Wits Basin Precious Minerals Inc. Stock Option Agreement (Non-Statutory)
EXHIBIT
10.2
(Non-Statutory)
This
stock option agreement is effective as of March 9, 2007 between Xxxxxxx X.
Xxxx
(“Executive”),
and
Wits Basin Precious Minerals Inc., a Minnesota corporation (the “Company”).
Background
A. The
Company desires to induce Executive to continue to serve the Company as an
executive.
B. The
Company has adopted the 2007 Stock Incentive Plan (the “Plan”)
pursuant to which shares of common stock of the Company have been reserved
for
issuance under the Plan.
Now,
Therefore,
the
parties hereto agree as follows:
1. Incorporation
by Reference.
The
terms of the Plan, a copy of which has been delivered to Executive, are hereby
incorporated herein and made a part hereof by reference as if set forth in
full.
In the event of any conflict or inconsistency between the provisions of this
Agreement and those of the Plan, the provisions of the Plan shall govern and
control.
2. Grant
of Option; Purchase Price.
Subject
to the terms and conditions herein set forth, the Company hereby irrevocably
grants from the Plan to Executive the right and option, hereinafter called
the
“Option”,
to
purchase all or any part of an aggregate of 3,000,000 shares of common stock
of
the Company (the “Shares”)
at the
price per Share of $1.02.
3. Exercise
and Vesting of Option.
The
Option shall be exercisable only to the extent that all, or any portion thereof,
has vested in the Executive. Except as provided in Paragraphs 4 and 5 below,
the
right to purchase the Shares subject to the Option shall vest pro rata in six
annual installments beginning on March 9, 2008 and continuing each year
thereafter until the Option is fully vested (the “Annual
Installments”),
as
set forth in the following schedule, so long as Executive continues to be
employed by the Company (each such date is hereinafter referred to singularly
as
a “Vesting
Date”
and
collectively as “Vesting
Dates”):
|
Total
Shares Subject
to
Vesting Date
|
Vesting
Date
|
|
500,000
|
March
9, 2008
|
|
500,000
|
March
9, 2009
|
|
500,000
|
March
9, 2010
|
|
500,000
|
March
9, 2011
|
|
500,000
|
March
9, 2012
|
|
500,000
|
March
9, 2013
|
4. Termination
of Employment.
In the
event that the Executive ceases to be employed by the Company, for any reason
or
no reason, with or without cause, prior to any Vesting Date, that part of the
Option scheduled to vest on such Vesting Date, and all parts of the Option
scheduled to vest in the future, shall not vest and all of Executive's rights
to
and under such non-vested parts of the Option shall terminate.
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5. Acceleration
of Vesting.
The
vesting of the Option shall be accelerated, in part, upon the occurrence of
the
following events: (a) upon the completion of a merger between the Company (or
a
subsidiary of the Company formed for that purpose) and Easyknit
Enterprises Holdings Limited
(or a
subsidiary of Easyknit
Enterprises Holdings Limited
formed
for that purpose) the then last remaining Annual Installment shall immediately
vest and (b) upon the completion of each material acquisition of mining related
assets by the Company the then last remaining Annual Installment shall
immediately vest, provided that, the board of directors of the Company, in
its
sole discretion, shall determine whether an acquisition is
“material”.
6. Term
of Option.
To the
extent vested, and except as otherwise provided in this agreement, the Option
shall be exercisable for 10 years from the date of this agreement; provided,
however,
that in
the event Executive ceases to be employed by the Company, for any reason or
no
reason, with or without cause, Executive or his/her legal representative shall
have 90 days from the date of such termination of his/her position as an
executive to exercise any part of the Option then vested. Upon the expiration
of
that 90 day period, or, if earlier, upon the expiration date of the Option
as
set forth above, the Option shall terminate and become null and
void.
7. Reduction
in Shares Due to Listing.
In the
event the Company attempts to obtain listing of its common stock on a stock
exchange and such stock exchange, as a condition to listing (to be determined
in
the sole discretion of the board of directors of the Company), requires that
the
Company reduce the number of Shares issued to Executive hereunder, the Company
shall be entitled to reduce the number of Shares issued hereunder accordingly
to
obtain listing on that exchange, provided that the Shares are not then vested.
8. Rights
of Option Holder.
Executive, as holder of the Option, shall not have any of the rights of a
shareholder with respect to the Shares covered by the Option except to the
extent that one or more certificates for such Shares shall be delivered to
him
or her upon the due exercise of all or any part of the Option.
9. Transferability.
The
Option shall not be transferable except to the extent permitted by the
Plan.
10. Securities
Law Matters.
Executive acknowledges that the Shares to be received by him upon exercise
of
the Option may have not been registered under the Securities Act of 1933 or
the
Blue Sky laws of any state (collectively, the “Securities
Acts”).
If
such Shares have not been so registered, Executive acknowledges and understands
that the Company is under no obligation to register, under the Securities Acts,
the Shares received by him or to assist him in complying with any exemption
from
such registration if he should at a later date wish to dispose of the Shares.
Executive acknowledges that if not then registered under the Securities Acts,
the Shares shall bear a legend restricting the transferability thereof, such
legend to be substantially in the following form:
“The
shares represented by this certificate have not been registered or qualified
under federal or state securities laws. The shares may not be offered for sale,
sold, pledged or otherwise disposed of unless so registered or qualified, unless
an exemption exists or unless such disposition is not subject to the federal
or
state securities laws, and the Company may require that the availability or
any
exemption or the inapplicability of such securities laws be established by
an
opinion of counsel, which opinion of counsel shall be reasonably satisfactory
to
the Company.”
11. Executive
Representations.
Executive hereby represents and warrants that Executive has reviewed with his
or
her own tax advisors the federal, state, and local tax consequences of the
transactions contemplated by this agreement. Executive is relying solely on
such
advisors and not on any statements or representation of the Company or any
of
its agents. Executive understands that he or she will be solely responsible
for
any tax liability that may result to him or her as a result of the transactions
contemplated by this agreement. The Option, if exercised, will be exercised
for
investment and not with a view to the sale or distribution of the Shares to
be
received upon exercise thereof.
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12. Notices.
All
notices and other communications provided in this agreement will be in writing
and will be deemed to have been duly given when received by the party to whom it
is directed at the following addresses:
|
If
to the Company:
000
XXX Xxxxxx
00
Xxxxx 0xx
Xxxxxx
Xxxxxxxxxxx,
XX 00000-0000
Attn:
Chief Financial Officer
|
If
to Executive:
Xxxxxxx
X. Xxxx
0000
Xxxxxxxx Xxxx Xx
Xxxxxxx,
XX 00000
|
13. General.
(a) The
Option is granted pursuant to the Plan and is governed by the terms thereof.
The
Company shall at all times during the term of the Option reserve and keep
available such number of Shares as will be sufficient to satisfy the
requirements of this agreement.
(b) Nothing
herein expressed or implied is intended or shall be construed as conferring
upon
or giving to any person, firm, or corporation other than the parties hereto,
any
rights or benefits under or by reason of this agreement.
(c) Each
party hereto agrees to execute such further documents as may be necessary or
desirable to effect the purposes of this agreement.
(d) This
agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which shall constitute one and the same
agreement.
(e) This
agreement, in its interpretation and effect, shall be governed by the laws
of
the State of Minnesota applicable to contracts executed and to be performed
therein.
IN
WITNESS WHEREOF, the undersigned have executed this agreement as of the date
first written above.
|
EXECUTIVE:
/s/
Xxxxxxx X. Xxxx
Name:
Xxxxxxx X. Xxxx
|
|
|
By:
/s/
Xxxx X. Xxxxx
Its:
Chief Financial Officer
|
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