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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>UNITED STATES</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>SECURITIES AND EXCHANGE COMMISSION</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Washington, D.C. 20549</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>FORM S-8</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B><U>INTERNATIONAL ENERGY, INC.</U></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>(Formerly E.Deal.net, Inc.) </U></B></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;(Exact name of registrant as specified in its charter)</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>Nevada</U></B></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(State or other jurisdiction of incorporation or organization)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>98-0195748</U></B></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(I.R.S. Employer Identification Number)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>216 &#150; 1628 West 1st Avenue, Vancouver, BC, V6J 1G1 &nbsp;TEL: (604) 659-5005</U></B></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Address, including postal code, and telephone number, including area code, of principal executive offices)</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>INTERNATIONAL ENERGY, INC. &nbsp;&#150; 2002 INCENTIVE STOCK PLAN</U></B></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Full Title of the Plan)</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><I>Copies of all communications to</I></B><I>:</I></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>Joseph Sierchio, Esq.</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>Sierchio Greco &amp; Greco, LLP</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>720 Fifth Avenue</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>New York, New York &nbsp;10019 &nbsp;</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>TEL: &nbsp;(212) 246-3030</U></B></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Name, address &nbsp;and telephone number of agent for service)</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>CALCULATION OF REGISTRATION FEE</U></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<TABLE cellspacing=0><TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:3pt double #000000; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=117.533><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>TITLE OF</P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>EACH CLASS OF SECURITIES TO BE REGISTERED</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=111.6><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>AMOUNT TO BE REGISTERED (1)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=162.333><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>PROPOSED MAXIMUM OFFERING PRICE PER SHARE </P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=160.467><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>PROPOSED MAXIMUM AGGREGATE OFFERING PRICE</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.75pt solid #000000; border-right:3pt double #000000; border-bottom:0.75pt solid #000000" valign=top width=115.267><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center>AMOUNT OF REGISTRATION FEE</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:3pt double #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=117.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Common Shares</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">($0.001 par value)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=111.6><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>8,000,000</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=162.333><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$0.13 (2)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=160.467><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$1,040,000</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:3pt double #000000; border-bottom:0.75pt solid #000000" valign=top width=115.267><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$122</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:3pt double #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=117.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Common Shares</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">($0.001 par value)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=111.6><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>12,000,000</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=162.333><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$0.65 (2)</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=160.467><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$7,800,000</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:3pt double #000000; border-bottom:0.75pt solid #000000" valign=top width=115.267><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$918</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:3pt double #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=117.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Total</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=111.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>20,000,000</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=162.333><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>-</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=160.467><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$8,840,000</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:3pt double #000000; border-bottom:0.75pt solid #000000" valign=top width=115.267><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>$1,040</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; padding-left:18pt; text-indent:-18pt; font-family:Times New Roman" align=justify>(1) This Registration Statement relates to such indeterminate number of additional shares of Common Stock of International Energy, Inc. (the &quot;Company&quot;) as may be issuable as a result of stock splits, stock dividends or similar transactions or adjustments of the registrants common stock.</P>
<P style="margin:0pt; padding-left:18pt; text-indent:-18pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:18pt; text-indent:-18pt; font-family:Times New Roman" align=justify>(2) &nbsp;To date, Registrant has granted options under the Plan to purchase an aggregate of 8,000,000 shares at $0.13 per share, which shares are included in the 8,000,000 shares to be registered. On August 24, 2005, the average price for our common shares as reported on the over the counter Bulletin Board was $0.65 per share. Pursuant to Rule 457(c) and 457(h) under the Securities Act of 1933, as amended, the registration fee was calculated on the basis of these figures.</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; padding-right:50.4pt; font-family:Times New Roman" align=center><B>TABLE OF CONTENTS</B></P>
<P style="margin:0pt; padding-right:50.4pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; padding-right:50.4pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman"><B>Part &nbsp;I. Information Required In The Section 10(A) Prospectus</B></P>
<B><P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman"></B>3</P>
<P style="margin:0pt; padding-right:50.4pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 1: &nbsp;Plan Information</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">3</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 2: &nbsp;Registrant Information and Employee Plan Annual Information</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">3</P>
<P style="margin:0pt; padding-right:50.4pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman"><B>Part II</B>:<B> Information Required In The Registration Statement</B></P>
<B><P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman"></B>4</P>
<P style="margin:0pt; padding-right:50.4pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 3: &nbsp;Incorporation of Documents by Reference</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">4</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 4: &nbsp;Description of Securities</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">4</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 5: &nbsp;Interests of Named Experts and Counsel</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">4</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 6: &nbsp;Indemnification of Directors and Officers</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">5</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 7: &nbsp;Exemption from Registration claimed</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">6</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 8: &nbsp;Exhibits</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">6</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Item 9: &nbsp;Undertakings</P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">6</P>
<P style="margin:0pt; padding-right:50.4pt; line-height:14pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-right:50.4pt; line-height:16pt; font-family:Times New Roman">Signatures </P>
<P style="margin:0pt; padding-right:50.4pt; text-indent:360pt; line-height:14pt; font-family:Times New Roman">8</P>
<P style="margin:0pt; padding-right:50.4pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>PART &nbsp;&nbsp;I</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>ITEM 1. &nbsp;Plan Information.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>The documents containing the information specified in Part I have been or will be sent to participants as specified by Rule 428(b)(1). Such documents are not being filed with the Securities and Exchange Commission (the &quot;Commission&quot;) either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424. Such documents and the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Part II of this Form, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>ITEM 2. &nbsp;Registrant Information and Employee Plan Annual Information.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>The documents incorporated by reference into this Registration Statement listed in Item 3 of Part II of this Registration Statement are available for review upon written or oral request without charge. Such documents are incorporated by reference in the Section 10(a) prospectus. &nbsp;All other documents required to be delivered to participants pursuant to Rule 428(b) of the Securities Act shall also be available upon written or oral request without charge. &nbsp;All such requests shall be made International Energy, Inc. in writing to 216 - 1628 W. 1st Avenue, Vancouver, British Columbia &nbsp;V6J 1G1, Canada, attention: Derek Cooper, President, or by phone at (604) 659-5005. </P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
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<P style="margin:0pt; font-family:Times New Roman" align=center><B>PART II</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>ITEM 3. &nbsp;Incorporation Of Certain Documents By Reference.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>The following documents filed by us with the Securities and Exchange Commission are incorporated herein by reference and made a part hereof:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:27pt; text-indent:-18pt; font-family:Times New Roman" align=justify>1.</P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify>Our latest Annual Report on Form 10KSB for the fiscal year ended March 31, 2005, filed pursuant to Section 13(a) of the Exchange Act;</P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:27pt; text-indent:-18pt; font-family:Times New Roman" align=justify>2.</P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify>Our latest Quarterly Report on Form 10QSB for the period ended June 30, 2005.</P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:27pt; text-indent:-18pt; font-family:Times New Roman" align=justify>3.</P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify>The description of our securities contained in our registration statement on Form SB-2 filed with the Commission on December 18, 2000.<B> &nbsp;</B></P>
<P style="margin:0pt; padding-left:27pt; text-indent:-27pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:27pt; text-indent:-18pt; font-family:Times New Roman" align=justify>4.</P>
<P style="margin:0pt; padding-left:27pt; font-family:Times New Roman" align=justify>Forms 8-K that we subsequently file with the SEC may be incorporated by reference in this Prospectus by our identifying in such forms that they are being incorporated by reference into this Prospectus.</P>
<P style="margin:0pt; padding-left:72pt; text-indent:-72pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>Item 4. &nbsp;Description Of Securities.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>The description of our securities is incorporated by reference to our registration statement on Form SB-2 filed with the Commission on December 18, 2000.<B> &nbsp;</B>See Item 8. Exhibits</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>Item 5. &nbsp;Interests Of Named Experts And Counsel</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Not Applicable</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>Item 6. &nbsp;Indemnification Of Directors And Officers.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Section &nbsp;78.7502 &nbsp;of &nbsp;the &nbsp;Nevada &nbsp;Revised &nbsp;Statutes &nbsp;contains &nbsp;&nbsp;provisions &nbsp;for indemnification &nbsp;of the &nbsp;officers &nbsp;and &nbsp;directors &nbsp;of the &nbsp;Company. &nbsp;Nevada &nbsp;law provides for &nbsp;indemnification &nbsp;(which may eliminate any personal &nbsp;liability of a director &nbsp;to the &nbsp;Company or its &nbsp;shareholders &nbsp;for &nbsp;monetary &nbsp;damages for gross negligence or lack of care in carrying out the director's fiduciary duties) if a director or officer acts in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the Company. &nbsp;A director or officer may be indemnified as to any matter in which he successfully defends himself.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>The officers and directors of the Company are accountable to the shareholders of the Company as fiduciaries, which means such officers and directors are required to exercise good faith and integrity in handling the Company's affairs.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>A shareholder may be able to institute legal action on behalf of himself and all other similarly situated &nbsp;shareholders to recover damages where the Company has failed or refused to observe the law. &nbsp;Shareholders &nbsp;may, &nbsp;subject to applicable rules of civil procedure, &nbsp;be able to bring a class action or derivative suit to enforce &nbsp;their &nbsp;rights, &nbsp;&nbsp;including &nbsp;rights &nbsp;under &nbsp;certain &nbsp;federal &nbsp;and &nbsp;state securities &nbsp;laws and &nbsp;regulations. &nbsp;Shareholders &nbsp;who have &nbsp;suffered &nbsp;losses &nbsp;in connection &nbsp;with the purchase or sale of their &nbsp;interest in the Company due to a breach &nbsp;of a &nbsp;fiduciary &nbsp;duty &nbsp;by an &nbsp;officer &nbsp;or &nbsp;director &nbsp;of the &nbsp;Company &nbsp;in connection &nbsp;with &nbsp;such sale or &nbsp;purchase &nbsp;including, &nbsp;but not &nbsp;limited &nbsp;to, &nbsp;the misapplication &nbsp;by any such officer or director of the proceeds from the sale of any securities, may be able to recover such losses from the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Insofar as indemnification &nbsp;for liabilities arising under the Securities Act may be &nbsp;permitted to &nbsp;directors, &nbsp;officers &nbsp;and &nbsp;controlling &nbsp;persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the &nbsp;Commission &nbsp;such &nbsp;indemnification &nbsp;is against public policy as expressed in the Securities Act and is, therefore, &nbsp;unenforceable. &nbsp;In the event that a claim for indemnification &nbsp;against such liabilities (other than the payment by the Company of expenses &nbsp;incurred or paid by a director, &nbsp;officer or controlling &nbsp;person of the Company in the &nbsp;successful &nbsp;defense or any action, suit or proceeding) is asserted by such director, &nbsp;officer or controlling person in connection with the securities being registered, &nbsp;the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit &nbsp;to a &nbsp;court &nbsp;of &nbsp;appropriate &nbsp;jurisdiction &nbsp;the &nbsp;question &nbsp;whether &nbsp;such indemnification &nbsp;by it is against &nbsp;public policy as expressed in the &nbsp;Securities Act and will be governed by the final adjudication of such issue.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>The Company has no agreements with any of its directors or executive officers providing for indemnification of any such persons with respect to liability arising out of their capacity or status as officers and directors.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>At present, there is no pending litigation or proceeding involving a director or executive officers of the Company as to which indemnification is being sought. </P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>ITEM 7. &nbsp;Exemption From Registration Claimed.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Not applicable.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><U>ITEM 8. &nbsp;Exhibits.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align=justify>3.1</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Articles of Incorporation, as amended, of the Company incorporated by reference and included in the Company&#146;s Registration Statement on Form SB-2 filed on December 18, 2000. </P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align=justify>3.2</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>By-laws of the Company incorporated by reference and included in the Company&#146;s Registration Statement on Form SB-2 filed on December 18, 2000.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align=justify>5.1</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Legal Opinion of Sierchio Greco &amp; Greco, LLP. </P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">23.1</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">Consent of Ernst &amp; Young LLP.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">23.2</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">Consent of Sierchio Greco &amp; Greco, LLP. (included in Exhibit 5.1)</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">99.1</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">International Energy, Inc. &#150; 2002 Incentive Stock Plan</P>
<P style="margin:0pt; font-family:Courier New"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><U>Item 9. &nbsp;Undertakings</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a) The undersigned Registrant hereby undertakes:</P>
<P style="margin:0pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:18pt; font-family:Times New Roman" align=justify>(1) </P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; font-family:Times New Roman" align=justify>To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any additional or changed material information on the plan of distribution.</P>
<P style="margin:0pt; padding-left:18pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:18pt; font-family:Times New Roman" align=justify>(2)</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; font-family:Times New Roman" align=justify>That for the purpose of determining any liability under the Securities Act, 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 the time shall be deemed to be the initial bona fide offering thereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:18pt; font-family:Times New Roman" align=justify>(3)</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; font-family:Times New Roman" align=justify>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. </P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>(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 Section 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 the 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.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>(c) Insofar as indemnification for liabilities arising under the Securities 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 Securities Act and is, therefore, unenforceable. &nbsp;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.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>SIGNATURES</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Pursuant to the &nbsp;requirements &nbsp;of the &nbsp;Securities &nbsp;Act of 1933, &nbsp;the &nbsp;registrant certifies &nbsp;that it has &nbsp;reasonable &nbsp;grounds to believe &nbsp;that it meets all of the requirements &nbsp;for &nbsp;filing &nbsp;on Form S-8 and has &nbsp;duly &nbsp;caused &nbsp;this &nbsp;registration statement &nbsp;to be &nbsp;signed &nbsp;on its &nbsp;behalf &nbsp;by &nbsp;the &nbsp;undersigned, &nbsp;thereunto &nbsp;duly authorized, &nbsp;in the City of Vancouver, &nbsp;Province of British Columbia, &nbsp;Canada on this 24th day of August, 2005.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><U>INTERNATIONAL ENERGY, INC.</U></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><U>Signature</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:137.4pt; font-family:Times New Roman"><U>Title</U></P>
<P style="margin:0pt; text-indent:274.8pt; font-family:Times New Roman"><U>Date</U></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><U>/s/ Derek Cooper</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:137.4pt; font-family:Times New Roman">President, CEO and </P>
<P style="margin:0pt; text-indent:274.8pt; font-family:Times New Roman">August 24, 2005</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Derek Cooper</P>
<P style="margin:0pt; text-indent:137.4pt; font-family:Times New Roman">Director</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><U>/s/ Harmel S. Rayat</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:137.4pt; font-family:Times New Roman">Secretary, Treasurer</P>
<P style="margin:0pt; text-indent:274.8pt; font-family:Times New Roman">August 24, 2005</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Harmel S. Rayat</P>
<P style="margin:0pt; text-indent:137.4pt; font-family:Times New Roman">and Director </P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Pursuant to the &nbsp;requirements of the Securities Act of 1933, &nbsp;this &nbsp;registration statement has been signed by the following &nbsp;persons in the capacities and on the date indicated.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">&nbsp;<U>Signature</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:137.4pt; font-family:Times New Roman"><U>Title</U></P>
<P style="margin:0pt; text-indent:274.8pt; font-family:Times New Roman"><U>Date</U></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><U>/s/ Derek Cooper</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:137.4pt; font-family:Times New Roman">President, CEO and </P>
<P style="margin:0pt; text-indent:274.8pt; font-family:Times New Roman">August 24, 2005</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Derek Cooper</P>
<P style="margin:0pt; text-indent:137.4pt; font-family:Times New Roman">Director</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><U>/s/ Harmel S. Rayat</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:137.4pt; font-family:Times New Roman">Secretary, Treasurer</P>
<P style="margin:0pt; text-indent:274.8pt; font-family:Times New Roman">August 24, 2005</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Harmel S. Rayat</P>
<P style="margin:0pt; text-indent:137.4pt; font-family:Times New Roman">and Director </P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Form S-8</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><U>International Energy, Inc.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>2002 &#150; Incentive Stock Plan</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B><U>EXHIBIT INDEX</U></B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><U>Exhibit</U></P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman"><U>Exhibit</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><U>Number</U></P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman"><U>Description</U></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">3.1</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">Articles of Incorporation, as amended, of the Company incorporated by reference and included in the Company&#146;s Registration Statement on Form SB-2 filed on December 18, 2000. </P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">3.2</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">By-laws of the Company incorporated by reference and included in the Company&#146;s Registration Statement on Form SB-2 filed on December 18, 2000. </P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">5.1</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">Legal Opinion of Sierchio Greco &amp; Greco, LLP. </P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">23.1</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">Consent of Ernst &amp; Young LLP.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">23.2</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">Consent of Sierchio Greco &amp; Greco, LLP. (included in Exhibit 5.1)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">99.1</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">International Energy, Inc. &#150; 2002 Incentive Stock Plan</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=right><B>EXHIBIT 5.1</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center>SIERCHIO GRECO &amp; GRECO, LLP</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>720 Fifth Avenue</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>New York, New York 10019</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Telephone: (212) 246-3030</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Facsimile: (212) 246-2225</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>August 24, 2005</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>International Energy, Inc</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>216 &#150; 1628 West 1st Avenue</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Vancouver, BC, V6J 1G1 &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Canada</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman" align=justify>Re:&nbsp;&nbsp;&nbsp;&nbsp; </P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>International Energy, Inc</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Registration Statement on Form&nbsp;S-8</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Ladies and Gentlemen:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>We have examined the Registration Statement on Form&nbsp;S-8 (the &quot;Registration Statement&quot;), of &nbsp;International Energy, Inc, a Nevada corporation (the &#147;Company&#148;), to be filed with the Securities and Exchange Commission (the &quot;Commission&quot;) pursuant to the Securities Act of 1933, as amended (the &quot;Securities Act&quot;), in connection with the offering by the Company of up to 20,000,000 shares of the Company's common stock (the &quot;Shares&quot;) under the International Energy, Inc., 2002 Incentive Stock Plan (the &#147;Plan&#148;).</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In rendering this opinion, we have relied upon, among other things, our examination of certain records of the Company, including, without limitation, the Company's Articles of Incorporation, the Company's By-Laws, and resolutions of the Board of Directors. We have also examined certificates of the Company's officers and of public officials and have reviewed such questions of law and made such other inquiries, as we have deemed necessary or appropriate for the purpose of rendering this opinion. As to various questions of fact material to this opinion, we have also relied upon representations and warranties of the Company and upon such certificates and other instruments of officers of the Company and public officials furnished to us by the Company, in each case without independent investigation or verification.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In addition, without any independent investigation or verification, we have assumed (i) the genuineness of all signatures, (ii) the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as certified, conformed or photostatic copies, (iii) the authority of all persons signing any document other than the officers of the Company, where applicable, signing in their capacity as such, (iv) the enforceability of all the documents we have reviewed in accordance with their respective terms against the parties thereto, and (v) the truth and accuracy of all matters of fact set forth in all certificates and other instruments furnished to us.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Based upon the foregoing examination and in reliance thereon, and subject to the assumptions stated and in reliance on statements of fact contained in the documents that we have examined, we are of the opinion that the Shares when issued against payment therefore will be validly issued, fully paid and non-assessable.</P>
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<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>No opinion is expressed herein with respect to any laws other than Chapter 78 of the Nevada Revised Statutes. No opinion is expressed as to the effect that the law of any other jurisdiction may have upon the subject matter of the opinion expressed herein under conflicts of law principles, rules and regulations or otherwise. We assume no obligation to supplement this letter if any applicable laws change after the date hereof or if we become aware of any new facts that might effect any view expressed herein after the date hereof.</P>
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<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section&nbsp;7 of the Securities Act or the Rules and Regulations of the Commission.</P>
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<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The foregoing opinion is delivered to the Board of Directors of the Company in connection with the Registration Statement, and may not be relied upon by any other person or for any other purpose.</P>
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<P style="margin:0pt; font-family:Times New Roman" align=justify>Very truly yours,</P>
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<P style="margin:0pt; font-family:Times New Roman" align=justify><U>/s/ Sierchio Greco &amp; Greco, LLP</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Sierchio Greco&amp; Greco, LLP</P>
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<P style="margin:0pt; font-family:Times New Roman" align=right><B>EXHIBIT 23.1</B></P>
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<P style="margin:0pt; font-family:Times New Roman"><B>[ERNST &amp; YOUNG, LLP LOGO]</B></P>
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<P style="margin:0pt; font-family:Times New Roman" align=center><B>CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS</B></P>
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<P style="margin:0pt; font-family:Times New Roman">We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to International Energy, Inc. 2002 - Incentive Stock Plan, to our report dated June 23, 2005, with respect to the financial statements of International Energy, Inc., included in its Annual Report (Form 10KSB) for the year ended March 31, 2005, filed with the Securities and Exchange Commission and all references to our firm included in this Form S-8. </P>
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<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Vancouver, BC</P>
<P style="margin:0pt; text-indent:274.8pt; font-family:Times New Roman"><U>/s/ Ernst &amp; Young LLP</U> </P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">August 24, 2005</P>
<P style="margin:0pt; text-indent:252pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chartered Accountants</P>
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<P style="margin:0pt; font-family:Times New Roman" align=right><B>EXHIBIT 23.2</B></P>
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<P style="margin:0pt; font-family:Times New Roman" align=center><B>CONSENT OF SIERCHIO GRECO &amp; GRECO, LLP. </B></P>
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<P style="margin:0pt; font-family:Times New Roman" align=center>(Included in Exhibit 5.1)</P>
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<P style="margin:0pt; font-family:Times New Roman" align=right><B>EXHIBIT 99.1</B></P>
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<P style="margin:0pt; font-family:Times New Roman" align=center><B>International Energy, Inc.</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>(Formerly e.Deal.net, Inc.)</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>2002 Incentive Stock Plan</B></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>1. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Objectives. </I>The International Energy, Inc. 2002 Incentive Stock Plan (the &quot;Plan&quot;) is designed to retain directors, executives and selected employees and consultants and reward them for making major contributions to the success of the Company. These objectives are accomplished by making long-term incentive awards under the Plan thereby providing Participants with a proprietary interest in the growth and performance of the Company.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman">2. &nbsp;</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman"><I>Definitions.</I></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Board&#148;</U> - The Board of Directors of the Company.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Nevada Securities Rules&#148;</U> &#150; Chapter 90 of Title 7 of the corporate securities rules of the state of Nevada.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Code&#148;</U> - The Internal Revenue Code of 1986, as amended from time to time.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Committee&#148;</U> - The Executive Compensation Committee of the Company&#146;s Board, or such other committee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated by Rule 16b-3 (&#147;Rule 16b-3&quot;) promulgated under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;).</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(e)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Company&#148;</U> &#150; International Energy, Inc. and its subsidiaries including subsidiaries of subsidiaries.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(f)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Exchange Act&#148;</U> - The Securities Exchange Act of 1934, as amended from time to time.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(g)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Fair Market Value&#148;</U> - The fair market value of the Company&#146;s issued and outstanding Stock as determined in good faith by the Board or Committee.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(h)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Grant&#148;</U> - The grant of any form of stock option, stock award, or stock purchase offer, whether granted singly, in combination or in tandem, to a Participant pursuant to such terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of the Plan.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(i)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Grant Agreement&#148;</U> - An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(j)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Option&#148;</U> - Either an Incentive Stock Option, in accordance with Section 422 of Code, or a Nonstatutory Option, to purchase the Company&#146;s Stock that may be awarded to a Participant under the Plan. A Participant who receives an award of an Option shall be referred to as an &#147;Optionee.&#148;</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(k)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Participant&#148;</U> - A director, officer, employee or consultant of the Company to whom an Award has been made under the Plan.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(l)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Restricted Stock Purchase Offer&#148;</U> - A Grant of the right to purchase a specified number of shares of Stock pursuant to a written agreement issued under the Plan.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(m)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Securities Act&#148;</U> - The Securities Act of 1933, as amended from time to time.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(n)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Stock&#148;</U> - Authorized and issued or unissued shares of common stock of the Company.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(o)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>&#147;Stock Award&#148;</U> - A Grant made under the Plan in stock or denominated in units of stock for which the Participant is not obligated to pay additional consideration.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>3. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Administration. </I>The Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Incentive Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan&#146;s administration. The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant made thereunder.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>4. &nbsp;</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><I>Eligibility.</I></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>General:</U> &nbsp;The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director of the Company subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the requirements of Rule 16b-3.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Incentive Stock Options:</U> &nbsp;Incentive Stock Options may only be issued to employees of the Company. Incentive Stock Options may be granted to officers or directors, provided they are also employees of the Company. Payment of a director&#146;s fee shall not be sufficient to constitute employment by the Company.</P>
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<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The Company shall not grant an Incentive Stock Option under the Plan to any employee if such Grant would result in such employee holding the right to exercise for the first time in any one calendar year, under all Incentive Stock Options granted under the Plan or any other plan maintained by the Company, with respect to shares of Stock having an aggregate fair market value, determined as of the date of the Option is granted, in excess of $100,000. Should it be determined that an Incentive Stock Option granted under the Plan exceeds such maximum for any reason other than a failure in good faith to value the Stock subject to such option, the excess portion of such option shall be considered a Nonstatutory Option. To the extent the employee holds two (2) or more such Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in which such Options are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding such maximum, such Option shall be considered a Nonstatutory Option.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Nonstatutory Option:</U> &nbsp;The provisions of the foregoing Section 4(b) shall not apply to any Option designated as a &#147;Nonstatutory Option&#148; or which sets forth the intention of the parties that the Option be a Nonstatutory Option.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Stock Awards and Restricted Stock Purchase Offers:</U> &nbsp;The provisions of this Section 4 shall not apply to any Stock Award or Restricted Stock Purchase Offer under the Plan.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>5. &nbsp;</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><I>Stock.</I></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Authorized Stock:</U> Stock subject to Grants may be either unissued or reacquired Stock.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Number of Shares:</U> &nbsp;Subject to adjustment as provided in Section 6(i) of the Plan, the total number of shares of Stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through exercise of Options granted under the Plan shall not exceed 20,000,000. If any Grant shall for any reason terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered by a Grant.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Reservation of Shares:</U> &nbsp;The Company shall reserve and keep available at all times during the term of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority was so deemed necessary unless and until such authority is obtained.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Application of Funds</U>. &nbsp;The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights under Stock Purchase Agreements will be used for general corporate purposes.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(e)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>No Obligation to Exercise</U>. &nbsp;The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>6. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Terms and Conditions of Options. </I>Options granted hereunder shall be evidenced by agreements between the Company and the respective Optionees, in such form and substance as the Board or Committee shall from time to time approve. The form of Incentive Stock Option Agreement attached hereto as Exhibit &#147;A&#148; and the three forms of a Nonstatutory Stock Option Agreement for employees, for directors and for consultants, attached hereto as Exhibits &#147;B-1,&#148; &#147;B-2&quot; and &#147;B-3,&#148; respectively, shall be deemed to be approved by the Board. Option agreements need not be identical, and in each case may include such provisions as the Board or Committee may determine, but all such agreements shall be subject to and limited by the following terms and conditions:</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Number of Shares:</U> Each Option shall state the number of shares to which it pertains.</P>
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<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Exercise Price:</U> Each Option shall state the exercise price, which shall be determined as follows:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(i) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Any Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of stock of the Company (&#147;Ten Percent Holder&#148;) shall have an exercise price of no less than 110% of the Fair Market Value of the Stock as of the date of grant; and</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(ii) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Incentive Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the date of grant.</P>
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<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>For the purposes of this Section 6(b), the Fair Market Value shall be as determined by the Board in good faith, which determination shall be conclusive and binding; provided however, that if there is a public market for such Stock, the Fair Market Value per share shall be the average of the bid and asked prices (or the closing price if such stock is listed on the NASDAQ National Market System or Small Cap Issue Market) on the date of grant of the Option, or if listed on a stock exchange, the closing price on such exchange on such date of grant.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Medium and Time of Payment:</U> &nbsp;The exercise price shall become immediately due upon exercise of the Option and shall be paid in cash or check made payable to the Company. Should the Company&#146;s outstanding Stock be registered under Section 12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(i) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>in shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company&#146;s earnings for financial reporting purposes and valued at Fair Market Value on the exercise date, or</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(ii) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions (a) to a Company designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction.</P>
<P style="margin:0pt; padding-left:108pt; text-indent:-108pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>At the discretion of the Board, exercisable either at the time of Option grant or of Option exercise, the exercise price may also be paid (i) by Optionee&#146;s delivery of a promissory note in form and substance satisfactory to the Company and permissible under the securities rules of the State of Nevada and bearing interest at a rate determined by the Board in its sole discretion, but in no event less than the minimum rate of interest required to avoid the imputation of compensation income to the Optionee under the Federal tax laws, or (ii) in such other form of consideration permitted by the Nevada corporations law as may be acceptable to the Board.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Term and Exercise of Options:</U> &nbsp;Any Option granted to an employee of the Company shall become exercisable over a period of no longer than five (5) years, and no less than twenty percent (20%) of the shares covered thereby shall become exercisable annually. No Option shall be exercisable, in whole or in part, prior to one (1) year from the date it is granted unless the Board shall specifically determine otherwise, as provided herein. In no event shall any Option be exercisable after the expiration of ten (10) years from the date it is granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be exercisable after the expiration of five (5) years from the date of the Option. Unless otherwise specified by the Board or the Committee in the resolution authorizing such Option, the date of grant of an Option shall be deemed to be the date upon which the Board or the Committee authorizes the granting of such Option.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Each Option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective Option agreements may provide. During the lifetime of an Optionee, the Option shall be exercisable only by the Optionee and shall not be assignable or transferable by the Optionee, and no other person shall acquire any rights therein. To the extent not exercised, installments (if more than one) shall accumulate, but shall be exercisable, in whole or in part, only during the period for exercise as stated in the Option agreement, whether or not other installments are then exercisable.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(e)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Termination of Status as Employee, Consultant or Director:</U> &nbsp;If Optionee&#146;s status as an employee shall terminate for any reason other than Optionee&#146;s disability or death, then Optionee (or if the Optionee shall die after such termination, but prior to exercise, Optionee&#146;s personal representative or the person entitled to succeed to the Option) shall have the right to exercise the portions of any of Optionee&#146;s Incentive Stock Options which were exercisable as of the date of such termination, in whole or in part, not less than 30 days nor more than three (3) months after such termination (or, in the event of &#147;termination for cause&#148; as that term is defined by the terms of the Plan or the Option Agreement or an employment agreement, the Option shall automatically terminate as of the termination of employment as to all shares covered by the Option).</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>With respect to Nonstatutory Options granted to employees, directors or consultants, the Board may specify such period for exercise, not less than 30 days (except that in the case of &#147;termination for cause&#148; or removal of a director, the Option shall automatically terminate as of the termination of employment or services as to shares covered by the Option, following termination of employment or services as the Board deems reasonable and appropriate. The Option may be exercised only with respect to installments that the Optionee could have exercised at the date of termination of employment or services. Nothing contained herein or in any Option granted pursuant hereto shall be construed to affect or restrict in any way the right of the Company to terminate the employment or services of an Optionee with or without cause.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(f)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Disability of Optionee:</U> &nbsp;If an Optionee is disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the three (3) month period set forth in Section 6(e) shall be a period, as determined by the Board and set forth in the Option, of not less than six months nor more than one year after such termination.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(g)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Death of Optionee:</U> &nbsp;If an Optionee dies while employed by, engaged as a consultant to, or serving as a Director of the Company, the portion of such Optionee&#146;s Option which was exercisable at the date of death may be exercised, in whole or in part, by the estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i) a period, as determined by the Board and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee&#146;s death, which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with respect to installments exercisable at the time of Optionee&#146;s death and not previously exercised by the Optionee.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(h)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Nontransferability of Option:</U> &nbsp;No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(i)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Recapitalization:</U> &nbsp;Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, and the exercise price per share thereof set forth in each such Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the Company shall not be deemed to have been &#147;effected without receipt of consideration&#148; by the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a &#147;Reorganization&#148;), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Paragraph 6(d) of the Plan; provided, that any such right granted shall be granted to all Optionees not receiving an offer to receive substitute options on a consistent basis, and provided further, that any such exercise shall be subject to the consummation of such Reorganization.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Subject to any required action of shareholders, if the Company shall be the surviving entity in any merger or consolidation, each outstanding Option thereafter shall pertain to and apply to the securities to which a holder of shares of Stock equal to the shares subject to the Option would have been entitled by reason of such merger or consolidation.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a change in the Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares without par value into the same number of shares with a par value, the shares resulting from any such change shall be deemed to be the Stock within the meaning of the Plan.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided in this Section 6(i), the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number or price of shares of Stock subject to any Option shall not be affected by, and no adjustment shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The Grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make any adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or any part of its business or assets.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(j)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Rights as a Shareholder:</U> &nbsp;An Optionee shall have no rights as a shareholder with respect to any shares covered by an Option until the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 6(i) hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(k)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Modification, Acceleration, Extension, and Renewal of Options:</U> &nbsp;Subject to the terms and conditions and within the limitations of the Plan, the Board may modify an Option, or, once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options (to the extent not theretofore exercised) and authorize the granting of new Options in substitution for such Options, provided such action is permissible under Section 422 of the Code and the Nevada securities rules. Notwithstanding the provisions of this Section 6(k), however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee&#146;s detriment or impair any rights or obligations under any Option theretofore granted under the Plan.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(l)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Exercise Before Exercise Date:</U> &nbsp;At the discretion of the Board, the Option may, but need not, include a provision whereby the Optionee may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option or any installment thereof. Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon termination of Optionee&#146;s employment as contemplated by Section 6(n) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(m)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Other Provisions:</U> &nbsp;The Option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the Options, as the Board or the Committee shall deem advisable. Shares shall not be issued pursuant to the exercise of an Option, if the exercise of such Option or the issuance of shares thereunder would violate, in the opinion of legal counsel for the Company, the provisions of any applicable law or the rules or regulations of any applicable governmental or administrative agency or body, such as the Code, the Securities Act, the Exchange Act, the Nevada securities rules, &nbsp;Nevada corporation law, and the rules promulgated under the foregoing or the rules and regulations of any exchange upon which the shares of the Company are listed. Without limiting the generality of the foregoing, the exercise of each Option shall be subject to the condition that if at any time the Company shall determine that (i) the satisfaction of withholding tax or other similar liabilities, or (ii) the listing, registration or qualification of any shares covered by such exercise upon any securities exchange or under any state or federal law, or (iii) the consent or approval of any regulatory body, or (iv) the perfection of any exemption from any such withholding, listing, registration, qualification, consent or approval is necessary or desirable in connection with such exercise or the issuance of shares thereunder, then in any such event, such exercise shall not be effective unless such withholding, listing registration, qualification, consent, approval or exemption shall have been effected, obtained or perfected free of any conditions not acceptable to the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(n)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Repurchase Agreement:</U> &nbsp;The Board may, in its discretion, require as a condition to the Grant of an Option hereunder, that an Optionee execute an agreement with the Company, in form and substance satisfactory to the Board in its discretion (&#147;Repurchase Agreement&#148;), (i) restricting the Optionee&#146;s right to transfer shares purchased under such Option without first offering such shares to the Company or another shareholder of the Company upon the same terms and conditions as provided therein; and (ii) providing that upon termination of Optionee&#146;s employment with the Company, for any reason, the Company (or another shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his or her employment at a price equal to (A) the fair value of such shares as of such date of termination, or (B) if such repurchase right lapses at 20% of the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible under the Nevada securities rules; provided that in the case of Options or Stock Awards granted to officers, directors, consultants or affiliates of the Company, such repurchase provisions may be subject to additional or greater restrictions as determined by the Board or Committee.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>7. &nbsp;</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><I>Stock Awards and Restricted Stock Purchase Offers.</I></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Types of Grants.</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:90pt; text-indent:-18pt; font-family:Times New Roman" align=justify>(i)</P>
<P style="margin:0pt; padding-left:90pt; font-family:Times New Roman" align=justify><U>Stock Award.</U> &nbsp;All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Such Awards may be based on Fair Market Value or other specified valuation. All Stock Awards will be made pursuant to the execution of a Stock Award Agreement substantially in the form attached hereto as Exhibit &#147;C&#148;.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:90pt; text-indent:-18pt; font-family:Times New Roman" align=justify>(ii) &nbsp;</P>
<P style="margin:0pt; padding-left:90pt; font-family:Times New Roman" align=justify><U>Restricted Stock Purchase Offer.</U> &nbsp;A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies related to the Participant&#146;s continued association with the Company for a specified time and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan. All Restricted Stock Purchase Offers shall be made pursuant to a Restricted Stock Purchase Offer substantially in the form attached hereto as Exhibit &#147;D&#148;.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Conditions and Restrictions.</U> &nbsp;Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as &#147;Restricted Stock&#148;. Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance with the provisions of Section 7(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee may establish.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Cancellation and Rescission of Grants.</U> &nbsp;Unless the Stock Award Agreement or Restricted Stock Purchase Offer specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if the Participant is not in compliance with all other applicable provisions of the Stock Award Agreement or Restricted Stock Purchase Offer, the Plan and with the following conditions:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(i) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>A Participant shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Board or Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company. For Participants whose employment has terminated, the judgment of the chief executive officer shall be based on the Participant&#146;s position and responsibilities while employed by the Company, the Participant&#146;s post-employment responsibilities and position with the other organization or business, the extent of past, current and potential competition or conflict between the Company and the other organization or business, the effect on the Company&#146;s customers, suppliers and competitors and such other considerations as are deemed relevant given the applicable facts and circumstances. A Participant who has retired shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent a substantial investment to the Participant or a greater than 10 percent equity interest in the organization or business.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(ii) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>A Participant shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company&#146;s business, any confidential information or material, as defined in the Company&#146;s Proprietary Information and Invention Agreement or similar agreement regarding confidential information and intellectual property, relating to the business of the Company, acquired by the Participant either during or after employment with the Company.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(iii) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>A Participant, pursuant to the Company&#146;s Proprietary Information and Invention Agreement, shall disclose promptly and assign to the Company all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company and shall do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in foreign countries.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(iv) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Upon exercise, payment or delivery pursuant to a Grant, the Participant shall certify on a form acceptable to the Committee that he or she is in compliance with the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 7(c) prior to, or during the six months after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment or delivery to be rescinded. The Company shall notify the Participant in writing of any such rescission within two years after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, the Participant shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to a Grant. Such payment shall be made either in cash or by returning to the Company the number of shares of Stock that the Participant received in connection with the rescinded exercise, payment or delivery.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Nonassignability.</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(i) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Except pursuant to Section 7(e)(iii) and except as set forth in Section 7(d)(ii), no Grant or any other benefit under the Plan shall be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(ii) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Where a Participant terminates employment and retains a Grant pursuant to Section 7(e)(ii) in order to assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by law, may authorize a third party (including but not limited to the trustee of a &#147;blind&#148; trust), acceptable to the applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant with regard to such Awards.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(e)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Termination of Employment.</U> &nbsp;If the employment or service to the Company of a Participant terminates, other than pursuant to any of the following provisions under this Section 7(e), all unexercised, deferred and unpaid Stock Awards or Restricted Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(i)</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify><U>Retirement Under a Company Retirement Plan.</U> &nbsp;When a Participant&#146;s employment terminates as a result of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability and vesting of any such Grants may be accelerated.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(ii)</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify><U>Rights in the Best Interests of the Company.</U> &nbsp;When a Participant resigns from the Company and, in the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 10 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant&#146;s Grants are not in the Company&#146;s best interest.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(iii) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify><U>Death or Disability of a Participant.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; font-family:Times New Roman" align=justify>(1)</P>
<P style="margin:0pt; padding-left:108pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a Participant&#146;s death, the Participant&#146;s estate or beneficiaries shall have a period up to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were living.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; font-family:Times New Roman" align=justify>(2)</P>
<P style="margin:0pt; padding-left:108pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination for cause, Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally designated guardian or representative if the Participant is legally incompetent by virtue of such disability.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; font-family:Times New Roman" align=justify>(3)</P>
<P style="margin:0pt; padding-left:108pt; text-indent:36pt; font-family:Times New Roman" align=justify>After the death or disability of a Participant, the Board or Committee may in its sole discretion at any time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to pay the total of any accelerated payments in a lump sum to the Participant, the Participant&#146;s estate, beneficiaries or representative -- notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under the Grant might ultimately have become payable to other beneficiaries.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; font-family:Times New Roman" align=justify>(4)</P>
<P style="margin:0pt; padding-left:108pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of uncertainty as to interpretation of or controversies concerning this Section 7, the determinations of the Board or Committee, as applicable, shall be binding and conclusive.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>8. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Investment Intent. &nbsp;</I>All Grants under the Plan are intended to be exempt from registration under the Securities Act provided by Rule 701 thereunder. Unless and until the granting of Options or sale and issuance of Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (i) give written assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters and the ability of such person (or representative) to evaluate the merits and risks of exercising the Option, and (ii) execute and deliver to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations made upon the exercise of such rights.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>9. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Amendment, Modification, Suspension or Discontinuance of the Plan. &nbsp;</I>The Board may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided, however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall not be impaired by suspension or termination of the Plan.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of any change in the outstanding Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Board or the Committee may adjust proportionally (a) the number of shares of Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options and Nonstatutory Options and (iii) covered by outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding Grants; and (c) the appropriate Fair Market Value and other price determinations for such Grants. In the event of any other change affecting the Stock or any distribution (other than normal cash dividends) to holders of Stock, such adjustments as may be deemed equitable by the Board or the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction to which Section 424(a) of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants or an assumption of previously issued Grants.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>10. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Tax Withholding. </I>The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>11. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Availability of Information. </I>During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan shall be exercisable, the Company shall make available, not later than one hundred and twenty (120) days following the close of each of its fiscal years, such financial and other information regarding the Company as is required by the bylaws of the Company and applicable law to be furnished in an annual report to the shareholders of the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>12. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Notice. </I>Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the chief personnel officer or to the chief executive officer of the Company, and shall become effective when it is received by the office of the chief personnel officer or the chief executive officer.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>13. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Indemnification of Board. </I>In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys&#146; fees, actually and necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action, suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend the same.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>14. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Governing Law. </I>The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of Nevada and construed accordingly.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>15. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><I>Effective and Termination Dates. </I>The Plan shall become effective on the date it is approved by the holders of a majority of the shares of Stock then outstanding. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 9.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The foregoing 2002 Incentive Stock Plan was duly adopted and approved by the Board of Directors on July 30, 2002 and approved by the shareholders of the Corporation on September 30, 2002.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><U>/s/ Derek Cooper</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>Derek Cooper</P>
<P style="margin:0pt; font-family:Times New Roman" align=right>President, CEO and Director</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>EXHIBIT A</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>INTERNATIONAL ENERGY, INC.</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>INCENTIVE STOCK OPTION AGREEMENT</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>THIS INCENTIVE STOCK OPTION AGREEMENT (&#147;Agreement&#148;) is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the &#147;Company&#148;), and the employee of the Company named in Section 1(b). (&#147;Optionee&#148;):</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In consideration of the covenants herein set forth, the parties hereto agree as follows:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>1. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Option Information.</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Date of Option:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Number of Shares:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Exercise Price:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>2. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Acknowledgements.</U></P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee is an employee of the Company.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>The Board of Directors (the &#147;Board&#148; which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the &#147;Plan&#148;), pursuant to which this Option is being granted.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>The Board has authorized the granting to Optionee of an incentive stock option (&#147;Option&#148;) as defined in Section 422 of the Internal Revenue Code of 1986, as amended, (the &#147;Code&#148;) to purchase shares of common stock of the Company (&#147;Stock&#148;) upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;) provided by Rule 701 thereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>3.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>&nbsp;<U>Shares; Price.</U> &nbsp;The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the &#147;Shares&#148;) for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the &#147;Exercise Price&#148;), such price being not less than the fair market value per share of the Shares covered by this Option as of the date hereof (unless Optionee is the owner of Stock possessing ten percent or more of the total voting power or value of all outstanding Stock of the Company, in which case the Exercise Price shall be no less than 110% of the fair market value of such Stock).</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>4.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Term of Option; Continuation of Employment.</U> &nbsp;This Option shall expire, and all rights hereunder to purchase the Shares shall terminate 10 from the date hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and as of the date of, the termination of Optionee&#146;s employment if such termination occurs prior to the end of such 10 year period. Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from the rate in existence at the date hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>5.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Vesting of Option.</U> &nbsp;Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term of Optionee&#146;s employment in five equal annual installments of twenty percent (20%) of the Shares covered by this Option, the first installment to be exercisable on the first anniversary of the date of this Option, with an additional twenty percent (20%) of such Shares becoming exercisable on each of the four (4) successive anniversary dates. The installments shall be cumulative (i.e., this option may be exercised, as to any or all Shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this option).</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>6. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Exercise.</U> &nbsp;This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime, except as provided in Section 8 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>7.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Termination of Employment.</U> &nbsp;If Optionee shall cease to be employed by the Company for any reason, whether voluntarily or involuntarily, other than by his or her death, Optionee (or if the Optionee shall die after such termination, but prior to such exercise date, Optionee&#146;s personal representative or the person entitled to succeed to the Option) shall have the right at any time within three (3) months following such termination of employment or the remaining term of this Option, whichever is the lesser, to exercise in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date of termination of employment and had not previously been exercised; provided, however: (i) if Optionee is permanently disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the foregoing three (3) month period shall be extended to six (6) months; or (ii) if Optionee is terminated &#147;for cause&#148; as that term is defined by the terms of the Plan or this Option Agreement or by any employment agreement between the Optionee and the Company, this Option shall automatically terminate as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>8.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Death of Optionee.</U> &nbsp;If the Optionee shall die while in the employ of the Company, Optionee&#146;s personal representative or the person entitled to Optionee&#146;s rights hereunder may at any time within six (6) months after the date of Optionee&#146;s death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee&#146;s death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>9.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>No Rights as Shareholder.</U> &nbsp;Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 10 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>10.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Recapitalization.</U> &nbsp;Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been &#147;effected without receipt of consideration by the Company&#148;.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a &#147;Reorganization&#148;), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>11.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Additional Consideration.</U> &nbsp;Should the Internal Revenue Service determine that the Exercise Price established by the Board as the fair market value per Share is less than the fair market value per Share as of the date of Option grant, Optionee hereby agrees to tender such additional consideration, or agrees to tender upon exercise of all or a portion of this Option, such fair market value per Share as is determined by the Internal Revenue Service.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>12.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>&nbsp;<U>Modification, Extension and Renewal of Options.</U> &nbsp;The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, and Section 422 of the Code. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee&#146;s detriment or impair any rights of Optionee hereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>13.</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Investment Intent; Restrictions on Transfer.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE &#145;SECURITIES ACT&#146;) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN INCENTIVE STOCK OPTION AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company&#146;s transfer agent.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>14.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Effects of Early Disposition.</U> &nbsp;Optionee understands that if an Optionee disposes of shares acquired hereunder within two (2) years after the date of this Option or within one (1) year after the date of issuance of such shares to Optionee, such Optionee will be treated for income tax purposes as having received ordinary income at the time of such disposition of an amount generally measured by the difference between the purchase price and the fair market value of such stock on the date of exercise, subject to adjustment for any tax previously paid, in addition to any tax on the difference between the sales price and Optionee&#146;s adjusted cost basis in such shares. The foregoing amount may be measured differently if Optionee is an officer, director or ten percent holder of the Company. Optionee agrees to notify the Company within ten (10) working days of any such disposition.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>15.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Stand-off Agreement.</U> &nbsp;Optionee agrees that in connection with any registration of the Company&#146;s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company&#146;s securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>16.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Restriction Upon Transfer.</U> &nbsp;The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Repurchase Right on Termination Other Than for Cause.</U> For the purposes of this Section, a &#147;Repurchase Event&#148; shall mean an occurrence of one of (i) termination of Optionee&#146;s employment by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee&#146;s spouse pursuant thereto (in which case this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Repurchase Right on Termination for Cause.</U> &nbsp;In the event Optionee&#146;s employment is terminated by the Company &#147;for cause&#148;, then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Exercise of Repurchase Right.</U> &nbsp;Any Repurchase Right under Paragraphs 16(a) or 16(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 16.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Right of First Refusal.</U> &nbsp;In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(e)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Acceptance of Restrictions.</U> &nbsp;Acceptance of the Shares shall constitute the Optionee&#146;s agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(f)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Permitted Transfers.</U> &nbsp;Notwithstanding any provisions in this Section 16 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 16(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(g)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Release of Restrictions on Shares.</U> &nbsp;All other restrictions under this Section 16 shall terminate five (5) years following the date of this Agreement, or when the Company&#146;s securities are publicly traded, whichever occurs earlier.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>17.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Notices.</U> &nbsp;Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided to the Company by Optionee for his or her employee records.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>18. </P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Agreement Subject to Plan; Applicable Law.</U> &nbsp;This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman" align=justify>International Energy, Inc.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman">By: ________________________________</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman">____________________________________</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman">Optionee</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(one of the following, as appropriate, shall be signed)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">I certify that as of the date</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">By his or her signature, the</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">hereof I am unmarried</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">spouse of Optionee hereby agrees</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">to be bound by the provisions of</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">the foregoing INCENTIVE STOCK</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">OPTION AGREEMENT</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">_____________________________</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">________________________________</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Optionee</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">Spouse of Optionee</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>Appendix A</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>NOTICE OF EXERCISE</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">International Energy, Inc.</P>
<P style="margin:0pt; font-family:Times New Roman">Suite 216 &#150; 1628 West 1st Avenue</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Vancouver, BC</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">V6J 1G1</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman"><B>Re: </B></P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman"><B>Incentive Stock Option</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Notice is hereby given pursuant to Section 6 of my Incentive Stock Option Agreement that I elect to purchase the number of shares set forth below at the exercise price set forth in my option agreement:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Incentive Stock Option Agreement dated: ____________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Number of shares being purchased: ____________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Exercise Price: $____________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>A check in the amount of the aggregate price of the shares being purchased is attached.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>I hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933, as amended, or any applicable federal or state securities laws. Further, I understand that the exemption from taxable income at the time of exercise is dependent upon my holding such stock for a period of at least one year from the date of exercise and two years from the date of grant of the Option.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>I understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>I agree to provide to the Company such additional documents or information as may be required pursuant to the Company&#146;s 2002 Incentive Stock Plan.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_________________________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=right>(signature)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>_________________________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=right>(Name of Optionee)</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>EXHIBIT B-1</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>International Energy, Inc.</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>NONSTATUTORY STOCK OPTION AGREEMENT</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>THIS NONSTATUTORY STOCK OPTION AGREEMENT (&#147;Agreement&#148;) is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the &#147;Company&#148;), and the following employee of the Company (&#147;Optionee&#148;):</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In consideration of the covenants herein set forth, the parties hereto agree as follows:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>1. </P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Option Information.</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Date of Option:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(b) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Optionee:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(c) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Number of Shares:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(d) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Exercise Price:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>2. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Acknowledgements.</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Optionee is an employee of the Company.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:72pt; font-family:Times New Roman" align=justify>(b) &nbsp;</P>
<P style="margin:0pt; text-indent:108pt; font-family:Times New Roman" align=justify>The Board of Directors (the &#147;Board&#148; which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the &#147;Plan&#148;), pursuant to which this Option is being granted; and</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:72pt; font-family:Times New Roman" align=justify>(c) &nbsp;</P>
<P style="margin:0pt; text-indent:108pt; font-family:Times New Roman" align=justify>The Board has authorized the granting to Optionee of a nonstatutory stock option (&#147;Option&#148;) to purchase shares of common stock of the Company (&#147;Stock&#148;) upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;) provided by Rule 701 thereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>3. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Shares; Price.</U> &nbsp;</P>
<P style="margin:0pt; text-indent:144pt; font-family:Times New Roman" align=justify>Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the &#147;Shares&#148;) for cash (or other consideration as is authorized under the Plan and acceptable to the Board of Directors of the Company, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the &#147;Exercise Price&#148;), such price being not less than [e.g., 85%] of the fair market value per share of the Shares covered by this Option as of the date hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>4.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Term of Option; Continuation of Service.</U> &nbsp;This Option shall expire, and all rights hereunder to purchase the Shares shall terminate 10 years from the date hereof. This Option shall earlier terminate subject o Sections 7 and 8 hereof upon, and as of the date of, the termination of Optionee&#146;s employment if such termination occurs prior to the end of such <U>10</U> year period. Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from the rate in existence at the date hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>5.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Vesting of Option.</U> &nbsp;Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term of Optionee&#146;s employment in five equal annual installments of twenty percent (20%) of the Shares covered by this Option, the first installment to be exercisable on the first anniversary of the date of this Option, with an additional twenty percent (20%) of such Shares becoming exercisable on each of the four (4) successive anniversary dates. The installments shall be cumulative (i.e., this option may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this option).</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>6.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Exercise.</U> &nbsp;This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime, except as provided in Section 8 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>7.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Termination of Employment.</U> &nbsp;If Optionee shall cease to be employed by the Company for any reason, whether voluntarily or involuntarily, other than by his or her death, Optionee (or if the Optionee shall die after such termination, but prior to such exercise date, Optionee&#146;s personal representative or the person entitled to succeed to the Option) shall have the right at any time within three (3) months following such termination of employment or the remaining term of this Option, whichever is the lesser, to exercise in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date of termination of employment and had not previously been exercised; provided, however: (i) if Optionee is permanently disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the foregoing three (3) month period shall be extended to six (6) months; or (ii) if Optionee is terminated &#147;for cause&#148; as that term is defined by the terms of the Plan or this Option Agreement or by any employment agreement between the Optionee and the Company, this Option shall automatically terminate as to all Shares covered by this Option not exercised prior to termination.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>8.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Death of Optionee.</U> &nbsp;If the Optionee shall die while in the employ of the Company, Optionee&#146;s personal representative or the person entitled to Optionee&#146;s rights hereunder may at any time within six (6) months after the date of Optionee&#146;s death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee&#146;s death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>9.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>No Rights as Shareholder.</U> &nbsp;Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 10 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>10.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Recapitalization.</U> &nbsp;Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been &#147;effected without receipt of consideration by the Company&#148;.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a &#147;Reorganization&#148;), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>11.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Taxation upon Exercise of Option.</U> &nbsp;Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee&#146;s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>12.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Modification, Extension and Renewal of Options.</U> &nbsp;The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code and the corporate securities rules of Nevada. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee&#146;s detriment or impair any rights of Optionee hereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>13.</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Investment Intent; Restrictions on Transfer.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE &#145;SECURITIES ACT&#146;) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company&#146;s transfer agent.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>14.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Stand-off Agreement.</U> &nbsp;Optionee agrees that, in connection with any registration of the Company&#146;s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company&#146;s securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>15.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>&nbsp;<U>Restriction Upon Transfer.</U> &nbsp;The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Repurchase Right on Termination Other Than for Cause. For the purposes of this Section, a &#147;Repurchase Event&#148; shall mean an occurrence of one of (i) termination of Optionee&#146;s employment by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee&#146;s spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Repurchase Right on Termination for Cause. In the event Optionee&#146;s employment is terminated by the Company &#147;for cause&#148;, then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Exercise of Repurchase Right. Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Right of First Refusal. In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(e)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Acceptance of Restrictions. Acceptance of the Shares shall constitute the Optionee&#146;s agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(f) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Permitted Transfers. Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(g) &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Release of Restrictions on Shares. All other restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement, or when the Company&#146;s securities are publicly traded, whichever occurs earlier.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>16. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Notices.</U> &nbsp;Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for his or her employee records.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>17.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Agreement Subject to Plan; Applicable Law.</U> &nbsp;This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman" align=justify>International Energy, Inc.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">By: _________________________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman" align=justify>_____________________________________</P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman">Optionee</P>
<P style="margin:0pt; text-indent:360pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(one of the following, as appropriate, shall be signed)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">I certify that as of the date</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">By his or her signature, the</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">hereof I am unmarried</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">spouse of Optionee hereby agrees</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">to be bound by the provisions of</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">the foregoing NONSTATUTORY STOCK</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">OPTION AGREEMENT</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">____________________________</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">________________________________</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Optionee</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">Spouse of Optionee</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>Appendix A</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>NOTICE OF EXERCISE</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman">International Energy, Inc.</P>
<P style="margin:0pt; font-family:Times New Roman">Suite 216 &#150; 1628 West 1st Avenue</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Vancouver, BC</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">V6J 1G1</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman"><B>Re: </B></P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman"><B>Nonstatutory Stock Option</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Notice is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares set forth below at the exercise price set forth in my option agreement:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Nonstatutory Stock Option Agreement dated: ____________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Number of shares being purchased: ____________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>Exercise Price: $____________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>A check in the amount of the aggregate price of the shares being purchased is attached.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>I hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933, as amended, or any applicable federal or state securities laws.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>I understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Further, I understand that, as a result of this exercise of rights, I will recognize income in an amount equal to the amount by which the fair market value of the Shares exceeds the exercise price. I agree to report such income in accordance with then applicable law and to cooperate with Company in establishing the withholding and corresponding deduction to the Company for its income tax purposes.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>I agree to provide to the Company such additional documents or information as may be required pursuant to the Company&#146;s 2002 Incentive Stock Plan.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>_______________________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=right>(signature)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>_______________________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=right>(name of Optionee)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>EXHIBIT B-2</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>International Energy, Inc.</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>NONSTATUTORY STOCK OPTION AGREEMENT</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>THIS NONSTATUTORY STOCK OPTION AGREEMENT (&#147;Agreement&#148;) is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the &#147;Company&#148;), and the following Director of the Company (&#147;Optionee&#148;):</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In consideration of the covenants herein set forth, the parties hereto agree as follows:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>1.</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Option Information.</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Date of Option:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(b) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Optionee:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(c) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Number of Shares:</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(d) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Exercise Price:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-36pt; font-family:Times New Roman" align=justify>2.</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><U>Acknowledgements.</U></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:108pt; text-indent:-36pt; font-family:Times New Roman" align=justify>(a) &nbsp;</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman" align=justify>Optionee is a director of the Company.</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:72pt; font-family:Times New Roman" align=justify>(b) &nbsp;</P>
<P style="margin:0pt; text-indent:108pt; font-family:Times New Roman" align=justify>The Board of Directors (the &#147;Board&#148; which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the &#147;Plan&#148;), pursuant to which this Option is being granted; and</P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:72pt; font-family:Times New Roman" align=justify>(c) &nbsp;</P>
<P style="margin:0pt; text-indent:108pt; font-family:Times New Roman" align=justify>The Board has authorized the granting to Optionee of a nonstatutory stock option (&#147;Option&#148;) to purchase shares of common stock of the Company (&#147;Stock&#148;) upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;) provided by Rule 701 thereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>3. &nbsp;</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Shares; Price.</U> &nbsp;The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the &#147;Shares&#148;) for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the &#147;Exercise Price&#148;), such price being not less than [e.g., 85%] of the fair market value per share of the Shares covered by this Option as of the date hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>4.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Term of Option; Continuation of Service.</U> &nbsp;This Option shall expire, and all rights hereunder to purchase the Shares shall terminate 10 years from the date hereof. Nothing contained herein shall be construed to interfere in any way with the right of the Company or its shareholders to remove or not elect Optionee as a Director of the Company, or to increase or decrease the compensation of Directors from the rate in effect at the date hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>5.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Vesting of Option.</U> &nbsp;Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term that Optionee serves as a Director of the Company in three (3) equal annual installments of thirty-three and one-third percent (33 1/3%) of the Shares covered by this Option, the first installment to be exercisable on the first anniversary of the date of this Option, with an additional thirty-three and one-third percent (33 1/3%) of such Shares becoming exercisable on each of the two (2) successive anniversary dates. The installments shall be cumulative (i.e., this option may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this Option).</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>6.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Exercise.</U> &nbsp;This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>7.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Termination of Service.</U> &nbsp;If Optionee shall cease to serve as a Director of the Company for any reason, no further installments shall vest pursuant to Section 5, and the maximum number of Shares that Optionee may purchase pursuant hereto shall be limited to the number of Shares that were vested as of the date Optionee ceases to be a Director (to the nearest whole Share). Thereupon, Optionee shall have the right to exercise this Option, at any time during the remaining term hereof, to the extent, but only to the extent, that this Option was exercisable as of the date Optionee ceases to be a Director; provided, however, if Optionee is removed as a Director pursuant to the Nevada corporation law, the foregoing right to exercise shall automatically terminate on the date Optionee ceases to be a Director as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>8.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Death of Optionee.</U> &nbsp;If the Optionee shall die while a Director of the Company, Optionee&#146;s personal representative or the person entitled to Optionee&#146;s rights hereunder may at any time within six (6) months after the date of Optionee&#146;s death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee&#146;s death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>9.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>No Rights as Shareholder.</U> &nbsp;Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 7 hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>10</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Recapitalization.</U> &nbsp;Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been &#147;effected without receipt of consideration by the Company&#148;.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a &#147;Reorganization&#148;), this Option shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board; provided, however, if Optionee shall be a Director at the time such Reorganization is approved by the stockholders, Optionee shall have the right to exercise this Option as to all or any part of the Shares, without regard to the installment provisions of Section 5, for a period beginning 30 days prior to the consummation of such Reorganization and ending as of the Reorganization or the expiration of this Option, whichever is earlier, subject to the consummation of the Reorganization. In any event, the Company shall notify Optionee, at least 30 days prior to the consummation of such Reorganization, of his exercise rights, if any, and that the Option shall terminate upon the consummation of the Reorganization.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>11.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Taxation upon Exercise of Option.</U> &nbsp;Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee&#146;s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>12.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Modification, Extension and Renewal of Options.</U> &nbsp;The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee&#146;s detriment or impair any rights of Optionee hereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>13.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Investment Intent; Restrictions on Transfer.</U></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify>Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE &#145;SECURITIES ACT&#146;) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ______, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company&#146;s transfer agent.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>14.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Stand-off Agreement.</U> &nbsp;Optionee agrees that, in connection with any registration of the Company&#146;s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company&#146;s securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of up to one year following the effective date of registration of such offering.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>15.</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Restriction Upon Transfer.</U> &nbsp;The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Repurchase Right on Termination Other Than by Removal.</U> &nbsp;For the purposes of this Section, a &#147;Repurchase Event&#148; shall mean an occurrence of one of (i) termination of Optionee&#146;s service as a director; (ii) death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee&#146;s spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, and upon mutual agreement of the Company and Optionee, the Company may repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b) </P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman" align=justify><U>Repurchase Right on Removal.</U> &nbsp;In the event Optionee is removed as a director &#147;for cause&#148; or Optionee voluntarily resigns as a director prior to the date upon which the last installment of Shares becomes exercisable pursuant to Section 5, then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal annual increments on each anniversary of the date of this Agreement over the term of this Option specified in Section 4. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon removal or resignation all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of such removal or resignation, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;<U>Exercise of Repurchase Right.</U> &nbsp;Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;<U>Right of First Refusal.</U> &nbsp;In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(e) &nbsp;<U>Acceptance of Restrictions.</U> &nbsp;Acceptance of the Shares shall constitute the Optionee&#146;s agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(f) &nbsp;<U>Permitted Transfers.</U> &nbsp;Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(g) &nbsp;<U>Release of Restrictions on Shares.</U> &nbsp;All other restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement, or when the Company&#146;s securities are publicly traded, whichever occurs earlier.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>16. &nbsp;<U>Notices.</U> &nbsp;Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for use in Company records related to Optionee.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>17. &nbsp;<U>Agreement Subject to Plan; Applicable Law.</U> &nbsp;This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman" align=justify>International Energy, Inc.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman" align=justify>By: ______________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman" align=justify>__________________________</P>
<P style="margin-top:0pt; margin-bottom:-14pt; text-indent:216pt; line-height:14pt; font-family:Times New Roman">Optionee</P>
<P style="margin:0pt; text-indent:396pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(one of the following, as appropriate, shall be signed)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">I certify that as of the date</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">By his or her signature, the</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">hereof I am unmarried</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">spouse of Optionee hereby agrees</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">to be bound by the provisions of</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">the foregoing NONSTATUTORY STOCK</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">OPTION AGREEMENT</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">____________________________</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">________________________________</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Optionee</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">&nbsp;Spouse of Optionee</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>EXHIBIT B-3</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>International Energy, Inc.</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>NONSTATUTORY STOCK OPTION AGREEMENT</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>THIS NONSTATUTORY STOCK OPTION AGREEMENT (&#147;Agreement&#148;) is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the &#147;Company&#148;), and the following consultant to the Company (herein, the &#147;Optionee&#148;):</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In consideration of the covenants herein set forth, the parties hereto agree as follows:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>1. &nbsp;<U>Option Information.</U></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Date of Option:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;Optionee:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;Number of Shares:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;Exercise Price:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>2. &nbsp;<U>Acknowledgements.</U></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Optionee is an independent consultant to the Company, not an employee;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;The Board of Directors (the &#147;Board&#148; which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the &#147;Plan&#148;), pursuant to which this Option is being granted; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;The Board has authorized the granting to Optionee of a nonstatutory stock option (&#147;Option&#148;) to purchase shares of common stock of the Company (&#147;Stock&#148;) upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;) provided by Rule 701 thereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>3. &nbsp;<U>Shares; Price.</U> &nbsp;The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the &#147;Shares&#148;) for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the &#147;Exercise Price&#148;), such price being not less than [e.g. 85%] of the fair market value per share of the Shares covered by this Option as of the date hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>4. &nbsp;<U>Term of Option.</U> &nbsp;This Option shall expire, and all rights hereunder to purchase the Shares, shall terminate 10 years from the date hereof. Nothing contained herein shall be construed to interfere in any way with the right of the Company to terminate Optionee as a consultant to the Company, or to increase or decrease the compensation paid to Optionee from the rate in effect as of the date hereof.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>5. &nbsp;<U>Vesting of Option.</U> &nbsp;Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the period that Optionee serves as a consultant of the Company in equal annual installments, each installment covering a fraction of the Shares, the numerator of which is one (1) and the denominator of which is the number of years in the term of this Option (not to exceed 5). The first installment shall become exercisable on the first anniversary of the date of this Option, and an additional installment shall become exercisable on each successive anniversary date during the term of this Option, except the last such anniversary date. The final installment shall become exercisable ninety days prior to the expiration of the term of this Option. The installments shall be cumulative (i.e., this option may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this option).</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>6. &nbsp;<U>Exercise.</U> &nbsp;This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>7. &nbsp;<U>Termination of Service.</U> &nbsp;If Optionee&#146;s service as a consultant to the Company terminates for any reason, no further installments shall vest pursuant to Section 5, and Optionee shall have the right at any time within thirty (30) days following such termination of services or the remaining term of this Option, whichever is the lesser, to exercise in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date Optionee ceased to be a consultant to the Company; provided, however, if Optionee is terminated for reasons that would justify a termination of employment &#147;for cause,&#148; the foregoing right to exercise shall automatically terminate on the date Optionee ceases to be a consultant to the Company as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>8. &nbsp;<U>Death of Optionee.</U> &nbsp;If the Optionee shall die while serving as a consultant to the Company, Optionee&#146;s personal representative or the person entitled to Optionee&#146;s rights hereunder may at any time within ninety (90) days after the date of Optionee&#146;s death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee&#146;s death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>9. &nbsp;<U>No Rights as Shareholder.</U> &nbsp;Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of the issuance of shares following exercise of this to Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 10 hereof.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>10. &nbsp;<U>Recapitalization.</U> &nbsp;Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been &#147;effected without receipt of consideration by the Company.&#148;</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a &#147;Reorganization&#148;), this Option shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board; provided, however, if Optionee shall be a consultant at the time such Reorganization is approved by the stockholders, Optionee shall have the right to exercise this Option as to all or any part of the Shares, without regard to the installment provisions of Section 5, for a period beginning 30 days prior to the consummation of such Reorganization and ending as of the Reorganization or the expiration of this Option, whichever is earlier, subject to the consummation of the Reorganization. In any event, the Company shall notify Optionee, at least 30 days prior to the consummation of such Reorganization, of his exercise rights, if any, and that the Option shall terminate upon the consummation of the Reorganization.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>11. &nbsp;<U>Taxation upon Exercise of Option.</U> &nbsp;Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee&#146;s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>12. &nbsp;<U>Modification, Extension and Renewal of Options.</U> &nbsp;The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee&#146;s detriment or impair any rights of Optionee hereunder.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>13. &nbsp;<U>Investment Intent; Restrictions on Transfer.</U></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE &#145;SECURITIES ACT&#146;) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ___________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company&#146;s transfer agent.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>14. &nbsp;<U>Stand-off Agreement.</U> &nbsp;Optionee agrees that, in connection with any registration of the Company&#146;s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company&#146;s securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of up to one year following the effective date of registration of such offering.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>15. &nbsp;<U>Restriction Upon Transfer.</U> &nbsp;The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;<U>Repurchase Right on Termination Other Than for Cause.</U> &nbsp;For the purposes of this Section, a &#147;Repurchase Event&#148; shall mean an occurrence of one of (i) termination of Optionee&#146;s service as a consultant, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee&#146;s spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of the Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;<U>Repurchase Right on Termination for Cause.</U> &nbsp;In the event Optionee&#146;s service as a consultant is terminated by the Company &#147;for cause&#148; (as contemplated by Section 7), then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal annual increments on each anniversary of the date of this Agreement over the term of this Option specified in Section 4. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon any such termination of service for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;<U>Exercise of Repurchase Right.</U> &nbsp;Any repurchase right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;<U>Right of First Refusal.</U> &nbsp;In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(e) &nbsp;<U>Acceptance of Restrictions.</U> &nbsp;Acceptance of the Shares shall constitute the Optionee&#146;s agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(f) &nbsp;<U>Permitted Transfers.</U> &nbsp;Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(g) &nbsp;<U>Release of Restrictions on Shares.</U> &nbsp;All rights and restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement, or when the Company&#146;s securities are publicly traded, whichever occurs earlier.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>16. &nbsp;<U>Notices.</U> &nbsp;Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for use in Company records related to Optionee.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>17. &nbsp;<U>Agreement Subject to Plan; Applicable Law.</U> &nbsp;This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>International Energy, Inc.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>By: ______________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>__________________________</P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>Optionee</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(one of the following, as appropriate, shall be signed)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">I certify that as of the date</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">By his or her signature, the</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">hereof I am unmarried</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">spouse of Optionee hereby agrees</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">to be bound by the provisions of</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">the foregoing RESTRICTED STOCK</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">PURCHASE AGREEMENT</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">____________________________</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">________________________________</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Optionee</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">Spouse of Optionee</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center>Appendix A</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>NOTICE OF EXERCISE</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">International Energy, Inc.</P>
<P style="margin:0pt; font-family:Times New Roman">Suite 216 1628 West 1st Avenue</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Vancouver, BC</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman">V6J 1G1</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman"><B>Re: Nonstatutory Stock Option</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">Notice is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares set forth below at the exercise price set forth in my option agreement:</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Nonstatutory Stock Option Agreement dated: ____________</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Number of shares being purchased: ____________</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Exercise Price: $____________</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">A check in the amount of the aggregate price of the shares being purchased is attached.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">I hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933, as amended, or any applicable federal or state securities laws.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">I understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">Further, I understand that, as a result of this exercise of rights, I will recognize income in an amount equal to the amount by which the fair market value of the Shares exceeds the exercise price. I agree to report such income in accordance with then applicable law and to cooperate with Company in establishing the withholding and corresponding deduction to the Company for its income tax purposes.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman">I agree to provide to the Company such additional documents or information as may be required pursuant to the Company&#146;s 2002 Incentive Stock Plan.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman">__________________________</P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman">(signature)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman">__________________________</P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman">(name of Optionee)</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>EXHIBIT C</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>International Energy, Inc.</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>STOCK AWARD AGREEMENT</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>THIS STOCK AWARD AGREEMENT (&#147;Agreement&#148;) is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the &#147;Company&#148;), and the employee, director or consultant of the Company named in Section 1(b). (&#147;Grantee&#148;):</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In consideration of the covenants herein set forth, the parties hereto agree as follows:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>1. &nbsp;<U>Stock Award Information.</U></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Date of Award:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;Grantee:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;Number of Shares:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;Original Value:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>2. &nbsp;<U>Acknowledgements.</U></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Grantee is a [employee/director/consultant] of the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;The Company has adopted a 2002 Incentive Stock Plan (the &#147;Plan&#148;) under which the Company&#146;s common stock (&#147;Stock&#148;) may be offered to directors, officers, employees and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;) provided by Rule 701 thereunder.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>3. &nbsp;<U>Shares; Value.</U> &nbsp;The Company hereby grants to Grantee, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) (the &#147;Shares&#148;), which Shares have a fair value per share (&#147;Original Value&#148;) equal to the amount set forth in Section 1(d). For the purpose of this Agreement, the terms &#147;Share&#148; or &#147;Shares&#148; shall include the original Shares plus any shares derived therefrom, regardless of the fact that the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation, stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement and the Original Value thereof shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>4. &nbsp;<U>Investment Intent.</U> &nbsp;Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>5. &nbsp;<U>Restriction Upon Transfer.</U> &nbsp;The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Grantee except as hereinafter provided.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;<U>Repurchase Right on Termination Other Than for Cause.</U> &nbsp;For the purposes of this Section, a &#147;Repurchase Event&#148; shall mean an occurrence of one of (i) termination of Grantee&#146;s employment [or service as a director/consultant] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee&#146;s spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to purchase all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of the Repurchase Event.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;<U>Repurchase Right on Termination for Cause.</U> In the event Grantee&#146;s employment [or service as a director/consultant] is terminated by the Company &#147;for cause&#148; (as defined below), then the Company shall have the right (but not an obligation) to purchase Shares of Grantee at a price equal to the Original Value. Such right of the Company to purchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [or service as a director/consultant] &#147;for cause&#148; means (i) as to employees or consultants, termination for cause as defined in the Plan, this Agreement or in any employment [or consulting] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Nevada corporation law. In the event the Company elects to purchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;<U>Exercise of Repurchase Right.</U> &nbsp;Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;<U>Right of First Refusal.</U> &nbsp;In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(e) &nbsp;<U>Acceptance of Restrictions.</U> &nbsp;Acceptance of the Shares shall constitute the Grantee&#146;s agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(f) &nbsp;<U>Permitted Transfers.</U> &nbsp;Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(g) &nbsp;<U>Release of Restrictions on Shares.</U> &nbsp;All rights and restrictions under this Section 5 shall terminate five (5) years following the date of this Agreement, or when the Company&#146;s securities are publicly traded, whichever occurs earlier.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>6. &nbsp;<U>Representations and Warranties of the Grantee.</U> &nbsp;This Agreement and the issuance and grant of the Shares hereunder is made by the Company in reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;Grantee further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information reasonably necessary to verify the accuracy of such information,</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; font-family:Times New Roman" align=justify>(d)</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; font-family:Times New Roman" align=justify>Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:</P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE &#145;SECURITIES ACT&#146;) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.</P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN STOCK AWARD AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company&#146;s transfer agent.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(e) &nbsp;Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of grant, exceeds the price paid by Grantee, if any. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee&#146;s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>7. &nbsp;<U>Stand-off Agreement.</U> &nbsp;Grantee agrees that, in connection with any registration of the Company&#146;s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company&#146;s securities, Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any termination of this Agreement.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>8. &nbsp;<U>Termination of Agreement.</U> &nbsp;This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public offering of common stock of the Company pursuant to an effective registration statement under the Securities Act; or (d) dissolution, bankruptcy, or insolvency of the Company.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>9. &nbsp;<U>Agreement Subject to Plan; Applicable Law.</U> &nbsp;This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Grant shall be governed by the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts therein.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>10. &nbsp;<U>Miscellaneous.</U></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;<U>Notices.</U> &nbsp;Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company&#146;s records.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;<U>Entire Agreement.</U> &nbsp;This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;<U>Enforcement.</U> &nbsp;This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in Douglas County, state of Nevada. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;<U>Validity of Agreement.</U> &nbsp;The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>International Energy, Inc.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>By: ______________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>__________________________</P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>Grantee</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(one of the following, as appropriate, shall be signed)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">I certify that as of the date</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">By his or her signature, the</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">hereof I am unmarried</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">spouse of Optionee hereby agrees</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">to be bound by the provisions of</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">the foregoing STOCK AWARD</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">AGREEMENT</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">____________________________</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">________________________________</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Grantee</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">Spouse of Grantee</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>EXHIBIT &#147;D&#148;</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>International Energy, Inc.</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>RESTRICTED STOCK PURCHASE AGREEMENT</B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>THIS RESTRICTED STOCK PURCHASE AGREEMENT (&#147;Agreement&#148;) is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the &#147;Company&#148;), and the employee, director or consultant of the Company named in Section 1(b). (&#147;Grantee&#148;):</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>In consideration of the covenants herein set forth, the parties hereto agree as follows:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>1. &nbsp;<U>Stock Purchase Information.</U></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Date of Agreement:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;Grantee:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;Number of Shares:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;Price per Share:</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>2. &nbsp;<U>Acknowledgements.</U></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Grantee is a [employee/director/consultant] of the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;The Company has adopted a 2002 Incentive Stock Plan (the &#147;Plan&#148;) under which the Company&#146;s common stock (&#147;Stock&#148;) may be offered to officers, employees, directors and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;) provided by Rule 701 thereunder.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;The Grantee desires to purchase shares of the Company&#146;s common stock on the terms and conditions set forth herein.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>3. &nbsp;<U>Purchase of Shares.</U> The Company hereby agrees to sell and Grantee hereby agrees to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) (the &#147;Shares&#148;), at the price per Share set forth in Section 1(d) (the &#147;Price&#148;). For the purpose of this Agreement, the terms &#147;Share&#148; or &#147;Shares&#148; shall include the original Shares plus any shares derived therefrom, regardless of the fact that the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation, stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>4. &nbsp;<U>Investment Intent.</U> Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>5. &nbsp;<U>Restriction Upon Transfer.</U> &nbsp;The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Grantee except as hereinafter provided.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;Repurchase Right on Termination Other Than for Cause. For the purposes of this Section, a &#147;Repurchase Event&#148; shall mean an occurrence of one of (i) termination of Grantee&#146;s employment [or service as a director/consultant] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee&#146;s spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Grantee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) Repurchase Right on Termination for Cause. In the event Grantee&#146;s employment [or service as a director/consultant] is terminated by the Company &#147;for cause&#148; (as defined below), then the Company shall have the right (but not an obligation) to repurchase Shares of Grantee at a price equal to the Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [or service as a director/consultant] &#147;for cause&#148; means (i) as to employees and consultants, termination for cause as defined in the Plan, this Agreement or in any employment [or consulting] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Nevada corporation law. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) <U>Exercise of Repurchase Right.</U> &nbsp;Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;<U>Right of First Refusal.</U> In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(e) &nbsp;<U>Acceptance of Restrictions.</U> Acceptance of the Shares shall constitute the Grantee&#146;s agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(f) &nbsp;<U>Permitted Transfers.</U> Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(g) &nbsp;<U>Release of Restrictions on Shares.</U> All rights and restrictions under this Section 5 shall terminate five (5) years following the date upon which the Company receives the full Price as set forth in Section 3, or when the Company&#146;s securities are publicly traded, whichever occurs earlier.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>6. &nbsp;<U>Representations and Warranties of the Grantee.</U> This Agreement and the issuance and grant of the Shares hereunder is made by the Company in reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;Grantee further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information reasonably necessary to verify the accuracy of such information,</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE &#145;SECURITIES ACT&#146;) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; padding-right:36pt; font-family:Times New Roman" align=justify>THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company&#146;s transfer agent.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(e) &nbsp;Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of Grant, exceeds the price paid by Grantee. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee&#146;s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>7. &nbsp;<U>Stand-off Agreement.</U> Grantee agrees that, in connection with any registration of the Company&#146;s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company&#146;s securities, Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any termination of this Agreement.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>8. &nbsp;<U>Termination of Agreement.</U> This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public offering of common stock of the Company pursuant to an effective registration statement under the Act; or (d) dissolution, bankruptcy, or insolvency of the Company.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>9. &nbsp;<U>Agreement Subject to Plan; Applicable Law.</U> This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Grant shall be governed by the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts therein.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>10. &nbsp;<U>Miscellaneous.</U></P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(a) &nbsp;<U>Notices.</U> &nbsp;Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company&#146;s records.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(b) &nbsp;<U>Entire Agreement.</U> &nbsp;This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(c) &nbsp;<U>Enforcement.</U> &nbsp;This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in Douglas County, state of Nevada. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman" align=justify>(d) &nbsp;<U>Validity of Agreement.</U> The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.</P>
<P style="margin:0pt; text-indent:36pt; font-family:Times New Roman" align=justify>IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>International Energy, Inc.</P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>By: ______________________</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>__________________________</P>
<P style="margin:0pt; text-indent:288pt; font-family:Times New Roman" align=justify>Grantee</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(one of the following, as appropriate, shall be signed)</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">I certify that as of the date</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">By his or her signature, the</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">hereof I am unmarried</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">spouse of Optionee hereby agrees</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">to be bound by the provisions of</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">the foregoing RESTRICTED STOCK</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">PURCHASE AGREEMENT</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">____________________________</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">________________________________</P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman">Grantee</P>
<P style="margin:0pt; text-indent:180pt; font-family:Times New Roman">Spouse of Grantee</P>
</BODY>
</HTML>
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UNITED STATES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTERNATIONAL ENERGY, INC.
(Formerly E.Deal.net, Inc.)
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
98-0195748
(I.R.S. Employer Identification Number)
216 – 1628 West 1st Avenue, Vancouver, BC, V6J 1G1  TEL: (604) 659-5005
(Address, including postal code, and telephone number, including area code, of principal executive offices)
INTERNATIONAL ENERGY, INC.  – 2002 INCENTIVE STOCK PLAN
(Full Title of the Plan)
Copies of all communications to
:
Joseph Sierchio, Esq.
Sierchio Greco & Greco, LLP
720 Fifth Avenue
New York, New York  10019
TEL:  (212) 246-3030
(Name, address  and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
TITLE OF
EACH CLASS OF SECURITIES TO BE REGISTERED
AMOUNT TO BE REGISTERED (1)
PROPOSED MAXIMUM OFFERING PRICE PER SHARE
PROPOSED MAXIMUM AGGREGATE OFFERING PRICE
AMOUNT OF REGISTRATION FEE
Common Shares
($0.001 par value)
8,000,000
$0.13 (2)
$1,040,000
$122
Common Shares
($0.001 par value)
12,000,000
$0.65 (2)
$7,800,000
$918
Total
20,000,000
-
$8,840,000
$1,040
(1) This Registration Statement relates to such indeterminate number of additional shares of Common Stock of International Energy, Inc. (the "Company") as may be issuable as a result of stock splits, stock dividends or similar transactions or adjustments of the registrants common stock.
(2)  To date, Registrant has granted options under the Plan to purchase an aggregate of 8,000,000 shares at $0.13 per share, which shares are included in the 8,000,000 shares to be registered. On August 24, 2005, the average price for our common shares as reported on the over the counter Bulletin Board was $0.65 per share. Pursuant to Rule 457(c) and 457(h) under the Securities Act of 1933, as amended, the registration fee was calculated on the basis of these figures.
TABLE OF CONTENTS
Part  I. Information Required In The Section 10(A) Prospectus
3
Item 1:  Plan Information
3
Item 2:  Registrant Information and Employee Plan Annual Information
3
Part II
:
Information Required In The Registration Statement
4
Item 3:  Incorporation of Documents by Reference
4
Item 4:  Description of Securities
4
Item 5:  Interests of Named Experts and Counsel
4
Item 6:  Indemnification of Directors and Officers
5
Item 7:  Exemption from Registration claimed
6
Item 8:  Exhibits
6
Item 9:  Undertakings
6
Signatures
8
PART   I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1.  Plan Information.
The documents containing the information specified in Part I have been or will be sent to participants as specified by Rule 428(b)(1). Such documents are not being filed with the Securities and Exchange Commission (the "Commission") either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424. Such documents and the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Part II of this Form, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.
ITEM 2.  Registrant Information and Employee Plan Annual Information.
The documents incorporated by reference into this Registration Statement listed in Item 3 of Part II of this Registration Statement are available for review upon written or oral request without charge. Such documents are incorporated by reference in the Section 10(a) prospectus.  All other documents required to be delivered to participants pursuant to Rule 428(b) of the Securities Act shall also be available upon written or oral request without charge.  All such requests shall be made International Energy, Inc. in writing to 216 - 1628 W. 1st Avenue, Vancouver, British Columbia  V6J 1G1, Canada, attention: Derek Cooper, President, or by phone at (604) 659-5005.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3.  Incorporation Of Certain Documents By Reference.
The following documents filed by us with the Securities and Exchange Commission are incorporated herein by reference and made a part hereof:
1.
Our latest Annual Report on Form 10KSB for the fiscal year ended March 31, 2005, filed pursuant to Section 13(a) of the Exchange Act;
2.
Our latest Quarterly Report on Form 10QSB for the period ended June 30, 2005.
3.
The description of our securities contained in our registration statement on Form SB-2 filed with the Commission on December 18, 2000.
4.
Forms 8-K that we subsequently file with the SEC may be incorporated by reference in this Prospectus by our identifying in such forms that they are being incorporated by reference into this Prospectus.
All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
Item 4.  Description Of Securities.
The description of our securities is incorporated by reference to our registration statement on Form SB-2 filed with the Commission on December 18, 2000.
See Item 8. Exhibits
Item 5.  Interests Of Named Experts And Counsel
Not Applicable
Item 6.  Indemnification Of Directors And Officers.
Section  78.7502  of  the  Nevada  Revised  Statutes  contains   provisions  for indemnification  of the  officers  and  directors  of the  Company.  Nevada  law provides for  indemnification  (which may eliminate any personal  liability of a director  to the  Company or its  shareholders  for  monetary  damages for gross negligence or lack of care in carrying out the director's fiduciary duties) if a director or officer acts in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the Company.  A director or officer may be indemnified as to any matter in which he successfully defends himself.
The officers and directors of the Company are accountable to the shareholders of the Company as fiduciaries, which means such officers and directors are required to exercise good faith and integrity in handling the Company's affairs.
A shareholder may be able to institute legal action on behalf of himself and all other similarly situated  shareholders to recover damages where the Company has failed or refused to observe the law.  Shareholders  may,  subject to applicable rules of civil procedure,  be able to bring a class action or derivative suit to enforce  their  rights,   including  rights  under  certain  federal  and  state securities  laws and  regulations.  Shareholders  who have  suffered  losses  in connection  with the purchase or sale of their  interest in the Company due to a breach  of a  fiduciary  duty  by an  officer  or  director  of the  Company  in connection  with  such sale or  purchase  including,  but not  limited  to,  the misapplication  by any such officer or director of the proceeds from the sale of any securities, may be able to recover such losses from the Company.
Insofar as indemnification  for liabilities arising under the Securities Act may be  permitted to  directors,  officers  and  controlling  persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the  Commission  such  indemnification  is against public policy as expressed in the Securities Act and is, therefore,  unenforceable.  In the event that a claim for indemnification  against such liabilities (other than the payment by the Company of expenses  incurred or paid by a director,  officer or controlling  person of the Company in the  successful  defense or any action, suit or proceeding) is asserted by such director,  officer or controlling person in connection with the securities being registered,  the Company 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  Securities Act and will be governed by the final adjudication of such issue.
The Company has no agreements with any of its directors or executive officers providing for indemnification of any such persons with respect to liability arising out of their capacity or status as officers and directors.
At present, there is no pending litigation or proceeding involving a director or executive officers of the Company as to which indemnification is being sought.
ITEM 7.  Exemption From Registration Claimed.
Not applicable.
ITEM 8.  Exhibits.
3.1
Articles of Incorporation, as amended, of the Company incorporated by reference and included in the Company's Registration Statement on Form SB-2 filed on December 18, 2000.
3.2
By-laws of the Company incorporated by reference and included in the Company's Registration Statement on Form SB-2 filed on December 18, 2000.
5.1
Legal Opinion of Sierchio Greco & Greco, LLP.
23.1
Consent of Ernst & Young LLP.
23.2
Consent of Sierchio Greco & Greco, LLP. (included in Exhibit 5.1)
99.1
International Energy, Inc. – 2002 Incentive Stock Plan
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 to include any additional or changed material information on the plan of distribution.
(2)
That for the purpose of determining any liability under the Securities Act, 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 the 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 Section 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 the 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 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 Securities 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
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 requirements  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 Vancouver,  Province of British Columbia,  Canada on this 24th day of August, 2005.
INTERNATIONAL ENERGY, INC.
Signature
Title
Date
/s/ Derek Cooper
President, CEO and
August 24, 2005
Derek Cooper
Director
/s/ Harmel S. Rayat
Secretary, Treasurer
August 24, 2005
Harmel S. Rayat
and Director
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 date indicated.
Signature
Title
Date
/s/ Derek Cooper
President, CEO and
August 24, 2005
Derek Cooper
Director
/s/ Harmel S. Rayat
Secretary, Treasurer
August 24, 2005
Harmel S. Rayat
and Director
Form S-8
International Energy, Inc.
2002 – Incentive Stock Plan
EXHIBIT INDEX
Exhibit
Exhibit
Number
Description
3.1
Articles of Incorporation, as amended, of the Company incorporated by reference and included in the Company's Registration Statement on Form SB-2 filed on December 18, 2000.
3.2
By-laws of the Company incorporated by reference and included in the Company's Registration Statement on Form SB-2 filed on December 18, 2000.
5.1
Legal Opinion of Sierchio Greco & Greco, LLP.
23.1
Consent of Ernst & Young LLP.
23.2
Consent of Sierchio Greco & Greco, LLP. (included in Exhibit 5.1)
99.1
International Energy, Inc. – 2002 Incentive Stock Plan
EXHIBIT 5.1
SIERCHIO GRECO & GRECO, LLP
720 Fifth Avenue
New York, New York 10019
Telephone: (212) 246-3030
Facsimile: (212) 246-2225
August 24, 2005
International Energy, Inc
216 – 1628 West 1st Avenue
Vancouver, BC, V6J 1G1
Canada
Re:
International Energy, Inc
Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration Statement"), of  International Energy, Inc, a Nevada corporation (the "Company"), to be filed with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), in connection with the offering by the Company of up to 20,000,000 shares of the Company's common stock (the "Shares") under the International Energy, Inc., 2002 Incentive Stock Plan (the "Plan").
In rendering this opinion, we have relied upon, among other things, our examination of certain records of the Company, including, without limitation, the Company's Articles of Incorporation, the Company's By-Laws, and resolutions of the Board of Directors. We have also examined certificates of the Company's officers and of public officials and have reviewed such questions of law and made such other inquiries, as we have deemed necessary or appropriate for the purpose of rendering this opinion. As to various questions of fact material to this opinion, we have also relied upon representations and warranties of the Company and upon such certificates and other instruments of officers of the Company and public officials furnished to us by the Company, in each case without independent investigation or verification.
In addition, without any independent investigation or verification, we have assumed (i) the genuineness of all signatures, (ii) the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as certified, conformed or photostatic copies, (iii) the authority of all persons signing any document other than the officers of the Company, where applicable, signing in their capacity as such, (iv) the enforceability of all the documents we have reviewed in accordance with their respective terms against the parties thereto, and (v) the truth and accuracy of all matters of fact set forth in all certificates and other instruments furnished to us.
Based upon the foregoing examination and in reliance thereon, and subject to the assumptions stated and in reliance on statements of fact contained in the documents that we have examined, we are of the opinion that the Shares when issued against payment therefore will be validly issued, fully paid and non-assessable.
No opinion is expressed herein with respect to any laws other than Chapter 78 of the Nevada Revised Statutes. No opinion is expressed as to the effect that the law of any other jurisdiction may have upon the subject matter of the opinion expressed herein under conflicts of law principles, rules and regulations or otherwise. We assume no obligation to supplement this letter if any applicable laws change after the date hereof or if we become aware of any new facts that might effect any view expressed herein after the date hereof.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission.
The foregoing opinion is delivered to the Board of Directors of the Company in connection with the Registration Statement, and may not be relied upon by any other person or for any other purpose.
Very truly yours,
/s/ Sierchio Greco & Greco, LLP
Sierchio Greco& Greco, LLP
EXHIBIT 23.1
[ERNST & YOUNG, LLP LOGO]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to International Energy, Inc. 2002 - Incentive Stock Plan, to our report dated June 23, 2005, with respect to the financial statements of International Energy, Inc., included in its Annual Report (Form 10KSB) for the year ended March 31, 2005, filed with the Securities and Exchange Commission and all references to our firm included in this Form S-8.
Vancouver, BC
/s/ Ernst & Young LLP
August 24, 2005
Chartered Accountants
EXHIBIT 23.2
CONSENT OF SIERCHIO GRECO & GRECO, LLP.
(Included in Exhibit 5.1)
EXHIBIT 99.1
International Energy, Inc.
(Formerly e.Deal.net, Inc.)
2002 Incentive Stock Plan
1.
Objectives.
The International Energy, Inc. 2002 Incentive Stock Plan (the "Plan") is designed to retain directors, executives and selected employees and consultants and reward them for making major contributions to the success of the Company. These objectives are accomplished by making long-term incentive awards under the Plan thereby providing Participants with a proprietary interest in the growth and performance of the Company.
2.
Definitions.
(a)
"Board"
- The Board of Directors of the Company.
(b)
"Nevada Securities Rules"
– Chapter 90 of Title 7 of the corporate securities rules of the state of Nevada.
(c)
"Code"
- The Internal Revenue Code of 1986, as amended from time to time.
(d)
"Committee"
- The Executive Compensation Committee of the Company's Board, or such other committee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated by Rule 16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(e)
"Company"
– International Energy, Inc. and its subsidiaries including subsidiaries of subsidiaries.
(f)
"Exchange Act"
- The Securities Exchange Act of 1934, as amended from time to time.
(g)
"Fair Market Value"
- The fair market value of the Company's issued and outstanding Stock as determined in good faith by the Board or Committee.
(h)
"Grant"
- The grant of any form of stock option, stock award, or stock purchase offer, whether granted singly, in combination or in tandem, to a Participant pursuant to such terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of the Plan.
(i)
"Grant Agreement"
- An agreement between the Company and a Participant that sets forth the terms, conditions and limitations applicable to a Grant.
(j)
"Option"
- Either an Incentive Stock Option, in accordance with Section 422 of Code, or a Nonstatutory Option, to purchase the Company's Stock that may be awarded to a Participant under the Plan. A Participant who receives an award of an Option shall be referred to as an "Optionee."
(k)
"Participant"
- A director, officer, employee or consultant of the Company to whom an Award has been made under the Plan.
(l)
"Restricted Stock Purchase Offer"
- A Grant of the right to purchase a specified number of shares of Stock pursuant to a written agreement issued under the Plan.
(m)
"Securities Act"
- The Securities Act of 1933, as amended from time to time.
(n)
"Stock"
- Authorized and issued or unissued shares of common stock of the Company.
(o)
"Stock Award"
- A Grant made under the Plan in stock or denominated in units of stock for which the Participant is not obligated to pay additional consideration.
3.
Administration.
The Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Incentive Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan's administration. The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant made thereunder.
4.
Eligibility.
(a)
General:
The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director of the Company subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the requirements of Rule 16b-3.
(b)
Incentive Stock Options:
Incentive Stock Options may only be issued to employees of the Company. Incentive Stock Options may be granted to officers or directors, provided they are also employees of the Company. Payment of a director's fee shall not be sufficient to constitute employment by the Company.
The Company shall not grant an Incentive Stock Option under the Plan to any employee if such Grant would result in such employee holding the right to exercise for the first time in any one calendar year, under all Incentive Stock Options granted under the Plan or any other plan maintained by the Company, with respect to shares of Stock having an aggregate fair market value, determined as of the date of the Option is granted, in excess of $100,000. Should it be determined that an Incentive Stock Option granted under the Plan exceeds such maximum for any reason other than a failure in good faith to value the Stock subject to such option, the excess portion of such option shall be considered a Nonstatutory Option. To the extent the employee holds two (2) or more such Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in which such Options are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding such maximum, such Option shall be considered a Nonstatutory Option.
(c)
Nonstatutory Option:
The provisions of the foregoing Section 4(b) shall not apply to any Option designated as a "Nonstatutory Option" or which sets forth the intention of the parties that the Option be a Nonstatutory Option.
(d)
Stock Awards and Restricted Stock Purchase Offers:
The provisions of this Section 4 shall not apply to any Stock Award or Restricted Stock Purchase Offer under the Plan.
5.
Stock.
(a)
Authorized Stock:
Stock subject to Grants may be either unissued or reacquired Stock.
(b)
Number of Shares:
Subject to adjustment as provided in Section 6(i) of the Plan, the total number of shares of Stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through exercise of Options granted under the Plan shall not exceed 20,000,000. If any Grant shall for any reason terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered by a Grant.
(c)
Reservation of Shares:
The Company shall reserve and keep available at all times during the term of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority was so deemed necessary unless and until such authority is obtained.
(d)
Application of Funds
.  The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights under Stock Purchase Agreements will be used for general corporate purposes.
(e)
No Obligation to Exercise
.  The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under such Grant.
6.
Terms and Conditions of Options.
Options granted hereunder shall be evidenced by agreements between the Company and the respective Optionees, in such form and substance as the Board or Committee shall from time to time approve. The form of Incentive Stock Option Agreement attached hereto as Exhibit "A" and the three forms of a Nonstatutory Stock Option Agreement for employees, for directors and for consultants, attached hereto as Exhibits "B-1," "B-2" and "B-3," respectively, shall be deemed to be approved by the Board. Option agreements need not be identical, and in each case may include such provisions as the Board or Committee may determine, but all such agreements shall be subject to and limited by the following terms and conditions:
(a)
Number of Shares:
Each Option shall state the number of shares to which it pertains.
(b)
Exercise Price:
Each Option shall state the exercise price, which shall be determined as follows:
(i)
Any Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of stock of the Company ("Ten Percent Holder") shall have an exercise price of no less than 110% of the Fair Market Value of the Stock as of the date of grant; and
(ii)
Incentive Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the date of grant.
For the purposes of this Section 6(b), the Fair Market Value shall be as determined by the Board in good faith, which determination shall be conclusive and binding; provided however, that if there is a public market for such Stock, the Fair Market Value per share shall be the average of the bid and asked prices (or the closing price if such stock is listed on the NASDAQ National Market System or Small Cap Issue Market) on the date of grant of the Option, or if listed on a stock exchange, the closing price on such exchange on such date of grant.
(c)
Medium and Time of Payment:
The exercise price shall become immediately due upon exercise of the Option and shall be paid in cash or check made payable to the Company. Should the Company's outstanding Stock be registered under Section 12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows:
(i)
in shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at Fair Market Value on the exercise date, or
(ii)
through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions (a) to a Company designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction.
At the discretion of the Board, exercisable either at the time of Option grant or of Option exercise, the exercise price may also be paid (i) by Optionee's delivery of a promissory note in form and substance satisfactory to the Company and permissible under the securities rules of the State of Nevada and bearing interest at a rate determined by the Board in its sole discretion, but in no event less than the minimum rate of interest required to avoid the imputation of compensation income to the Optionee under the Federal tax laws, or (ii) in such other form of consideration permitted by the Nevada corporations law as may be acceptable to the Board.
(d)
Term and Exercise of Options:
Any Option granted to an employee of the Company shall become exercisable over a period of no longer than five (5) years, and no less than twenty percent (20%) of the shares covered thereby shall become exercisable annually. No Option shall be exercisable, in whole or in part, prior to one (1) year from the date it is granted unless the Board shall specifically determine otherwise, as provided herein. In no event shall any Option be exercisable after the expiration of ten (10) years from the date it is granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be exercisable after the expiration of five (5) years from the date of the Option. Unless otherwise specified by the Board or the Committee in the resolution authorizing such Option, the date of grant of an Option shall be deemed to be the date upon which the Board or the Committee authorizes the granting of such Option.
Each Option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective Option agreements may provide. During the lifetime of an Optionee, the Option shall be exercisable only by the Optionee and shall not be assignable or transferable by the Optionee, and no other person shall acquire any rights therein. To the extent not exercised, installments (if more than one) shall accumulate, but shall be exercisable, in whole or in part, only during the period for exercise as stated in the Option agreement, whether or not other installments are then exercisable.
(e)
Termination of Status as Employee, Consultant or Director:
If Optionee's status as an employee shall terminate for any reason other than Optionee's disability or death, then Optionee (or if the Optionee shall die after such termination, but prior to exercise, Optionee's personal representative or the person entitled to succeed to the Option) shall have the right to exercise the portions of any of Optionee's Incentive Stock Options which were exercisable as of the date of such termination, in whole or in part, not less than 30 days nor more than three (3) months after such termination (or, in the event of "termination for cause" as that term is defined by the terms of the Plan or the Option Agreement or an employment agreement, the Option shall automatically terminate as of the termination of employment as to all shares covered by the Option).
With respect to Nonstatutory Options granted to employees, directors or consultants, the Board may specify such period for exercise, not less than 30 days (except that in the case of "termination for cause" or removal of a director, the Option shall automatically terminate as of the termination of employment or services as to shares covered by the Option, following termination of employment or services as the Board deems reasonable and appropriate. The Option may be exercised only with respect to installments that the Optionee could have exercised at the date of termination of employment or services. Nothing contained herein or in any Option granted pursuant hereto shall be construed to affect or restrict in any way the right of the Company to terminate the employment or services of an Optionee with or without cause.
(f)
Disability of Optionee:
If an Optionee is disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the three (3) month period set forth in Section 6(e) shall be a period, as determined by the Board and set forth in the Option, of not less than six months nor more than one year after such termination.
(g)
Death of Optionee:
If an Optionee dies while employed by, engaged as a consultant to, or serving as a Director of the Company, the portion of such Optionee's Option which was exercisable at the date of death may be exercised, in whole or in part, by the estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i) a period, as determined by the Board and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee's death, which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with respect to installments exercisable at the time of Optionee's death and not previously exercised by the Optionee.
(h)
Nontransferability of Option:
No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution.
(i)
Recapitalization:
Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, and the exercise price per share thereof set forth in each such Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration" by the Company.
In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a "Reorganization"), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Paragraph 6(d) of the Plan; provided, that any such right granted shall be granted to all Optionees not receiving an offer to receive substitute options on a consistent basis, and provided further, that any such exercise shall be subject to the consummation of such Reorganization.
Subject to any required action of shareholders, if the Company shall be the surviving entity in any merger or consolidation, each outstanding Option thereafter shall pertain to and apply to the securities to which a holder of shares of Stock equal to the shares subject to the Option would have been entitled by reason of such merger or consolidation.
In the event of a change in the Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares without par value into the same number of shares with a par value, the shares resulting from any such change shall be deemed to be the Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided in this Section 6(i), the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number or price of shares of Stock subject to any Option shall not be affected by, and no adjustment shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.
The Grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make any adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or any part of its business or assets.
(j)
Rights as a Shareholder:
An Optionee shall have no rights as a shareholder with respect to any shares covered by an Option until the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 6(i) hereof.
(k)
Modification, Acceleration, Extension, and Renewal of Options:
Subject to the terms and conditions and within the limitations of the Plan, the Board may modify an Option, or, once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options (to the extent not theretofore exercised) and authorize the granting of new Options in substitution for such Options, provided such action is permissible under Section 422 of the Code and the Nevada securities rules. Notwithstanding the provisions of this Section 6(k), however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights or obligations under any Option theretofore granted under the Plan.
(l)
Exercise Before Exercise Date:
At the discretion of the Board, the Option may, but need not, include a provision whereby the Optionee may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option or any installment thereof. Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon termination of Optionee's employment as contemplated by Section 6(n) hereof prior to the exercise date stated in the Option and such other restrictions and conditions as the Board or Committee may deem advisable.
(m)
Other Provisions:
The Option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the Options, as the Board or the Committee shall deem advisable. Shares shall not be issued pursuant to the exercise of an Option, if the exercise of such Option or the issuance of shares thereunder would violate, in the opinion of legal counsel for the Company, the provisions of any applicable law or the rules or regulations of any applicable governmental or administrative agency or body, such as the Code, the Securities Act, the Exchange Act, the Nevada securities rules,  Nevada corporation law, and the rules promulgated under the foregoing or the rules and regulations of any exchange upon which the shares of the Company are listed. Without limiting the generality of the foregoing, the exercise of each Option shall be subject to the condition that if at any time the Company shall determine that (i) the satisfaction of withholding tax or other similar liabilities, or (ii) the listing, registration or qualification of any shares covered by such exercise upon any securities exchange or under any state or federal law, or (iii) the consent or approval of any regulatory body, or (iv) the perfection of any exemption from any such withholding, listing, registration, qualification, consent or approval is necessary or desirable in connection with such exercise or the issuance of shares thereunder, then in any such event, such exercise shall not be effective unless such withholding, listing registration, qualification, consent, approval or exemption shall have been effected, obtained or perfected free of any conditions not acceptable to the Company.
(n)
Repurchase Agreement:
The Board may, in its discretion, require as a condition to the Grant of an Option hereunder, that an Optionee execute an agreement with the Company, in form and substance satisfactory to the Board in its discretion ("Repurchase Agreement"), (i) restricting the Optionee's right to transfer shares purchased under such Option without first offering such shares to the Company or another shareholder of the Company upon the same terms and conditions as provided therein; and (ii) providing that upon termination of Optionee's employment with the Company, for any reason, the Company (or another shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his or her employment at a price equal to (A) the fair value of such shares as of such date of termination, or (B) if such repurchase right lapses at 20% of the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible under the Nevada securities rules; provided that in the case of Options or Stock Awards granted to officers, directors, consultants or affiliates of the Company, such repurchase provisions may be subject to additional or greater restrictions as determined by the Board or Committee.
7.
Stock Awards and Restricted Stock Purchase Offers.
(a)
Types of Grants.
(i)
Stock Award.
All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company performance. Such Awards may be based on Fair Market Value or other specified valuation. All Stock Awards will be made pursuant to the execution of a Stock Award Agreement substantially in the form attached hereto as Exhibit "C".
(ii)
Restricted Stock Purchase Offer.
A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies related to the Participant's continued association with the Company for a specified time and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan. All Restricted Stock Purchase Offers shall be made pursuant to a Restricted Stock Purchase Offer substantially in the form attached hereto as Exhibit "D".
(b)
Conditions and Restrictions.
Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as "Restricted Stock". Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance with the provisions of Section 7(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee may establish.
(c)
Cancellation and Rescission of Grants.
Unless the Stock Award Agreement or Restricted Stock Purchase Offer specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if the Participant is not in compliance with all other applicable provisions of the Stock Award Agreement or Restricted Stock Purchase Offer, the Plan and with the following conditions:
(i)
A Participant shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Board or Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company. For Participants whose employment has terminated, the judgment of the chief executive officer shall be based on the Participant's position and responsibilities while employed by the Company, the Participant's post-employment responsibilities and position with the other organization or business, the extent of past, current and potential competition or conflict between the Company and the other organization or business, the effect on the Company's customers, suppliers and competitors and such other considerations as are deemed relevant given the applicable facts and circumstances. A Participant who has retired shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent a substantial investment to the Participant or a greater than 10 percent equity interest in the organization or business.
(ii)
A Participant shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company's business, any confidential information or material, as defined in the Company's Proprietary Information and Invention Agreement or similar agreement regarding confidential information and intellectual property, relating to the business of the Company, acquired by the Participant either during or after employment with the Company.
(iii)
A Participant, pursuant to the Company's Proprietary Information and Invention Agreement, shall disclose promptly and assign to the Company all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company and shall do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in foreign countries.
(iv)
Upon exercise, payment or delivery pursuant to a Grant, the Participant shall certify on a form acceptable to the Committee that he or she is in compliance with the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 7(c) prior to, or during the six months after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment or delivery to be rescinded. The Company shall notify the Participant in writing of any such rescission within two years after such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, the Participant shall pay to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to a Grant. Such payment shall be made either in cash or by returning to the Company the number of shares of Stock that the Participant received in connection with the rescinded exercise, payment or delivery.
(d)
Nonassignability.
(i)
Except pursuant to Section 7(e)(iii) and except as set forth in Section 7(d)(ii), no Grant or any other benefit under the Plan shall be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted.
(ii)
Where a Participant terminates employment and retains a Grant pursuant to Section 7(e)(ii) in order to assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by law, may authorize a third party (including but not limited to the trustee of a "blind" trust), acceptable to the applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant with regard to such Awards.
(e)
Termination of Employment.
If the employment or service to the Company of a Participant terminates, other than pursuant to any of the following provisions under this Section 7(e), all unexercised, deferred and unpaid Stock Awards or Restricted Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise:
(i)
Retirement Under a Company Retirement Plan.
When a Participant's employment terminates as a result of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability and vesting of any such Grants may be accelerated.
(ii)
Rights in the Best Interests of the Company.
When a Participant resigns from the Company and, in the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 10 or at such time as the Board or Committee shall deem the continuation of all or any part of the Participant's Grants are not in the Company's best interest.
(iii)
Death or Disability of a Participant.
(1)
In the event of a Participant's death, the Participant's estate or beneficiaries shall have a period up to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were living.
(2)
In the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination for cause, Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally designated guardian or representative if the Participant is legally incompetent by virtue of such disability.
(3)
After the death or disability of a Participant, the Board or Committee may in its sole discretion at any time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to pay the total of any accelerated payments in a lump sum to the Participant, the Participant's estate, beneficiaries or representative -- notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under the Grant might ultimately have become payable to other beneficiaries.
(4)
In the event of uncertainty as to interpretation of or controversies concerning this Section 7, the determinations of the Board or Committee, as applicable, shall be binding and conclusive.
8.
Investment Intent.
All Grants under the Plan are intended to be exempt from registration under the Securities Act provided by Rule 701 thereunder. Unless and until the granting of Options or sale and issuance of Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (i) give written assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters and the ability of such person (or representative) to evaluate the merits and risks of exercising the Option, and (ii) execute and deliver to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations made upon the exercise of such rights.
9.
Amendment, Modification, Suspension or Discontinuance of the Plan.
The Board may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided, however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall not be impaired by suspension or termination of the Plan.
In the event of any change in the outstanding Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Board or the Committee may adjust proportionally (a) the number of shares of Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options and Nonstatutory Options and (iii) covered by outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding Grants; and (c) the appropriate Fair Market Value and other price determinations for such Grants. In the event of any other change affecting the Stock or any distribution (other than normal cash dividends) to holders of Stock, such adjustments as may be deemed equitable by the Board or the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction to which Section 424(a) of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants or an assumption of previously issued Grants.
10.
Tax Withholding.
The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.
11.
Availability of Information.
During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan shall be exercisable, the Company shall make available, not later than one hundred and twenty (120) days following the close of each of its fiscal years, such financial and other information regarding the Company as is required by the bylaws of the Company and applicable law to be furnished in an annual report to the shareholders of the Company.
12.
Notice.
Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the chief personnel officer or to the chief executive officer of the Company, and shall become effective when it is received by the office of the chief personnel officer or the chief executive officer.
13.
Indemnification of Board.
In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action, suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend the same.
14.
Governing Law.
The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of Nevada and construed accordingly.
15.
Effective and Termination Dates.
The Plan shall become effective on the date it is approved by the holders of a majority of the shares of Stock then outstanding. The Plan shall terminate ten years later, subject to earlier termination by the Board pursuant to Section 9.
The foregoing 2002 Incentive Stock Plan was duly adopted and approved by the Board of Directors on July 30, 2002 and approved by the shareholders of the Corporation on September 30, 2002.
/s/ Derek Cooper
Derek Cooper
President, CEO and Director
EXHIBIT A
INTERNATIONAL ENERGY, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the "Company"), and the employee of the Company named in Section 1(b). ("Optionee"):
In consideration of the covenants herein set forth, the parties hereto agree as follows:
1.
Option Information.
(a)
Date of Option:
(b)
Optionee:
(c)
Number of Shares:
(d)
Exercise Price:
2.
Acknowledgements.
(a)
Optionee is an employee of the Company.
(b)
The Board of Directors (the "Board" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the "Plan"), pursuant to which this Option is being granted.
(c)
The Board has authorized the granting to Optionee of an incentive stock option ("Option") as defined in Section 422 of the Internal Revenue Code of 1986, as amended, (the "Code") to purchase shares of common stock of the Company ("Stock") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act") provided by Rule 701 thereunder.
3.
Shares; Price.
The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the "Exercise Price"), such price being not less than the fair market value per share of the Shares covered by this Option as of the date hereof (unless Optionee is the owner of Stock possessing ten percent or more of the total voting power or value of all outstanding Stock of the Company, in which case the Exercise Price shall be no less than 110% of the fair market value of such Stock).
4.
Term of Option; Continuation of Employment.
This Option shall expire, and all rights hereunder to purchase the Shares shall terminate 10 from the date hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and as of the date of, the termination of Optionee's employment if such termination occurs prior to the end of such 10 year period. Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from the rate in existence at the date hereof.
5.
Vesting of Option.
Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term of Optionee's employment in five equal annual installments of twenty percent (20%) of the Shares covered by this Option, the first installment to be exercisable on the first anniversary of the date of this Option, with an additional twenty percent (20%) of such Shares becoming exercisable on each of the four (4) successive anniversary dates. The installments shall be cumulative (i.e., this option may be exercised, as to any or all Shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this option).
6.
Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime, except as provided in Section 8 hereof.
7.
Termination of Employment.
If Optionee shall cease to be employed by the Company for any reason, whether voluntarily or involuntarily, other than by his or her death, Optionee (or if the Optionee shall die after such termination, but prior to such exercise date, Optionee's personal representative or the person entitled to succeed to the Option) shall have the right at any time within three (3) months following such termination of employment or the remaining term of this Option, whichever is the lesser, to exercise in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date of termination of employment and had not previously been exercised; provided, however: (i) if Optionee is permanently disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the foregoing three (3) month period shall be extended to six (6) months; or (ii) if Optionee is terminated "for cause" as that term is defined by the terms of the Plan or this Option Agreement or by any employment agreement between the Optionee and the Company, this Option shall automatically terminate as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.
8.
Death of Optionee.
If the Optionee shall die while in the employ of the Company, Optionee's personal representative or the person entitled to Optionee's rights hereunder may at any time within six (6) months after the date of Optionee's death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee's death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.
9.
No Rights as Shareholder.
Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 10 hereof.
10.
Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been "effected without receipt of consideration by the Company".
In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a "Reorganization"), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.
Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.
To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.
11.
Additional Consideration.
Should the Internal Revenue Service determine that the Exercise Price established by the Board as the fair market value per Share is less than the fair market value per Share as of the date of Option grant, Optionee hereby agrees to tender such additional consideration, or agrees to tender upon exercise of all or a portion of this Option, such fair market value per Share as is determined by the Internal Revenue Service.
12.
Modification, Extension and Renewal of Options.
The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, and Section 422 of the Code. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights of Optionee hereunder.
13.
Investment Intent; Restrictions on Transfer.
(a)
Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
(b)
Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information.
(c)
Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN INCENTIVE STOCK OPTION AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
14.
Effects of Early Disposition.
Optionee understands that if an Optionee disposes of shares acquired hereunder within two (2) years after the date of this Option or within one (1) year after the date of issuance of such shares to Optionee, such Optionee will be treated for income tax purposes as having received ordinary income at the time of such disposition of an amount generally measured by the difference between the purchase price and the fair market value of such stock on the date of exercise, subject to adjustment for any tax previously paid, in addition to any tax on the difference between the sales price and Optionee's adjusted cost basis in such shares. The foregoing amount may be measured differently if Optionee is an officer, director or ten percent holder of the Company. Optionee agrees to notify the Company within ten (10) working days of any such disposition.
15.
Stand-off Agreement.
Optionee agrees that in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering.
16.
Restriction Upon Transfer.
The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.
(a)
Repurchase Right on Termination Other Than for Cause.
For the purposes of this Section, a "Repurchase Event" shall mean an occurrence of one of (i) termination of Optionee's employment by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
(b)
Repurchase Right on Termination for Cause.
In the event Optionee's employment is terminated by the Company "for cause", then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 16(a) or 16(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 16.
(d)
Right of First Refusal.
In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 16 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 16(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
(g)
Release of Restrictions on Shares.
All other restrictions under this Section 16 shall terminate five (5) years following the date of this Agreement, or when the Company's securities are publicly traded, whichever occurs earlier.
17.
Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided to the Company by Optionee for his or her employee records.
18.
Agreement Subject to Plan; Applicable Law.
This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.
International Energy, Inc.
By: ________________________________
____________________________________
Optionee
(one of the following, as appropriate, shall be signed)
I certify that as of the date
By his or her signature, the
hereof I am unmarried
spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing INCENTIVE STOCK
OPTION AGREEMENT
_____________________________
________________________________
Optionee
Spouse of Optionee
Appendix A
NOTICE OF EXERCISE
International Energy, Inc.
Suite 216 – 1628 West 1st Avenue
Vancouver, BC
V6J 1G1
Re:
Incentive Stock Option
Notice is hereby given pursuant to Section 6 of my Incentive Stock Option Agreement that I elect to purchase the number of shares set forth below at the exercise price set forth in my option agreement:
Incentive Stock Option Agreement dated: ____________
Number of shares being purchased: ____________
Exercise Price: $____________
A check in the amount of the aggregate price of the shares being purchased is attached.
I hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933, as amended, or any applicable federal or state securities laws. Further, I understand that the exemption from taxable income at the time of exercise is dependent upon my holding such stock for a period of at least one year from the date of exercise and two years from the date of grant of the Option.
I understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.
I agree to provide to the Company such additional documents or information as may be required pursuant to the Company's 2002 Incentive Stock Plan.
_________________________________
(signature)
_________________________________
(Name of Optionee)
EXHIBIT B-1
International Energy, Inc.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT ("Agreement") is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the "Company"), and the following employee of the Company ("Optionee"):
In consideration of the covenants herein set forth, the parties hereto agree as follows:
1.
Option Information.
(a)
Date of Option:
(b)
Optionee:
(c)
Number of Shares:
(d)
Exercise Price:
2.
Acknowledgements.
(a)
Optionee is an employee of the Company.
(b)
The Board of Directors (the "Board" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the "Plan"), pursuant to which this Option is being granted; and
(c)
The Board has authorized the granting to Optionee of a nonstatutory stock option ("Option") to purchase shares of common stock of the Company ("Stock") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act") provided by Rule 701 thereunder.
3.
Shares; Price.
Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other consideration as is authorized under the Plan and acceptable to the Board of Directors of the Company, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the "Exercise Price"), such price being not less than [e.g., 85%] of the fair market value per share of the Shares covered by this Option as of the date hereof.
4.
Term of Option; Continuation of Service.
This Option shall expire, and all rights hereunder to purchase the Shares shall terminate 10 years from the date hereof. This Option shall earlier terminate subject o Sections 7 and 8 hereof upon, and as of the date of, the termination of Optionee's employment if such termination occurs prior to the end of such
10
year period. Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from the rate in existence at the date hereof.
5.
Vesting of Option.
Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term of Optionee's employment in five equal annual installments of twenty percent (20%) of the Shares covered by this Option, the first installment to be exercisable on the first anniversary of the date of this Option, with an additional twenty percent (20%) of such Shares becoming exercisable on each of the four (4) successive anniversary dates. The installments shall be cumulative (i.e., this option may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this option).
6.
Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime, except as provided in Section 8 hereof.
7.
Termination of Employment.
If Optionee shall cease to be employed by the Company for any reason, whether voluntarily or involuntarily, other than by his or her death, Optionee (or if the Optionee shall die after such termination, but prior to such exercise date, Optionee's personal representative or the person entitled to succeed to the Option) shall have the right at any time within three (3) months following such termination of employment or the remaining term of this Option, whichever is the lesser, to exercise in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date of termination of employment and had not previously been exercised; provided, however: (i) if Optionee is permanently disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination, the foregoing three (3) month period shall be extended to six (6) months; or (ii) if Optionee is terminated "for cause" as that term is defined by the terms of the Plan or this Option Agreement or by any employment agreement between the Optionee and the Company, this Option shall automatically terminate as to all Shares covered by this Option not exercised prior to termination.
Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.
8.
Death of Optionee.
If the Optionee shall die while in the employ of the Company, Optionee's personal representative or the person entitled to Optionee's rights hereunder may at any time within six (6) months after the date of Optionee's death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee's death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.
9.
No Rights as Shareholder.
Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 10 hereof.
10.
Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been "effected without receipt of consideration by the Company".
In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a "Reorganization"), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.
Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.
To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.
11.
Taxation upon Exercise of Option.
Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.
12.
Modification, Extension and Renewal of Options.
The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code and the corporate securities rules of Nevada. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights of Optionee hereunder.
13.
Investment Intent; Restrictions on Transfer.
(a)
Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
(b)
Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information
(c)
Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
14.
Stand-off Agreement.
Optionee agrees that, in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering.
15.
Restriction Upon Transfer.
The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.
(a)
Repurchase Right on Termination Other Than for Cause. For the purposes of this Section, a "Repurchase Event" shall mean an occurrence of one of (i) termination of Optionee's employment by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
(b)
Repurchase Right on Termination for Cause. In the event Optionee's employment is terminated by the Company "for cause", then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
(c)
Exercise of Repurchase Right. Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.
(d)
Right of First Refusal. In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
(e)
Acceptance of Restrictions. Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
(f)
Permitted Transfers. Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
(g)
Release of Restrictions on Shares. All other restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement, or when the Company's securities are publicly traded, whichever occurs earlier.
16.
Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for his or her employee records.
17.
Agreement Subject to Plan; Applicable Law.
This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.
International Energy, Inc.
By: _________________________________
_____________________________________
Optionee
(one of the following, as appropriate, shall be signed)
I certify that as of the date
By his or her signature, the
hereof I am unmarried
spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing NONSTATUTORY STOCK
OPTION AGREEMENT
____________________________
________________________________
Optionee
Spouse of Optionee
Appendix A
NOTICE OF EXERCISE
International Energy, Inc.
Suite 216 – 1628 West 1st Avenue
Vancouver, BC
V6J 1G1
Re:
Nonstatutory Stock Option
Notice is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares set forth below at the exercise price set forth in my option agreement:
Nonstatutory Stock Option Agreement dated: ____________
Number of shares being purchased: ____________
Exercise Price: $____________
A check in the amount of the aggregate price of the shares being purchased is attached.
I hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933, as amended, or any applicable federal or state securities laws.
I understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.
Further, I understand that, as a result of this exercise of rights, I will recognize income in an amount equal to the amount by which the fair market value of the Shares exceeds the exercise price. I agree to report such income in accordance with then applicable law and to cooperate with Company in establishing the withholding and corresponding deduction to the Company for its income tax purposes.
I agree to provide to the Company such additional documents or information as may be required pursuant to the Company's 2002 Incentive Stock Plan.
_______________________________
(signature)
_______________________________
(name of Optionee)
EXHIBIT B-2
International Energy, Inc.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT ("Agreement") is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the "Company"), and the following Director of the Company ("Optionee"):
In consideration of the covenants herein set forth, the parties hereto agree as follows:
1.
Option Information.
(a)
Date of Option:
(b)
Optionee:
(c)
Number of Shares:
(d)
Exercise Price:
2.
Acknowledgements.
(a)
Optionee is a director of the Company.
(b)
The Board of Directors (the "Board" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the "Plan"), pursuant to which this Option is being granted; and
(c)
The Board has authorized the granting to Optionee of a nonstatutory stock option ("Option") to purchase shares of common stock of the Company ("Stock") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act") provided by Rule 701 thereunder.
3.
Shares; Price.
The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the "Exercise Price"), such price being not less than [e.g., 85%] of the fair market value per share of the Shares covered by this Option as of the date hereof.
4.
Term of Option; Continuation of Service.
This Option shall expire, and all rights hereunder to purchase the Shares shall terminate 10 years from the date hereof. Nothing contained herein shall be construed to interfere in any way with the right of the Company or its shareholders to remove or not elect Optionee as a Director of the Company, or to increase or decrease the compensation of Directors from the rate in effect at the date hereof.
5.
Vesting of Option.
Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term that Optionee serves as a Director of the Company in three (3) equal annual installments of thirty-three and one-third percent (33 1/3%) of the Shares covered by this Option, the first installment to be exercisable on the first anniversary of the date of this Option, with an additional thirty-three and one-third percent (33 1/3%) of such Shares becoming exercisable on each of the two (2) successive anniversary dates. The installments shall be cumulative (i.e., this option may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this Option).
6.
Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime.
7.
Termination of Service.
If Optionee shall cease to serve as a Director of the Company for any reason, no further installments shall vest pursuant to Section 5, and the maximum number of Shares that Optionee may purchase pursuant hereto shall be limited to the number of Shares that were vested as of the date Optionee ceases to be a Director (to the nearest whole Share). Thereupon, Optionee shall have the right to exercise this Option, at any time during the remaining term hereof, to the extent, but only to the extent, that this Option was exercisable as of the date Optionee ceases to be a Director; provided, however, if Optionee is removed as a Director pursuant to the Nevada corporation law, the foregoing right to exercise shall automatically terminate on the date Optionee ceases to be a Director as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.
8.
Death of Optionee.
If the Optionee shall die while a Director of the Company, Optionee's personal representative or the person entitled to Optionee's rights hereunder may at any time within six (6) months after the date of Optionee's death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee's death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.
9.
No Rights as Shareholder.
Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 7 hereof.
10
Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been "effected without receipt of consideration by the Company".
In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a "Reorganization"), this Option shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board; provided, however, if Optionee shall be a Director at the time such Reorganization is approved by the stockholders, Optionee shall have the right to exercise this Option as to all or any part of the Shares, without regard to the installment provisions of Section 5, for a period beginning 30 days prior to the consummation of such Reorganization and ending as of the Reorganization or the expiration of this Option, whichever is earlier, subject to the consummation of the Reorganization. In any event, the Company shall notify Optionee, at least 30 days prior to the consummation of such Reorganization, of his exercise rights, if any, and that the Option shall terminate upon the consummation of the Reorganization.
Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.
To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.
11.
Taxation upon Exercise of Option.
Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.
12.
Modification, Extension and Renewal of Options.
The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights of Optionee hereunder.
13.
Investment Intent; Restrictions on Transfer.
(a)
Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
(b)
Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information.
(c)
Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ______, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
14.
Stand-off Agreement.
Optionee agrees that, in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of up to one year following the effective date of registration of such offering.
15.
Restriction Upon Transfer.
The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.
(a)
Repurchase Right on Termination Other Than by Removal.
For the purposes of this Section, a "Repurchase Event" shall mean an occurrence of one of (i) termination of Optionee's service as a director; (ii) death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, and upon mutual agreement of the Company and Optionee, the Company may repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
(b)
Repurchase Right on Removal.
In the event Optionee is removed as a director "for cause" or Optionee voluntarily resigns as a director prior to the date upon which the last installment of Shares becomes exercisable pursuant to Section 5, then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal annual increments on each anniversary of the date of this Agreement over the term of this Option specified in Section 4. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon removal or resignation all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of such removal or resignation, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.
(d)
Right of First Refusal.
In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
(g)
Release of Restrictions on Shares.
All other restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement, or when the Company's securities are publicly traded, whichever occurs earlier.
16.
Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for use in Company records related to Optionee.
17.
Agreement Subject to Plan; Applicable Law.
This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.
International Energy, Inc.
By: ______________________
__________________________
Optionee
(one of the following, as appropriate, shall be signed)
I certify that as of the date
By his or her signature, the
hereof I am unmarried
spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing NONSTATUTORY STOCK
OPTION AGREEMENT
____________________________
________________________________
Optionee
Spouse of Optionee
EXHIBIT B-3
International Energy, Inc.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT ("Agreement") is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the "Company"), and the following consultant to the Company (herein, the "Optionee"):
In consideration of the covenants herein set forth, the parties hereto agree as follows:
1.
Option Information.
(a)  Date of Option:
(b)  Optionee:
(c)  Number of Shares:
(d)  Exercise Price:
2.
Acknowledgements.
(a)  Optionee is an independent consultant to the Company, not an employee;
(b)  The Board of Directors (the "Board" which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2002 Incentive Stock Plan (the "Plan"), pursuant to which this Option is being granted; and
(c)  The Board has authorized the granting to Optionee of a nonstatutory stock option ("Option") to purchase shares of common stock of the Company ("Stock") upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act") provided by Rule 701 thereunder.
3.
Shares; Price.
The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the "Exercise Price"), such price being not less than [e.g. 85%] of the fair market value per share of the Shares covered by this Option as of the date hereof.
4.
Term of Option.
This Option shall expire, and all rights hereunder to purchase the Shares, shall terminate 10 years from the date hereof. Nothing contained herein shall be construed to interfere in any way with the right of the Company to terminate Optionee as a consultant to the Company, or to increase or decrease the compensation paid to Optionee from the rate in effect as of the date hereof.
5.
Vesting of Option.
Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the period that Optionee serves as a consultant of the Company in equal annual installments, each installment covering a fraction of the Shares, the numerator of which is one (1) and the denominator of which is the number of years in the term of this Option (not to exceed 5). The first installment shall become exercisable on the first anniversary of the date of this Option, and an additional installment shall become exercisable on each successive anniversary date during the term of this Option, except the last such anniversary date. The final installment shall become exercisable ninety days prior to the expiration of the term of this Option. The installments shall be cumulative (i.e., this option may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this option).
6.
Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime.
7.
Termination of Service.
If Optionee's service as a consultant to the Company terminates for any reason, no further installments shall vest pursuant to Section 5, and Optionee shall have the right at any time within thirty (30) days following such termination of services or the remaining term of this Option, whichever is the lesser, to exercise in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date Optionee ceased to be a consultant to the Company; provided, however, if Optionee is terminated for reasons that would justify a termination of employment "for cause," the foregoing right to exercise shall automatically terminate on the date Optionee ceases to be a consultant to the Company as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.
8.
Death of Optionee.
If the Optionee shall die while serving as a consultant to the Company, Optionee's personal representative or the person entitled to Optionee's rights hereunder may at any time within ninety (90) days after the date of Optionee's death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee's death; provided, in any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.
9.
No Rights as Shareholder.
Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of the issuance of shares following exercise of this to Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 10 hereof.
10.
Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been "effected without receipt of consideration by the Company."
In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a "Reorganization"), this Option shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board; provided, however, if Optionee shall be a consultant at the time such Reorganization is approved by the stockholders, Optionee shall have the right to exercise this Option as to all or any part of the Shares, without regard to the installment provisions of Section 5, for a period beginning 30 days prior to the consummation of such Reorganization and ending as of the Reorganization or the expiration of this Option, whichever is earlier, subject to the consummation of the Reorganization. In any event, the Company shall notify Optionee, at least 30 days prior to the consummation of such Reorganization, of his exercise rights, if any, and that the Option shall terminate upon the consummation of the Reorganization.
Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.
In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.
To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.
The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.
11.
Taxation upon Exercise of Option.
Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.
12.
Modification, Extension and Renewal of Options.
The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee's detriment or impair any rights of Optionee hereunder.
13.
Investment Intent; Restrictions on Transfer.
(a)  Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
(b)  Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information.
(c)  Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ___________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
14.
Stand-off Agreement.
Optionee agrees that, in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of up to one year following the effective date of registration of such offering.
15.
Restriction Upon Transfer.
The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.
(a)
Repurchase Right on Termination Other Than for Cause.
For the purposes of this Section, a "Repurchase Event" shall mean an occurrence of one of (i) termination of Optionee's service as a consultant, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of the Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
(b)
Repurchase Right on Termination for Cause.
In the event Optionee's service as a consultant is terminated by the Company "for cause" (as contemplated by Section 7), then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal annual increments on each anniversary of the date of this Agreement over the term of this Option specified in Section 4. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon any such termination of service for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
(c)
Exercise of Repurchase Right.
Any repurchase right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.
(d)
Right of First Refusal.
In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Optionee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.
(g)
Release of Restrictions on Shares.
All rights and restrictions under this Section 15 shall terminate five (5) years following the date of this Agreement, or when the Company's securities are publicly traded, whichever occurs earlier.
16.
Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for use in Company records related to Optionee.
17.
Agreement Subject to Plan; Applicable Law.
This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.
IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.
International Energy, Inc.
By: ______________________
__________________________
Optionee
(one of the following, as appropriate, shall be signed)
I certify that as of the date
By his or her signature, the
hereof I am unmarried
spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing RESTRICTED STOCK
PURCHASE AGREEMENT
____________________________
________________________________
Optionee
Spouse of Optionee
Appendix A
NOTICE OF EXERCISE
International Energy, Inc.
Suite 216 1628 West 1st Avenue
Vancouver, BC
V6J 1G1
Re: Nonstatutory Stock Option
Notice is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares set forth below at the exercise price set forth in my option agreement:
Nonstatutory Stock Option Agreement dated: ____________
Number of shares being purchased: ____________
Exercise Price: $____________
A check in the amount of the aggregate price of the shares being purchased is attached.
I hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933, as amended, or any applicable federal or state securities laws.
I understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.
Further, I understand that, as a result of this exercise of rights, I will recognize income in an amount equal to the amount by which the fair market value of the Shares exceeds the exercise price. I agree to report such income in accordance with then applicable law and to cooperate with Company in establishing the withholding and corresponding deduction to the Company for its income tax purposes.
I agree to provide to the Company such additional documents or information as may be required pursuant to the Company's 2002 Incentive Stock Plan.
__________________________
(signature)
__________________________
(name of Optionee)
EXHIBIT C
International Energy, Inc.
STOCK AWARD AGREEMENT
THIS STOCK AWARD AGREEMENT ("Agreement") is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the "Company"), and the employee, director or consultant of the Company named in Section 1(b). ("Grantee"):
In consideration of the covenants herein set forth, the parties hereto agree as follows:
1.
Stock Award Information.
(a)  Date of Award:
(b)  Grantee:
(c)  Number of Shares:
(d)  Original Value:
2.
Acknowledgements.
(a)  Grantee is a [employee/director/consultant] of the Company.
(b)  The Company has adopted a 2002 Incentive Stock Plan (the "Plan") under which the Company's common stock ("Stock") may be offered to directors, officers, employees and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act") provided by Rule 701 thereunder.
3.
Shares; Value.
The Company hereby grants to Grantee, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) (the "Shares"), which Shares have a fair value per share ("Original Value") equal to the amount set forth in Section 1(d). For the purpose of this Agreement, the terms "Share" or "Shares" shall include the original Shares plus any shares derived therefrom, regardless of the fact that the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation, stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement and the Original Value thereof shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.
4.
Investment Intent.
Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
5.
Restriction Upon Transfer.
The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Grantee except as hereinafter provided.
(a)
Repurchase Right on Termination Other Than for Cause.
For the purposes of this Section, a "Repurchase Event" shall mean an occurrence of one of (i) termination of Grantee's employment [or service as a director/consultant] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to purchase all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
(b)
Repurchase Right on Termination for Cause.
In the event Grantee's employment [or service as a director/consultant] is terminated by the Company "for cause" (as defined below), then the Company shall have the right (but not an obligation) to purchase Shares of Grantee at a price equal to the Original Value. Such right of the Company to purchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [or service as a director/consultant] "for cause" means (i) as to employees or consultants, termination for cause as defined in the Plan, this Agreement or in any employment [or consulting] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Nevada corporation law. In the event the Company elects to purchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.
(d)
Right of First Refusal.
In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Grantee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.
(g)
Release of Restrictions on Shares.
All rights and restrictions under this Section 5 shall terminate five (5) years following the date of this Agreement, or when the Company's securities are publicly traded, whichever occurs earlier.
6.
Representations and Warranties of the Grantee.
This Agreement and the issuance and grant of the Shares hereunder is made by the Company in reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:
(a)  The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;
(b)  The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and
(c)  Grantee further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information reasonably necessary to verify the accuracy of such information,
(d)
Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN STOCK AWARD AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
(e)  Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of grant, exceeds the price paid by Grantee, if any. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.
7.
Stand-off Agreement.
Grantee agrees that, in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any termination of this Agreement.
8.
Termination of Agreement.
This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public offering of common stock of the Company pursuant to an effective registration statement under the Securities Act; or (d) dissolution, bankruptcy, or insolvency of the Company.
9.
Agreement Subject to Plan; Applicable Law.
This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Grant shall be governed by the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts therein.
10.
Miscellaneous.
(a)
Notices.
Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company's records.
(b)
Entire Agreement.
This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.
(c)
Enforcement.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in Douglas County, state of Nevada. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.
(d)
Validity of Agreement.
The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
International Energy, Inc.
By: ______________________
__________________________
Grantee
(one of the following, as appropriate, shall be signed)
I certify that as of the date
By his or her signature, the
hereof I am unmarried
spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing STOCK AWARD
AGREEMENT
____________________________
________________________________
Grantee
Spouse of Grantee
EXHIBIT "D"
International Energy, Inc.
RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into as of the date set forth below, by and between International Energy, Inc., a Nevada corporation (the "Company"), and the employee, director or consultant of the Company named in Section 1(b). ("Grantee"):
In consideration of the covenants herein set forth, the parties hereto agree as follows:
1.
Stock Purchase Information.
(a)  Date of Agreement:
(b)  Grantee:
(c)  Number of Shares:
(d)  Price per Share:
2.
Acknowledgements.
(a)  Grantee is a [employee/director/consultant] of the Company.
(b)  The Company has adopted a 2002 Incentive Stock Plan (the "Plan") under which the Company's common stock ("Stock") may be offered to officers, employees, directors and consultants pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act") provided by Rule 701 thereunder.
(c)  The Grantee desires to purchase shares of the Company's common stock on the terms and conditions set forth herein.
3.
Purchase of Shares.
The Company hereby agrees to sell and Grantee hereby agrees to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) (the "Shares"), at the price per Share set forth in Section 1(d) (the "Price"). For the purpose of this Agreement, the terms "Share" or "Shares" shall include the original Shares plus any shares derived therefrom, regardless of the fact that the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation, stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.
4.
Investment Intent.
Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.
5.
Restriction Upon Transfer.
The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Grantee except as hereinafter provided.
(a)  Repurchase Right on Termination Other Than for Cause. For the purposes of this Section, a "Repurchase Event" shall mean an occurrence of one of (i) termination of Grantee's employment [or service as a director/consultant] by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the sole and separate property of Grantee's spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Grantee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.
(b) Repurchase Right on Termination for Cause. In the event Grantee's employment [or service as a director/consultant] is terminated by the Company "for cause" (as defined below), then the Company shall have the right (but not an obligation) to repurchase Shares of Grantee at a price equal to the Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. Termination of employment [or service as a director/consultant] "for cause" means (i) as to employees and consultants, termination for cause as defined in the Plan, this Agreement or in any employment [or consulting] agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Nevada corporation law. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.
(c)
Exercise of Repurchase Right.
Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.
(d)
Right of First Refusal.
In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
(e)
Acceptance of Restrictions.
Acceptance of the Shares shall constitute the Grantee's agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
(f)
Permitted Transfers.
Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Grantee and the Company.
(g)
Release of Restrictions on Shares.
All rights and restrictions under this Section 5 shall terminate five (5) years following the date upon which the Company receives the full Price as set forth in Section 3, or when the Company's securities are publicly traded, whichever occurs earlier.
6.
Representations and Warranties of the Grantee.
This Agreement and the issuance and grant of the Shares hereunder is made by the Company in reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:
(a)  The Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other things, upon the bona fide nature of his representations as expressed herein;
(b)  The Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption; and
(c)  Grantee further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information reasonably necessary to verify the accuracy of such information,
(d)  Unless and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT DATED ____________, 2002, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company's transfer agent.
(e)  Grantee understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the date of Grant, exceeds the price paid by Grantee. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee's then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such liability.
7.
Stand-off Agreement.
Grantee agrees that, in connection with any registration of the Company's securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any termination of this Agreement.
8.
Termination of Agreement.
This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public offering of common stock of the Company pursuant to an effective registration statement under the Act; or (d) dissolution, bankruptcy, or insolvency of the Company.
9.
Agreement Subject to Plan; Applicable Law.
This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Grant shall be governed by the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts therein.
10.
Miscellaneous.
(a)
Notices.
Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company's records.
(b)
Entire Agreement.
This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.
(c)
Enforcement.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in Douglas County, state of Nevada. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.
(d)
Validity of Agreement.
The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
International Energy, Inc.
By: ______________________
__________________________
Grantee
(one of the following, as appropriate, shall be signed)
I certify that as of the date
By his or her signature, the
hereof I am unmarried
spouse of Optionee hereby agrees
to be bound by the provisions of
the foregoing RESTRICTED STOCK
PURCHASE AGREEMENT
____________________________
________________________________
Grantee
Spouse of Grantee