TORNADO GOLD INTERNATIONAL CORP.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is made and entered into
in duplicate this 15th day of April, 2005, between Tornado Gold International
Corp., a Nevada corporation ("Company"), having a principal place of business at
0000 Xxxxxxxxxx Xxx, Xxxxx 000, Xxxx, Xxxxxx 00000, and Xxxx X. Xxxxxx
("Holder"), with respect to the following facts:
Pursuant and subject to the Tornado Gold International Corp. 2005 Stock Option
Plan, a copy of which is furnished to the Holder with a copy of this Agreement
and the provisions of which, by this reference, are made a part of this
Agreement as though specified completely and specifically verbatim in this
Agreement (the "Plan"), on April 15, 2005, the Company's Board of Directors
determined that it is in the best interests of the Company and its stockholders
to grant the options provided for herein to the Holder. The parties agree as
follows:
Options Granted
1. On the terms and conditions specified in this Agreement, Company
grants Holder the ability to acquire up to 250,000 Options to purchase shares of
common stock of Company at a purchase price of $1.00 per share ("Options")
according to the terms and vesting schedule of the Director Agreement between
Company and Holder attached hereto as an exhibit, such Options being further
subject to the provisions of the Plan, as administered by Company's Option
Committee. Subject to the provisions of the Plan and the terms contained herein,
Holder's right to receive Options granted hereunder terminates should Holder
resign, or be forcibly removed, as a Director of Company.
Time of Exercise of Option
2. Holder's right to receive the Options shall vest according to
the schedule specified in the Director Agreement, such date shall begin the
period during which the Options may be exercised ("Exercise Period"). As long as
Holder remains in the service of the Company as Director, then Holder's right to
exercise the Options granted hereunder shall remain in effect during the
Exercise Period.
Method of Exercise
3. The Options shall be exercised by written notice delivered to
Company at its principal place of business, specifying the number of shares of
common stock of Company for which the Option is being exercised. A form of the
notice is attached hereto. The notice must be accompanied by payment (by cash,
check, promissory note, or other means of acceptable payment as set forth in the
Plan) for the amount of the purchase price for the shares of common stock of
Company purchased pursuant to the exercise of the Option.
Capital Adjustments
4. (a) The existence of the Options shall not affect in any way the
right or power of Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in Company's
capital structure or its business, or any merger or consolidation of Company or
any issue of bonds, debentures, preferred stock having a preference to or
affecting Company's common stock or the rights thereof, or the issuance of any
securities convertible into any such common stock or of any rights, options, or
warrants to purchase any such common stock, or the dissolution or liquidation of
Company, any sale or transfer of all or any part of its assets or business, or
any other act or proceeding of Company, whether of a similar character or
otherwise.
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(b) The securities with respect to which the Options
are granted are shares of the common stock of Company as presently constituted,
but if and whenever, prior to the delivery by Company of all the shares of the
common stock with respect to which the Options are granted, Company shall effect
a subdivision or consolidation of shares or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of such common stock outstanding without receiving compensation therefore
in money, services, or property, the number of shares of such common stock then
remaining subject to the Options shall be adjusted as specified in the Plan.
Merger and Consolidation
5. (a) Following the merger of one or more corporations with and
into Company or any consolidation of Company and one or more corporations in
which Company is the surviving corporation, the exercise of the Options shall
apply to the shares of common stock of the surviving corporation.
(b) Notwithstanding any other provision of this
Agreement, the Options shall
terminate on the dissolution or liquidation of Company.
Representations of Company
6. During such time as the Options remain outstanding and unexpired,
Company will reserve for issuance, upon the exercise of the Options, the number
of shares of Company's common stock that are subject to the Options. The shares
of Company's common stock subject to the Options, when issued, shall be fully
paid and nonassessable. Company will pay, when due and payable, any and all
taxes or fees that may be payable by Company with respect to the grant of the
Options or the issuance of any shares of Company's common stock or certificates
therefor subject to the Options. This does not include, however, any federal,
state or other personal income tax payable by Holder because of (i) the grant of
the Options; (ii) the issuance of any share of the Company's common stock upon
exercise thereof; or (iii) any subsequent disposition of such shares, which
shall remain the obligation of Holder.
Withholding Taxes
7. If Company determines that it is required to withhold federal,
state or local tax as a result of the exercise of the Options, Holder, as a
condition to the exercise of the Options, shall make arrangements satisfactory
to Company to enable it to satisfy such withholding requirements.
Committee Determination Final
8. The interpretation of the Plan, the Director Agreement and this
Option Agreement, including any inconsistency between the two documents, shall
be reserved to and made by the Option Committee, which is the Committee of the
Board of Directors of Company provided for in the Plan. The Option Committee's
determinations shall be final as between the parties hereto, unless otherwise
determined by the Board of Directors of Company.
Transfer of Options
9. During Holder's lifetime, the Options shall be exercisable only
by Holder. The Options shall not be transferable by Holder, other than by the
laws of descent and distribution upon Holder's death. In the event of Holder's
death during service to the Company, Holder's personal representatives may
exercise any portion of the Options that remain unexercised at the time of
Holder's death; provided, however, that any such exercise must be made, if at
all, during the period within one (1) year after Holder's death, and subject to
the option termination date specified in Paragraph 2 of this Agreement.
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Investment Undertaking
10. The Options may be exercised only by Holder. The Holder will
hold the Options and the rights constituent thereto for investment and not with
an intention of distribution, and upon exercise will deliver a letter confirming
the Holder's nondistributive intent with respect to the shares of the Company's
common stock received as a result of the exercise of the Options.
Rights as Shareholder
11. Holder will not be deemed to be a holder of any shares of
Company's common stock pursuant to the exercise of the Options until Holder pays
the purchase price therefor and a stock certificate is delivered to Holder for
those shares. No adjustment shall be made for dividends or other rights for
which the record date is prior to the date such stock certificate is delivered.
IN WITNESS WHEREOF, the parties have made and entered into this Agreement in
duplicate on the date specified in its preamble.
COMPANY HOLDER
Tornado Gold International Corp.,
a Nevada corporation _________________________________
Xxxx X. Xxxxxx
By: _________________________
Xxxx Xxxxxx
Its: Chief Executive Officer and Secretary
