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                                                                   EXHIBIT 10.20

                            INDEMNIFICATION AGREEMENT

     This Agreement made and entered into this 21st day of June, 2004 (the
"Agreement"), by and between NeuroMetrix, Inc., a Delaware corporation (the
"Company," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company) and Shai
N. Gozani, M.D., Ph.D. (the "Indemnitee"):

     WHEREAS, it is essential to the Company that it be able to retain and
attract as directors and executive officers the most capable persons available;

     WHEREAS, increased corporate litigation has subjected directors and
executive officers to litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have made it
increasingly difficult for the Company to attract and retain such persons;

     WHEREAS, the Company's By-laws (the "By-laws") require it to indemnify its
directors and officers to the fullest extent permitted by law and permit it to
make other indemnification arrangements and agreements;

     WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the By-laws or any change in the ownership of the Company or
the composition of its Board of Directors);

     WHEREAS, the Company intends that this Agreement provide Indemnitee with
greater protection than that which is provided by the Company's By-laws; and

     WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director and executive officer of the Company.

     NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

     1.   DEFINITIONS.

          (a)  "Corporate Status" describes the status of a person who is
          serving or has served (i) as a director or officer of the Company,
          (ii) in any capacity with respect to any employee benefit plan of the
          Company, or (iii) as a director, partner, trustee, officer, employee,
          or agent of any other Entity at the request of the Company. For
          purposes of subsection (iii) of this Section 1(a), if Indemnitee is
          serving or has served as a director, partner, trustee, officer,
          employee or agent of a Subsidiary, Indemnitee shall be deemed to be
          serving at the request of the Company.

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          (b)  "Entity" shall mean any corporation, partnership, limited
          liability company, joint venture, trust, foundation, association,
          organization or other legal entity.

          (c)  "Expenses" shall mean all fees, costs and expenses incurred by
          Indemnitee in connection with any Proceeding (as defined below),
          including, without limitation, attorneys' fees, disbursements and
          retainers (including, without limitation, any such fees, disbursements
          and retainers incurred by Indemnitee pursuant to Sections 10 and 11(c)
          of this Agreement), fees and disbursements of expert witnesses,
          private investigators and professional advisors (including, without
          limitation, accountants and investment bankers), court costs,
          transcript costs, fees of experts, travel expenses, duplicating,
          printing and binding costs, telephone and fax transmission charges,
          postage, delivery services, secretarial services, and other
          disbursements and expenses.

          (d)  "Indemnifiable Expenses," "Indemnifiable Liabilities" and
          "Indemnifiable Amounts" shall have the meanings ascribed to those
          terms in Section 3(a) below.

          (e)  "Liabilities" shall mean judgments, damages, liabilities, losses,
          penalties, excise taxes, fines and amounts paid in settlement.

          (f)  "Proceeding" shall mean any threatened, pending or completed
          claim, action, suit, arbitration, alternate dispute resolution
          process, investigation, administrative hearing, appeal, or any other
          proceeding, whether civil, criminal, administrative, arbitrative or
          investigative, whether formal or informal, including a proceeding
          initiated by Indemnitee pursuant to Section 10 of this Agreement to
          enforce Indemnitee's rights hereunder.

          (g)  "Subsidiary" shall mean any corporation, partnership, limited
          liability company, joint venture, trust or other Entity of which the
          Company owns (either directly or through or together with another
          Subsidiary of the Company) either (i) a general partner, managing
          member or other similar interest or (ii) (A) 50% or more of the voting
          power of the voting capital equity interests of such corporation,
          partnership, limited liability company, joint venture or other Entity,
          or (B) 50% or more of the outstanding voting capital stock or other
          voting equity interests of such corporation, partnership, limited
          liability company, joint venture or other Entity.

     2.   SERVICES OF INDEMNITEE. In consideration of the Company's covenants
and commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company. However, this Agreement shall not impose any obligation
on Indemnitee or the Company to continue Indemnitee's service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

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     3.   AGREEMENT TO INDEMNIFY. The Company agrees to indemnify Indemnitee as
follows:

          (a)  PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE COMPANY. Subject
          to the exceptions contained in Section 4(a) below, if Indemnitee was
          or is a party or is threatened to be made a party to any Proceeding
          (other than an action by or in the right of the Company) by reason of
          Indemnitee's Corporate Status, Indemnitee shall be indemnified by the
          Company against all Expenses and Liabilities incurred or paid by
          Indemnitee in connection with such Proceeding (referred to herein as
          "Indemnifiable Expenses" and "Indemnifiable Liabilities,"
          respectively, and collectively as "Indemnifiable Amounts").

          (b)  PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. Subject to the
          exceptions contained in Section 4(b) below, if Indemnitee was or is a
          party or is threatened to be made a party to any Proceeding by or in
          the right of the Company by reason of Indemnitee's Corporate Status,
          Indemnitee shall be indemnified by the Company against all
          Indemnifiable Expenses.

          (c)  CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CARE. In making any
          determination required to be made under Delaware law with respect to
          entitlement to indemnification hereunder, the person, persons or
          entity making such determination shall presume that Indemnitee is
          entitled to indemnification under this Agreement if Indemnitee
          submitted a request therefor in accordance with Section 5 of this
          Agreement, and the Company shall have the burden of proof to overcome
          that presumption in connection with the making by any person, persons
          or entity of any determination contrary to that presumption.

     4.   EXCEPTIONS TO INDEMNIFICATION. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than with respect to any specific claim, issue or matter involved in the
Proceeding out of which Indemnitee's claim for indemnification has arisen, as
follows:

          (a)  PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE COMPANY. If
          indemnification is requested under Section 3(a) and it has been
          finally adjudicated by a court of competent jurisdiction that, in
          connection with such specific claim, issue or matter, Indemnitee
          failed to act (i) in good faith and (ii) in a manner Indemnitee
          reasonably believed to be in or not opposed to the best interests of
          the Company, or, with respect to any criminal Proceeding, Indemnitee
          had reasonable cause to believe that Indemnitee's conduct was
          unlawful, Indemnitee shall not be entitled to payment of Indemnifiable
          Amounts hereunder.

          (b)  PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. If indemnification
          is requested under Section 3(b) and

               (i)    it has been finally adjudicated by a court of competent
               jurisdiction that, in connection with such specific claim, issue
               or matter, Indemnitee failed to act (A) in good faith and (B) in
               a manner Indemnitee reasonably

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               believed to be in or not opposed to the best interests of the
               Company, Indemnitee shall not be entitled to payment of
               Indemnifiable Expenses hereunder; or

               (ii)   it has been finally adjudicated by a court of competent
               jurisdiction that Indemnitee is liable to the Company with
               respect to such specific claim, Indemnitee shall not be entitled
               to payment of Indemnifiable Expenses hereunder with respect to
               such claim, issue or matter unless the Court of Chancery or
               another court in which such Proceeding was brought shall
               determine upon application that, despite the adjudication of
               liability, but in view of all the circumstances of the case,
               Indemnitee is fairly and reasonably entitled to indemnification
               for such Indemnifiable Expenses which such court shall deem
               proper; or

               (iii)  it has been finally adjudicated by a court of competent
               jurisdiction that Indemnitee is liable to the Company for an
               accounting of profits made from the purchase or sale by the
               Indemnitee of securities of the Company pursuant to the
               provisions of Section 16(b) of the Securities Exchange Act of
               1934, the rules and regulations promulgated thereunder and
               amendments thereto or similar provisions of any federal, state or
               local statutory law, Indemnitee shall not be entitled to payment
               of Indemnifiable Expenses hereunder.

          (c)  INSURANCE PROCEEDS. To the extent payment is actually made to the
          Indemnitee under a valid and collectible insurance policy in respect
          of Indemnifiable Amounts in connection with such specific claim, issue
          or matter, Indemnitee shall not be entitled to payment of
          Indemnifiable Amounts hereunder except in respect of any excess beyond
          the amount of payment under such insurance.

     5.   PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Section 3 of this Agreement and the basis
for the claim. The Company shall pay such Indemnifiable Amounts to Indemnitee
within sixty (60) calendar days of receipt of the request. At the request of the
Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is
entitled to indemnification hereunder.

     6.   INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim,

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issue or matter. For purposes of this Agreement, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without prejudice, by
reason of settlement, judgment, order or otherwise, shall be deemed to be a
successful result as to such claim, issue or matter.

     7.   EFFECT OF CERTAIN RESOLUTIONS. Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create a presumption that
Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal Proceeding, had reasonable cause to believe
that Indemnitee's action was unlawful.

     8.   AGREEMENT TO ADVANCE EXPENSES; UNDERTAKING. The Company shall advance
all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding, including a Proceeding by or in the right of the Company, in which
Indemnitee is involved by reason of such Indemnitee's Corporate Status within
ten (10) calendar days after the receipt by the Company of a written statement
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. To the extent required
by Delaware law, Indemnitee hereby undertakes to repay any and all of the amount
of Indemnifiable Expenses paid to Indemnitee if it is finally determined by a
court of competent jurisdiction that Indemnitee is not entitled under this
Agreement to indemnification with respect to such Expenses. This undertaking is
an unlimited general obligation of Indemnitee.

     9.   PROCEDURE FOR ADVANCE PAYMENT OF EXPENSES. Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than ten (10) calendar days after the Company's receipt of such request.

     10.  REMEDIES OF INDEMNITEE.

          (a)  RIGHT TO PETITION COURT. In the event that Indemnitee makes a
          request for payment of Indemnifiable Amounts under Sections 3 and 5
          above or a request for an advancement of Indemnifiable Expenses under
          Sections 8 and 9 above and the Company fails to make such payment or
          advancement in a timely manner pursuant to the terms of this
          Agreement, Indemnitee may petition the Court of Chancery to enforce
          the Company's obligations under this Agreement.

          (b)  BURDEN OF PROOF. In any judicial proceeding brought under Section
          10(a) above, the Company shall have the burden of proving that
          Indemnitee is not entitled to payment of Indemnifiable Amounts
          hereunder.

          (c)  EXPENSES. The Company agrees to reimburse Indemnitee in full for
          any Expenses incurred by Indemnitee in connection with investigating,
          preparing for,

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          litigating, defending or settling any action brought by Indemnitee
          under Section 10(a) above, or in connection with any claim or
          counterclaim brought by the Company in connection therewith, whether
          or not Indemnitee is successful in whole or in part in connection with
          any such action.

          (d)  FAILURE TO ACT NOT A DEFENSE. The failure of the Company
          (including its Board of Directors or any committee thereof,
          independent legal counsel, or stockholders) to make a determination
          concerning the permissibility of the payment of Indemnifiable Amounts
          or the advancement of Indemnifiable Expenses under this Agreement
          shall not be a defense in any action brought under Section 10(a)
          above, and shall not create a presumption that such payment or
          advancement is not permissible.

     11.  DEFENSE OF THE UNDERLYING PROCEEDING.

          (a)  NOTICE BY INDEMNITEE. Indemnitee agrees to notify the Company
          promptly upon being served with any summons, citation, subpoena,
          complaint, indictment, information, or other document relating to any
          Proceeding which may result in the payment of Indemnifiable Amounts or
          the advancement of Indemnifiable Expenses hereunder; provided,
          however, that the failure to give any such notice shall not disqualify
          Indemnitee from the right, or otherwise affect in any manner any right
          of Indemnitee, to receive payments of Indemnifiable Amounts or
          advancements of Indemnifiable Expenses unless the Company's ability to
          defend in such Proceeding is materially and adversely prejudiced
          thereby.

          (b)  DEFENSE BY COMPANY. Subject to the provisions of the last
          sentence of this Section 11(b) and of Section 11(c) below, the Company
          shall have the right to defend Indemnitee in any Proceeding which may
          give rise to the payment of Indemnifiable Amounts hereunder; provided,
          however that the Company shall notify Indemnitee of any such decision
          to defend within ten (10) calendar days of receipt of notice of any
          such Proceeding under Section 11(a) above. The Company shall not,
          without the prior written consent of Indemnitee, consent to the entry
          of any judgment against Indemnitee or enter into any settlement or
          compromise which (i) includes an admission of fault of Indemnitee or
          (ii) does not include, as an unconditional term thereof, the full
          release of Indemnitee from all liability in respect of such
          Proceeding, which release shall be in form and substance reasonably
          satisfactory to Indemnitee. This Section 11(b) shall not apply to a
          Proceeding brought by Indemnitee under Section 10(a) above or pursuant
          to Section 19 below.

          (c)  INDEMNITEE'S RIGHT TO COUNSEL. Notwithstanding the provisions of
          Section 11(b) above, if in a Proceeding to which Indemnitee is a party
          by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably
          concludes that he or she may have separate defenses or counterclaims
          to assert with respect to any issue which may not be consistent with
          the position of other defendants in such Proceeding, (ii) a conflict
          of interest or potential conflict of interest exists between
          Indemnitee and the Company, or (iii) if the Company fails to assume
          the

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          defense of such proceeding in a timely manner, Indemnitee shall be
          entitled to be represented by separate legal counsel of Indemnitee's
          choice at the expense of the Company. In addition, if the Company
          fails to comply with any of its obligations under this Agreement or in
          the event that the Company or any other person takes any action to
          declare this Agreement void or unenforceable, or institutes any
          action, suit or proceeding to deny or to recover from Indemnitee the
          benefits intended to be provided to Indemnitee hereunder, Indemnitee
          shall have the right to retain counsel of Indemnitee's choice, at the
          expense of the Company, to represent Indemnitee in connection with any
          such matter.

     12.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Indemnitee as follows:

          (a)  AUTHORITY. The Company has all necessary power and authority to
          enter into, and be bound by the terms of, this Agreement, and the
          execution, delivery and performance of the undertakings contemplated
          by this Agreement have been duly authorized by the Company.

          (b)  ENFORCEABILITY. This Agreement, when executed and delivered by
          the Company in accordance with the provisions hereof, shall be a
          legal, valid and binding obligation of the Company, enforceable
          against the Company in accordance with its terms, except as such
          enforceability may be limited by applicable bankruptcy, insolvency,
          moratorium, reorganization or similar laws affecting the enforcement
          of creditors' rights generally.

     13.  INSURANCE. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with a reputable insurance company
providing the Indemnitee with coverage for losses from wrongful acts. For so
long as Indemnitee shall remain a director or officer of the Company and with
respect to any such prior service, in all policies of director and officer
liability insurance, Indemnitee shall be named as an insured in such a manner as
to provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's officers and directors. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, or if the coverage provided
by such insurance is limited by exclusions so as to provide an insufficient
benefit. The Company shall promptly notify Indemnitee of any good faith
determination not to provide such coverage.

     14.  CONTRACT RIGHTS NOT EXCLUSIVE. The rights to payment of Indemnifiable
Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's Certificate of
Incorporation or By-laws, or any other agreement, vote of stockholders or
directors (or a committee of directors), or otherwise, both as to action in
Indemnitee's official capacity and as to action in any other capacity as a
result of Indemnitee's Corporate Status.

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     15.  SUCCESSORS. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law)
and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.

     16.  SUBROGATION. In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.

     17.  CHANGE IN LAW. To the extent that a change in Delaware law (whether by
statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the By-laws and this
Agreement, Indemnitee shall be entitled to such broader indemnification and
advancements, and this Agreement shall be deemed to be amended to such extent.

     18.  SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.

     19.  INDEMNITEE AS PLAINTIFF. Except as provided in Section 10(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the Board
of Directors of the Company has consented to the initiation of such Proceeding.
This Section shall not apply to counterclaims or affirmative defenses asserted
by Indemnitee in an action brought against Indemnitee.

     20.  MODIFICATIONS AND WAIVER. Except as provided in Section 17 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.

     21.  GENERAL NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified

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or registered mail with postage prepaid, on the third business day after the
date on which it is so mailed:

               (i)    If to Indemnitee, to:

                      Shai N. Gozani, M.D., Ph.D.
                      187 Mason Terrace
                      Brookline, MA 02446
                      Facsimile: __________

               (ii)   If to the Company, to:

                      NeuroMetrix, Inc.
                      62 Fourth Avenue
                      Waltham, MA 02451
                      Facsimile: (781) 890-1556
                      Attention: President

or to such other address as may have been furnished in the same manner by any
party to the others.

     22.  GOVERNING LAW; CONSENT TO JURISDICTION; SERVICE OF PROCESS. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to its rules of conflict of laws. Each of the
Company and the Indemnitee hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the Court of Chancery of the State of
Delaware and the courts of the United States of America located in the State of
Delaware (the "Delaware Courts") for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum. Each of the parties
hereto agrees, (a) to the extent such party is not otherwise subject to service
of process in the State of Delaware, to appoint and maintain an agent in the
State of Delaware as such party's agent for acceptance of legal process, and (b)
that service of process may also be made on such party by prepaid certified mail
with a proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service. Service made pursuant to (a) or (b)
above shall have the same legal force and effect as if served upon such party
personally within the State of Delaware. For purposes of implementing the
parties' agreement to appoint and maintain an agent for service of process in
the State of Delaware, each such party does hereby appoint Corporation Service
Company, 2711 Centerville Road Suite 400, Wilmington, New Castle County,
Delaware 19808, as such agent and each such party hereby agrees to complete all
actions necessary for such appointment.

                            [signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                   NEUROMETRIX, INC.

                                   By: /s/ Nicholas J. Alessi
                                       ----------------------
                                       Name: Nicholas J. Alessi
                                       Title: Director of Finance and Treasurer

                                   INDEMNITEE

                                   /s/ Shai N. Gozani
                                   ------------------

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Exhibit 4.1    
    

 
 

GEXA CORPORATION
  2002 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN    
    

1.    PURPOSE.
The Gexa Corporation 2002 Non-Employee Director Stock Option Plan (the "Plan") of Gexa Corporation (the "Company") is for the benefit of members of the Board of
Directors of the Company who, at the time of their service, are not employees of the Company or any of its affiliates, by providing them an opportunity to become owners of the Common Stock, no par
value, of the Company (the "Stock"), thereby advancing the best interests of the Company by increasing their proprietary interest in the success of the Company and encouraging them to continue in
their present capacity. 

2.    EFFECTIVE
DATE OF PLAN. The Plan is effective June 30, 2002, if within one year of that date it shall have been approved by the holders of at least a majority of the outstanding
shares of voting stock of the Company voting in person or by proxy at a duly held shareholders' meeting, or if the provisions of the corporate charter, bylaws or applicable state law prescribes a
greater degree of shareholder approval for this action, the approval by the holders of that percentage, at a duly held meeting of shareholders, or in either case by a consent in lieu of a meeting if
permitted by the corporate charter, bylaws and applicable law. 

3.    ADMINISTRATION.
The Plan shall be administered by the Board of Directors of the Company (the "Board"). Subject to the terms of the Plan, the Board shall have the power to construe the
provisions of the Plan, Options, and Stock issued hereunder, to determine all questions arising hereunder, and to adopt and amend such rules and regulations for administering the Plan as the Board
deans desirable. 

4.    DEDICATED
SHARES. The total number of shares of Stock with respect to which Initial Grants or Annual Grants (collectively, the "Options") may be granted under this Plan shall not
exceed, in the aggregate 500,000 shares; provided, that the class and aggregate number of shares of Stock which may be granted hereunder shall be subject to adjustment in accordance with the
provisions of Paragraph 17. The shares of Stock may be treasury shares or authorized but unissued shares of Stock. In the event that any outstanding Option shall expire or is terminated or
canceled for any reason, the shares of
Stock allocable to the unexercised portion of that Option may again be subject to an Option or Options under the Plan. 

5.    GRANT
OF OPTIONS. All Options granted under the Plan shall be Nonqualified Options which are not intended to satisfy the requirements of Section 422 of the Internal Revenue Code
of 1986, as amended. No options shall be granted under the Plan subsequent to January 4, 2008. 

6.    ELIGIBILITY.
The individuals who shall be eligible to receive Options under the Plan shall be each member of the Board who is not an employee of the Company or any affiliate of the
Company ("Eligible Director"). 

7.    OPTION
GRANT SIZE AND GRANT DATES. 

On
the one year anniversary of which the Eligible Director is first elected or appointed to be a director (whichever is applicable), the Eligible Director shall be granted an Option to purchase up to
50,000 shares of Stock on the terms and conditions set forth herein (an "Initial Grant"). On the anniversaries thereafter ("Subsequent Grants"), each Eligible Director would be granted a subsequent
option as follows: 

Year
2    30,000 options        Year 3    20,000 options. 

It
is contemplated under this agreement that an Eligible Director on the 4th year anniversary would be compensated pursuant to the discretion of the Corporate Governance Committee. In the event the
Eligible Director resigns, is removed, voted off the Board, or for whatever reason is unable to serve a full year term, then the Eligible Director would only be entitled to a prorate share of the
option grant. 

For
Example: The Eligible Director for serving 3 months would receive 3/12's of the grant. For purposes of anniversary dates all Eligible Directors are deemed to have begun their term in June
of each year. Under this plan the first term shall begin on June 2002 with the initial anniversary date of June 2003. 

Subject
only to any applicable limitations set out in this Plan, the number of shares of Stock to be covered by any Option granted to an Eligible Director shall be as determined by the Board.
Notwithstanding the provisions of Section 17, the number of shares of Stock which may subsequently be awarded pursuant to this Section 7 shall not increase but may be decreased if
appropriate under Section 17. If service of an Eligible Director who previously received an Initial Grant terminates and the
Director is subsequently elected or appointed to the Board, that Director shall not be eligible to receive a second Initial Grant. 

If
the General Counsel of the Company determines, in his sole discretion, that the Company is in possession of material, nonpublic information about the Company or any of its subsidiaries, he may
suspend granting of the Initial Grant or Annual Grant to each Eligible Director until the second trading day after public dissemination of that information, and the determination by the General
Counsel that issuance of the Options is then appropriate. 

8.    OPTION
PRICE; FAIR MARKET VALUE. The price at which shares of Stock may be purchased by each Eligible Director (the "Optionee") pursuant to his Initial Grant or Annual Grant, shall be
100% of the "Fair Market Value" of the shares of Stock on the date of grant of the Initial Grant or Annual Grant, as applicable. 

For
all purposes of this Plan, the "Fair Market Value" of the Stock as of any date means (a) the average of the high and low sale prices of the Stock on that date on the principal securities
exchange on which the Stock is listed: or (b) if the Stock is not listed on a securities exchange, the average of the high and low sale prices of the Stock on that date as reported on the
NASDAQ National Market System; or (c) if the Stock is not listed on the NASDAQ National Market System, the average of the high and low bid quotations for the Stock on that date as reported by
the National Quotation Bureau Incorporated; (d) for any Options issued prior to the initial public offering of the Stock, the initial public offering price; or (e) if none of the
foregoing is applicable, the average between tile closing bid and ask prices per share of stock on the last preceding date on which those prices were reported or that amount as determined by the
Board. Notwithstanding anything contained herein to the contrary, the options granted to Eligible Directors, whether Initial or Subsequent, shall not have a Fair Market Value below $2.00 per share. 

9.    DURATION
OF OPTIONS. The terns of each Option shall be five years from the date of grant. No Option shall be exercisable after the expiration of five years from the date the Option is
granted. 

10.    AMOUNT
EXERCISABLE. Each Option hereunder shall become exercisable on a cumulative basis in 50% increments on and after each annual anniversary of the grant of the Option. However,
upon a Change of Control, each Option shall become immediately exercisable. For this purpose, a "Change in Control" shall have occurred if, after the Effective Date of the Plan: 

        (i)    a
report on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) shall be filed with the Commission pursuant to the
Exchange Act and that report discloses that any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act), other than the Company (or one of its subsidiaries)
or any employee benefit plan sponsored by the Company (or one of its subsidiaries), is the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act), directly or indirectly, of 50 percent or more of the outstanding Voting Stock; 

        (ii)   any
person (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act), other than the Company (or one of its subsidiaries) or any
employee benefit plan sponsored by the Company (or one of its subsidiaries), shall purchase securities pursuant to a tender offer or exchange offer to acquire any Voting Stock (or any securities
convertible into Voting Stock) and, immediately after consummation of that purchase, that person is the beneficial owner (as that term 

is
defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of 50 percent or more of the outstanding Voting
Stock (such person's beneficial ownership to be determined, in the case of rights to acquire Voting Stock, pursuant to paragraph (d) of Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act); 

        (iii)  the
consummation of: 

        (x)   a
merger, consolidation or reorganization of the Company with or into any other person if (a) the Company is not the surviving entity or (b) as a result of
such merger, consolidation or reorganization, 50 percent or less of the combined voting power of the then-outstanding securities of such other person immediately after such merger,
consolidation or reorganization are held in the aggregate by the holders of Voting Stock immediately prior to such merger, consolidation or reorganization; 

        (y)   any
sale, lease, exchange or other transfer of all or substantially all the assets of the Company and its consolidated subsidiaries to any other person if as a result of
such sale, lease, exchange or other transfer, 50 percent or less of the combined voting power of the then-outstanding securities of such other person immediately after such sale,
lease, exchange or other transfer are held in the aggregate by the holders of Voting Stock immediately prior to such sale, lease, exchange or other transfer; or 

        (z)   a
transaction immediately after the consummation of which any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act) would be
the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of more than
50 percent of the outstanding Voting Stock; 

        (iv)  the
stockholders of the Company approve the dissolution of the Company; or 

"Voting
Stock" means shares of the capital stock of the Company the holders of which are entitled to vote for the election of directors, but excluding shares entitled to so vote only upon the
occurrence of a contingency unless that contingency shall have occurred. 

11.    EXERCISE
OF OPTIONS. Each Option shall be exercised by the delivery of written notice to the Committee setting forth the number of shares of Stock with respect to which the Option is
to be exercised, together with: (a) cash, certified check, bank draft, or postal or express money order payable to the order of the Company for an amount equal to the option price of the
shares, (b) Mature Shares at their Fair Market Value on the date of exercise, (c) payment to the Company, through a broker-assisted exercise that is approved by the Committee, for an
amount equal to the option price of the shares, (d) any combination of (a), (b), or (c), and/or (e) any other form of payment which is acceptable to the Committee, and specifying the
address to which the certificates for the shares are to be mailed. 

As
promptly as practicable after receipt of written notification and payment, the Company shall deliver to the Eligible Director certificates for the number of shares with respect to which the Option
has been exercised, issued in the Eligible Director's name. 

Whenever
an Option is exercised by exchanging Mature Shares owed by the Optionee, the Optionee shall deliver to the Company certificates registered in the name of the Optionee representing a number of
Mature Shares legally and beneficially owned by the Optionee, free of all liens, claims, and encumbrances of every kind, accompanied by stock powers duly endorsed in blank by the record holder of the
shares represented by the certificates, (with signature guaranteed by a commercial bank or trust company or by a brokerage firm having a membership on a registered national stock exchange). The
delivery of certificates upon the exercise of Options is subject to the condition that the person exercising the Option provide the Company with the information the Company might reasonably request
pertaining to exercise, sale or other disposition. 

If
Mature Shares are used in payment, the aggregate Fair Market Value of the Mature Shares tendered must be equal to or less than the aggregate exercise price of the shares being purchased upon
exercise of the Option, and any difference must be paid by cash, certified check, bank draft, or postal or express money order payable to the order of the Company. 

Delivery
of the shares shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited the certificates in the United States mail, addressed to the Eligible
Director, at the address specified by the Eligible Director. 

Notwithstanding
any other provision of the Plan, the Committee shall have the authority to cause an Optionee to utilize a different method of exercise if the method selected by the Optionee could
result in adverse accounting treatment for the Company. 

"Mature
Shares" means shares of Stock that have been legally and beneficially owned by the Optionee for at least six months. 

12.    NON-TRANSFERABILITY
OF OPTIONS. Options shall not be transferable by the Optionee other than by will or under the laws of descent and distribution, and shall be
exercisable, during the Optionee's lifetime, only by him. Notwithstanding any provision in this Plan to the contrary, an Eligible Director may transfer an Option to an Immediate Family Member or an
entity controlled by an Eligible Director or an Immediate Family Member, provided, however, no further transfer shall be made except by operation of law or a transfer back to such Eligible Director or
such other transfer which may be approved by the Board. For this purpose, "Immediate Family Member" means an Eligible Director's children, grandchildren or spouse, or a trust for the benefit of such
Immediate Family Members. 

13.    TERMINATION
OF DIRECTORSHIP OF OPTIONEE. If, before the date of expiration of the Option, the Optionee shall cease to be a director of the Company, the Option shall terminate on the
earlier of the date of expiration or 90 days after the date of ceasing to serve as a director. In this event, the Optionee shall have the right, prior to the termination of the Option, to
exercise the Option if he was entitled to exercise immediately prior to ceasing to serve as a director. 

Upon
the death or disability of the Optionee while serving as a director, his options shall become fully vested and, in the case of death his executors, administrators, or any person or persons to
whom his Option may be transferred by will or by the laws of descent and distribution, shall have the right, at any time prior to the earlier of the date of expiration of the Option or
12 months following the date of his death, to exercise the Option, in whole or in part. 

14.    REQUIREMENTS
OF LAW. The Company shall not be required to sell or issue any Stock under any Option if issuing that Stock would constitute or result in a violation by the Optionee or
the Company of any provision of any law, statute, or regulation of any governmental authority. Specifically, in connection with any applicable statute or regulation relating to the registration of
securities, upon exercise of any Option, the Company shall not be required to issue any Stock unless the Company has received evidence satisfactory to it to the effect that the holder of that Option
will not transfer the Stock except in accordance with applicable law, including receipt of an opinion of counsel satisfactory to the Company to the effect that any proposed transfer complies with
applicable law. The determination by the Company on this matter shall be final, binding and conclusive. The Company may, but shall in no event be obligated to, register any Stock covered by this Plan
pursuant to applicable securities laws of any country or any political subdivision. In the event the Stock issuable on exercise of an Option is not registered, the Company may imprint on the
certificate evidencing the Stock any legend that counsel for the Company considers necessary or advisable to comply with applicable law. The Company shall not be obligated to take any other
affirmative action in order to
cause the exercise of an Option, or the issuance of shares under it, to comply with any law or regulation of any governmental authority. 

15.    NO
RIGHTS AS STOCKHOLDER. No Optionee shall have any rights as a stockholder with respect to Stock covered by any Option until the date a stock certificate is issued for the Stock,
and, 

except
as otherwise provided in Paragraph 17 hereof, no adjustment for dividends, or otherwise, shall be made if the record date thereof is prior to the date of issuance of such certificate. 

16.    NO
OBLIGATION TO RETAIN OPTIONEE. The granting of any Option shall not impose upon the Company or its stockholders any obligation to retain or continue to retain any Optionee or
nominate any Optionee for election to continue in his capacity as a director of the Company. The right of the Company, the Board of Directors, and the Stockholders to terminate the service of any
Optionee as a director shall not be diminished or affected by reason of the fact that one or more Options have been or would be granted to him, 

17.    CHANGES
IN THE COMPANY'S CAPITAL STRUCTURE. The existence of outstanding Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Stock or its rights, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 

If
the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the Stock
outstanding, without receiving compensation for it in money, services or property, then (a) the number, class, and per share price of shares of Stock subject to outstanding Options under this
Plan shall be appropriately adjusted in such a manner as to entitle an Optionee to receive upon exercise of an Option, for the same aggregate cash consideration, the equivalent total number and class
of shares he would have received had he exercised his Option in full immediately prior to the event requiring the adjustment; and (b) the number and class of shares of Stock with respect to
which Options may be granted under the Plan shall be adjusted by substituting for the total number and class of shares of Stock then available for grant, that number and class of shares of Stock that
would have been received by the owner of an equal number of outstanding shares of each class of Stock as the result of the event requiring the adjustment. 

If
while unexercised Options remain outstanding under the Plan (i) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a
subsidiary of an entity other than an entity that was wholly-owned by the Company immediately prior to such
merger, consolidation or other reorganization), (ii) the Company sells, leases or exchanges or agrees to sell, lease or exchange all or substantially all of its assets to any other person or
entity (other than an entity wholly-owned by the Company), (iii) the Company is to be dissolved, or (iv) the Company is a under Section 424(a) of the Code and applicable Treasury
Regulations) that is not described in clauses (i), (ii) or (iii) of this sentence (each such event is referred to herein as a "Corporate Change"), then (x) except as otherwise
provided in an Option Agreement or as a result of the Board's effectuation of one or more of the alternatives described below, there shall be no acceleration of the time at which any Option then
outstanding may be exercised, and (y) no later than ten (10) days after the approval by the stockholders of the Company of such Corporate Change, the Board, acting in its sole and
absolute discretion without the consent or approval of any Optionee, shall act to effect one or more of the following alternatives, which may vary among individual Optionees and which may vary among
Options held by any individual Optionee: 

        (1)   accelerate
the time at which some or all of the Options then outstanding may be exercised so that such Options may be exercised in full for a limited period of time on
or before a specified date (before or after such Corporate Change) fixed by the Board, after which specified date all such Options that remain unexercised and all rights of Optionees thereunder shall
terminate, 

        (2)   require
the mandatory surrender to the Company by all or selected Optionees of some or all of the then outstanding Options held by such Optionees (irrespective of
whether such Options are then exercisable under the provisions of this Plan or the Option Agreements evidencing such Options) as of a date, before or after such Corporate Change, specified by the
Board, in which event the Board shall thereupon cancel such Options and the Company shall pay to each such Optionee an amount of cash 

per
share equal to the excess, if any, of the per share price offered to stockholders of the Company in connection with such Corporate Change over the exercise price(s) under such Options for such
shares, 

        (3)   with
respect to all or selected Optionees, have some or all of their then outstanding Options (whether vested or unvested) assumed or have a new Option substituted for
some or all of their then outstanding Options (whether vested or unvested) by an entity which is a party to the transaction resulting in such Corporate Change and which is then employing him, or a
parent or subsidiary of such entity, provided that (A) such assumption or substitution is on a basis where the excess of the aggregate fair market value of the shares subject to the Option
immediately after the assumption or substitution over the aggregate exercise price of such shares is equal to the excess of the aggregate fair market value of all shares subject to the Option
immediately before such assumption or substitution over the aggregate exercise price of such shares, and (B) the assumed rights under such existing Option or the substituted rights under such
new Option as the case may be will have the same terms and conditions as the rights under the existing Option assumed or substituted for, as the case may be, 

        (4)   provide
that the number and class of shares of Stock covered by an Option (whether vested or unvested) theretofore granted shall be adjusted so that such Option when
exercised shall thereafter cover the number and class of shares of stock or other securities or property (including, without limitation, cash) to which the Optionee would have been entitled pursuant
to the terms of the agreement and/or plan relating to such Corporate Change if, immediately prior to such Corporate Change, the Optionee had been the holder of record of the number of shares of Stock
then covered by such Option, or 

        (5)   make
such adjustments to Options then outstanding as the Board deems appropriate to reflect such Corporate Change (provided, however, that the Board may determine in its
sole and absolute discretion that no such adjustment is necessary). 

In
effecting one or more of alternatives (3), (4) or (5) above, and except as otherwise may be provided in an Option Agreement, the Board, in its sole and absolute discretion and without
the consent or approval of any Optionee, may accelerate the time at which some or all Options then outstanding may be exercised. 

In
the event of changes in the outstanding Stock by reason of recapitalizations, reorganizations. mergers, consolidations, combinations, exchanges or other relevant changes in capitalization occurring
after the date of the grant of any Option and not otherwise provided for by this Section 4.5, any outstanding Options and any agreements evidencing such Options shall be subject to adjustment
by the Board in its sole and absolute discretion as to the number and price of shares of stock or other consideration subject to such Options. In the event of any such change in the outstanding Stock,
the aggregate number of shares available under this Plan may be appropriately adjusted by the Board, whose determination shall be conclusive. 

The
issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon
the exercise of rights or warrants to subscribe for them, or upon conversion of shares or obligations of the Company convertible into shares or other securities, shall not affect, and no adjustment by
reason of such issuance shall be made with respect to, the number, class, or price of shares of Stock then subject to outstanding Options. 

18.    TERMINATION
AND AMENDMENT OF PLAN. 

        (a)   The
Board may amend, terminate or suspend the Plan at any time and from time to time, in its sole and absolute discretion, in whole or in part; provided, however, that
any amendment which must be approved by the shareholders of the Company in order to comply with applicable law or the rules of the principal national securities exchange upon which the shares of Stock
are traded or quoted, shall not be effective unless and until such approval has been obtained. Presentation of this Plan or any amendment hereof for shareholder approval shall not be construed to
limit the Company's authority to offer similar or dissimilar benefits under other plans without shareholder approval. 

        (b)   The
Board shall not, without the further approval of the shareholders of the Company, authorize the amendment of any outstanding Option to reduce the option price.
Furthermore, no Option shall be canceled and replaced with awards having a lower option price without further approval of the shareholders of the Company. This Section is intended to prohibit the
unlimited repricing of "underwater" Options without the further approval of the shareholders of the Company and shall not be construed to prohibit the adjustments provided for in Section 17 of
this Plan. 

19.    WRITTEN
AGREEMENT. Each Option granted hereunder shall be embodied in a written agreement, which shall be subject to the terms and conditions of this Plan and shall be signed by the
Optionee and by the Chairman of the Board and CEO. 

20.    INDEMNIFICATION
OF BOARD. With respect to administration of the Plan, the Company shall indemnify each present and future member of the Board of Directors against, and each member of
the Board of Directors shall be entitled without further act on his part to indemnity from the Company for, all expenses (including the amount of judgments and the amount of approved settlements made
with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in
which he may be involved by reason of his being or having been a member of the Board of Directors, whether or not he continues to be a member of the Board of Directors at the time of incurring the
expenses. However, this indemnity shall not include any expenses incurred by any member of the Board of Directors (a) in respect of matters as to which he shall be finally adjudged in any
action, suit or proceeding to have been guilty of gross negligence or willful misconduct in the performance of his duty as a member of the Board of Directors, or (b) in respect of any matter in
which any settlement is effected, to an amount in excess of the amount approved by the Company on the advice of its legal counsel. In addition, no right of indemnification under this Plan shall be
available to or enforceable by any member of the Board of Directors unless, within 60 days after institution of any action, suit or proceeding, he shall have offered the Company, in writing,
the opportunity to handle and defend same at its own expense. This right of indemnification shall inure to the benefit of the heirs, executors or administrators of each member of the Board of
Directors and shall be in addition to all other rights to which a member of the Board of Directors may be entitled as a matter of law, contract, or otherwise. 

21.    FORFEITURES.
Notwithstanding any other provision of this Plan, if, before or after termination of the Optionee's capacity as a director of the Company, there is an adjudication by a
court of competent
jurisdiction that the Optionee committed fraud, embezzlement, theft, commission of felony, or proven dishonesty in the course of his advisory relationship to the Company and its affiliates which
conduct materially damaged the Company or its affiliates, or disclosed trade secrets of the Company or its affiliates, then any outstanding options which have not been exercised by Optionee shall be
forfeited. In order to provide the Company with an opportunity to enforce this Section, an Option may not be exercised if a lawsuit alleging that an action described in the preceding sentence has
taken place until a final resolution of the lawsuit favorable to the Optionee. 

22.    GENDER.
If the context requires, words of one gender when used in this Plan shall include the others and words used in the singular or plural shall include the other. 

23.    HEADINGS.
Headings are included for convenience of reference only and do not constitute part of the Plan and shall not be used in construing the terms of the Plan. 

24.    GOVERNING
LAW. The provisions of this Plan shall be construed, administered. and governed under the laws of the State of Texas. 

QuickLinks

Exhibit 4.1

GEXA CORPORATION 2002 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

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