OxySure Systems, Inc. VOTING STOCK OPTION PLAN VOTING STOCK OPTION AGREEMENT

Definitions.  For purposes of this Agreement, defined terms shall have the meanings given to them by the Plan except as “Agreement”, which means this document as executed by the Company and the Optionee, and as it may be subsequently amended.

 

Grant of Option.  Subject to the terms and conditions set forth in this Agreement, the Company grants to the Optionee an Option to purchase from the Company during the period ending five years from the Effective Date of this Agreement,_________Shares (“Shares”) at a price of $_____________per Share, subject to adjustment, if any, as provided in this Agreement and the Plan.  This Option is not an incentive stock option within the meaning of Code section 422.

 

The Option shall become vested and exercisable according to the following schedule:

 

_____________of the Shares subject to the Option on or after the date which is one (1) year from the date the Option is granted, but only if Optionee is then an employee of the Company;

 

_____________of the Shares subject to the Option on or after the date which is two (2) years from the date the Option is granted, but only if the Optionee is then an employee of the Company;

 

 _____________of the Shares subject to the Option on or after the date which is three (3) years from the date the Option is granted, but only if the Optionee is then an employee of the Company;

 

Right of First Refusal - Subsequent Transfer.  The Optionee agrees that the Shares acquired on exercise of this Option will be subject to the right of first refusal described in this Paragraph for the period beginning on the date that the Option is exercised and ending on the date which is twelve (12) months after the date the Optionee ceases to be an Eligible Individual.  Prior to any subsequent transfer, the Shares must first be offered by written notice to the Company.  This notice of proposed transfer shall state the number of Shares to be transferred, the name of the proposed transferee, the consideration for the proposed transfer, and the terms and conditions of the proposed transfer.  The Optionee shall also submit with the notice copies of all papers and other documents to be used in connection with the proposed transfer.  Any deviation from the terms outlined in the notice, however slight, shall require a new notice thereby effecting a new option for the Company under this Paragraph.  The Company must exercise its option to purchase, as to all or a portion of the Shares offered, within fourteen (14) days of receipt of the notice of proposed transfer.  The Company’s option shall be exercised by means of written notice of exercise to the Optionee within the period designated below.

 

If the option is not exercised in full by the Company within fourteen (14) days after the notice of proposed transfer, the unexercised part of the option shall lapse, and then the proposed transfer must be completed within ninety (90) days following the end of the period for exercise, but only upon the same terms and at a price which is no less than that set forth in the notice of proposed transfer.  Any such permitted transfer, however, shall be conditioned upon the proposed transferee executing such documents as the Administrator may reasonably request which evidences the transferee’s agreement to abide by the terms and provisions of both Paragraph 5 and this Paragraph concerning the Shares, or any interest therein proposed to be acquired, and to agree to any legends and to any restrictions on transferability as the Administrator may reasonably require to ensure compliance with federal and state securities laws and other applicable laws and regulations.

 

In accepting an offer to purchase, the Company agrees to complete the purchase pursuant to the terms of the notice of proposed transfer and at the greater of the Fair Market Value of the Shares on the date the Company provides notice of exercise to the Optionee or the price specified in the notice of proposed transfer.  The terms of the payment of the purchase price shall in no event be less favorable than the terms of an independent third party offer.

 

 Sale after IPO.  Notwithstanding any other provision of this Agreement, in the event that the Company completes an initial public offering of its shares resulting in the trading of its shares in a recognized market, the shares shall not be sold for a period of 12 months thereafter.

 

Transferability and Exercise Restrictions.  This Option shall not be transferable except by will or by the laws of descent and distribution.  During the Optionee’s lifetime this Option may be exercised only by him.  No assignment or transfer of this Option, whether voluntary or involuntary, by operation of law or otherwise, except a transfer by will or by the laws of descent or distribution, shall vest in the assignee or transferee any interest or right whatsoever in this Option.

 

Information Confidential.  AS PARTIAL CONSIDERATION FOR THE GRANTING OF THIS OPTION, THE OPTIONEE AGREES THAT HE WILL KEEP CONFIDENTIAL ALL INFORMATION AND KNOWLEDGE THAT HE HAS RELATING TO THE MANNER AND AMOUNT OF HIS OR ANY OTHER PERSON’S PARTICIPATION IN THE PLAN OR CAPITAL STRUCTURE OF THE COMPANY; PROVIDED, THAT SUCH INFORMATION MAY BE DISCLOSED AS REQUIRED BY LAW AND MAY BE GIVEN IN CONFIDENCE TO THE OPTIONEE’S SPOUSE, TAX AND FINANCIAL ADVISORS, OR TO A FINANCIAL INSTITUTION TO THE EXTENT THAT SUCH INFORMATION IS NECESSARY TO SECURE A LOAN. THE COMPANY MAY SEEK DAMAGES, INCLUDING FORFEITURE OF THIS OPTION, FOR ANY BREACH OF THE FOREGOING CONFIDENTIALITY REQUIREMENT.

 

Governing Law.  Except as is otherwise provided in Paragraph 10.17 of the Plan, the provisions of this Agreement shall be governed by the contract law of the State of Texas.

 

Acknowledgments.  In connection with this Agreement and issuance of any Shares, and a certificate therefore, pursuant to the Option,  Optionee acknowledges as follows:

 

THE OPTIONS AND THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.  THE OPTIONS AND THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OPTIONS OR THE ACCURACY OR ADEQUACY OF ANY INFORMATION ABOUT THE COMPANY, THE OPTIONS, THE SHARES OR THE PLAN, WHICH THE COMPANY IS MAKING AVAILABLE TO THE OPTIONEE.

 

 THE EFFECTIVENESS OF ANY SALE OR OTHER TRANSFER OF THE SHARES WILL BE CONDITIONED UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT THE SALE OR TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE STATE SECURITIES LAWS.  ANY PARTICIPANT WHO ACQUIRES SHARES WILL BE REQUIRED TO REPRESENT THAT HE OR SHE WILL NOT SELL OR OTHERWISE DISPOSE OF THAT COMMON STOCK WITHOUT REGISTRATION OR OTHER COMPLIANCE WITH THE AFORESAID STATUTES AND THE RULES AND REGULATIONS PROMULGATED UNDER THOSE STATES, INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

At the request of an Optionee, the Company's most recent audited annual financial statement and other information regarding the Company will be provided to each Optionee for review, and, upon request of the Optionee, the Company's current Business Plan, if any, will be provided to each Optionee for review by the Optionee or the investment advisor(s) of the Optionee.  The Company encourages the Optionee to review these materials as often as Optionee desires and to ask the executive officer of the Company in charge of monitoring the Plan any questions concerning the Company, the Plan, this Option or the Shares which Optionee may have.  In addition, upon the request of the Optionee, each Optionee shall be given access to information concerning the Company equivalent to that information generally made available to the Company's common shareholders.

 

Optionee shall not have registration rights for the Shares purchased by Optionee pursuant to this Option.

 

The Optionee represents that the Optionee is familiar with the terms and provisions of this Voting Stock Option Agreement, including all restrictions on alienation and hereby accepts the Option subject to all of the terms and provisions thereof.  The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board or the Administrator, as the case may be, upon any questions arising under this Agreement.

 

The undersigned, being the spouse of the above-named Optionee, does hereby acknowledge that the undersigned has read and is familiar with the provisions of the above Voting Stock Option Agreement, and the undersigned hereby agrees thereto and joins therein to the extent, if any, that the agreement and joinder of the undersigned may be necessary.

 

I have, either alone or together with my advisors, such knowledge and experience in financial and business and financial matters and in investments of this nature that I am capable of bearing the economic risks and evaluating the merits and risks of an investment in the Company and thereby making an informed investment decision and protecting my own interest therein.  I am not relying upon any other person in connection with evaluating such merits and risks.

 

I have received or had access to all information and documents that I consider necessary or advisable to enable me to make an informed decision concerning the Shares and I have had an opportunity to ask questions of and receive answers from the Company or its designated representative concerning the terms and conditions of this investment; and all such questions, if any, have been answered to my full satisfaction.

 

I am familiar with the Company's business and I believe that the Shares are the type of investment that I wish to hold for investment and that the nature and amount of the investment is consistent with my investment program.  I am aware that the purchase of the Shares and operation of the Company involves a high degree of risk, and that there is, and will be, no public market for the Shares.

 

It is my present sole intention to purchase, receive and hold the Shares as my private investment for my own account only and I am unaware of any occurrence, event or circumstance upon the happening of which I intend to transfer, divide, sell or otherwise distribute the Shares.

 

I agree that a restrictive legend may be placed on the certificate representing the Shares, and that transfer of the Shares may be refused by the Company, or its transfer agent if in the opinion of the Company's counsel any proposed sale or transfer of the Shares by me would not be in compliance with the applicable federal, state or other securities laws.