Document:

ex4-6.htm

EXHIBIT 4.6

 

PACIFIC ENERGY DEVELOPMENT CORP.

 

2012 EQUITY INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

 

Unless otherwise defined herein, the terms in the Stock Option Agreement (the “Option Agreement”) have the same meanings as defined in the Pacific Energy Development Corp. 2012 Equity Incentive Plan (the “Plan”).

 

I. NOTICE OF STOCK OPTION GRANT

 

Optionee:

 

Address:

 

You have been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

 

	
Grant Date:

 

	  
	
Vesting Commencement Date:

 

	  
	
Exercise Price per Share:

 

	
 

	
Total Number of Shares Granted:

 

	  
	
Total Exercise Price:

 

	  
	
Type of Option:

 

	
 

	
Expiration Date:

 

	
Ten (10) years after Grant Date

	
Vesting Schedule:

 

	  
	
Termination Period:

	  

 

To the extent vested, this Option will be exercisable for three (3) months after Optionee ceases to be a Service Provider, unless termination is due to Optionee’s death or Disability, in which case this Option will be exercisable for twelve (12) months after Optionee ceases to be a Service Provider.  In the event of termination due to Optionee’s death, the Company shall use commercially reasonable efforts to notify Optionee’s estate of the exercisability of the Option following Optionee’s death.  Notwithstanding the foregoing sentence, in no event may this Option be exercised after any termination of the Optionee as a Service Provider determined by the Company’s Board to be for Cause or after the Expiration Date as provided above and this Option may be subject to earlier termination as provided in the Plan.

  

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“Cause” has the meaning ascribed to such term or words of similar import in Optionee’s written employment or service contract with the Company or its Parent or any Subsidiary and, in the absence of such agreement or definition, means Optionee’s (i) conviction of, or plea of nolo contendere to, a felony or any other crime involving moral turpitude; (ii) fraud on or misappropriation of any funds or property of the Company or its subsidiaries, or any affiliate, customer or vendor; (iii) personal dishonesty, incompetence, willful misconduct, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses), or breach of fiduciary duty which involves personal profit; (iv) willful misconduct in connection with Optionee’s duties or willful failure to perform Optionee’s responsibilities in the best interests of the Company or its subsidiaries; (v) illegal use or distribution of drugs; (vi) violation of any material rule, regulation, procedure or policy of the Company or its subsidiaries, the violation of which could have a material detriment to the Company; or (vii) material breach of any provision of any employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by Optionee for the benefit of the Company or its subsidiaries, all as reasonably determined by the Company’s Board, which determination will be conclusive.  

 

II. AGREEMENT

 

1. Grant of Option.  The Administrator grants to the Optionee named in the Notice of Stock Option Grant in Part I of this Option Agreement, an Option to purchase the number of Shares set forth in the Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference.  In the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan prevail.

 

If designated in the Notice of Stock Option Grant as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Code section 422.  Nevertheless, to the extent that it exceeds the $100,000 rule of Code section 422(d), this Option will be treated as a Nonstatutory Stock Option.

 

2. Exercise of Option.

 

(a) Right to Exercise.  This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement.

 

(b) Method of Exercise.  This Option is exercisable by (i) delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and pursuant to procedures as the Administrator may determine, which will state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and other representations and agreements as may be required by the Company and (ii) paying the Company in full the aggregate Exercise Price as to all Shares being acquired, together with any applicable tax withholding.

 

This Option will be deemed to be exercised upon receipt by the Company of a fully executed Exercise Notice accompanied by the aggregate Exercise Price, together with any applicable tax withholding.

 

No Shares will be issued pursuant to the exercise of an Option unless the issuance and exercise of Shares complies with Applicable Laws.  Assuming compliance, for income tax purposes the Shares will be considered transferred to the Optionee on the date on which the Option is exercised with respect to the Shares.

  

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3. Method of Payment.  The aggregate Exercise Price may be paid by any of the following, or a combination thereof, at the election of the Optionee:

 

(a) cash;

 

(b) check;

 

(c) to the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, a promissory note;

 

(d) other Shares, provided Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised;

 

(e) by asking the Company to withhold Shares from the total Shares to be delivered upon exercise equal to the number of Shares having a value equal to the aggregate Exercise Price of the Shares being acquired;

 

(f) any combination of the foregoing methods of payment; or

 

(g) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

 

4. Restrictions on Exercise.  This Option may not be exercised (a) until such time as the Plan has been approved by the stockholders of the Company, or (b) if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Laws.  The Company will be relieved of any liability with respect to any delayed issuance of shares or its failure to issue shares if such delay or failure is necessary to comply with Applicable Laws.

 

5. Non-Transferability of Option.  This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee.  The terms of the Plan and this Option Agreement are binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

 

6. Term of Option.  This Option may be exercised only within the term set out in the Notice of Stock Option Grant, and may be exercised during the term only in accordance with the Plan and the terms of this Option.

 

7. Tax Obligations.

 

(a) Withholding Taxes.  Optionee agrees to arrange for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise.  Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver the Shares if withholding amounts are not delivered at the time of exercise.

 

(b) Notice of Disqualifying Disposition of ISO Shares.  If the Option granted to Optionee is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Grant Date, or (ii) the date one (1) year after the date of exercise, the Optionee must immediately notify the Company of the disposition in writing.  Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee.

  

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(c) Code Section 409A.  Under Code section 409A, an Option that vests after December 31, 2004 that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the Grant Date (a “discount option”) may be considered deferred compensation.  An Option that is a discount option may result in (i) income recognition by the Optionee prior to the exercise of the Option, (ii) an additional twenty percent (20%) tax, and (iii) potential penalty and interest charges.  Optionee acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share Exercise Price of this Option equals or exceeds Fair Market Value of a Share on the Grant Date in a later examination.  Optionee agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the Grant Date, Optionee will be solely responsible for any and all resulting tax consequences.

 

8. No Guarantee of Continued Service.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING OPTIONEE) TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

 

9. Notices.  All notices or other communications which are required or permitted hereunder will be in writing and sufficient if (i) personally delivered or sent by telecopy, (ii) sent by nationally-recognized overnight courier or (iii) sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

 

(a)           if to the Optionee, to the address (or telecopy number) set forth on the Notice of Stock Option Grant; and

(b)           if to the Company, to its principal executive office as specified in any report filed by the Company with the Securities and Exchange Commission or to such address as the Company may have specified to the Grantee in writing, Attention: Corporate Secretary;

or to any other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith.  Any communication will be deemed to have been given (i) when delivered, if personally delivered, or when telecopied, if telecopied, (ii) on the first Business Day (as hereinafter defined) after dispatch, if sent by nationally-recognized overnight courier and (iii) on the fourth Business Day following the date on which the piece of mail containing the communication is posted, if sent by mail.  As used herein, “Business Day” means a day that is not a Saturday, Sunday or a day on which banking institutions in the city to which the notice or communication is to be sent are not required to be open.

 

10. Specific Performance.  Optionee expressly agrees that the Company will be irreparably damaged if the provisions of this Option Agreement and the Plan are not specifically enforced.  Upon a breach or threatened breach of the terms, covenants and/or conditions of this Option Agreement or the Plan by the Optionee, the Company will, in addition to all other remedies, be entitled to a temporary or permanent injunction, without showing any actual damage, and/or decree for specific performance, in accordance with the provisions hereof and thereof.  The Administrator has the power to determine what constitutes a breach or threatened breach of this Option Agreement or the Plan.  The Administrator’s determinations will be final and conclusive and binding upon the Optionee.

  

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11. No Waiver.  No waiver of any breach or condition of this Option Agreement will be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

 

12. Optionee Undertaking.  The Optionee agrees to take whatever additional actions and execute whatever additional documents the Company may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Optionee pursuant to the express provisions of this Option Agreement.

 

13. Modification of Rights.  The rights of the Optionee are subject to modification and termination in certain events as provided in this Option Agreement and the Plan.

 

14. Governing Law.  This Agreement is governed by, and construed in accordance with, the laws of the State of California, without giving effect to its conflict or choice of law principles that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

15. Counterparts; Facsimile Execution.  This Option Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which together constitute one and the same instrument.  Facsimile execution and delivery of this Option Agreement is legal, valid and binding execution and delivery for all purposes.

 

16. Entire Agreement.  The Plan, this Option Agreement, and upon execution, the Exercise Notice, constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee.

 

17. Severability.  In the event one or more of the provisions of this Option Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this Option Agreement, and this Option Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

 

18. WAIVER OF JURY TRIAL.  THE OPTIONEE EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS OPTION AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

[remainder of page left blank intentionally]

  

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Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and accepts this Option subject to all of the terms and provisions thereof.  Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option.  Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option.  Optionee further agrees to notify the Company upon any change in the residence address indicated below.

	
OPTIONEE

	  	
PACIFIC ENERGY DEVELOPMENT CORP.

	  	  	  
	
Signature

	  	
By

	  	  	  
	
Print Name

	  	
Print Name

	  	  	  
	  	  	
Title

	  	  	  
	
Residence Address

	  	  

  

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EXHIBIT A

2012 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

Pacific Energy Development Corp.

[Address]

Attention: _______________, _________________

 

1. Exercise of Option.  Effective as of today, _____________, _____, the undersigned (“Optionee”) elects to exercise Optionee’s option to purchase _________ shares of the Common Stock (the “Shares”) of Pacific Energy Development Corp. (the “Company”) under and pursuant to the Pacific Energy Development Corp. 2012 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement dated ____________, ____ (the “Option Agreement”).

 

2. Delivery of Payment.  Optionee herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option.

 

3. Representations of Optionee.  Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

 

4. Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder exists with respect to the Optioned Stock, notwithstanding the exercise of the Option.  Subject to the requirements of Section 6 below, the Shares will be issued to the Optionee as soon as practicable after the Option is exercised in accordance with the Option Agreement.  No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in the Plan.

 

5. Tax Consultation.  Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee’s purchase or disposition of the Shares.  Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

 

6. Refusal to Transfer.  The Company will not (i) transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice, or (ii) be required to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares have been so transferred.

 

7. Successors and Assigns.  The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice inures to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Exercise Notice is binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

  

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8. Interpretation.  Any dispute regarding the interpretation of this Exercise Notice will be submitted by Optionee or by the Company forthwith to the Administrator for review at its next regular meeting.  The resolution of disputes by the Administrator will be final and binding on all parties.

 

9. Governing Law; Severability.  This Exercise Notice is be governed by, and construed in accordance with, the laws of the State of California, without giving effect to its conflict or choice of law principles that might otherwise refer construction or interpretation of this Exercise to the substantive law of another jurisdiction.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice will continue in full force and effect.

 

10. Notices.  Any notice required or permitted hereunder will be provided in writing and deemed effective if provided in the manner specified in the Option Agreement.

 

11. Further Instruments.  The parties agree to execute any further instruments and to take any further action as may be reasonably necessary to carry out the purposes and intent of the Option Agreement and this Exercise Notice.

 

12. Entire Agreement.  The Plan and Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan, and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee.

 

[signature page follows]

  

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Submitted by:

	  	
Accepted by:

	
OPTIONEE

	  	
PACIFIC ENERGY DEVELOPMENT CORP.

	  	  	  
	
Signature

	  	
By

	  	  	  
	
Print Name

	  	
Print Name

	  	  	  
	
Address:

	  	
Address:

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	
Date Received

 

 

9ex4-7.htm

EXHIBIT 4.7

 

RESTRICTED STOCK GRANT AGREEMENT

 

THIS RESTRICTED STOCK GRANT AGREEMENT (the “Agreement”) is entered into as of __________________ (the “Grant Date”), by and between Pacific Energy Development Corp., a Nevada corporation (the “Company”), and ___________________ (“Grantee”).

 

1. Restricted Stock Grant.

 

(a) Contemporaneously with the execution of this Agreement, the Company will grant and issue to Grantee ______________ shares of Common Stock, par value $0.001 per share, of the Company (the “Restricted Stock”) for $0.00 consideration from Grantee (the “Purchase Price”).  Stock certificates evidencing the Restricted Stock will be retained by the Company for the period during which the Restricted Stock is subject to forfeiture by the Company pursuant to the terms of Section 2 hereof.

 

(b) All shares of Restricted Stock issued hereunder shall be deemed issued to Grantee as fully paid and nonassessable shares, and Grantee shall have all rights of a stockholder with respect thereto, including the right to vote, receive dividends (including stock dividends), participate in stock splits or other recapitalizations, and exchange such shares in a merger, consolidation or other reorganization.  The term “Restricted Stock,” in addition to the shares purchased pursuant to this Agreement, also refers to all securities received in replacement of the Restricted Stock, as a stock dividend or as a result of any stock split, recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Grantee is entitled by reason of Grantee’s ownership of the Restricted Stock.

 

2. Vesting of Restricted Stock.

 

(a) The Restricted Stock is restricted and subject to forfeiture by the Company until vested (the “Repurchase Option”).  The Restricted Stock which has vested and is no longer subject to forfeiture is referred to as “Vested Shares.”  All Restricted Stock which has not become Vested Shares is referred to as “Nonvested Shares.”

 

(b) Restricted Stock will vest and become nonforfeitable in accordance with the following vesting schedule, in each case subject to Grantee’s continued service as an employee, officer, director or consultant with the Company on such date:

 

	
(i)  

	
50% of the shares on the six (6) month anniversary of the Grant Date;

 

	
(ii)  

	
20% on the twelve (12) month anniversary of the Grant Date;

 

	
(iii)  

	
20% on the eighteen (18) month anniversary of the Grant Date; and

 

	
(iv)  

	
the balance 10% on the twenty-four (24) month anniversary of the Grant Date.

 

(c)  Any Nonvested Shares of Grantee will automatically vest and become nonforfeitable if Grantee’s service as an employee, officer, director or consultant with the Company ceases owing to the Grantee’s death.

 

  

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(d) In the event of a Corporate Transaction, the Company, in its discretion, may accelerate the time at which all or any portion of Grantee’s Restricted Stock will vest.  A “Corporate Transaction” means (i) a liquidation or dissolution of the Company; (ii) a merger or consolidation of the Company with or into another corporation with the shareholders of the Company immediately prior to the merger or consolidation owning less than 50% of the voting securities of the surviving entity (or the parent of the surviving entity if the merger is a triangular merger); or (iii) a sale of all or substantially all of the assets of the Company in a single transaction or a series of related transactions.

 

(e) Nonvested Shares may not be sold, transferred, assigned, pledged, or otherwise disposed of, directly or indirectly, whether by operation of law or otherwise.

 

3. Forfeiture of Nonvested Shares.  Except as provided herein, if Grantee's service with the Company ceases for any reason other than Grantee’s death, any Nonvested Shares will be automatically forfeited to the Company; provided, however, that the Company may cause any Nonvested Shares immediately to vest and become nonforfeitable if Grantee’s service with the Company is terminated by the Company without cause, as determined by the Company.

 

4. Escrow of Unvested Shares.  For purposes of facilitating the enforcement of the provisions of Section 2 above, Grantee agrees, immediately upon receipt of the certificate(s) for the Shares subject to the Repurchase Option, to deliver such certificate(s), together with an Assignment Separate from Certificate in the form attached to this Agreement as Exhibit A executed by Grantee and by Grantee’s spouse (if required for transfer), in blank, to the Secretary of the Company, or the Secretary’s designee, to hold such certificate(s) and Assignment Separate from Certificate in escrow and to take all such actions and to effectuate all such transfers and/or releases as are in accordance with the terms of this Agreement.  Grantee hereby acknowledges that the Secretary of the Company, or the Secretary’s designee, is so appointed as the escrow holder with the foregoing authorities as a material inducement to make this Agreement and that said appointment is coupled with an interest and is accordingly irrevocable.  Grantee agrees that said escrow holder shall not be liable to any party hereof (or to any other party).  The escrow holder may rely upon any letter, notice or other document executed by any signature purported to be genuine and may resign at any time.  Grantee agrees that if the Secretary of the Company, or the Secretary’s designee, resigns as escrow holder for any or no reason, the Board of Directors of the Company shall have the power to appoint a successor to serve as escrow holder pursuant to the terms of this Agreement.

 

5. No Employment Rights.  Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Grantee’s employment or consulting relationship, for any reason, with or without cause.

 

6. Section 83(b) Election.  Grantee understands that Section 83(a) of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the amount paid for the Restricted Stock and the fair market value of the Restricted Stock as of the date any restrictions on the Restricted Stock lapse.  In this context, “restriction” means the right of the Company to buy back or forfeit the Restricted Stock pursuant to the Repurchase Option set forth in Section 2 of this Agreement.  Grantee understands that Grantee may elect to be taxed at the time the Restricted Stock is acquired, rather than when and as the Repurchase Option expires, by filing an election under Section 83(b) (an “83(b) Election”) of the Code with the Internal Revenue Service within 30 days from the date of acquisition.  Even if the fair market value of the Restricted Stock at the time of the execution of this Agreement equals the amount paid for the Restricted Stock, the election must be made to avoid income under Section 83(a) in the future.  Grantee understands that failure to file such an election in a timely manner may result in adverse tax consequences for Grantee.  Grantee further understands that an additional copy of such election form should be filed with his or her federal income tax return for the calendar year in which the date of this Agreement falls.  Grantee acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Restricted Stock hereunder, and does not purport to be complete.  Grantee further acknowledges that the Company has directed Grantee to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Grantee may reside, and the tax consequences of Grantee’s death.

 

  

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Grantee agrees that he will execute and deliver to the Company with this executed Agreement a copy of the Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the “Acknowledgment”), attached hereto as Exhibit C.  Grantee further agrees that Grantee will execute and submit with the Acknowledgment a copy of the 83(b) Election, attached hereto as Exhibit D, if Grantee has indicated in the Acknowledgment his or her decision to make such an election.

 

GRANTEE ACKNOWLEDGES THAT IT IS GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY ANY ELECTION UNDER SECTION 83(b), EVEN IF GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON GRANTEE’S BEHALF.

7. Investment Representations.

 

(a) This Agreement is made in reliance upon Grantee’s representations to the Company, which by its acceptance hereof Grantee hereby confirms, that the shares of Restricted Stock to be received by Grantee will be acquired for investment for his or her own  account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and that he or she 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 or her property shall at all times be within his or her control.

 

(b) The Grantee understands that the Restricted Stock is not registered under the Securities Act of 1933, as amended (the “1933 Act”), on the basis that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from registration under the 1933 Act pursuant to Section 4(2) thereof, and that the Company’s reliance on such exemption is predicated on Grantee’s representations set forth herein.  Grantee realizes that the basis for the exemption may not be present if, notwithstanding such representations, the Grantee has in mind merely acquiring shares of the Restricted Stock for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise.  Grantee does not have any such intention.

 

(c) Grantee understands that the Restricted Stock may not be sold, transferred, or otherwise disposed of without registration under the 1933 Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Restricted Stock or an available exemption from registration under the 1933 Act, the Restricted Stock must be held indefinitely.  In particular, Grantee is aware that the Restricted Stock may not be sold pursuant to Rule 144 or Rule 701 promulgated under the 1933 Act unless all of the conditions of the applicable Rules are met.  Among the conditions for use of Rule 144 is the availability of current information to the public about the Company.  Such information is not now available, and the Company has no present plans to make such information available.  The Grantee represents that, in the absence of an effective registration statement covering the Restricted Stock, he or she will sell, transfer, or otherwise dispose of the Restricted Stock only in a manner consistent with his or her representations set forth herein and then only in accordance with the provisions of paragraph 4(d) hereof.

 

  

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(d) Grantee agrees that in no event will he or she make a transfer or disposition of any of the Restricted Stock (other than pursuant to an effective registration statement under the 1933 Act), unless and until (i) Grantee shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the disposition, and (ii) if requested by the Company, at the expense of Grantee or his or her transferees, Grantee shall have furnished to the Company either (A) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such transfer may be made without registration under the 1933 Act or (B) a “no action” letter from the Securities and Exchange Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Securities and Exchange Commission that action be taken with respect thereto.

 

(e) Grantee represents and warrants to the Company that he or she is an “accredited investor” within the meaning of Securities and Exchange Commission Rule 501 of Regulation D, as presently in effect.

 

8. Legends; Stop Transfer.

 

(a) All certificates for shares of the Restricted Stock shall bear substantially the following legends:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  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 AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITONS OF A CERTAIN RESTRICTED STOCK GRANT AGREEMENT BETWEEN THE CORPORATION AND THE HOLDER OF STOCK OF THE CORPORATION REPRESENTED BY THIS CERTIFICATE.  A COPY OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

(b) The certificates for shares of the Restricted Stock shall also bear any legends required by applicable state corporate or securities laws.

 

(c) In addition, the Company shall make a notation regarding the restrictions on transfer of the Restricted Stock in its stockbooks, and shares of the Restricted Stock shall be transferred on the books of the Company only if transferred or sold pursuant to an effective registration statement under the 1933 Act covering such shares or pursuant to and in compliance with the provisions of this Agreement.

 

9. California Law.  This Agreement is to be construed in accordance with and governed by the internal laws of the State of California as permitted by Section 1646.5 of the California Civil Code (or any similar successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties.

 

  

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10. Notice.  Any notice required to be given under the terms of this Agreement shall be addressed to the Company in care of its Secretary at the office of the Company at 4125 Blackhawk Plaza Circle, Suite 201A, Danville, CA 94506, Attn:  General Counsel, and any notice to be given to Grantee shall be addressed to him or her at the address given by such Grantee beneath his or her signature to this Agreement, or such other address as either party to this Agreement may hereafter designate in writing to the other.  Any such notice shall be deemed to have been duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, registered or certified and deposited (postage or registration or certification fee prepaid) in a post office or branch post office regularly maintained by the United States, or when sent via nationally recognized courier service.

 

11. Successors.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.  Where the context permits, “Grantee” as used in this Agreement shall include Grantee’s executors, administrators or other legal representatives or the person or persons to whom Grantee’s rights pass by will or the applicable laws of descent and distribution.

 

12. Spousal Consent.  Grantee shall cause his or her spouse to execute a Consent of Spouse in substantially the form of that attached hereto as Exhibit B concurrently with the execution of this Agreement or, if later, at the time Grantee becomes married.

 

13. California Securities Law.  THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE.  THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

  

5

  

IN WITNESS WHEREOF, the parties hereto have duly executed this Restricted Stock Grant Agreement as of the date first above written.

 

	
COMPANY:

 

	
PACIFIC ENERGY DEVELOPMENT CORP.,

	
a Nevada corporation

 

	
By: _______________________________

 

GRANTEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION 2 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY.  GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF SUCH EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE GRANTEE’S EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

 

 

	 GRANTEE:
	  
	  
	
By:  ____________________________________

	  
	
Name:  __________________________________

	  
	
Title:  ___________________________________

	  
	
Address:_________________________________

	
________________________________________

  

6

  

 

EXHIBIT A

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

 

FOR VALUE RECEIVED and pursuant to that certain Common Stock Purchase Agreement between the undersigned (“Grantee”) and Pacific Energy Development Corp (the “Company”) dated _______________ (the “Agreement”), Grantee hereby sells, assigns and transfers unto the Company _________________________________ (________) shares of the Common Stock of the Company standing in Grantee’s name on the Company’s books and represented by Certificate No. _____,  and does hereby irrevocably constitute and appoint ______________________ to transfer said stock on the books of the Company with full power of substitution in the premises.  THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.

 

Dated: ______________________

 

	
 Signature:

 

	
______________________________

	
GRANTEE:  ___________________

Instruction:  Please do not fill in any blanks other than the signature line.  The purpose of this assignment is to enable the Company to exercise its repurchase option set forth in the Agreement without requiring additional signatures on the part of Grantee.

 

  

7

  

EXHIBIT B

 

CONSENT OF SPOUSE

 

I, _____________________, spouse of ____________________________, have read and approved the foregoing Agreement.  In consideration of the right of my spouse to purchase shares of Pacific Energy Development Corp as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement insofar as I may have any rights under the community property laws of the State of California or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

 

Dated:  ______________                                                                  ________________________________

(Signature of Spouse)

  

8

  

EXHIBIT C

ACKNOWLEDGMENT AND STATEMENT OF DECISION

REGARDING SECTION 83(b) ELECTION

The undersigned has entered a stock purchase agreement with Pacific Energy Development Corp, a Nevada corporation (the “Company”), pursuant to which the undersigned is purchasing ___________ shares of Common Stock of the Company (the “Shares”).  In connection with the purchase of the Shares, the undersigned hereby represents as follows:

 

1.           The undersigned has carefully reviewed the stock purchase agreement pursuant to which the undersigned is purchasing the Shares.

 

2.           The undersigned either [check and complete as applicable]:

 

	
  (a) ____

	
 has consulted, and has been fully advised by, the undersigned’s own tax advisor, __________________________, whose business address is _____________________________, regarding the federal, state and local tax consequences of purchasing the Shares, and particularly regarding the advisability of making elections pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) and pursuant to the corresponding provisions, if any, of applicable state law; or

	
  (b) ____

	
 has knowingly chosen not to consult such a tax advisor.

3.           The undersigned hereby states that the undersigned has decided [check as applicable]:

 

	
  (a) ____

	
 to make an election pursuant to Section 83(b) of the Code, and is submitting to the Company, together with the undersigned’s executed Common Stock Purchase Agreement, an executed form entitled “Election Under Section 83(b) of the Internal Revenue Code of 1986;” or

	
  (b) ____ 

	
not to make an election pursuant to Section 83(b) of the Code.

4.           Neither the Company nor any subsidiary or representative of the Company has made any warranty or representation to the undersigned with respect to the tax consequences of the undersigned’s purchase of the Shares or of the making or failure to make an election pursuant to Section 83(b) of the Code or the corresponding provisions, if any, of applicable state law.

 

Date: ___________________                                                         ___________________________

GRANTEE:                                                               

  

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EXHIBIT D

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code, to include in taxpayer’s gross income or alternative minimum taxable income, as applicable, for the current taxable year, the amount of any income that may be taxable to taxpayer in connection with taxpayer’s receipt of the property described below:

 

	
1.

	
The name, address, taxpayer identification number and taxable year of the undersigned are as follows:

 

	  	
TAXPAYER:

	
SPOUSE:

	
NAME:

	  	  
	
ADDRESS:

	  	  
	
IDENTIFICATION NO.:

	  	  
	
TAXABLE YEAR:

	  	  

 

	
2.

	
The property with respect to which the election is made is described as follows:

 

__________ shares of the Common Stock of Pacific Energy Development Corp, a Nevada corporation (the “Company”).

 

	
3.

	
The date on which the property was transferred is:

 

	
4.

	
The property is subject to the following restrictions:

 

The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company.  These restrictions lapse upon the satisfaction of certain conditions contained in such agreement.

	
5.

	
The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is:  $______

 

	
6.

	
The amount (if any) paid for such property:  NONE.

 

The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the above-described property.  The transferee of such property is the person performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.

 

Dated: ______________________, _____                                                                                 

Taxpayer

 

The undersigned spouse of taxpayer joins in this election.

Dated: ______________________, _____                                                                                 

Spouse of Taxpayer

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