Wits Basin Precious Minerals Inc. Amended and Restated Stock Option Agreement (Non-Statutory)
EXHIBIT
10.3
Amended
and Restated Stock Option Agreement
(Non-Statutory)
This
agreement effective as of May 29, 2008 (the “Agreement”) amends and restates the
stock option agreement between Xxxxxxx Xxxx (“Optionee”),
and
Wits Basin Precious Minerals Inc., a Minnesota corporation (the “Company”)
dated
March 12, 2007.
Background
A. Xxxxxxx
X. Xxxx is currently the Chief Executive Officer of the Company, and the Company
granted to Xx. Xxxx an option to purchase up to 3,000,000 shares of common
stock
of the Company on March 9, 2007 (the “Original
Option Agreement”).
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.
C. The
Plan
allows for assignment of an option and Xx. Xxxx so directed and authorized
the
Company to assign the Original Option Agreement over to his spouse, Xxxxxxx
Xxxx, effective March 12, 2007 (the “Former
Option Agreement”).
D. Pursuant
to negotiations between Xx. Xxxx and the Company’s Compensation Committee, Xx.
Xxxx requested modifications to the vesting schedule under certain conditions
as
stated in the Former Option Agreement.
E. The
Company and Xxx. Xxxx hereby amend and restate the Former Option Agreement
in
its entirety as follows.
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 Optionee, 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 Optionee 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 Optionee. Except as provided in Paragraphs 4 and 5 below,
the
right to purchase the Shares subject to the Option shall vest pro rata in three
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 Xx. Xxxx 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
|
|
|
1,000,000
|
March
9, 2008
|
|
|
1,000,000
|
March
9, 2009
|
|
|
1,000,000
|
March
9, 2010
|
4. Acceleration
of Vesting.
Notwithstanding the above, all of the Shares will become immediately vested
if
the closing sale price of the Company’s common stock (as quoted on the OTCBB or
an exchange) remains at or above $1.00 per share for 30 trading days.
Additionally, the entire unvested portion of the Option will immediately vest
upon Xx. Xxxx’x death, upon the occurrence of a Change in Control (as defined
below), or upon the Company’s termination of Xx. Xxxx for any reason except for
Cause (as defined in the employment agreement between the Company and Xx. Xxxx
dated May 29, 2008). “Change in Control” means (i) the acquisition, directly or
indirectly by any person (as such term is defined in Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended), in one transaction or
a
series of related transactions, of securities of the Company representing in
excess of 50% or more of the combined voting power of the Company's then
outstanding securities or (ii) the disposition by the Company (whether direct
or
indirect, by sale of assets or stock, merger, consolidation or otherwise) of
all
or substantially all of its business and/or assets in one transaction or series
of related transactions (other than a merger effected exclusively for the
purpose of changing the domicile of the Company).
5. 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 Xx. Xxxx ceases to be employed by the Company, for any reason or
no
reason, with or without cause, Optionee or his/her legal representative shall
have one year from the date of such termination exercise any part of the Option
then vested. Upon the expiration of that one year period, or, if earlier, upon
the expiration date of the Option as set forth above, the Option shall terminate
and become null and void.
6. 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 Optionee 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.
7. Rights
of Option Holder.
Optionee, 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.
8. Transferability.
The
Option shall not be transferable except to the extent permitted by the
Plan.
9. Securities
Law Matters.
Optionee acknowledges that the Shares to be received by her 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, Optionee acknowledges and understands
that the Company is under no obligation to register, under the Securities Acts,
the Shares received by her or to assist her in complying with any exemption
from
such registration if she should at a later date wish to dispose of the Shares.
Optionee 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:
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“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.”
10. Optionee
Representations.
Optionee hereby represents and warrants that Optionee has reviewed with his
or
her own tax advisors the federal, state, and local tax consequences of the
transactions contemplated by this agreement. Optionee is relying solely on
such
advisors and not on any statements or representation of the Company or any
of
its agents. Optionee 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.
11. 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:
900
IDS Center
00
Xxxxx 0xx
Xxxxxx
Xxxxxxxxxxx,
XX 00000
Attn:
Chief Financial Officer
|
If
to Optionee:
Xxxxxxx
Xxxx
|
12. 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.
(f) This
agreement amends and restates the Former Option Agreement in its entirety and
the Former Option Agreement is hereby of no force and effect.
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IN
WITNESS WHEREOF, the undersigned have executed this agreement as of the date
first written above.
|
OPTIONEE:
|
WITS BASIN PRECIOUS MINERALS INC. | |||
|
By:
|
/s/
Xxxx X. Xxxxx
|
|||
| /s/ Xxxxxxx Xxxx | Its: | Chief Financial Officer | ||
|
Name:
Xxxxxxx Xxxx
|
||||
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