FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DISCOVERY ENERGY CORP.
(Exact name of registrant as specified in its charter)
Nevada 98-0507846
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Riverway Drive, Suite 1700 77056
(Address of Principal Executive Offices) (Zip Code)
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Keith J. MCKenzie
One Riverway Drive, Suite 1700
Houston, Texas 77056
(Name and address of agent for service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
Title of Proposed maximum Proposed maximun
securities Amount to be offering price aggregate Amount of
to be registered (1) per share (2) offering registration
registered prive (2) fee
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Common Stock, 6,000,000 $0.20 $1,200,000.00 $137.52
$0.001 per shares
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(1) Represents the maximum number of shares that may be distributed pursuant
to this Registration Statement.
(2) Estimated solely for purposes of calculating the registration fee based
on the last reported price of the Registrant's common stock as reported on the
OTC Bulletin Board as of July 26, 2012, or $0.20 per share.
PART I
INFORMATION REQUIRED IN THIS SECTION 10(A) PROSPECTUS
The document containing the information specified in Part I of this Registration Statement on Form S-8 will be sent or given to participants in the Plan as specified by Rule 428(b)(1) under the Securities Act of 1933, as amended. Such documents are not required to be, and are not being, filed by the Registrant with the U.S. Securities and Exchange Commission, either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act of 1933, as amended. Such documents, together with the documents incorporated by reference herein pursuant to Item 3 of Part II of this Registration Statement on Form S-8, constitute a prospectus that meets the requirements of Section 10 (a) of the Securities Act of 1933, as amended.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. Incorporation of Documents by Reference.
The following documents filed by Discovery Energy Corp. (the "Company") with the U.S. Securities and Exchange Commission (the "Commission") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K (the "Annual Report") for the year ended February 29, 2012 (file no. 000-53520), including all amendments; and
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2012 (file no. 000-53520), including all amendments; and
(c) All other reports filed by the Company with the Commission pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by the Annual Report; and
(d) The description of the Company's common stock, par value $0.001 per share (the "Common Stock"), set forth under the caption "Description of Capital Stock " in the Company's Amendment No. 1 filed on November 28, 2008 to the Company's Registration Statement on Form S-1 filed with the Commission on July 14, 2008, and all amendments and reports filed thereafter for the purpose of updating such description, which description is incorporated by reference into the Company's Form 8-A filed on December 9, 2008.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange, prior to the filing of a post-effective
amendment that indicates that all securities offered hereby have been sold or
which de-registers all securities remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such document.
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
In an exhibit to this Registration Statement, Randall W. Heinrich is rendering an opinion that the securities being registered are duly and validly issued, fully paid and non-assessable. Mr. Heinrich has served as counsel to the Company for the past several months. The Company expects to issue to Mr. Heinrich during fiscal 2013 shares registered pursuant to this Registration Statement. Although the number of shares that may be issued to him is not now known, the number of shares that may be issued to Mr. Heinrich during fiscal 2013 may have an aggregate fair market value exceeding $50,000, the threshold dollar figure requiring disclosure pursuant to this Item 5.
ITEM 6. Indemnification of Directors and Officers.
Section 78.7502 of the Nevada Revised Statutes ("NRS") provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another entity, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if the person (a) acted in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful, or (b) is found to be not liable pursuant to another particular Section of the NRS, Section 78.138, which absolves a person from liability if it is determined that the person's act or failure to act did not constitute a breach of his or her fiduciary duties, or did not involve intentional misconduct, fraud or a knowing violation of law. With respect to actions or suits by or in the right of the corporation, Section 78.7502 provides that a corporation may indemnify those serving in the capacities mentioned above against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred in connection with the defense or settlement of the action or suit, provided that such person acted in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, or is found to be not liable pursuant to Section 78.138. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify the person against expenses, including attorneys' fees, actually and reasonably incurred by the person in connection with the defense.
Section 78.751 of the NRS provides that the articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending an action, suit or proceeding must be paid by the corporation in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined that the person is not entitled to be indemnified by the corporation. Section 78.751 further provides that indemnification and advancement of expense provisions contained in the NRS shall not be deemed exclusive of any rights to which a director, officer, employee or agent may be entitled, whether contained in the articles of incorporation or any by-law, agreement, vote of shareholders or disinterested directors or otherwise, provided, however, that no indemnification may be made to or on behalf of any director or officer if a final adjudication establishes that the person's acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action.
The Company's First Amended and Restated Articles of Incorporation permits, and the Company's Bylaws requires, indemnification in accordance with Section 78.7502 of the NRS. The Company's First Amended and Restated Articles of Incorporation limit the personal liability of a director to the corporation or its shareholders to damages for breach of the director's fiduciary duty.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
Exhibit
Number Exhibit
------ -------
4.1 Discovery Energy Corp. 2012 Equity Incentive Plan.
5.1 Opinion of Randall W. Heinrich, PC
23.1 Consent of MaloneBailey, LLP
23.2 Consent of MacKay LLP
23.3 Consent of Randall W. Heinrich, PC (included in Exhibit 5.1 to
this Registration Statement).
24.1 Power of Attorney (included on the signature page
hereto).
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ITEM 9. Undertakings
A. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
i. To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement.
iii. To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
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periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirement for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas on August 2, 2012.
DISCOVERY ENERGY CORP.
By: /s/ Keith J. McKenzie
-------------------------
Keith J. McKenzie
Chief Executive Officer
Date: August 2, 2012
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POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Keith J. McKenzie and Michael D. Dahlke, acting singly or collectively, as attorney-in-fact for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the U.S. Securities and Exchange Commission under the Securities Act of 1933 any and all amendments (including post-effective amendments) and exhibits to this registration statement and any and all applications and other documents to be filed with the U.S. Securities and Exchange Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite and necessary or desirable, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
/s/ Keith J. McKenzie --------------------- Keith J. McKenzie Director, Chief Executive Officer (Principal executive officer) Date August 2, 2012 /s/ Keith D. Spickelmier ------------------------ Keith D. Spickelmier Director Date: August 2, 2012 /s/ William E. Begley --------------------- William E. Begley Director, Chief Financial Officer (Principal financial and accounting officer) Date: August 2, 2012 |
EXHIBITS INDEX
Exhibit Sequential
Number Description Page Number
------ ----------- ------------
4.1 Discovery Energy Corp. 2012 Equity Incentive Plan.
5.1 Opinion of Randall W. Heinrich, PC
23.1 Consent of MaloneBailey, LLP
23.2 Consent of MacKay LLP
23.3 Consent of Randall W. Heinrich, PC (included in Exhibit
5.1 to this Registration Statement).
24.1 Power of Attorney (included on the signature page
hereto).
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DISCOVERY ENERGY CORP.
2012 EQUITY INCENTIVE PLAN
The Discovery Energy Corp. 2012 Equity Incentive Plan (the "Plan") was adopted by the Board of Directors of Discovery Energy Corp., a Nevada corporation (the "Company"), effective as of August 2, 2012.
1. DEFINITIONS.
Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Discovery Energy Corp. 2012 Equity Incentive Plan, have the following meanings:
"Administrator" means the Board of Directors, unless it has delegated power to the Committee to act under or pursuant to the provisions of the Plan, in which case the Administrator means the Committee.
"Affiliate" means any entity that controls, is controlled by or is under common control with the Company.
"Agreement" means an agreement between the Company and a Participant delivered pursuant to the Plan, in such a form as the Administrator shall approve.
"Board of Directors" means the Board of Directors of the Company.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of the Board of Directors or such other committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan.
"Common Stock" means shares of the Company's common stock, $0.001 par value per share.
"Company" means Discovery Energy Corp., a Nevada corporation.
"Disability" or "Disabled" means permanent and total disability as defined in Section 22(e)(3) of the Code.
"Employee" means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.
"Fair Market Value" of a Share of Common Stock means:
(1) If the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the Common Stock, the average of the closing or last price of the Common Stock on the composite tape or other comparable reporting system for the five (5) trading days, consisting of (i) the two (2) trading days immediately following the applicable date, (ii) the trading day that is the applicable date, and (iii) the two (2) trading days immediately preceding the applicable date;
(2) If the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter market for the trading day on which Common Stock was traded immediately preceding the applicable date; and
(3) If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator, in good faith, shall determine.
"Option" means a stock option that is not intended to qualify as an incentive stock option under Section 422 of the Code, i.e. a non- qualified stock option.
"Participant" means an Employee, a director or an officer (whether or not also an Employee), or consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan. As used herein, "Participant" shall include "Participant's Survivors" where the context requires.
"Plan" means this Discovery Energy Corp. 2012 Equity Incentive Plan.
"Shares" means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both. All Shares issued under the Plan shall be represented by a stock certificate.
"Stock-Based Award" means a grant by the Company under the Plan of an equity award or an equity based award that is not an Option or a Stock Grant.
"Stock Grant" means a grant by the Company of Shares under the
Plan.
"Stock Right" means a right to Shares or the value of Shares of the Company granted pursuant to the Plan - an Option, a Stock Grant or a Stock- Based Award.
"Survivor" means a deceased Participant's legal representatives and/ or any person or persons who acquired the Participant's rights to a Stock Right by will or by the laws of descent and distribution.
2. PURPOSES OF THE PLAN.
The purpose of the Plan is to attract and retain the services of Employees, certain consultants, and directors and officers of the Company and its subsidiaries and to provide such persons with a proprietary interest in the Company through the granting of Options, Stock Grants and Stock-Based Awards, whether granted singly, or in combination, or in tandem, that will
(a) Increase the interest of such persons in the Company's welfare;
(b) Furnish an incentive to such persons to continue their services for the Company; and
(c) Provide a means through which the Company may attract able persons as Employees, contractors, consultants, officers and directors.
With respect to reporting Participants, the Plan and all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 promulgated under the Securities Exchange Act of 1934. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void ab initio, to the extent permitted by law and deemed advisable by the Committee.
3. SHARES SUBJECT TO THE PLAN.
(a) The number of Shares which may be issued from time to time pursuant to this Plan shall be six million (6,000,000), or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 24 of the Plan.
(b) If an Option ceases to be "outstanding," in whole or in part (other than by exercise), or if the Company shall reacquire (at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding the foregoing, if a Stock Right is exercised in whole or in part, by tender of Shares or if the Company's tax withholding obligation is satisfied by withholding Shares, the number of Shares needed to have been issued under the Plan for purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or portion thereof, and not the net number of Shares actually issued.
4. ADMINISTRATION OF THE PLAN.
The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors elects to delegate to the Committee all or part of the power to act under or pursuant to the provisions of the Plan, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:
(a) Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations that it deems necessary or advisable for the administration of the Plan;
(b) Determine which Employees, directors, officers and consultants shall be granted Stock Rights;
(c) Determine the number of Shares for which a Stock Right or Stock Rights shall be granted;
(d) Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;
(e) Make changes to any outstanding Stock Right, including, without limitation, to reduce or increase the exercise price or purchase price, accelerate the vesting schedule or extend the expiration date, provided that no such change shall impair the rights of a Participant under any grant previously made without such Participant's consent;
(f) Buy out for a payment in cash or Shares, a Stock Right previously granted and/or cancel any such Stock Right and grant in substitution therefor other Stock Rights, covering the same or a different number of Shares and having an exercise price or purchase price per share which may be lower or higher than the exercise price or purchase price of the cancelled Stock Right, based on such terms and conditions as the Administrator shall establish and the Participant shall accept; and
(g) Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company or to Plan Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right.
Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.
To the extent permitted under applicable law, the Board of Directors or the
Committee may allocate all or any portion of its responsibilities and powers to
any one or more of its members and may delegate all or any portion of its
responsibilities and powers to any other person selected by it. The Board of
Directors or the Committee may revoke any such allocation or delegation at any
time.
5. ELIGIBILITY FOR PARTICIPATION.
The Administrator will, in its sole discretion, name the Participants in the Plan, provided, however, that each Participant must be an Employee, a director or an officer (whether or not also an Employee), or consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, a director or an officer, or consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the stockholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to the terms and conditions that the Administrator determines to be appropriate and in the best interest of the Company, and subject to the following minimum standards for any Option:
(a) Option Price: Each Option Agreement shall state the option price (per share) of the Shares covered by each Option, which option price shall be determined by the Administrator but shall not be less than the Fair Market Value per share of Common Stock.
(b) Number of Shares: Each Option Agreement shall state the number of Shares to which it pertains.
(c) Option Periods: Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events.
(d) Option Conditions: Exercise of any Option may be conditioned upon the Participant's execution of a Share purchase agreement in form satisfactory to the Administrator providing for certain protections for the Company and its other stockholders, including requirements that:
(i) The Participant's or the Participant's Survivors' right to sell or transfer the Shares may be restricted; and
(ii) The Participant or the Participant's Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.
7. TERMS AND CONDITIONS OF STOCK GRANTS.
Each offer of a Stock Grant to a Participant shall state the date prior to which the Stock Grant must be accepted by the Participant, and the principal terms of each Stock Grant shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:
(a) Each Agreement shall state the purchase price (per share), if any, of the Shares covered by each Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by applicable Nevada corporation law on the date of the grant of the Stock Grant;
(b) Each Agreement shall state the number of Shares to which the Stock Grant pertains; and
(c) Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time and events upon which such rights shall accrue and the purchase price therefor, if any.
8. TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.
The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based Award shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company.
9. EXERCISE OF OPTIONS AND ISSUE OF SHARES.
An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee, together with provision for payment of the full purchase price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the purchase price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option and held for at least six months, or (c) at the discretion of the Administrator, by having the Company retain from the shares otherwise issuable upon exercise of the Option, a number of shares having a Fair Market Value equal as of the date of exercise to the exercise price of the Option, or (d) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (e) at the discretion of the Administrator, by any combination of (a), (b), (c) and (d) above, or (f) at the discretion of the Administrator, payment of such other lawful consideration as the Administrator may determine but not less than the minimum consideration required by applicable Nevada corporation law on the date of the exercise of the Option.
The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant's Survivors, as the case may be). In determining what constitutes "reasonably promptly," it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or "blue sky" laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of exercise of any installment of any Option.
The Administrator may, in its discretion, amend any term or condition of an outstanding Option provided (i) such term or condition as amended is permitted by the Plan, (ii) any such amendment shall be made only with the consent of the Participant to whom the Option was granted, or in the event of the death of the Participant, the Participant's Survivors, if the amendment is adverse to the Participant, and (iii) any such amendment of any Option shall be made only after the Administrator determines whether such amendment cause any adverse tax consequences for the holder of such Option including, but not limited to, pursuant to Section 409A of the Code.
10. ACCEPTANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.
A Stock Grant or Stock-Based Award (or any part or installment thereof)
shall be accepted by executing the applicable Agreement and delivering it to the
Company or its designee, together with provision for payment of the full
purchase price, if any, in accordance with this Paragraph for the Shares as to
which such Stock Grant or Stock-Based Award is being accepted, and upon
compliance with any other conditions set forth in the applicable Agreement.
Payment of the purchase price for the Shares as to which such Stock Grant or
Stock-Based Award is being accepted shall be made (a) in United States dollars
in cash or by check, or (b) at the discretion of the Administrator, through
delivery of shares of Common Stock held for at least six months and having a
Fair Market Value equal as of the date of acceptance of the Stock Grant or Stock
Based-Award to the purchase price of the Stock Grant or Stock-Based Award, or
(c) at the discretion of the Administrator, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the applicable Federal rate, as defined in Section 1274(d) of
the Code, or (d) at the discretion of the Administrator, by any combination of
(a), (b) and (c) above, or (e) at the discretion of the Administrator, payment
of such other lawful consideration as the Administrator may determine but not
less than the minimum consideration required by applicable Nevada corporation
law on the date of the issuance of the related Shares.
The Company shall then, if required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award was accepted to the Participant (or to the Participant's Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement. In determining what constitutes "reasonably promptly," it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or "blue sky" laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Administrator may, in its discretion, amend any term or condition of an outstanding Stock Grant, Stock-Based Award or applicable Agreement provided (i) such term or condition as amended is permitted by the Plan, and (ii) any such amendment shall be made only with the consent of the Participant to whom the Stock Grant or Stock-Based Award was made, if the amendment is adverse to the Participant.
11. RIGHTS AS A STOCKHOLDER.
No Participant to whom a Stock Right has been granted shall have rights as a stockholder with respect to any Shares covered by such Stock Right, except after due exercise of the Option or acceptance of the Stock Grant or as set forth in any Agreement, and tender of the full purchase price, if any, for the Shares being purchased pursuant to such exercise or acceptance and registration of the Shares in the Company's share register in the name of the Participant.
12. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.
By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above, a Stock Right shall only be exercisable or may only be accepted, during the Participant's lifetime, by such Participant (or by his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.
13. EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR DISABILITY.
Except as otherwise provided in a Participant's Option Agreement, in the event of a termination of service (whether as an employee, director, officer or consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:
(a) A Participant who ceases to be an employee, director, officer or consultant of the Company or of an Affiliate (for any reason other than termination "for cause", Disability, or death for which events there are special rules in Paragraphs 14, 15, and 16, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within such term as the Administrator has designated in a Participant's Option Agreement.
(b) The provisions of this Paragraph, and not the provisions of Paragraph 15 or 16, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of employment, director or officer status, or consultancy; provided, however, in the case of a Participant's Disability or death within three months after the termination of employment, director or officer status, or consultancy, the Participant or the Participant's Survivors may exercise the Option within one year after the date of the Participant's termination of service, but in no event after the date of expiration of the term of the Option.
(c) Notwithstanding anything herein to the contrary, if subsequent to a Participant's termination of employment, termination of director or officer status, or termination of consultancy, but prior to the exercise of an Option, the Administrator determines that, either prior or subsequent to the Participant's termination, the Participant engaged in conduct which would constitute "cause", then such Participant shall forthwith cease to have any right to exercise any Option.
(d) A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant's employment, director or officer status, or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.
(e) Except as required by law or as set forth in a Participant's Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant's status within or among the Company and any Affiliates, so long as the Participant continues to be an employee, director, officer or consultant of the Company or any Affiliate.
14. EFFECT ON OPTIONS OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in a Participant's Option Agreement, the following rules apply if the Participant's service (whether as an employee, director, officer or consultant) with the Company or an Affiliate is terminated "for cause" prior to the time that all his or her outstanding Options have been exercised:
(a) All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated "for cause" will immediately be forfeited.
(b) For purposes of this Plan, "cause" shall include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of the Administrator as to the existence of "cause" will be conclusive on the Participant and the Company.
(c) "Cause" is not limited to events that have occurred prior to a Participant's termination of service, nor is it necessary that the Administrator's finding of "cause" occur prior to termination. If the Administrator determines, subsequent to a Participant's termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant's termination the Participant engaged in conduct which would constitute "cause", then the right to exercise any Option is forfeited.
(d) Any provision in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of "cause" for termination and which is in effect at the time of such termination, shall supersede the definition in this Plan with respect to that Participant.
15. EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in a Participant's Option Agreement:
(a) A Participant who ceases to be an employee, director, officer or consultant of the Company or of an Affiliate by reason of Disability may exercise any Option granted to such Participant:
(i) To the extent that the Option has become exercisable but has not been exercised on the date of Disability; and
(ii) In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled. The pro ration shall be based upon the number of days accrued in the current vesting period prior to the date of Disability.
(b) A Disabled Participant may exercise such rights only within the period ending one year after the date of the Participant's termination of employment, director or officer status, or consultancy, as the case may be, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not become Disabled and had continued to be an employee, director, officer or consultant or, if earlier, within the originally prescribed term of the Option.
(c) The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, a physician selected or approved by the Administrator shall examine the Participant, and the Company shall pay the cost of the examination.
16. EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR, OFFICER OR CONSULTANT.
Except as otherwise provided in a Participant's Option Agreement:
(a) In the event of the death of a Participant while the Participant is an employee, director, officer or consultant of the Company or of an Affiliate, the Participant's Survivors may exercise such Option:
(i) To the extent that the Option has become exercisable but has not been exercised on the date of death; and
(ii) In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The pro ration shall be based upon the number of days accrued in the current vesting period prior to the Participant's date of death.
(b) If the Participant's Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died but had continued to be an employee, director, officer or consultant or, if earlier, within the originally prescribed term of the Option.
17. EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS.
In the event of a termination of service (whether as an employee, director, officer or consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant, such offer shall terminate.
For purposes of this Paragraph 17 and Paragraph 18 below, a Participant to whom a Stock Grant has been offered and accepted under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant's employment, director or officer status, or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.
In addition, for purposes of this Paragraph 17 and Paragraph 18 below, any change of employment or other service within or among the Company and any Affiliates shall not be treated as a termination of employment, director or officer status, or consultancy so long as the Participant continues to be an employee, director, officer or consultant of the Company or any Affiliate.
18. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR DISABILITY.
Except as otherwise provided in a Participant's Stock Grant Agreement, in the event of a termination of service (whether as an employee, director, officer or consultant), other than termination "for cause," Disability, or death for which events there are special rules in Paragraphs 19, 20, and 21, respectively, before all Company rights of repurchase shall have lapsed, then the Company shall have the right to repurchase that number of Shares subject to a Stock Grant as to which the Company's repurchase rights have not lapsed.
19. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in a Participant's Stock Grant Agreement, the following rules apply if the Participant's service (whether as an employee, director, officer or consultant) with the Company or an Affiliate is terminated "for cause":
(a) All Shares subject to any Stock Grant shall be immediately subject to repurchase by the Company at the purchase price, if any, thereof.
(b) For purposes of this Plan, "cause" shall include (and is not limited to) dishonesty with respect to the employer, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of the Administrator as to the existence of "cause" will be conclusive on the Participant and the Company.
(c) "Cause" is not limited to events that have occurred prior to a Participant's termination of service, nor is it necessary that the Administrator's finding of "cause" occur prior to termination. If the Administrator determines, subsequent to a Participant's termination of service, that either prior or subsequent to the Participant's termination the Participant engaged in conduct which would constitute "cause," then the Company's right to repurchase all of such Participant's Shares shall apply.
(d) Any provision in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of "cause" for termination and which is in effect at the time of such termination, shall supersede the definition in this Plan with respect to that Participant.
20. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in a Participant's Stock Grant Agreement, the
following rules apply if a Participant ceases to be an employee, director,
officer or consultant of the Company or of an Affiliate by reason of Disability:
to the extent the Company's rights of repurchase have not lapsed on the date of
Disability, they shall be exercisable; provided, however, that in the event such
rights of repurchase lapse periodically, such rights shall lapse to the extent
of a pro rata portion of the Shares subject to such Stock Grant through the date
of Disability as would have lapsed had the Participant not become Disabled. The
pro ration shall be based upon the number of days accrued prior to the date of
Disability.
The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, a physician selected or approved by the Administrator shall examine the Participant, and the Company shall pay the cost of the examination.
21. EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR, OFFICER OR CONSULTANT.
Except as otherwise provided in a Participant's Stock Grant Agreement, the following rules apply in the event of the death of a Participant while the Participant is an employee, director, officer or consultant of the Company or of an Affiliate: to the extent the Company's rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however, that in the event such rights of repurchase lapse periodically, such rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of death as would have lapsed had the Participant not died. The pro ration shall be based upon the number of days accrued prior to the Participant's death.
22. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular exercise or acceptance of a Stock Right shall have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"), the Company shall be under no obligation to issue the Shares covered by such exercise unless and until the following conditions have been fulfilled:
(a) The person(s) who exercise(s) or accept(s) such Stock Right shall warrant to the Company, prior to the receipt of such Shares, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon the certificate(s) evidencing their Shares issued pursuant to such exercise or such grant:
"The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws."
(b) At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise or acceptance in compliance with the 1933 Act without registration thereunder.
23. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant's Survivors have not otherwise terminated and expired, the Participant or the Participant's Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.
24. ADJUSTMENTS.
Upon the occurrence of any of the following events, a Participant's rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant's Agreement:
A. Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or ot her securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, the number of shares of Common Stock deliverable upon the exercise of an Option or acceptance of a Stock Grant shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the purchase price per share, to reflect such events.
B. Corporate Transactions. If the Company is to be
consolidated with or acquired by another entity in a merger,
or a sale of all or substantially all of the Company's assets
(and excluding than a transaction to merely change the state
of incorporation) (a "Corporate Transaction"), the
Administrator or the board of directors of any entity
assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding Options, either (i)
make appropriate provision for the continuation of such Options
by substituting on an equitable basis for the Shares then
subject to such Options either the consideration payable with
respect to the outstanding shares of Common Stock in connection
with the Corporate Transaction or securities of any successor
or acquiring entity; or (ii) upon written notice to the
Participants, provide that all Options must be exercised (either
(a) to the extent then exercisable or, (b) at the discretion
of the Administrator, all Options being made fully exercisable
for purposes of this Subparagraph), within a specified
number of days of the date of such notice, at the end of which
period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess
of the Fair Market Value of the Shares subject to such
Options (either (a) to the extent then exercisable or, (b)
at the discretion of the Administrator, all Options being
made fully exercisable for purposes of this Subparagraph) over
the exercise price thereof.
With respect to outstanding Stock Grants, the Administrator or the
Successor Board, shall either (i) make appropriate provisions for
the continuation of such Stock Grants on the same terms and
conditions by substituting on an equitable basis for the Shares then
subject to such Stock Grants either the consideration payable with respect
to the outstanding Shares of Common Stock in connection with the Corporate
Transaction or securities of any successor or acquiring entity; or
(ii) terminate all Stock Grants in exchange for a cash payment equal to
the excess of the Fair Market Value of the Shares subject to such Stock
Grants over the purchase price thereof, if any. In addition, in the event
of a Corporate Transaction, the Administrator may waive any or all Company
repurchase rights with respect to outstanding Stock Grants.
C. Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization shall be entitled to receive for the purchase price paid upon such exercise or acceptance of the number of replacement securities which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.
D. Adjustments to Stock-Based Awards. Upon the happening of any of the events described in Subparagraphs A, B or C above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 24, and, subject to Paragraph 4, its determination shall be conclusive.
25. ISSUANCES OF SECURITIES.
Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.
26. FRACTIONAL SHARES.
No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.
27. WITHHOLDING.
In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant's salary, wages or other remuneration in connection with the exercise or acceptance of a Stock Right or upon the lapsing of any right of repurchase, the Company may withhold from the Participant's compensation, if any, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company's Common Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the Fair Market Value of the shares withheld for purposes of payroll withholding shall be determined in the manner provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may condition the exercise of an Option for less than the then Fair Market Value on the Participant's payment of such additional withholding.
28. TERMINATION OF THE PLAN.
The Plan will terminate on 10 years after adoption. The Plan may be terminated at an earlier date by vote of the stockholders or the Board of Directors; provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination.
29. AMENDMENT OF THE PLAN AND AGREEMENTS.
The stockholders of the Company may amend the Plan. The Plan may also be amended by the Administrator, including, without limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded incentive stock options under Section 422 of the Code, and to the extent necessary to qualify the shares issuable upon exercise or acceptance of any outstanding Stock Rights granted, or Stock Rights to be granted, under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Any amendment approved by the Administrator that the Administrator determines is of a scope that requires stockholder approval shall be subject to obtaining such stockholder approval. Any modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her. With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, the Administrator may amend outstanding Agreements in a manner that is not adverse to the Participant.
30. EMPLOYMENT OR OTHER RELATIONSHIP.
Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy, or director or officer status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy, or director or officer status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.
31. GOVERNING LAW.
This Plan shall be construed and enforced in accordance with the law of the State of Texas.
RANDALL W. HEINRICH, P.C.
8 GREENWAY PLAZA, SUITE 818
HOUSTON, TEXAS 77046
TELEPHONE: 713/951-9100 FAX: 713/961-3082
August 2, 2012
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
RE: Registration Statement on Form S-8 Under the Securities Act of 1933
Ladies and Gentlemen:
I have acted as counsel for Discovery Energy Corp., f/k/a "Santos Resource Corp.," a Nevada corporation (the "Company"), in connection with the registration with the United States Securities and Exchange Commission (the "Commission") on a Registration Statement on Form S-8 under the Securities Act of 1933 of up to 6.0 million shares of the common stock, $.001 par value (the "Common Stock"), which may be issued pursuant to the terms, provisions and conditions of the Discovery Energy Corp. 2012 Equity Incentive Plan (the "Plan").
In such capacity, I have examined originals, or copies certified or otherwise identified to my satisfaction, of the following documents:
1. Charter documents of the Company on file with the Secretary of
State of Nevada;
2. Bylaws of the Company, as amended to date;
3. The Plan;
4. The records of corporate proceedings relating to the authorization
of the Plan; and
5. Such other instruments and documents as I have deemed necessary
for the purpose of rendering the following opinion.
In such examination, I have assumed the authenticity and completeness of all documents, certificates and records submitted to me as originals, the conformity to the original instruments of all documents, certificates and records submitted to me as copies, and the authenticity and completeness of the originals of such instruments. As to certain matters of fact relating to this opinion, I have relied on the accuracy and truthfulness of a certificates of an officer of the Company and on certificates of public officials, and have made such investigations of law as I have deemed necessary and relevant.
Based on the foregoing, and having due regard for such legal considerations as I believe relevant, I am of the opinion that the Common Stock has been duly and validly authorized by the Company and, when issued in accordance with the Plan, will be duly and validly issued, fully paid and non-assessable.
The foregoing opinions are based on and are limited to the corporation law of the state of Nevada. The opinions expressed herein are rendered as of the date hereof, and I undertake no, and hereby disclaim any, obligation to advise you of any changes in or any new developments which might affect any matter or opinion set forth herein.
I hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement pursuant to which the Common Stock
will be registered with the Commission. In giving such consent, I do not hereby
admit that I am in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Commission.
Very truly yours,
RANDALL W. HEINRICH, P.C.
By: /s/ Randall W. Heinrich Randall W. Heinrich, President |
Exhibit 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSENT
We consent to the use in this Registration Statement on Form S-8 of our report dated June 4, 2012 with respect to the audited financial statements of Discovery Energy Corp. as of February 29, 2012 and the related statements of expenses, stockholders' equity and cash flows for the year then ended.
We also consent to the reference to us under the heading "Experts" in this registration statement.
MaloneBailey, LLP
www.malone-bailey.com
Houston, Texas
July 26, 2012
Exhibit 23.2
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSENT
We consent to the use in this Registration Statement on Form S-8 of our report dated May 14, 2011 with respect to the audited financial statements of Discovery Energy Corp. (formerly Santos Resource Corp.) as of February 28, 2011 and the related statements of expenses, stockholders' equity and cash flows for the year then ended.
"MacKay LLP"
MacKay LLP
Vancouver BC, Canada
July 26, 2012