Wits Basin Precious Minerals Inc. Stock Option Agreement (Non-Statutory)
EXHIBIT
10.2
(Non-Statutory)
This
stock option agreement is effective as of May 29, 2008 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 2,000,000 shares of common stock
of
the Company (the “Shares”)
at the
price per Share of $0.20.
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 three
annual installments beginning on May 1, 2009, 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
|
|
|
666,667
|
May
29, 2009
|
|
|
666,667
|
May
29, 2010
|
|
|
666,666
|
May
29, 2011
|
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 Executive’s death, upon the occurrence of a Change in Control (as defined
below), or upon the Company’s termination of Executive for any reason except for
Cause (as defined in the employment agreement between the Company and Executive
dated on the date hereof). “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 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 one year 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 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 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.
7. 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.
8. Transferability.
The
Option shall not be transferable except to the extent permitted by the
Plan.
9. 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.”
10. 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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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 Xxxxxx Xxxxxx
Xxxxxxxxxxx,
XX 00000
Attn:
Chief Financial Officer
|
If
to Executive:
Xxxxxxx
X. 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. Signatures
delivered electronically or via facsimile shall be valid and binding to the
same
extent as original signatures.
(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.
Signatures
appear on next page
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IN
WITNESS WHEREOF, the undersigned have executed this stock option agreement
as of
the date first written above.
|
EXECUTIVE:
|
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|
/s/
Xxxxxxx X. Xxxx
|
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|
Name:
Xxxxxxx X. Xxxx
|
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|
By:
|
/s/
Xxxx X. Xxxxx
|
||
|
Its:
|
Chief
Financial Officer
|
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