefit of and be binding upon the parties hereto
        and their respective heirs, executors, administrators and
        successors.

      


      11.
        INCONSISTENT PROVISIONS

      


      The
        Option granted hereby is subject to the provisions of the Plan as in effect
        on
        the date hereof. If any provision of this Agreement conflicts with such a
        provision of the Plan, the Plan provision shall control.

      


      12.
        SEVERABILITY

      


      If
        a
        court of competent jurisdiction determines that any provision of this Agreement
        is invalid or unenforceable, then the invalidity or unenforceability of that
        provision shall not affect the validity or enforceability of any other provision
        of this Agreement, and all other provisions shall remain in full force and
        effect.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      


      IN
        WITNESS WHEREOF
        the
        parties hereto have caused this Agreement to be executed on the day and year
        first above written.

       

      
        	 	 	 
	 	TRULITE,
                INC.
	 
 	 
 	 
 
	 	By:  	/s/ John
                G. Sifonis
	 	
                
President
                and CEO and Director
	 	 
	 	 
	 	
	 	
                
John
                Sifonis