Document:

exv4w11

 

Exhibit 4.11

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

 

Non-Qualified Stock Option Award Agreement

(for Non-Employee Directors)

 

 

Award No.                    

          You (the “Participant”) are hereby awarded the following stock option (the
“Option”) to purchase Shares of Commerce Energy Group, Inc. (the “Company”),
subject to the terms and conditions set forth in this Non-Qualified Stock Option Award Agreement
(the “Award Agreement”) and in the Commerce Energy Group, Inc. 2006 Stock Incentive Plan
(the “Plan”), which is attached hereto as Exhibit A. A summary of the Plan
appears in its Prospectus, which is attached as Exhibit B. You should carefully review
these documents, and consult with your personal financial advisor, before exercising this Option.

          By executing this Award Agreement, you agree to be bound by all of the Plan’s terms and
conditions as if they had been set out verbatim in this Award Agreement. In addition, you
recognize and agree that all determinations, interpretations, or other actions respecting the Plan
and this Award Agreement will be made by the Board of Directors (the “Board”) of Commerce
Energy Group, Inc. (the “Company”) and shall (in the absence of manifest bad faith or
fraud) be final, conclusive and binding on all parties, including you and your successors in
interest. Capitalized terms are defined in the Plan or in this Award Agreement.

1. Variable Terms. This Option shall have, and be interpreted according to, the following
terms, subject to the provisions of the Plan in all instances:

	 	 	 	 	 
	 

	 	Name of Participant:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Type of Stock Option:
	 	Non-Qualified Stock Option
	 
	 	 	 	 
	 

	 	Number of Shares subject to Option:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Option Exercise Price per Share1:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Grant Date:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Reverse Vesting (per Plan Section ):
	 	o Allowed in accordance with
Section 6 of the Plan.

o Not allowed.
	 

	 	 	 	 

 

			
	1	 	The exercise price of a non-qualified stock
option must be at least 100% of the Fair Market Value, and shall be the greater
of the Fair Market Value or the cash value of the Company’s common stock
on the date of grant.

 

 

Commerce Energy Group, Inc.

2006 Stock Incentive Plan

Stock Option Award Agreement (for Non-Employee Directors)

Page 2

	 	 	 	 	 
	2. Vesting Schedule:

	 	(Establishes the Participant’s rights to exercise this Option with respect to the Number of Shares stated above, subject to acceleration per Section 2 below
and to any shareholder approval requirement set forth in the Plan.)
	 
	 	 	 	 
	 

	 	o
	 	                     Number of Shares on Grant Date.
	 
	 	 	 	 
	 

	 	o
	 	                     Number of Shares shall vest quarterly on each three month anniversary of the Grant Date.
	 
	 	 	 	 
	    Lifetime Transfer:

	 	o
	 	Allowed pursuant to Section 9 below only for Non-Qualified Stock Option.
	 
	 	 	 	 
	    Expiration Date:

	 	þ
	 	6 years (1-9) after Grant
Date; or
	 
	 	 	 	 
	 

	 	o
	 	10 years after Grant Date

3. Term of Option. The term of the Option will expire at 5:00 p.m. (P.D.T. or P.S.T., as
applicable) on the Expiration Date.

4. Manner of Exercise. The Option shall be exercised in the manner set forth in the Plan,
using the exercise form attached hereto as Exhibit C. The amount of Shares for which the
Option may be exercised is cumulative; that is, if you fail to exercise the Option for all of the
Shares vested under the Option during any period set forth above, then any Shares subject to the
Option that are not exercised during such period may be exercised during any subsequent period,
until the expiration or termination of the Option pursuant to Sections 2 and 5 of this Award
Agreement and the terms of the Plan. Fractional Shares may not be purchased.

5. Termination of Continuous Service. If your Continuous Service with the Company is
terminated, any unvested portion of this Award shall be automatically forfeited. You may exercise
any vested portion of this Award at any time during your Continuous Service or following a
termination of Continuous Service prior to the Expiration Date.

6. Termination, Rescission and Recapture. Notwithstanding any other provision of the Plan
or this Award Agreement, the provisions set forth in Section 25 of the Plan shall not apply to this
Award Agreement.

7. Designation of Beneficiary. Notwithstanding anything to the contrary contained herein
or in the Plan, following the execution of this Award Agreement, you may expressly designate a
beneficiary (the “Beneficiary”) to his or her interest in the Option awarded hereby. You
shall designate the Beneficiary by completing and executing a designation of beneficiary agreement
substantially in the form attached hereto as Exhibit D (the “Designation of
Beneficiary”) and delivering an executed copy of the Designation of Beneficiary to the Company.

8. Restrictions on Transfer. This Award Agreement may not be sold, pledged, or otherwise
transferred without the prior written consent of the Committee. Notwithstanding the foregoing, the

 

 

Commerce Energy Group, Inc.

2006 Stock Incentive Plan

Stock Option Award Agreement (for Non-Employee Directors)

Page 3

Participant may transfer this Option if allowed under Section 1 for a Non-Qualified Stock Option
(i) by instrument to an inter vivos or testamentary trust (or other entity) in which each
beneficiary is a permissible gift recipient, as such is set forth in subsection (ii) of this
Section, or (ii) by gift to charitable institutions or by gift or transfer for consideration to any
of the following relatives of the Participant (or to an inter vivos trust, testamentary trust or
other entity primarily for the benefit of the following relatives of the Participant): any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, domestic partner,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law, and shall include adoptive relationships. Any transferee of the Participant’s
rights shall succeed and be subject to all of the terms of this Award Agreement and the Plan.

9. Taxes. By signing this Award Agreement, you acknowledge that you shall be solely
responsible for the satisfaction of any taxes that may arise (including taxes arising under
Sections 409A or 4999 of the Code), and that neither the Company nor the Administrator shall have
any obligation whatsoever to pay such taxes.

10. Notices. Any notice or communication required or permitted by any provision of this
Award Agreement to be given to you shall be in writing and shall be delivered personally or sent by
certified mail, return receipt requested, addressed to you at the last address that the Company had
for you on its records. Each party may, from time to time, by notice to the other party hereto,
specify a new address for delivery of notices relating to this Award Agreement. Any such notice
shall be deemed to be given as of the date such notice is personally delivered or properly mailed.

11. Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan,
every covenant, term, and provision of this Award Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legatees, legal representatives,
successors, transferees, and assigns.

12. Modifications. This Award Agreement may be modified or amended at any time in
accordance with Section 15 of the Plan, provided that you must consent in writing to any
modification that adversely alters or impairs any rights or obligations under this Award Agreement.

13. Headings. Section and other headings contained in this Award Agreement are for
reference purposes only and are not intended to describe, interpret, define or limit the scope or
intent of this Award Agreement or any provision hereof.

14. Severability. Every provision of this Award Agreement and of the Plan is intended to
be severable. If any term hereof is illegal or invalid for any reason, such illegality or
invalidity shall not affect the validity or legality of the remaining terms of this Award
Agreement.

15. Counterparts. This Award Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.

 

 

Commerce Energy Group, Inc.

2006 Stock Incentive Plan

Stock Option Award Agreement (for Non-Employee Directors)

Page 4

16. Plan Governs. By signing this Award Agreement, you acknowledge that you have received
a copy of the Plan and that your Award Agreement is subject to all the provisions contained in the
Plan, the provisions of which are made a part of this Award Agreement and your Award is subject to
all interpretations, amendments, rules and regulations which from time to time may be promulgated
and adopted pursuant to the Plan. In the event of a conflict between the provisions of this Award
Agreement and those of the Plan, the provisions of the Plan shall control.

17. Governing Law. The laws of the State of Delaware shall govern the validity of this
Award Agreement, the construction of its terms, and the interpretation of the rights and duties of
the parties hereto.

18. Investment Purposes. You acknowledge that you are acquiring your Options for investment
purposes only and without any present intention of selling or distributing them.

     BY YOUR SIGNATURE BELOW, along with the signature of the Company’s representative, you and the
Company agree that the Option is awarded under and governed by the terms and conditions of this
Award Agreement and the Plan.

	 	 	 	 	 	 	 	 	 
	 	 	COMMERCE ENERGY GROUP, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PARTICIPANT
	 
	 	 	 	 	 	 	 	 
	 	 	The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Name of Participant:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

Exhibit A

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

 

Plan Document

 

 

 

 

Exhibit B

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

 

Plan Prospectus

 

 

 

 

Exhibit C

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

 

Form of Exercise of Stock Option Award Agreement

 

 

Commerce Energy Group, Inc.

2006 Stock Incentive Plan Committee

600 Anton Boulevard

Costa Mesa, California 92626

Dear Sir or Madam:

     The undersigned elects to exercise his/her Non-Qualified Stock Option to purchase                      shares of Common Stock of Commerce Energy Group, Inc. (the “Company”) under and pursuant to a Stock Option
Award Agreement dated as of                     .

     1. o Delivered herewith is a certified or bank cashier’s or teller’s check and/or shares of
Common Stock held by the undersigned for at least six months*, valued at the closing sale price of
the stock on the business day prior to the date of exercise, as follows:

	 	 	 	 	 	 	 	 
	 
	 	$	 	 	 	 	in cash or check
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	$	 	 	 	 	in the form of                      shares of Common Stock,
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	   valued at $                      per share
	 
	 	$	 	 	Total
	 	 
	 

	 	 	 	 	 	 	 

     2. o Delivered herewith are irrevocable instructions to a broker approved by the Company to
deliver promptly to the Company the amount of sale or loan proceeds to pay the exercise price.**

     If method 1 is chosen, the name or names to be on the stock certificate or certificates and
the address and Social Security Number of such person(s) is as follows:

	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	Address:	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Social Security Number	 	 
	 

	 	 	 	 	 	 

	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	 

	Date

	 	Optionee

 

	 	 	 
	* The Committee may waive the six months’ requirement in its discretion.
	 
	 	 
	** The Committee must approve this method in writing before your election

 

 

Exhibit D

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

Designation of Beneficiary

          In connection with Award Agreements between Commerce Energy Group, Inc. (the
“Company”) and                     , an individual residing at                      (the
“Recipient”), the Recipient hereby designates the person specified below as the beneficiary
of the Recipient’s interest in Awards as defined in the Company’s 2006 Stock Incentive Plan (the
“Plan”). This designation shall remain in effect until revoked in writing by the Recipient.

	 	 	 	 	 
	 

	 	Name of Beneficiary:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Social Security No.:	 	 
	 

	 	 	 	 

     This beneficiary designation relates to any and all of Recipient’s rights under the following
Award or Awards:

	 	o	 	any Award that Recipient has received under the Plan.
	 
	 	o	 	the                              Award that Recipient received pursuant to an award agreement dated                                   ,             between Recipient and the Company.

          The Recipient understands that this designation operates to entitle the above-named
beneficiary to the rights conferred by an Award from the date this form is delivered to the Company
until such date as this designation is revoked in writing by the Recipient, including by delivery
to the Company of a written designation of beneficiary executed by the Recipient on a later date.

	 	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	[Recipient Name]

Sworn to before me this

              day of                     , 200  

                                                       

Notary Public

County of                                     

State ofexv4w12

 

Exhibit 4.12

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

Restricted Share Award Agreement

(for U.S. Employees)

 

Award No.                     

Date                     

          In consideration of, and as a reward for, your past services rendered to the Company and to
provide you with an incentive for on-going superior performance (which has a value exceeding the
par value of the Restricted Shares awarded pursuant to this Agreement), you are hereby awarded
Restricted Shares subject to the terms and conditions set forth in this Restricted Share Award
Agreement (“Award Agreement” or “Award”), and in the Commerce Energy Group, Inc.
2006 Stock Incentive Plan (the “Plan”), which is attached hereto as Exhibit A. A
summary of the Plan appears in its Prospectus, which is attached as Exhibit B. You should
carefully review these documents, and consult with your personal financial advisor, in order to
fully understand the implications of this Award, including your tax alternatives and their
consequences.

          By executing this Award Agreement, you agree to be bound by all of the Plan’s terms and
conditions as if they had been set out verbatim in this Award Agreement. In addition, you
recognize and agree that all determinations, interpretations, or other actions respecting the Plan
and this Award Agreement will be made by the Board of Directors (the “Board”) of Commerce
Energy Group, Inc. (the “Company”) or and Committee appointed by the Board to administer
the Plan, and shall (in the absence of manifest bad faith or fraud) be final, conclusive and
binding upon all parties, including you, your heirs and representatives. Capitalized terms are
defined in the Plan or in this Award Agreement.

1. Specific Terms. Your Restricted Shares have the following terms:

	 	 	 
	Name of Participant
	 	 
	 
	 	 
	Number of Shares
	 	 
	Subject to Award
	 	 
	 
	 	 
	Purchase Price per
	 	 
	Share (if applicable)

	 	Not applicable.
	 
	 	 
	Award Date
	 	 
	 
	 	 
	Vesting

	 	At the rate of ___% on each of the next ___ [monthly] [quarterly] [annual]
anniversaries of the Award Date; subject to acceleration as provided in the Plan
and in Section 2 below, and to your Continuous Service not ending before the
vesting date.

 

 

Commerce Energy Group, Inc.

Restricted Shares Award Agreement

Page 2

	 	 	 
	Lifetime Transfer

	 	o Allowed.          o Not allowed.
	 
	 	 
	Deferral Elections

	 	o Allowed in accordance with Section 8(g) of the Plan.   o Not allowed.

2. Accelerated Vesting; Change in Corporate Control. To the extent you have not previously
vested in your rights with respect to this Award, your Award will become –

	 	o	 	         % vested if your Continuous Service ends due to your death or “disability” within the
meaning of Section 409A of the Code;
	 
	 	o	 	         % vested if your Continuous Service ends due to your retirement at or after you have
attained the age of          and completed at least          full years of Continuous Service;
	 
	 	o	 	according to the following schedule if your Continuous Service ends due to an
Involuntary Termination that occurs within the one year period following a Change in
Control:

	 	 	 	 	 
	Date on which Your Involuntary Termination	 	Portion of Your Award
	Occurs (by reference to Date of Award)	 	As to which Vesting Accelerates
	Before 1st Anniversary
	 	 	0	%
	Between 1st and 2nd Anniversary
	 	 	—	%
	 	 	 	 	 
	After 2nd Anniversary
	 	 	—	%
	 	 	 	 	 

<Other Desired Schedule>

3. Investment Purposes. You acknowledge that you are acquiring your Restricted Shares for
investment purposes only and without any present intention of selling or distributing them.

4. Issuance of Restricted Shares. Until all vesting restrictions lapse, any certificates
that you receive for Restricted Shares will include a legend stating that they are subject to the
restrictions set forth in the Plan and this Award Agreement. Certificates shall not be delivered
to you unless you have made arrangements satisfactory to the Committee to satisfy tax-withholding
obligations. The certificates evidencing such Restricted Shares that will be issued will bear the
following legend that shall remain in place and effective until all other vesting restrictions
lapse and new certificates are issued:

     “The sale or other transfer of the Stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in
the Commerce Energy Group, Inc. 2006 Stock Incentive Plan, and in any rules and administrative
procedures adopted pursuant to such Plan and in a related Award Agreement. A copy of the Plan,
such rules and procedures and such Award Agreement may be obtained from the Secretary of Commerce
Energy Group, Inc.”

5. Unvested Restricted Shares. The Company will hold such Restricted Shares in escrow
until vesting occurs. You will be reflected as the owner of record on the Company’s books and

 

 

Commerce Energy Group, Inc.

Restricted Shares Award Agreement

Page 3

records of any Shares issued pursuant to this Award Agreement. The Company will hold the stock
certificates for safekeeping until such Shares have become vested and non-forfeitable. You must
deliver to the Company, as soon as practicable after the date any Shares are issued, a stock power,
endorsed in blank, with respect to any such Shares. If you forfeit any Shares, the stock power will
be used to return the certificates for the forfeited Shares to the transfer agent for cancellation.
As the owner of record of any Restricted Shares you qualify to receive pursuant to this Award
Agreement, you will be entitled to all rights of a stockholder of the Company, including the right
to vote Shares; subject, however, to the provisions of Section 6 hereof with respect to any cash or
stock dividends that are paid between the date of this Award and your receipt of Shares pursuant to
a vesting event, subject in each case to the treatment of the Award upon termination of employment
before the particular record date for determining stockholders of record entitled to the payment of
the dividend or distribution. To the extent such dividend is paid in stock, such stock shall be
subject to the same restrictions contained in Section 1.

6.Dividends. When Shares are delivered to you or your duly-authorized transferee pursuant
to the vesting of the Shares, you or your duly-authorized transferee shall also be entitled to
receive, with respect to each Share issued, an amount equal to any cash dividends (plus simple
interest at a rate of five percent per annum, or such other reasonable rate as the Committee may
determine) and a number of Shares equal to any stock dividends, which were declared and paid to the
holders of Shares between the Grant Date and the date such Share is issued. To the extent that
your Continuous Service ends before vesting of the Shares, you will forfeit all dividends (whether
paid in cash or in stock) attributable to all such Shares.

[7. Long-term Consideration for Award. <OPTIONAL> The Participant recognizes and
agrees that the Company’s key consideration in granting this Award is securing the long-term
commitment of the Participant to serve as [a key employee of the Company][a key employee of an
Affiliate of the Company][an officer of the Company][an officer of an Affiliate of the Company] who
will advance and promote the business interests and objectives of the Company and/or its Affiliates
(the “Company Group”). Accordingly, the Participant agrees that this Award shall be subject to the
terms and conditions set forth in Section 25 of the Plan (relating to the termination, rescission
and recapture if you violate certain commitments made therein to the Company Group), as well as to
the following terms and conditions as material and indivisible consideration for this Award:

          (a) Fiduciary Duty. During his or her employment with the Company Group the
Participant shall devote his or her full energies, abilities, attention and business time to the
performance of his or her job responsibilities and shall not engage in any activity which conflicts
or interferes with, or in any way compromises, his or her performance of such responsibilities.

          (b) Confidential Information. The Participant recognizes that by virtue of his or her
employment with the Company Group, he or she will be granted otherwise prohibited access to
confidential information and proprietary data which are not known, and not readily accessible to
the competitors of the Company Group. This information (the “Confidential Information”) includes,
but is not limited to, current and prospective customers; the identity of key contacts at such
customers; customers’ particularized preferences and needs; marketing strategies and plans;
financial data; personnel data; compensation data; proprietary procedures and processes; and other
unique

 

 

Commerce Energy Group, Inc.

Restricted Shares Award Agreement

Page 4

and specialized practices, programs and plans of the Company Group and their respective
customers and prospective customers. The Participant recognizes that this Confidential Information
constitutes a valuable property of the Company Group, developed over a significant period of time
and at substantial expense. Accordingly, the Participant agrees that he or she shall not, at any
time during or after his or her employment with the Company Group, divulge such Confidential
Information or make use of it for his or her own purposes or the purposes of any person or entity
other than the Company Group.

          (c) Non-Solicitation of Customers. The Participant recognizes that by virtue of his
or her employment with the Company Group he or she will be introduced to and involved in the
solicitation and servicing of existing customers of the Company Group and new customers obtained by
the Company Group during his or her employment. The Participant understands and agrees that all
efforts expended in soliciting and servicing such customers shall be for the permanent benefit of
the Company Group. The Participant further agrees that during his or her employment with the
Company Group the Participant will not engage in any conduct which could in any way jeopardize or
disturb any of the customer relationships of the Company Group. The Participant also recognizes
the legitimate interest of the Company Group in protecting, for a reasonable period of time after
his or her employment with the Company Group, the customers of the Company Group. Accordingly, the
Participant agrees that, for a period beginning on the date hereof and ending one (1) year after
termination of Participant’s employment with the Company Group, regardless of the reason for such
termination, the Participant shall not, directly or indirectly, without the prior written consent
of the Chief Executive Officer of the Company, market, offer, sell or otherwise furnish any
products or services similar to, or otherwise competitive with, those offered by the Company Group
to any customer of the Company Group.

          (d) Non-Solicitation of Employees. The Participant recognizes the substantial
expenditure of time and effort which the Company Group devotes to the recruitment, hiring,
orientation, training and retention of its employees. Accordingly, the Participant agrees that,
for a period beginning on the date hereof and ending two (2) years after termination of
Participant’s employment with the Company Group, regardless of the reason for such termination, the
Participant shall not, directly or indirectly, for himself or herself or on behalf of any other
person or entity, solicit, offer employment to, hire or otherwise retain the services of any
employee of the Company Group. <ADDITIONAL ALTERNATIVE: NON-COMPETITION REQUIREMENT, TAILORED
CAREFULLY TO CONFORM WITH APPLICABLE LAW.>

          (e) Survival of Commitments; Potential Recapture of Award and Proceeds. The
Participant acknowledges and agrees that the terms and conditions of this Section regarding
confidentiality and non-solicitation [and non-competition] shall survive both (i) the
termination of Participant’s employment with the Company Group for any reason, and (ii) the
termination of the Plan, for any reason. The Participant acknowledges and agrees that the grant of
Options in this Award Agreement is just and adequate consideration for the survival of the
restrictions set forth herein, and that the Company Group may pursue any or all of the following
remedies if the Participant either violates the terms of this Section or succeeds for any reason in
invalidating any part of it (it being understood that the invalidity of any term hereof would
result in a failure of consideration for the Award):

 

 

Commerce Energy Group, Inc.

Restricted Shares Award Agreement

Page 5

	 	(i)	 	declaration that the Award is null and void and of no further
force or effect;
	 
	 	(ii)	 	recapture of any cash paid or Shares issued to the Participant,
or any designee or beneficiary of the Participant, pursuant to the Award;
	 
	 	(iii)	 	recapture of the proceeds, plus reasonable interest, with
respect to any Shares that are both issued pursuant to this Award and sold or
otherwise disposed of by the Participant, or any designee or beneficiary of the
Participant.

The remedies provided above are not intended to be exclusive, and the Company Group may seek such
other remedies as are provided by law, including equitable relief.

          (f) Acknowledgement. The Participant acknowledges and agrees that his or her
adherence to the foregoing requirements will not prevent him or her from engaging in his or her
chosen occupation and earning a satisfactory livelihood following the termination of his or her
employment with the Company Group.]

8. Section 83(b) Election Notice. If you make an election under Section 83(b) of the
Internal Revenue Code of 1986, as amended, with respect to the Shares underlying your Restricted
Shares (a “Section 83(b) election”), you agree to provide a copy of such election to the
Company within 10 days after filing that election with the Internal Revenue Service. Exhibit
C contains a suggested form of Section 83(b) election.

9. Designation of Beneficiary. Notwithstanding anything to the contrary contained herein
or in the Plan, following the execution of this Award Agreement, you may expressly designate a
beneficiary (the “Beneficiary”) to your interest, if any, in the Restricted Shares awarded
hereby. You shall designate the Beneficiary by completing and executing a designation of
beneficiary agreement substantially in the form attached hereto as Exhibit D (the
“Designation of Beneficiary”) and delivering an executed copy of the Designation of
Beneficiary to the Company.

10. Restrictions on Transfer. This Award Agreement may not be sold, pledged, or otherwise
transferred without the prior written consent of the Committee. Notwithstanding the foregoing, the
Participant may transfer this Award (i) by instrument to an inter vivos or
testamentary trust (or other entity) in which each beneficiary is a permissible gift recipient, as
such is set forth in subsection (ii) of this Section, or (ii) by gift to charitable institutions or
by gift or transfer for consideration to any of the following relatives of the Participant (or to
an inter vivos trust, testamentary trust or other entity primarily for the benefit of the following
relatives of the Participant): any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, domestic partner, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive
relationships. Any transferee of the Participant’s rights shall succeed and be subject to all of
the terms of this Award Agreement and the Plan.

11. Income Taxes and Deferred Compensation. The Participant is solely responsible and
liable for the satisfaction of all taxes and penalties that may arise in connection with this Award
(including any taxes arising under Section 409A of the Code), and the Company shall not have any
obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes.

 

 

Commerce Energy Group, Inc.

Restricted Shares Award Agreement

Page 6

The Committee shall have the discretion to unilaterally modify this Award in a manner that (i)
conforms with the requirements of Section 409A of the Code, (ii) that voids any election of the
Participant to the extent it would violate Section 409A of the Code, and (iii) for any distribution
election that would violate Section 409A of the Code, to make distributions pursuant to the Award
at the earliest to occur of a distribution event that is allowable under Section 409A of the Code
or any distribution event that is both allowable under Section 409A of the Code and is elected by
the Participant, subject to any valid second election to defer, provided that the Committee permits
second elections to defer in accordance with Section 409A(a)(4)(C). The Committee shall have the
sole discretion to interpret the requirements of the Code, including Section 409A, for purposes of
the Plan and this Award Agreement.

12. Notices. Any notice or communication required or permitted by any provision of this
Award Agreement to be given to you shall be in writing and shall be delivered personally or sent by
certified mail, return receipt requested, addressed to you at the last address that the Company had
for you on its records. Each party may, from time to time, by notice to the other party hereto,
specify a new address for delivery of notices relating to this Award Agreement. Any such notice
shall be deemed to be given as of the date such notice is personally delivered or properly mailed.

13. Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan,
every covenant, term, and provision of this Award Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legatees, legal representatives,
successors, transferees, and assigns.

14. Modifications. This Award Agreement may be modified or amended at any time, in
accordance with Section 15 of the Plan and provided that you must consent in writing to any
modification that adversely alters or impairs any rights or obligations under this Award Agreement.

15. Headings. Section and other headings contained in this Award Agreement are for
reference purposes only and are not intended to describe, interpret, define or limit the scope or
intent of this Award Agreement or any provision hereof.

16. Severability. Every provision of this Award Agreement and of the Plan is intended to
be severable. If any term hereof is illegal or invalid for any reason, such illegality or
invalidity shall not affect the validity or legality of the remaining terms of this Award
Agreement.

17. Counterparts. This Award Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.

18. Plan Governs. By signing this Award Agreement, you acknowledge that you have received
a copy of the Plan and that your Award Agreement is subject to all the provisions contained in the
Plan, the provisions of which are made a part of this Award Agreement and your Award is subject to
all interpretations, amendments, rules and regulations which from time to time may be promulgated
and adopted pursuant to the Plan. In the event of a conflict between the provisions of this Award
Agreement and those of the Plan, the provisions of the Plan shall control.

 

 

Commerce Energy Group, Inc.

Restricted Shares Award Agreement

Page 7

19. Governing Law. The laws of the State of Delaware shall govern the validity of this
Award Agreement, the construction of its terms, and the interpretation of the rights and duties of
the parties hereto.

20. Not a Contract of Employment. By executing this Award Agreement you acknowledge and
agree that (i) any person who is terminated before full vesting of an award, such as the one
granted to you by this Award, could claim that he or she was terminated to preclude vesting; (ii)
you promise never to make such a claim; (iii) nothing in this Award Agreement or the Plan confers
on you any right to continue an employment, service or consulting relationship with the [Company
and/or its Affiliates] [Company Group], nor shall it affect in any way your right or the right of
the [Company and/or its Affiliates] [Company Group], as applicable to terminate your employment,
service, or consulting relationship at any time, with or without Cause; and (iv) the Company would
not have granted this Award to you but for these acknowledgements and agreements.

21. Employment Agreement Provision [OPTION IF EMPLOYEE HAS AN EMPLOYMENT AGREEMENT] By
executing this Award, you acknowledge and agree that your rights upon a termination of employment
before full vesting of this Award will be determined under Section                      of your employment
agreement with the Company and                                         , dated as of                                          , 20   .

     BY YOUR SIGNATURE BELOW, along with the signature of the Company’s representative, you and the
Company agree that the Restricted Shares are awarded under and governed by the terms and conditions
of this Award Agreement and the Plan.

	 	 	 	 	 	 	 	 	 
	 	 	COMMERCE ENERGY GROUP, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PARTICIPANT
	 
	 	 	 	 	 	 	 	 
	 	 	The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Name of Participant:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

 

Exhibit A

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

Plan Document

 

 

 

Exhibit B

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

Plan Prospectus

 

 

 

Exhibit C

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

  

Section 83(b) Election Form

 

Attached is an Internal Revenue Code Section 83(b) Election Form. IF YOU WISH TO MAKE A SECTION
83(B) ELECTION, YOU MUST DO SO WITHIN 30 DAYS AFTER THE DATE THE RESTRICTED SHARES COVERED BY THE
ELECTION WERE TRANSFERRED TO YOU. In order to make the election, you must completely fill out the
attached form and file one copy with the Internal Revenue Service office where you file your tax
return. In addition, one copy of the statement also must be submitted with your income tax return
for the taxable year in which you make this election. Finally, you also must submit a copy of the
election form to the Company within 10 days after filing that election with the Internal Revenue
Service. A Section 83(b) election normally cannot be revoked.

 

 

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

Election to Include Value of Restricted Shares in Gross Income

in Year of Transfer Under Internal Revenue Code Section 83(b)

 

     Pursuant to Section 83(b) of the Internal Revenue Code, I hereby elect within 30 days after
receiving the property described herein to be taxed immediately on its value specified in item 5
below.

	1.	 	My General Information:

	 	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	 
	 

	 	S.S.N.	 	 
	 

	 	or T.I.N.:	 	 
	 

	 	 	 	 

	2.	 	Description of the property with respect to which I am making this election:

                                         shares of                      stock of Commerce Energy Group, Inc. (the “Restricted Shares”).

	3.	 	The Restricted Shares were transferred to me on                           , 20   . This election
relates to the 20      calendar taxable year.
	 
	4.	 	The Restricted Shares are subject to the following restrictions:

The Restricted Shares are forfeitable until they is are earned in accordance with
Section 1 of the Commerce Energy Group, Inc. 2006 Stock Incentive Plan
(“Plan”) Restricted Shares Award Agreement (“Award Agreement”) or
other Award Agreement or Plan provisions. The Restricted Shares generally are not
transferable until my interest becomes vested and nonforfeitable, pursuant to the
Award Agreement and the Plan.

	5.	 	Fair market value:

The fair market value at the time of transfer (determined without regard to any
restrictions other than restrictions which by their terms never will lapse) of the
Restricted Shares with respect to which I am making this election is $                      per
share.

 

 

	6.	 	Amount paid for Restricted Shares:

The amount I paid for the Restricted Shares is $                     per share.

	7.	 	Furnishing statement to employer:

A copy of this statement has been furnished to my employer, ___. If the
transferor of the Restricted Shares is not my employer, that entity also has been
furnished with a copy of this statement.

	8.	 	Award Agreement or Plan not affected:

Nothing contained herein shall be held to change any of the terms or conditions of
the Award Agreement or the Plan.

     Dated:                           , 20     .

	 	 	 
	 

	 	 
	 

	 	    Taxpayer

2

 

EXHIBIT D

COMMERCE ENERGY GROUP, INC.

2006 STOCK INCENTIVE PLAN

 

Designation of Beneficiary

 

     In connection with Award Agreements between Commerce Energy Group, Inc. (the
“Company”) and                     , an individual residing at                      (the
“Recipient”), the Recipient hereby designates the person specified below as the beneficiary
of the Recipient’s interest in Awards as defined in the Company’s 2006 Stock Incentive Plan (the
“Plan”). This designation shall remain in effect until revoked in writing by the
Recipient.

	 	 	 	 	 
	 

	 	Name of Beneficiary:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Social Security No.:	 	 
	 

	 	 	 	 

     This beneficiary designation relates to any and all of Recipient’s rights under the following
Award or Awards:

	 	o	 	any Award that Recipient has received under the Plan.
	 
	 	o	 	the                                          Award that Recipient received pursuant to an award agreement dated                           ,            between Recipient and the Company.

          The Recipient understands that this designation operates to entitle the above-named
beneficiary to the rights conferred by an Award from the date this form is delivered to the Company
until such date as this designation is revoked in writing by the Recipient, including by delivery
to the Company of a written designation of beneficiary executed by the Recipient on a later date.

	 	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	[Recipient Name]

Sworn to before me this

              day of                     , 200  

                                                       

Notary Public

County of                                     

State of

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