AMERICAN GOLDFIELDS INC
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is entered into as of
July 12, 2006 by and between American Goldfields Inc., a Nevada corporation
(the "Corporation"), and Xxxxxx Xxxx (the "Optionee").
WHEREAS, the Corporation desires to afford the Optionee an opportunity
to purchase certain Shares of the Corporation's common stock so as to acquire
a proprietary interest as a shareholder of the Corporation and to provide the
Optionee with an incentive to use his best efforts in the service of the
Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth below, the parties agree as follows:
1. Grant of Option.
The Corporation hereby grants to Optionee the right to purchase up to the
aggregate number of Shares set forth in Exhibit A attached hereto at the
exercise price per Share stated therein. The right to purchase such Shares
shall be subject to all of the provisions, terms and conditions set forth in
this Agreement and in the AMERICAN GOLDFIELDS INC 2004 STOCK OPTION PLAN (the
"Plan"), a copy of which is annexed hereto and made a part hereof. Unless
defined in this Agreement, capitalized terms used herein shall have the
meaning ascribed to them in the Plan.
2. Vesting Schedule and Expiration.
This Option shall not be exercisable prior to the vesting date set forth in
Exhibit A attached hereto or subsequent to the expiration date set forth
therein unless extended by the Board of Directors or the Option Committee.
During the exercise period, the Option may be exercised by the Optionee (or
such other person or persons authorized to exercise Options under the Plan),
in whole or in part, from time to time, subject to the maximum percentage of
Options then exercisable in accordance with the schedule set forth in Exhibit
A attached hereto. The Corporation agrees to maintain during such exercise
period a sufficient number of Shares (which may be authorized and unissued
Shares or issued Shares that have been reacquired by the Corporation)
corresponding to the number of unexercised Options granted to the Optionee
after taking into account any Share adjustment under the Plan.
3. Restrictions on Transferability of Options.
This Option may not be transferred by the Optionee other than by will or the
laws of descent and distribution and may be exercised during the Optionee's
lifetime only by the Optionee or the Optionee's guardian or legal
representative. A transfer of an Option by will or the laws of descent and
distribution shall not be effective unless the Option Committee shall have
been furnished with such evidence as it may deem necessary to establish the
validity and effectiveness of the transfer. Any attempted transfer of the
Options made in violation of this Agreement shall be null and void and of no
force or effect.
4. Termination Provisions
(1) Except as provided in paragraphs (2), and (3) below, if an
Optionee's employment by, or relationship with, the Corporation is terminated
voluntarily or, by the Corporation, whether such termination is for Cause or
for no reason whatsoever, any Option heretofore granted which remains
unexercised at the time of such termination shall expire immediately,
provided, however, that the Option Committee may, in its sole and absolute
discretion, within thirty (30) days of such termination, waive the expiration
of any Option awarded under the Plan, by giving written notice of such waiver
to the Optionee at such Optionee's last known address. In the event of such
waiver, the Optionee may exercise any such Options only to such extent, for
such time, and upon such terms and conditions set forth in subparagraph (i)
above. The determination as to whether a termination is voluntary, for Cause,
or by reason of death, Disability, or Retirement shall be made by the Option
Committee, whose decision shall be final and conclusive.
(2) If an Optionee ceases to be employed by or ceases to perform
services to the Corporation by reason of death or Disability, the aggregate
amount of unexercised Options granted hereunder shall thereupon become fully
vested and immediately exercisable and shall expire no later than one (1) year
thereafter unless such Options by their terms expire before such date. During
such one (1) year period, the Optionee, or, in the case of death, the
Optionee's estate or the person or persons to whom the Option was transferred
by will or the laws of descent and distribution, may exercise any such
Options, and if not exercised, shall expire at the end of such one (1) year
period unless such Options by their terms expire before such date.
(3) If the Optionee ceases to be employed by, or ceases to provide
services to the Corporation by reason of Retirement, the aggregate amount of
unexercised Options granted hereunder shall thereupon become fully vested and
immediately exercisable and shall expire, in the case of an Incentive Stock
Option, no later than three (3) months following such Retirement, or in the
case of a Nonqualifying Stock Option one (1) year following Retirement,
unless, in either case, the Options by their terms expire prior to such date.
5. Exercise, Payment for and Delivery of Stock
This Option may be exercised by the Optionee or other person then entitled to
exercise it by delivery of a written notice to the Secretary of the
Corporation together with this Option Agreement specifying the number of
Options intended to be exercised and the exercise price and accompanied by
payment in full of the exercise price for the number of Shares with respect to
which the Option is exercised.
If the Corporation is required to withhold any federal, state or local tax as
a result of such exercise, the notice shall also be accompanied by a check
payable to the Corporation in payment of the applicable amount required to be
withheld, unless alternate arrangements have been agreed to between the
parties to satisfy any applicable withholding obligations.
Payment for Shares may be made in cash, or with the approval of the Option
Committee (which may be withheld in its sole discretion) with Shares having a
fair market value on the date of exercise equal to the exercise price, or a
combination of cash and Shares. In addition, subject to the approval
of the Option Committee (which may be withheld in its sole discretion),
payment may be effected wholly or partly by monies borrowed from the
Corporation pursuant to the terms of a promissory note, the terms and
conditions of which shall be determined from time to time by the Option
Committee. An Optionee may purchase less than the total numbers of Shares for
which Options are then exercisable, provided, however, that any partial
exercise shall not be for less than 100 Shares and shall not include any
fractional Shares.
6. Adjustments.
In the event that there is any change in the Shares of the Corporation arising
through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split or combination thereof, the Board of Directors shall
make such adjustments in the aggregate number of Options subject to this
Agreement and/or the price per share of such Options in order to prevent
dilution or enlargement of the Optionee's rights and of the value represented
by the Options. Upon any adjustment in the number or exercise price of Shares
subject to an Option, a new Option may be granted in place of such Option
which has been so adjusted. In the event of a dissolution or liquidation of
the Corporation or a merger, consolidation, sale of all or substantially all
of the Corporation's assets, or other corporate reorganization in which the
Corporation is not the surviving corporation, or any merger in which the
Corporation is the surviving corporation but the holders of Shares receive
securities of another corporation, outstanding Options shall terminate,
provided that the holder of each Option shall, in such event, if no provision
has been made for the substitution of a new option for such outstanding
option, have the right immediately prior to such event to exercise the
holder's Options in whole or in part without regard to the date on which the
Options otherwise would be first exercisable.
7. Compliance with Laws and Regulations.
By accepting this Option, the Optionee represents and agrees for himself and
his transferees by will or the laws of descent and distribution that, unless
a registration statement under Securities Act of 1933 is in effect as to
Shares purchased upon any exercise of this Option, (a) any and all Shares so
purchased shall be acquired for his personal account and not with a view to or
for sale in connection with distribution, and (b) each notice of exercise of
all or any portion of this Option shall, if the Option Committee so requests,
be accompanied by a representation and warranty in writing, signed by the
person entitled to exercise the same, that the Shares are being so acquired in
good faith for his or her personal account and not with a view to or for sale
in connection with any distribution.
No certificates for Shares purchased upon exercise of this Option shall be
issued and delivered unless and until, in the opinion of legal counsel for the
Corporation, such securities may be issued and delivered without causing the
Corporation to be in violation of or incur any liability under any federal,
state or other securities law or any other requirement of law or of any
regulatory body having jurisdiction over the Corporation. Without limiting
the generality of the foregoing, the Optionee acknowledges and understands
that the Shares subject to the Options granted hereunder have not been
registered under the Securities Act of 1933, as amended, or under the blue sky
or securities laws of any state, that the Corporation has no obligation to so
register any of such Shares and that, except to the extent the Shares are so
registered, the Shares will be restricted securities and may be sold,
transferred or otherwise disposed of only if an exemption from such
registration is available. Unless
the Shares have been so registered, there shall be noted conspicuously upon
each stock certificate representing such Shares, the following statement:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 (1933 Act) nor under any
applicable state securities act and may not be offered or sold except
pursuant to (i) an effective registration statement relating to such
stock under the 1933 Act and any applicable state securities act, (ii)
to the extent applicable, Rule 144 under the 1933 Act (or any similar
rule under such act or acts relating to the disposition of securities),
or (iii) an opinion of counsel satisfactory to the Corporation that an
exemption from registration under Act or Acts is available.
8. Invalidity; Severability.
If any clause or provision of this Agreement shall be adjudged invalid, the
same shall not affect the validity of any other clause or provision of this
Agreement, or of any other document pertaining to the subject matter thereof,
or constitute by reason thereof, any claim or cause of action in favor of
Optionee as against the Corporation. In addition, the provisions of this
Agreement shall be read and construed and shall have effect as separate,
severable and independent provisions or restrictions, and shall be enforceable
accordingly.
9. Entire Agreement; No Waiver; Remedies.
This Agreement contains the entire agreement of the parties and incorporates
and supersedes any and all prior or contemporaneous oral or written agreements
with respect to the matters referred to in it. No waiver of any breach or
default hereunder shall be considered valid unless in writing and signed by
the party giving such waiver, and no such waiver shall be deemed a waiver of
any subsequent breach or default of the same or similar nature. No failure on
the part of any party to exercise, and no delay in exercising any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; no
waiver whatever shall be valid unless in writing signed by the party or
parties to be charged and then only to the extent specifically set forth in
such writing. All remedies, rights, powers and privileges, either under this
Agreement or by law or otherwise afforded the parties to this Agreement,
shall be cumulative and shall not be exclusive of any remedies, rights, powers
and privileges provided by law.
10. Successors and Assigns.
The rights and obligations of the Corporation under this Agreement shall inure
to the benefit of and shall be binding upon the successors and assigns of the
Corporation.
11. Headings; Counterparts; Governing Law.
The headings in this Agreement are for convenience of reference only and are
not intended to define or limit the contents of any section or paragraph.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument. This Agreement shall in all respects be governed by
the laws (without reference to conflicts of laws principles) of the State of
Nevada applicable to contracts made and performed within the State of Nevada.
12. Execution.
(1) The grant of the Option hereunder shall be binding and effective
only if this Agreement is duly executed by or on behalf of the Corporation and
by the Optionee, and a signed copy is returned to the Corporation.
(2) The Optionee acknowledges that no assurances or representations are
made by the Corporation as to the present or future market value of the Shares
or as to the business, affairs, financial condition or prospects of the
Corporation.
13. Governing Provisions.
In the event of any conflict between the terms and provisions contained in
this Agreement and the terms and provisions contained in the Plan, the terms,
provisions and conditions set forth in the Plan shall govern.
14. Optionee Bound by Plan.
OPTIONEE ACKNOWLEDGES RECEIPT OF THE ATTACHED COPY OF THE AMERICAN GOLDFIELDS
INC 2004 STOCK OPTION PLAN AND AGREES TO BE BOUND BY ALL THE TERMS AND
PROVISIONS THEREOF.
AGREED AND ACCEPTED:
AMERICAN GOLDFIELDS INC:
/s/ Xxxxxx Xxxx Xxxxxx Xxxx
__________________________ By: __________________
Xxxxxx Xxxx Name: Xxxxxx Xxxx
Title: President, CEO
EXHIBIT A
TO
AGREEMENT dated as of July 12, 2006
PURSUANT TO THE AMERICAN GOLDFIELDS INC
2004 STOCK OPTION PLAN
with
Xxxxxx Xxxx (the OPTIONEE)
(a) Number of shares of the Common Stock covered by the Option: 200,000 Shares
(b) Exercise price per share: $1.00
(c) Vesting Schedule:
Number of Shares Date
200,000 July 12, 2006
(d) Expiration Date: July 12, 2016
