Document:

surge_schloss.htm

    EXHIBIT 10.74

     

    
      SURGE
GLOBAL ENERGY, INC.

       

      NOTICE
OF GRANT OF STOCK OPTION

       

      Non-Plan
Option

       

      E. Jamie
Schloss (the “Optionee”)
has been granted an option (the “Option”)
to purchase certain shares of Stock of Surge Global Energy, Inc., a Delaware
corporation, pursuant to the Stock Option Agreement
attached hereto (the “Agreement”),
as follows:

       

      
        	
                Date
      of Option Grant:

              	
                February
      27, 2008

              
	 	 
	
                Number
      of Option Shares:

              	
                1,700,000

              
	 	 
	
                Exercise
      Price:

              	
                $0.08

              
	 	 
	
                Initial
      Exercise Date:

              	
                February
      27, 2008

              
	 	 
	
                Initial
      Vesting Date:

              	
                February
      27, 2008

              
	 	 
	
                Option
      Expiration Date:

              	
                February
      26, 2013

              
	 	 
	
                Tax
      Status of Option:

              	
                Nonstatutory Stock
      Option.  (Enter “Incentive” or
      “Nonstatutory.”  If blank, this Option will be a Nonstatutory
      Stock Option.)

              
	 	 
	
                Vesting
      Provisions:

              	
                The
      Options will vest in monthly installments over 12 months with the first
      such installment vesting immediately and the last installment vesting on
      February 28, 2009.  30% of the Options will vest in the first
      monthly installment, and the remaining balance of the Options will vest in
      equal monthly installments over the remaining 11 months, with the final
      month adjusting for any rounding differences.  However, should
      the Optionee decide to discontinue his Services early such vested Options
      that exceed the amount of vested Options Optionee would have received if
      the Options vested ratably over 12 months on a pro rata basis are subject
      to forfeiture.

              
	 	 
	
                Exceptions
      to Provisions of Stock Option Agreement:

              	
                None.

              

      

       

      By their
signatures below, the Company and the Optionee agree that the Option is governed
by this Notice and by the provisions of the Stock Option Agreement (except as
otherwise set forth opposite Exceptions to Provisions of Stock Option
Agreement), which is attached to and made a part of this
document.  The Optionee acknowledges receipt of a copy of the Stock
Option Agreement, represents that the Optionee has read and is familiar with its
provisions, and hereby accepts the Option subject to all of its terms and
conditions.

       

      
        	
                SURGE
      GLOBAL ENERGY, INC.

                 

                By:

                 

                Print
      Name:

                 

                 

                ATTACHMENTS:  Stock
      Option Agreement

              	
                OPTIONEE:
      __________________________

                 

                ___________________________________

                Signature

                 

                
                  ___________________________________

                

                Date

                 

                
                  ___________________________________

                

                Address

                 

                
                  _______________________________

                

                 

              

      

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

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

      THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933.

       

      SURGE
GLOBAL ENERGY, INC.

      STOCK
OPTION AGREEMENT

       

      Non-Plan
Option

       

      Surge
Global Energy, Inc., a Delaware corporation, has granted to the individual (the
“Optionee”)
named in the Notice of Grant
of Stock Option (the “Notice”)
to which this Stock Option Agreement (the “Option
Agreement”) is attached an option (the “Option”)
to purchase certain shares of Stock upon the terms and conditions set forth in
the Notice and this Option Agreement.  By signing the Notice, the
Optionee: (a) represents that the Optionee has read and is familiar with
the terms and conditions of the Notice and this Option Agreement, including the
Effect of Termination of Service set forth in Section 7, (b) accepts
the Option subject to all of the terms and conditions of the Notice and this
Option Agreement, (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under the
Notice or this Option Agreement, and (d) acknowledges receipt of a copy of
the Notice and this Option Agreement.

       

      1. Definitions
and Construction.

       

      1.1 Definitions.  Whenever
used herein, the following terms shall have their respective meanings set forth
below:

       

      (a) “Board”
means the Board of Directors of the Company, or a committee of the Board duly
appointed to administer this Option and having such powers as shall be specified
by the Board.

       

      (b) “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

       

      (c) “Company”
means Surge Global Energy, Inc., a Delaware corporation, or any successor
corporation thereto.

       

      (d) “Consultant”
means a person engaged to provide consulting or advisory services (other than as
an Employee or a Director) to a Participating Company, provided that the
identity of such person, the nature of such services or the entity to which such
services are provided would not preclude the Company from offering or selling
securities to such person pursuant to this Agreement in reliance on either the
exemption from registration provided by Rule 701 under the Securities Act or, if
the Company is required to file reports pursuant to Section 13 or
15(d) of the Exchange Act, registration on a Form S-8 Registration
Statement under the Securities Act.

       

      (e) “Director”
means a member of the Board or of the board of directors of any other
Participating Company.

       

      (f) “Disability”
means the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionee’s
position with the Participating Company Group because of the sickness or injury
of the Optionee.

       

      
        
          
          

        

        
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      (g) “Employee”
means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company;
provided, however, that neither service as a Director nor payment of a
director’s fee shall be sufficient to constitute employment for purposes of this
Agreement.  The Company shall determine in good faith and in the
exercise of its discretion whether an individual has become or has ceased to
bean Employee and the effective date of such individual’s employment or
termination of employment, as the case may be.

       

      (h) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

       

      (i) “Fair Market
Value” means, as of any date, the value of a share of Stock or other
property as determined by the Board, in its discretion, or by the Company, in
its discretion, if such determination is expressly allocated to the Company
herein, subject to the following:

       

      (i) If, on
such date, the Stock is listed on a national or regional securities exchange or
market system, the Fair Market Value of a share of Stock shall be the closing
price of a share of Stock (or the mean of the closing bid and asked prices of a
share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq
National Market, The Nasdaq SmallCap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in The Wall Street
Journal or such other source as the Company deems reliable.  If
the relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system, the date on which the Fair Market Value
shall be established shall be the last day on which the Stock was so traded
prior to the relevant date, or such other appropriate day as shall be determined
by the Board, in its discretion.

       

      (ii) If on
such date, the Stock is not listed on a national or regional securities exchange
or market system, the Fair Market Value of a share of Stock shall be as
determined by the Board in good faith without regard to any restriction other
than a restriction which, by its terms, will never lapse.

       

      (j) “Incentive Stock
Option” means an Option intended to be (as set forth in the Option
Agreement) and which qualifies as an incentive stock option within the meaning
of Section 422(b) of the Code.

       

      (k) “Insider”
means an officer or a Director of the Company or any other person whose
transactions in Stock are subject to Section 16 of the Exchange
Act.

       

      (l) “Nonstatutory
Stock Option” means an Option not intended to be (as set forth in the
Option Agreement) or which does not qualify as an Incentive Stock
Option.

       

      (m) “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

       

      (n) “Participating
Company” means the Company or any Parent Corporation or Subsidiary
Corporation.

       

      (o) “Participating
Company Group” means, at any point in time, all corporations collectively
which are then Participating Companies

       

      (p) “Securities
Act” means the Securities Act of 1933, as amended.

       

      (q) “Service”
means the Optionee’s employment or service with the Participating Company Group,
whether in the capacity of an Employee, a Director or a
Consultant.  The Optionee’s Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee’s
Service.  Furthermore, the Optionee’s Service with the Participating
Company Group shall not be deemed to have terminated if the Optionee takes any
military leave, sick leave, or other bona fide leave of absence approved by the
Company; provided, however, that if any such leave exceeds ninety (90) days, on
the ninety-first (91st) day of such leave the Optionee’s Service shall be deemed
to have terminated unless the Optionee’s right to return to Service with the
Participating Company Group is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under this Option
Agreement.  The Optionee’s Service shall be deemed to have terminated
either upon an actual termination of Service or upon the corporation for which
the Optionee performs Service ceasing to be a Participating
Company.  Subject to the foregoing, the Company, in its discretion,
shall determine whether the Optionee’s Service has terminated and the effective
date of such termination.

       

      
        
          
          

        

        
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      (r) “Stock”
means the common stock of the Company, as adjusted from time to time in
accordance with Section 9.

       

      (s) “Subsidiary
Corporation” means any present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the Code.

       

      1.2 Construction.  Captions
and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of’ this Option
Agreement.  Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the
singular.  Use of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.

       

      2. Tax
Status of Option.  This Option is intended to be a Nonstatutory
Stock Option and shall not be treated as an Incentive Stock Option within the
meaning of Section 422(b) of the Code.

       

      3. Administration.

       

      All
questions of interpretation concerning this Option Agreement shall be determined
by the Board.  All determinations by the Board shall be final and
binding upon all persons having an interest in the Option.  Any
officer of a Participating Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

       

      4. Exercise
of the Option.

       

      4.1 Right to
Exercise.  Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Exercise Date and prior to the
termination of the Option (as provided in Section 6) in an amount not to
exceed the Number of Vested Shares (determined in accordance with the Notice)
less the number of shares previously acquired upon exercise of the
Option.

       

      4.2 Method of
Exercise.  Exercise of the Option shall be by written notice to
the Company in the form of Exhibit 1 hereto (the “Exercise
Notice”) which must state the election to exercise the Option, the number
of whole shares of Stock for which the Option is being exercised and such other
representations and agreements as to the Optionee’s investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement.  The written notice must be signed by the Optionee
and must be delivered in person, by certified or registered mail, return receipt
requested, by confirmed facsimile transmission, or by such other means as the
Company may permit, to the Chief Financial Officer of the Company, or other
authorized representative of the Participating Company Group, prior to the
termination of the Option as set forth in Section 6, accompanied by full
payment of the aggregate Exercise Price for the number of shares of Stock being
purchased.  The Option shall be deemed to be exercised upon receipt by
the Company of such written notice, the aggregate Exercise Price, and, if
required by the Company, such executed agreement.

       

      
        
          
          

        

        
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      4.3 Payment of Exercise
Price.  Except as otherwise provided below, payment of the
aggregate Exercise Price for the number of shares of Stock for which the Option
is being exercised shall be made (i) in cash, by check, or cash equivalent,
(ii) by means of a Cashless Exercise, as defined below, or (iii) by
any combination of the foregoing.  Optionee shall be responsible for
filing any reports of remittance or other foreign exchange filings required in
order to pay the exercise price.  A “Cashless
Exercise” means the delivery of a properly executed notice together with
irrevocable instructions to a broker in a form acceptable to the Company
providing for the assignment to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System).  The Company reserves, at
any and all times, the right, in the Company’s sole and absolute discretion, to
decline to approve or terminate any such program or procedure.

       

      4.4 Tax Withholding.  At
the time the Option is exercised, in whole or in part, or at any time thereafter
as requested by the Company, the Optionee hereby authorizes withholding from
payroll and any other amounts payable to the Optionee, and otherwise agrees to
make adequate provision for (including by means of a Cashless Exercise to the
extent permitted by the Company), any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Participating
Company Group, if any, which arise in connection with the Option, including,
without limitation, obligations arising upon (i) the exercise, in whole or
in part, of the Option, (ii) the transfer, in whole or in part, of any
shares acquired upon exercise of the Option, or (iii) the operation of any
law or regulation providing for the imputation of interest.  The
Option is not exercisable unless the tax withholding obligations of the
Participating Company Group are satisfied.  Accordingly, the Company
shall have no obligation to deliver shares of Stock until the tax withholding
obligations of the Participating Company Group have been satisfied by the
Optionee.

       

      4.5 Certificate
Registration.  Except in the event the Exercise Price is paid
by means of a Cashless Exercise, the certificate for the shares as to which the
Option is exercised shall be registered in the name of the Optionee, or, if
applicable, in the names of the heirs of the Optionee.

       

      4.6 Restrictions on Grant of the Option
and Issuance of Shares.  The grant of the Option and the
issuance of shares of Stock upon exercise of the Option shall be subject to
compliance with all applicable requirements of federal, state or foreign law
with respect to such securities.  The Option may not be exercised if
the issuance of shares of Stock upon exercise would constitute a violation of
any applicable federal, state or foreign securities laws or other law or
regulations or the requirements of any stock exchange or market system upon
which the Stock may then be listed.  In addition, the Option may not
be exercised unless (i) a registration statement under the Securities Act
shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act.  THE OPTIONEE IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS
ARE SATISFIED.  ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE
THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel to be necessary to
the lawful issuance and sale of any shares subject to the Option shall relieve
the Company of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been
obtained.  As a condition to the exercise of the Option, the Company
may require the Optionee to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.  Any shares which are issued will be “restricted
securities” as that term is defined in Rule 144 under the Securities Act, as
further described in Section 7 of the Exercise Notice, unless they are
registered under the Securities Act.  The Company is under no
obligation to register the shares of Stock issuable upon exercise of this
Option.

       

      4.7 Fractional
Shares.  The Company shall not be required to issue fractional
shares upon the exercise of the Option.

       

      
        
          
          

        

        
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      5. Nontransferability
of the Option.

       

      The
Option may be exercised during the lifetime of the Optionee only by the Optionee
or the Optionee’s guardian or legal representative and may not be assigned or
transferred in any manner except by will or by the laws of descent and
distribution.  Following the death of the Optionee, the Option, to the
extent provided in Section 7, may be exercised by the Optionee’s legal
representative or by any person empowered to do so under the deceased Optionee’s
will or under the then applicable laws of descent and distribution.

       

      6. Termination
of the Option.

       

      The
Option shall terminate and may no longer be exercised on the first to occur of
(a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee’s Service as described in
Section 7, or (c) a Change in Control to the extent provided in
Section 8.

       

      7. Effect of
Termination of Service.

       

      7.1 Option
Exercisability.

       

      (a) Disability.  If
the Optionee’s Service with the Participating Company Group terminates because
of the Disability of the Optionee, the Option, to the extent unexercised and
exercisable on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee (or the Optionee’s guardian or legal representative)
at any time prior to the expiration of six (6) months after the date on
which the Optionee’s Service terminated, but in any event no later than the
Option Expiration Date.

       

      (b) Death.  If
the Optionee’s Service with the Participating Company Group terminates because
of the death of the Optionee, the Option, to the extent unexercised and
exercisable on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee’s legal representative or other person who acquired
the right to exercise the Option by reason of the Optionee’s death at any time
prior to the expiration of six (6) months after the date on which the
Optionee’s Service terminated, but in any event no later than the Option
Expiration Date.  The Optionee’s Service shall be deemed to have
terminated on account of death if the Optionee dies within three (3) months
after the Optionee’s termination of Service.

       

      (c) Other Termination
of Service.  If the Optionee’s Service with the Participating
Company Group terminates for any reason, except Disability or death, the Option,
to the extent unexercised and exercisable by the Optionee on the date on which
the Optionee’s Service terminated, may be exercised by the Optionee at any time
prior to the expiration of six (6) months (or such other longer period of
time as determined by the Board, in its discretion) after the date on which the
Optionee’s Service terminated, but in any event no later than the Option
Expiration Date.

       

      7.2 Extension if Exercise Prevented by
Law.  Notwithstanding the foregoing, if the exercise of the
Option within the applicable time periods set forth in Section 7.1 is
prevented by the provisions of Section 4.6, the Option shall remain
exercisable until three (3) months after the date the Optionee is notified
by the Company that the Option is exercisable, but in any event no later than
the Option Expiration Date.

       

      7.3 Extension if Optionee Subject to
Section 16(b).  Notwithstanding the foregoing, if a sale
within the applicable time periods set forth in Section 7.1 of shares
acquired upon the exercise of the Option would subject the Optionee to suit
tinder Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Optionee’s termination of Service, or (iii) the Option
Expiration Date.

       

      
        
          
          

        

        
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      8. Change In
Control.

       

      8.1 Definitions.

       

      (a) An “Ownership Change
Event” shall be deemed to have occurred if any of the following occurs
with respect to the Company: (i) the direct or indirect sale or exchange in
a single or series of related transactions by the stockholders of the Company of
more than fifty percent (50%) of the voting stock of the Company: (ii) a
merger or consolidation in which the Company is a party; (iii) the sale,
exchange, or transfer of all or substantially all of the assets of the Company;
or (iv) a liquidation or dissolution of the Company.

       

      (b) A “Change in
Control” shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, a “Transaction”)
wherein the stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of tile Company were transferred (the “Transferee
Corporation(s)”), as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one or
more subsidiary corporations.

       

      8.2 Effect of Change in Control on
Option.  In the event of a Change in Control, the surviving,
continuing, successor, or purchasing corporation or parent corporation thereof
as the case may be (the “Acquiring
Corporation”), may either assume the Company’s rights and obligations
under the Option or substitute for the Option a substantially equivalent option
for the Acquiring Corporation’s stock.  In the event the Acquiring
Corporation elects not to assume the Company’s rights and obligations under the
Option or substitute for the Option in connection with the Change in Control,
and provided that the Optionee’s Service has not terminated prior to such date,
the Option shall become one hundred percent (100%) vested as of the date ten
(10) days prior to the date of the Change in Control.  Any vesting of
the Option that was permissible solely by reason of this Section 8.2 shall
be conditioned upon the consummation of the Change in Control.  The
Option shall terminate and cease to be outstanding effective as of the date of
the Change in Control to the extent that the Option is neither assumed or
substituted for by the Acquiring Corporation in connection with the Change in
Control nor exercised as of the date of the Change in
Control.  Notwithstanding the foregoing, shares acquired upon exercise
of the Option prior to the Change in Control and any consideration received
pursuant to the Change in Control with respect to such shares shall continue to
be subject to all applicable provisions of this Option Agreement except as
otherwise provided herein.  Furthermore, notwithstanding the
foregoing, if the corporation the stock of which is subject to the Option
immediately prior to an Ownership Change Event described in Section 8.1
(a)(i) constituting a Change in Control is the surviving or continuing
corporation and immediately after such Ownership Change Event less than fifty
percent (50%) of the total combined voting power of its voting stock is held by
another corporation or by other corporations that are members of an affiliated
group within the meaning of Section 1504(a) of the Code without regard
to the provisions of Section 1504(b) of the Code, the Option shall not
terminate.  In the event the Acquiring Corporation does assume the
Company’s rights and obligations under the Option or substitutes for the Option
a substantially equivalent option for the Acquiring Corporation’s stock, the
vesting of the Option in the Optionee, as described in the Notice, shall be
accelerated and made fully exercisable.  The Company shall provide the
Optionee with 10 business days written notice prior to the closing of a Change
in Control event so that the Optionee may exercise his Option
hereunder.

       

      9. Adjustments
For Changes In Capital Structure.

       

      In the
event of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification, or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number, Exercise Price and
class of shares of stock subject to the Option.  If a majority of the
shares which are of the same class as the shares that are subject to the Option
are exchanged for, converted into, or otherwise become (whether or not pursuant
to an Ownership Change Event) shares of another corporation (the “New
Shares”), the Board may unilaterally amend the Option to provide that the
Option is exercisable for New Shares.  In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its
discretion.  Notwithstanding the foregoing, any fractional share
resulting from all adjustment pursuant to this Section 9 shall be rounded
down to the nearest whole number, and in no event may the Exercise Price be
decreased to an amount less than the par value, if any, of the stock subject to
the Option.  The adjustments determined by the Board pursuant to this
Section 9 shall be final, binding and conclusive.

       

      
        
          
          

        

        
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      10. Rights as
a Stockholder, Employee or Consultant.

       

      The
Optionee shall have no rights as a stockholder with respect to any shares
covered by the Option until the date of the issuance of a certificate for the
shares for which the Option has been exercised (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company).  No adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 9.  If the Optionee is an
Employee, the Optionee understands and acknowledges that, except as otherwise
provided in a separate, written employment agreement between a Participating
Company and the Optionee, the Optionee’s employment is “at will” and is for no
specified term.  Nothing in this Option Agreement shall confer upon
the Optionee any right to continue in the Service of a Participating Company or
interfere in any way with any right of the Participating Company Group to
terminate the Optionee’s Service as an Employee or Consultant, as the case may
be, at any time.

       

      11. Lock-Up
Agreement.

       

      The
Optionee hereby agrees that in the event of any underwritten public offering of
stock, including but not limited to an initial public offering of stock, made by
the Company pursuant to au effective registration statement filed under the
Securities Act, the Optionee shall not offer, sell, contract to sell, pledge,
hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering.  The
foregoing limitation shall not apply to shares registered in the public offering
under the Securities Act.

       

      12. Legends.

       

      The
Company may at any time place legends referencing and any applicable federal,
state or foreign securities law restrictions on all certificates representing
shares of stock subject to the provisions of this Option
Agreement.  The Optionee shall, at the request of the Company,
promptly present to the Company any and all certificates representing shares
acquired pursuant to the Option in the possession of the Optionee in order to
carry out the provisions of this Section.  Unless otherwise specified
by the Company, legends placed on such certificates may include, but shall not
be limited to, the following:

       

      “THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACT.”

       

      13. Restrictions
on Transfer of Shares.

       

      No shares
acquired upon exercise of the Option may be sold, exchanged, transferred
(including, without limitation, any transfer to a nominee or agent of the
Optionee), assigned, pledged, hypothecated or otherwise disposed of, including
by operation of law, in any manner which violates any of the provisions of this
Option Agreement and any such attempted disposition shall be
void.  The Company shall not be required (a) to transfer on its
books any shares which will have been transferred in violation of any of the
provisions set forth in this Option Agreement or (b) to treat as owner of
such shares or to accord the right to vote as such owner or to pay dividends to
any transferee to whom such shares will have been so transferred.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      14. Miscellaneous
Provisions.

       

      14.1 Binding
Effect.  Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

       

      14.2 Termination or
Amendment.  The Board may terminate or amend the Option at any
time; provided, however, that except as provided in Section 8.2 in
connection with a Change in Control, no such termination or amendment may
adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation.  No amendment
or addition to this Option Agreement shall be effective unless in
writing.

       

      14.3 Notices.  Any notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Option Agreement provides for
effectiveness only upon actual receipt of such notice) upon personal delivery or
upon deposit in the United States Post Office, by registered or certified mail,
with postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature or at such other address as such party may
designate in writing from time to time to the other party.

       

      14.4 Integrated
Agreement.  The Notice and this Option Agreement constitute the
entire understanding and agreement of the Optionee and the Participating Company
Group with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations,
or warranties among the Optionee and the Participating Company Group with
respect to such subject matter other than those as set forth or provided for
herein or therein.  To the extent contemplated herein or therein, the
provisions of the Notice and the Option Agreement shall survive any exercise of
the Option and shall remain in full force and effect.

       

      14.5 Applicable
Law.  This Option Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.

       

      14.6 Counterparts.  The
Notice may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      EXHIBIT 1

       

      Optionee:  E. Jamie Schloss

      

      Date:
February 27, 2008

       

      STOCK
OPTION EXERCISE NOTICE

      Non-Plan
Option

       

      Surge
Global Energy, Inc.

      Attention:  Chief
Financial Officer

      12220 El
Camino Real

      Suite 410

      San Diego,
CA 92103

       

      Ladies
and Gentlemen:

       

      1. Option.  I
was granted an option (the “Option”)
to purchase shares of the common stock (the “Shares”)
of Energy, Inc., a Delaware corporation (the “Company”),
pursuant to my Notice of Grant of Stock Option (the my Stock Option Agreement
(the “Option
Agreement”) as follows:

       

      
        	
                Grant Number:

              	 
      
	 	 
	
                Date
      of Option Grant:

              	
                February
      27, 2008

              
	 	 
	
                Number
      of Option Shares:

              	
                1,700,000

              
	 	 
	
                Exercise
      Price per Share:

              	
                $
      0.08

              

      

       

      2. Exercise
of Option.  I hereby elect to exercise the Option to purchase
the following number of Shares:

       

      
        	
                Total
      Shares Purchased:

              	
                __________

              
	 	 
	
                Total
      Exercise Price (Total Shares X Price per Share)

              	
                $_________

              

      

       

      3. Payments.  I
enclose payment in fill of the total exercise price for the Shares in the
following form(s), as authorized by my Option Agreement:

       

      
        	
                q Cash:

                 

              	
                __________

              
	
                q Check:

                 

              	
                $_________

              

      

      

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      4. Tax
Withholding.  I enclose payment in full of my withholding
taxes, if any, as follows:

       

      (Contact
Chief Financial Officer for amount of tax due.)

       

      
        	
                q Cash:

                 

              	
                $_________

              
	
                q Check:

                 

              	
                $_________

              

      

      

      5. Optionee
Information.

       

      
        	
                My
      address is:

              	 
      ________________________________________
	 	 
	
                My
      Social Security Number is:

              	 
      ________________________________________

      

       

      6. Binding
Effect.  I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the
Option Agreement, to all of which I hereby expressly assent.  This
Agreement shall inure to the benefit of and be binding upon the my heirs,
executors, administrators, successors and assigns.

       

      7. Transfer.  I
understand and acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the “Securities
Act”), and that consequently the Shares must be held indefinitely unless
they are subsequently registered under the Securities Act, an exemption from
such registration is available, or they are sold in accordance with Rule 144
under the Securities Act, I further understand and acknowledge that the Company
is under no obligation to register the Shares.  I understand that the
certificate or certificates evidencing the Shares will be imprinted with legends
which prohibit the transfer of the Shares unless they are registered or such
registration is not required in the opinion of legal counsel satisfactory to the
Company.

       

      I am
aware that Rule 144 under the Securities Act, which permits limited public
resale of securities acquired in a nonpublic offering, is not currently
available with respect to the Shares and, in any event, is available only if
certain conditions are satisfied.  I understand that any sale of the
Shares that might be made in reliance upon Rule 144 may only be made in limited
amounts in accordance with the terms and conditions of such rule and that a copy
of Rule 144 will be delivered to me upon request.

       

      I
understand that I am purchasing the Shares pursuant to the terms of the Notice
and my Option Agreement, copies of which I have received and carefully read and
understand.

       

      
        	 
      	
                Very
      truly yours,

                 

                 

                /s/
      E. Jamie Schloss        

                E. Jamie Schloss

                 

              
	
                Receipt
      of the above is hereby acknowledged.

                 

                Surge
      Global Energy, Inc.

                 

                By: _____________________________

                Title: ____________________________

                Dated: ___________________________

                 

              	 
      

      

      

       

       

      -11-surge_polinso.htm

    EXHIBIT 10.75

     

    
      SURGE
GLOBAL ENERGY, INC.

       

      NOTICE
OF GRANT OF STOCK OPTION

       

      Non-Plan
Option

       

      Kenneth
Polin (the “Optionee”)
has been granted an option (the “Option”)
to purchase certain shares of Stock of Surge Global Energy, Inc., a Delaware
corporation, pursuant to the Stock Option Agreement
attached hereto (the “Agreement”),
as follows:

       

      
        	
                Date
      of Option Grant:

              	
                March
      18, 2008

              
	 	 
	
                Number
      of Option Shares:

              	
                500,000

              
	 	 
	
                Exercise
      Price:

              	
                $0.10

              
	 	 
	
                Initial
      Exercise Date:

              	
                April
      18, 2008

              
	 	 
	
                Initial
      Vesting Date:

              	
                April
      18, 2008

              
	 	 
	
                Option
      Expiration Date:

              	
                March
      17, 2013

              
	 	 
	
                Tax
      Status of Option:

              	
                Nonstatutory Stock
      Option.  (Enter “Incentive” or
      “Nonstatutory.”  If blank, this Option will be a Nonstatutory
      Stock Option.)

              
	 	 
	
                Vesting
      Provisions:

              	
                The
      Option vests in equal monthly installments over 12 months with the first
      such installment vesting on April 18, 2008 and the last installment
      vesting on March 18, 2009.

              
	 	 
	
                Exceptions
      to Provisions of Stock Option Agreement:

              	
                None.

              

      

       

      By their
signatures below, the Company and the Optionee agree that the Option is governed
by this Notice and by the provisions of the Stock Option Agreement (except as
otherwise set forth opposite Exceptions to Provisions of Stock Option
Agreement), which is attached to and made a part of this
document.  The Optionee acknowledges receipt of a copy of the Stock
Option Agreement, represents that the Optionee has read and is familiar with its
provisions, and hereby accepts the Option subject to all of its terms and
conditions.

       

      
        	
                SURGE
      GLOBAL ENERGY, INC.

                 

                By:

                 

                Print
      Name:

                 

                 

                ATTACHMENTS:  Stock
      Option Agreement

              	
                OPTIONEE:
      __________________________

                 

                ______________________________

                Signature

                 

                ______________________________

                Date

                 

                ______________________________

                Address

                 

                ______________________________

                 

                 

              

      

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

       

      THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933.

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      SURGE
GLOBAL ENERGY, INC.

      STOCK
OPTION AGREEMENT

       

      Non-Plan
Option

       

      Surge
Global Energy, Inc., a Delaware corporation, has granted to the individual (the
“Optionee”)
named in the Notice of Grant
of Stock Option (the “Notice”)
to which this Stock Option Agreement (the “Option
Agreement”) is attached an option (the “Option”)
to purchase certain shares of Stock upon the terms and conditions set forth in
the Notice and this Option Agreement.  By signing the Notice, the
Optionee: (a) represents that the Optionee has read and is familiar with
the terms and conditions of the Notice and this Option Agreement, including the
Effect of Termination of Service set forth in Section 7, (b) accepts
the Option subject to all of the terms and conditions of the Notice and this
Option Agreement, (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under the
Notice or this Option Agreement, and (d) acknowledges receipt of a copy of
the Notice and this Option Agreement.

       

      1. Definitions
and Construction.

       

      1.1 Definitions.  Whenever
used herein, the following terms shall have their respective meanings set forth
below:

       

      (a) “Board”
means the Board of Directors of the Company, or a committee of the Board duly
appointed to administer this Option and having such powers as shall be specified
by the Board.

       

      (b) “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

       

      (c) “Company”
means Surge Global Energy, Inc., a Delaware corporation, or any successor
corporation thereto.

       

      (d) “Consultant”
means a person engaged to provide consulting or advisory services (other than as
an Employee or a Director) to a Participating Company, provided that the
identity of such person, the nature of such services or the entity to which such
services are provided would not preclude the Company from offering or selling
securities to such person pursuant to this Agreement in reliance on either the
exemption from registration provided by Rule 701 under the Securities Act or, if
the Company is required to file reports pursuant to Section 13 or
15(d) of the Exchange Act, registration on a Form S-8 Registration
Statement under the Securities Act.

       

      (e) “Director”
means a member of the Board or of the board of directors of any other
Participating Company.

       

      (f) “Disability”
means the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionee’s
position with the Participating Company Group because of the sickness or injury
of the Optionee.

       

      (g) “Employee”
means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company;
provided, however, that neither service as a Director nor payment of a
director’s fee shall be sufficient to constitute employment for purposes of this
Agreement.  The Company shall determine in good faith and in the
exercise of its discretion whether an individual has become or has ceased to
bean Employee and the effective date of such individual’s employment or
termination of employment, as the case may be.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      (h) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

       

      (i) “Fair Market
Value” means, as of any date, the value of a share of Stock or other
property as determined by the Board, in its discretion, or by the Company, in
its discretion, if such determination is expressly allocated to the Company
herein, subject to the following:

       

      (i) If, on
such date, the Stock is listed on a national or regional securities exchange or
market system, the Fair Market Value of a share of Stock shall be the closing
price of a share of Stock (or the mean of the closing bid and asked prices of a
share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq
National Market, The Nasdaq SmallCap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in The Wall Street
Journal or such other source as the Company deems reliable.  If
the relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system, the date on which the Fair Market Value
shall be established shall be the last day on which the Stock was so traded
prior to the relevant date, or such other appropriate day as shall be determined
by the Board, in its discretion.

       

      (ii) If on
such date, the Stock is not listed on a national or regional securities exchange
or market system, the Fair Market Value of a share of Stock shall be as
determined by the Board in good faith without regard to any restriction other
than a restriction which, by its terms, will never lapse.

       

      (j) “Incentive Stock
Option” means an Option intended to be (as set forth in the Option
Agreement) and which qualifies as an incentive stock option within the meaning
of Section 422(b) of the Code.

       

      (k) “Insider”
means an officer or a Director of the Company or any other person whose
transactions in Stock are subject to Section 16 of the Exchange
Act.

       

      (l) “Nonstatutory
Stock Option” means an Option not intended to be (as set forth in the
Option Agreement) or which does not qualify as an Incentive Stock
Option.

       

      (m) “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

       

      (n) “Participating
Company” means the Company or any Parent Corporation or Subsidiary
Corporation.

       

      (o) “Participating
Company Group” means, at any point in time, all corporations collectively
which are then Participating Companies

       

      (p) “Securities
Act” means the Securities Act of 1933, as amended.

       

      (q) “Service”
means the Optionee’s employment or service with the Participating Company Group,
whether in the capacity of an Employee, a Director or a
Consultant.  The Optionee’s Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee’s
Service.  Furthermore, the Optionee’s Service with the Participating
Company Group shall not be deemed to have terminated if the Optionee takes any
military leave, sick leave, or other bona fide leave of absence approved by the
Company; provided, however, that if any such leave exceeds ninety (90) days, on
the ninety-first (91st) day of such leave the Optionee’s Service shall be deemed
to have terminated unless the Optionee’s right to return to Service with the
Participating Company Group is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under this Option
Agreement.  The Optionee’s Service shall be deemed to have terminated
either upon an actual termination of Service or upon the corporation for which
the Optionee performs Service ceasing to be a Participating
Company.  Subject to the foregoing, the Company, in its discretion,
shall determine whether the Optionee’s Service has terminated and the effective
date of such termination.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      (r) “Stock”
means the common stock of the Company, as adjusted from time to time in
accordance with Section 9.

       

      (s) “Subsidiary
Corporation” means any present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the Code.

       

      1.2 Construction.  Captions
and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of’ this Option
Agreement.  Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the
singular.  Use of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.

       

      2. Tax
Status of Option.  This Option is intended to be a Nonstatutory
Stock Option and shall not be treated as an Incentive Stock Option within the
meaning of Section 422(b) of the Code.

       

      3. Administration.

       

      All
questions of interpretation concerning this Option Agreement shall be determined
by the Board.  All determinations by the Board shall be final and
binding upon all persons having an interest in the Option.  Any
officer of a Participating Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

       

      4. Exercise
of the Option.

       

      4.1 Right to
Exercise.  Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Exercise Date and prior to the
termination of the Option (as provided in Section 6) in an amount not to
exceed the Number of Vested Shares (determined in accordance with the Notice)
less the number of shares previously acquired upon exercise of the
Option.

       

      4.2 Method of
Exercise.  Exercise of the Option shall be by written notice to
the Company in the form of Exhibit 1 hereto (the “Exercise
Notice”) which must state the election to exercise the Option, the number
of whole shares of Stock for which the Option is being exercised and such other
representations and agreements as to the Optionee’s investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement.  The written notice must be signed by the Optionee
and must be delivered in person, by certified or registered mail, return receipt
requested, by confirmed facsimile transmission, or by such other means as the
Company may permit, to the Chief Financial Officer of the Company, or other
authorized representative of the Participating Company Group, prior to the
termination of the Option as set forth in Section 6, accompanied by full
payment of the aggregate Exercise Price for the number of shares of Stock being
purchased.  The Option shall be deemed to be exercised upon receipt by
the Company of such written notice, the aggregate Exercise Price, and, if
required by the Company, such executed agreement.

       

      4.3 Payment of Exercise
Price.  Except as otherwise provided below, payment of the
aggregate Exercise Price for the number of shares of Stock for which the Option
is being exercised shall be made (i) in cash, by check, or cash equivalent,
(ii) by means of a Cashless Exercise, as defined below, or (iii) by
any combination of the foregoing.  Optionee shall be responsible for
filing any reports of remittance or other foreign exchange filings required in
order to pay the exercise price.  A “Cashless
Exercise” means the delivery of a properly executed notice together with
irrevocable instructions to a broker in a form acceptable to the Company
providing for the assignment to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System).  The Company reserves, at
any and all times, the right, in the Company’s sole and absolute discretion, to
decline to approve or terminate any such program or procedure.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      4.4 Tax Withholding.  At
the time the Option is exercised, in whole or in part, or at any time thereafter
as requested by the Company, the Optionee hereby authorizes withholding from
payroll and any other amounts payable to the Optionee, and otherwise agrees to
make adequate provision for (including by means of a Cashless Exercise to the
extent permitted by the Company), any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Participating
Company Group, if any, which arise in connection with the Option, including,
without limitation, obligations arising upon (i) the exercise, in whole or
in part, of the Option, (ii) the transfer, in whole or in part, of any
shares acquired upon exercise of the Option, or (iii) the operation of any
law or regulation providing for the imputation of interest.  The
Option is not exercisable unless the tax withholding obligations of the
Participating Company Group are satisfied.  Accordingly, the Company
shall have no obligation to deliver shares of Stock until the tax withholding
obligations of the Participating Company Group have been satisfied by the
Optionee.

       

      4.5 Certificate
Registration.  Except in the event the Exercise Price is paid
by means of a Cashless Exercise, the certificate for the shares as to which the
Option is exercised shall be registered in the name of the Optionee, or, if
applicable, in the names of the heirs of the Optionee.

       

      4.6 Restrictions on Grant of the Option
and Issuance of Shares.  The grant of the Option and the
issuance of shares of Stock upon exercise of the Option shall be subject to
compliance with all applicable requirements of federal, state or foreign law
with respect to such securities.  The Option may not be exercised if
the issuance of shares of Stock upon exercise would constitute a violation of
any applicable federal, state or foreign securities laws or other law or
regulations or the requirements of any stock exchange or market system upon
which the Stock may then be listed.  In addition, the Option may not
be exercised unless (i) a registration statement under the Securities Act
shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act.  THE OPTIONEE IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS
ARE SATISFIED.  ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE
THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel to be necessary to
the lawful issuance and sale of any shares subject to the Option shall relieve
the Company of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been
obtained.  As a condition to the exercise of the Option, the Company
may require the Optionee to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.  Any shares which are issued will be “restricted
securities” as that term is defined in Rule 144 under the Securities Act, as
further described in Section 7 of the Exercise Notice, unless they are
registered under the Securities Act.  The Company is under no
obligation to register the shares of Stock issuable upon exercise of this
Option.

       

      4.7 Fractional
Shares.  The Company shall not be required to issue fractional
shares upon the exercise of the Option.

       

      5. Nontransferability
of the Option.

       

      The
Option may be exercised during the lifetime of the Optionee only by the Optionee
or the Optionee’s guardian or legal representative and may not be assigned or
transferred in any manner except by will or by the laws of descent and
distribution.  Following the death of the Optionee, the Option, to the
extent provided in Section 7, may be exercised by the Optionee’s legal
representative or by any person empowered to do so under the deceased Optionee’s
will or under the then applicable laws of descent and distribution.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      6. Termination
of the Option.

       

      The
Option shall terminate and may no longer be exercised on the first to occur of
(a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee’s Service as described in
Section 7, or (c) a Change in Control to the extent provided in
Section 8.

       

      7. Effect of
Termination of Service.

       

      7.1 Option
Exercisability.

       

      (a) Disability.  If
the Optionee’s Service with the Participating Company Group terminates because
of the Disability of the Optionee, the Option, to the extent unexercised and
exercisable on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee (or the Optionee’s guardian or legal representative)
at any time prior to the expiration of six (6) months after the date on
which the Optionee’s Service terminated, but in any event no later than the
Option Expiration Date.

       

      (b) Death.  If
the Optionee’s Service with the Participating Company Group terminates because
of the death of the Optionee, the Option, to the extent unexercised and
exercisable on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee’s legal representative or other person who acquired
the right to exercise the Option by reason of the Optionee’s death at any time
prior to the expiration of six (6) months after the date on which the
Optionee’s Service terminated, but in any event no later than the Option
Expiration Date.  The Optionee’s Service shall be deemed to have
terminated on account of death if the Optionee dies within three (3) months
after the Optionee’s termination of Service.

       

      (c) Other Termination
of Service.  If the Optionee’s Service with the Participating
Company Group terminates for any reason, except Disability or death, the Option,
to the extent unexercised and exercisable by the Optionee on the date on which
the Optionee’s Service terminated, may be exercised by the Optionee at any time
prior to the expiration of six (6) months (or such other longer period of
time as determined by the Board, in its discretion) after the date on which the
Optionee’s Service terminated, but in any event no later than the Option
Expiration Date.

       

      7.2 Extension if Exercise Prevented by
Law.  Notwithstanding the foregoing, if the exercise of the
Option within the applicable time periods set forth in Section 7.1 is
prevented by the provisions of Section 4.6, the Option shall remain
exercisable until three (3) months after the date the Optionee is notified
by the Company that the Option is exercisable, but in any event no later than
the Option Expiration Date.

       

      7.3 Extension if Optionee Subject to
Section 16(b).  Notwithstanding the foregoing, if a sale
within the applicable time periods set forth in Section 7.1 of shares
acquired upon the exercise of the Option would subject the Optionee to suit
tinder Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Optionee’s termination of Service, or (iii) the Option
Expiration Date.

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      8. Change In
Control.

       

      8.1 Definitions.

       

      (a) An “Ownership Change
Event” shall be deemed to have occurred if any of the following occurs
with respect to the Company: (i) the direct or indirect sale or exchange in
a single or series of related transactions by the stockholders of the Company of
more than fifty percent (50%) of the voting stock of the Company: (ii) a
merger or consolidation in which the Company is a party; (iii) the sale,
exchange, or transfer of all or substantially all of the assets of the Company;
or (iv) a liquidation or dissolution of the Company.

       

      (b) A “Change in
Control” shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, a “Transaction”)
wherein the stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of tile Company were transferred (the “Transferee
Corporation(s)”), as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one or
more subsidiary corporations.

       

      8.2 Effect of Change in Control on
Option.  In the event of a Change in Control, the surviving,
continuing, successor, or purchasing corporation or parent corporation thereof
as the case may be (the “Acquiring
Corporation”), may either assume the Company’s rights and obligations
under the Option or substitute for the Option a substantially equivalent option
for the Acquiring Corporation’s stock.  In the event the Acquiring
Corporation elects not to assume the Company’s rights and obligations under the
Option or substitute for the Option in connection with the Change in Control,
and provided that the Optionee’s Service has not terminated prior to such date,
the Option shall become one hundred percent (100%) vested as of the date ten
(10) days prior to the date of the Change in Control.  Any vesting of
the Option that was permissible solely by reason of this Section 8.2 shall
be conditioned upon the consummation of the Change in Control.  The
Option shall terminate and cease to be outstanding effective as of the date of
the Change in Control to the extent that the Option is neither assumed or
substituted for by the Acquiring Corporation in connection with the Change in
Control nor exercised as of the date of the Change in
Control.  Notwithstanding the foregoing, shares acquired upon exercise
of the Option prior to the Change in Control and any consideration received
pursuant to the Change in Control with respect to such shares shall continue to
be subject to all applicable provisions of this Option Agreement except as
otherwise provided herein.  Furthermore, notwithstanding the
foregoing, if the corporation the stock of which is subject to the Option
immediately prior to an Ownership Change Event described in Section 8.1
(a)(i) constituting a Change in Control is the surviving or continuing
corporation and immediately after such Ownership Change Event less than fifty
percent (50%) of the total combined voting power of its voting stock is held by
another corporation or by other corporations that are members of an affiliated
group within the meaning of Section 1504(a) of the Code without regard
to the provisions of Section 1504(b) of the Code, the Option shall not
terminate.  In the event the Acquiring Corporation does assume the
Company’s rights and obligations under the Option or substitutes for the Option
a substantially equivalent option for the Acquiring Corporation’s stock, the
vesting of the Option in the Optionee, as described in the Notice, shall be
accelerated and made fully exercisable.  The Company shall provide the
Optionee with 10 business days written notice prior to the closing of a Change
in Control event so that the Optionee may exercise his Option
hereunder.

       

      9. Adjustments
For Changes In Capital Structure.

       

      In the
event of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification, or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number, Exercise Price and
class of shares of stock subject to the Option.  If a majority of the
shares which are of the same class as the shares that are subject to the Option
are exchanged for, converted into, or otherwise become (whether or not pursuant
to an Ownership Change Event) shares of another corporation (the “New
Shares”), the Board may unilaterally amend the Option to provide that the
Option is exercisable for New Shares.  In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its
discretion.  Notwithstanding the foregoing, any fractional share
resulting from all adjustment pursuant to this Section 9 shall be rounded
down to the nearest whole number, and in no event may the Exercise Price be
decreased to an amount less than the par value, if any, of the stock subject to
the Option.  The adjustments determined by the Board pursuant to this
Section 9 shall be final, binding and conclusive.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      10. Rights as
a Stockholder, Employee or Consultant.

       

      The
Optionee shall have no rights as a stockholder with respect to any shares
covered by the Option until the date of the issuance of a certificate for the
shares for which the Option has been exercised (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company).  No adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 9.  If the Optionee is an
Employee, the Optionee understands and acknowledges that, except as otherwise
provided in a separate, written employment agreement between a Participating
Company and the Optionee, the Optionee’s employment is “at will” and is for no
specified term.  Nothing in this Option Agreement shall confer upon
the Optionee any right to continue in the Service of a Participating Company or
interfere in any way with any right of the Participating Company Group to
terminate the Optionee’s Service as an Employee or Consultant, as the case may
be, at any time.

       

      11. Lock-Up
Agreement.

       

      The
Optionee hereby agrees that in the event of any underwritten public offering of
stock, including but not limited to an initial public offering of stock, made by
the Company pursuant to au effective registration statement filed under the
Securities Act, the Optionee shall not offer, sell, contract to sell, pledge,
hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering.  The
foregoing limitation shall not apply to shares registered in the public offering
under the Securities Act.

       

      12. Legends.

       

      The
Company may at any time place legends referencing and any applicable federal,
state or foreign securities law restrictions on all certificates representing
shares of stock subject to the provisions of this Option
Agreement.  The Optionee shall, at the request of the Company,
promptly present to the Company any and all certificates representing shares
acquired pursuant to the Option in the possession of the Optionee in order to
carry out the provisions of this Section.  Unless otherwise specified
by the Company, legends placed on such certificates may include, but shall not
be limited to, the following:

       

      “THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACT.”

       

      13. Restrictions
on Transfer of Shares.

       

      No shares
acquired upon exercise of the Option may be sold, exchanged, transferred
(including, without limitation, any transfer to a nominee or agent of the
Optionee), assigned, pledged, hypothecated or otherwise disposed of, including
by operation of law, in any manner which violates any of the provisions of this
Option Agreement and any such attempted disposition shall be
void.  The Company shall not be required (a) to transfer on its
books any shares which will have been transferred in violation of any of the
provisions set forth in this Option Agreement or (b) to treat as owner of
such shares or to accord the right to vote as such owner or to pay dividends to
any transferee to whom such shares will have been so transferred.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

       

      14. Miscellaneous
Provisions.

       

      14.1 Binding
Effect.  Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

       

      14.2 Termination or
Amendment.  The Board may terminate or amend the Option at any
time; provided, however, that except as provided in Section 8.2 in
connection with a Change in Control, no such termination or amendment may
adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation.  No amendment
or addition to this Option Agreement shall be effective unless in
writing.

       

      14.3 Notices.  Any notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Option Agreement provides for
effectiveness only upon actual receipt of such notice) upon personal delivery or
upon deposit in the United States Post Office, by registered or certified mail,
with postage and fees prepaid, addressed to the other party at the address shown
below that party’s signature or at such other address as such party may
designate in writing from time to time to the other party.

       

      14.4 Integrated
Agreement.  The Notice and this Option Agreement constitute the
entire understanding and agreement of the Optionee and the Participating Company
Group with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations,
or warranties among the Optionee and the Participating Company Group with
respect to such subject matter other than those as set forth or provided for
herein or therein.  To the extent contemplated herein or therein, the
provisions of the Notice and the Option Agreement shall survive any exercise of
the Option and shall remain in full force and effect.

       

      14.5 Applicable
Law.  This Option Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.

       

      14.6 Counterparts.  The
Notice may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      EXHIBIT 1

       

      Optionee:  Kenneth Polin

      

      Date:
March 18, 2008

       

      STOCK
OPTION EXERCISE NOTICE

      Non-Plan
Option

       

      Surge
Global Energy, Inc.

      Attention:  Chief
Financial Officer

      12220 El
Camino Real

      Suite 410

      San Diego,
CA 92103

       

      Ladies
and Gentlemen:

       

      1. Option.  I
was granted an option (the “Option”)
to purchase shares of the common stock (the “Shares”)
of Energy, Inc., a Delaware corporation (the “Company”),
pursuant to my Notice of Grant of Stock Option (the my Stock Option Agreement
(the “Option
Agreement”) as follows:

       

      
        	
                Grant Number:

              	 
      
	 	 
	
                Date
      of Option Grant:

              	
                March
      18, 2008

              
	 	 
	
                Number
      of Option Shares:

              	
                500,000

              
	 	 
	
                Exercise
      Price per Share:

              	
                $0.10

              

      

       

      2. Exercise
of Option.  I hereby elect to exercise the Option to purchase
the following number of Shares:

       

      
        	
                Total
      Shares Purchased:

              	
                __________

              
	 	 
	
                Total
      Exercise Price (Total Shares X Price per Share)

              	
                $_________

              

      

       

      3. Payments.  I
enclose payment in fill of the total exercise price for the Shares in the
following form(s), as authorized by my Option Agreement:

       

      
        	
                q Cash:

                 

              	
                __________

              
	
                q Check:

                 

              	
                $_________

              

      

      

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      4. Tax
Withholding.  I enclose payment in full of my withholding
taxes, if any, as follows:

       

      (Contact
Chief Financial Officer for amount of tax due.)

       

      
        	
                q Cash:

                 

              	
                $_________

              
	
                q Check:

                 

              	
                $_________

              

      

      

      5. Optionee
Information.

       

      
        	
                My
      address is:

              	 
      _______________________________________
	 	 
	
                My
      Social Security Number is:

              	 
      _______________________________________

      

       

      6. Binding
Effect.  I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the
Option Agreement, to all of which I hereby expressly assent.  This
Agreement shall inure to the benefit of and be binding upon the my heirs,
executors, administrators, successors and assigns.

       

      7. Transfer.  I
understand and acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the “Securities
Act”), and that consequently the Shares must be held indefinitely unless
they are subsequently registered under the Securities Act, an exemption from
such registration is available, or they are sold in accordance with Rule 144
under the Securities Act, I further understand and acknowledge that the Company
is under no obligation to register the Shares.  I understand that the
certificate or certificates evidencing the Shares will be imprinted with legends
which prohibit the transfer of the Shares unless they are registered or such
registration is not required in the opinion of legal counsel satisfactory to the
Company.

       

      I am
aware that Rule 144 under the Securities Act, which permits limited public
resale of securities acquired in a nonpublic offering, is not currently
available with respect to the Shares and, in any event, is available only if
certain conditions are satisfied.  I understand that any sale of the
Shares that might be made in reliance upon Rule 144 may only be made in limited
amounts in accordance with the terms and conditions of such rule and that a copy
of Rule 144 will be delivered to me upon request.

       

      I
understand that I am purchasing the Shares pursuant to the terms of the Notice
and my Option Agreement, copies of which I have received and carefully read and
understand.

       

      
        	 
      	
                Very
      truly yours,

                 

                 

                 

                /s/ Kenneth
      Polin        

                Kenneth
      Polin

                 

              
	
                Receipt
      of the above is hereby acknowledged.

                 

                Surge
      Global Energy, Inc.

                 

                By:  _________________________

                Title:  ________________________

                Dated: _______________________

                 

              	 
      

      

      

       

       

      -11-

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