Item 5.02 Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On
October 30, 2009, pursuant to the execution of nonqualified stock option
agreements, we granted options to purchase 6,000,000 shares of our common stock
in exchange for the return and cancellation of 6,500,000 restricted shares of
common stock currently held by our three directors and two
officers. The options have a five-year term and an exercise price of
$0.05, which exceeded the volume weighted average closing price of our stock on
the five trading days prior to the grant. Per the terms of the
nonqualified stock option agreements, the options vest immediately and
will expire five years from date of grant or ninety (90) days subsequent to
the termination of employment or membership on the Company’s board of directors,
whichever occurs earlier.
In
addition, on October 30, 2009, our board of directors approved the renewal of
the Amended Employment Agreements for Brad Colby, our President and Chief
Executive Officer, and Craig Phelps, our Vice President of Engineering, for a
period of two years. The terms of employment and annual compensation
amounts included in the renewed employment agreements are substantially the same
as the predecessor agreements. The renewed employment agreements do
not include any additional stock option grants or any form of advance
compensation.
SECTION
8 – OTHER EVENTS
ITEM
8.01 Other Events.
We issued
a press release on October 30, 2009, in which we announced the grant of the
stock options and return and cancellation of the restricted stock.
SECTION
9 – FINANCIAL STATEMENTS AND EXHIBITS
ITEM
9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit
Number
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Description
of Document
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99.1
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Press
Release dated October 30, 2009.
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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Date: October
30, 2009
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ETERNAL
ENERGY CORP.
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By:
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/s/ Bradley M.
Colby
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Bradley
M. Colby
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President
and Chief Executive Officer
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