Adera Mines Limited
Adera
Mines Limited
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TABLE
OF
CONTENTS
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SECTION
1: BACKGROUND, PURPOSE AND DURATION
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1
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1.1
Background and Effective Date
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1
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1.2
Purpose of the Plan
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1
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1.3
Duration of the Plan
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1
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SECTION
2 DEFINITIONS
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1
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2.1
1934 Act
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1
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2.2
Affiliate
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1
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2.3
Affiliated SAR
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1
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2.4
Applicable Laws
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2
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2.5
Award
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2
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2.6
Award Agreement
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2
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2.7
Board or Board of Directors
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2
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2.8
Code
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2
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2.9
Committee
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2
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2.10
Company
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2
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2.11
Consultant
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2
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2.12
Director
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2
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2.13
Disability
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2
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2.14
Employee
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2
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2.15
ERISA
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2
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2.16
Fair Market Value
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2
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2.17
Freestanding SAR
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3
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2.18
Incentive Stock Option
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3
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2.19
Nonqualified Stock Option
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3
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2.20
Option
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3
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2.21
Option Price
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3
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2.22
Participant
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3
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2.23
Performance Share
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3
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2.24
Performance Unit
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3
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2.25
Period of Restriction
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3
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2.26
Plan
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3
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2.27
Restricted Stock
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3
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2.28
Retirement
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3
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2.29
Rule 16b-3
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4
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2.30
Section 16 Person
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4
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2.31
Shares
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4
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2.32
Stock Appreciation Right or SAR
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4
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2.33
Subsidiary
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4
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2.34
Tandem SAR
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4
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2.35
Termination of Employment
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4
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SECTION
3 ADMINISTRATION
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4
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3.1
The Committee
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4
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3.2
Authority of the Committee
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4
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3.3
Decisions Binding
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5
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SECTION
4 SHARES SUBJECT TO THE PLAN
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5
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4.1
Shares Available
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5
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4.1.1
Maximum Shares Available Under Plan
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5
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4.1.5
Adjustments
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5
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4.2
Number of Shares
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5
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4.2
Lapsed Awards
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6
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SECTION
5 STOCK OPTIONS
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6
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5.1
Grant of Options
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6
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5.2
Award Agreement
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6
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5.3
Option Price
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6
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5.3.1
Nonqualified Stock Options
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6
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5.3.2
Incentive Stock Options
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6
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5.3.3
Substitute Options
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6
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5.4
Expiration of Options
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7
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5.4.1
Expiration Dates
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7
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5.4.2
Committee Discretion
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7
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5.5
Exercise of Options
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7
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5.6
Payment
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7
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5.7
Restrictions on Share Transferability
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8
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5.8
Certain Additional Provisions for Incentive Stock Options
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8
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5.8.1
Exercisability
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8
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5.8.2
Termination of Employment
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8
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5.8.3
Company and Subsidiaries
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8
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5.8.4
Expiration
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8
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5.9
Nontransferability
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8
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SECTION
6 STOCK APPRECIATION RIGHTS
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9
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6.1
Grant of SARs
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9
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6.2
Exercise of Tandem SARs
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9
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6.2.1
ISOs
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9
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6.3
Exercise of Affiliated SARs
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9
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6.4
Exercise of Freestanding SARs
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9
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6.5
SAR Agreement
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9
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6.6
Expiration of SARs
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9
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6.7
Payment of SAR Amount
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9
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6.8
Nontransferability of SARs
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10
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SECTION
7 RESTRICTED STOCK
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10
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7.1
Grant of Restricted Stock
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10
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7.2
Restricted Stock Agreement
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10
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7.3
Transferability
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10
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7.4
Other Restrictions
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10
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7.5
Removal of Restrictions
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10
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7.6
Voting Rights
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11
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7.7
Dividends and Other Distributions
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11
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7.8
Return of Restricted Stock to Company
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11
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7.9
Repurchase Option
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11
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SECTION
8 PERFORMANCE UNITS AND PERFORMANCE SHARES
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11
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8.1
Grant of Performance Units/Shares
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11
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8.2
Value of Performance Units/Shares
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11
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8.3
Earning of Performance Units/Shares
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11
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8.4
Form and Timing of Performance Units/Shares
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12
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8.5
Cancellation of Performance Units/Shares
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12
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8.6
Nontransferability
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12
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SECTION
9 BENEFICIARY DESIGNATION
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12
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SECTION
10 DEFERRALS
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12
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SECTION
11 RIGHTS OF EMPLOYEES AND CONSULTANTS
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12
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11.1
No Effect on Employment or Service
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12
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11.2
Participation
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12
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SECTION
12 AMENDMENT, SUSPENSION, OR TERMINATION
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13
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SECTION
13 TAX WITHHOLDING
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13
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13.1
Withholding Requirements
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13
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13.2
Shares Withholding
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13
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SECTION
14 INDEMNIFICATION
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13
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SECTION
15 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,
DISSOLUTION, MERGER OR ASSET SALE
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13
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15.1
Changes in Capitalization
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13
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15.2
Dissolution or Liquidation
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14
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15.3
Merger or Asset Sale
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14
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SECTION
16 CONDITIONS UPON ISSUANCE OF SHARES
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15
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16.1
Legal Compliance
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15
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16.2
Investment Representations
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15
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SECTION
17 INABILITY TO OBTAIN AUTHORITY
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15
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SECTION
18 RESERVATION OF SHARES
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15
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SECTION
19 LEGAL CONSTRUCTION
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15
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19.1
Gender and Number
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15
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19.2
Severability
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15
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19.3
Requirements of Law
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15
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20.4
Securities Law Compliance
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15
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19.5
Governing Law
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15
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19.6
Captions
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16
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Adera
Mines Limited
Adera
Mines Limited hereby adopts the 2006 Equity Incentive Plan, effective as of
September 14, 2006, as follows:
SECTION
1
BACKGROUND,
PURPOSE AND DURATION
1.1 Background
and Effective Date.
The Plan
provides for the granting of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance
Units, and Performance Shares. The Plan is adopted and effective as of September
14, 2006, subject to approval by the stockholders of the Company within twelve
(12) months. The Company will seek stockholder approval in the manner and to
the
degree required under Applicable Laws. Awards may be granted prior to the
receipt of stockholder approval, but such grants shall be null and void if
such
approval is not in fact received within twelve (12) months.
1.2 Purpose
of the Plan.
The
purpose of the Plan is to promote the success, and enhance the value, of the
Company by aligning the interests of Participants with those of the Company’s
shareholders, and by providing Participants with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of outstanding
individuals, upon whose judgment, interest, and special effort the success
of
the Company largely is dependent.
1.3 Duration
of the Plan.
The
Plan shall commence on the date specified in Section 1.1
and
subject to SECTION
12
(concerning the Board’s right to amend or terminate the Plan), shall remain in
effect thereafter. However, without further stockholder approval, no Incentive
Stock Option may be granted under the Plan on or after September 13, 2016.
SECTION
2
DEFINITIONS
The
following words and phrases shall have the following meanings unless a different
meaning is plainly required by the context:
2.1 “1934
Act”
means
the Securities Exchange Act of 1934, as amended. Reference to a specific section
of the Exchange Act or regulation thereunder shall include such section or
regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.
2.2 “Affiliate”
means
any corporation or any other entity (including, but not limited to, partnerships
and joint ventures) controlling, controlled by, or under common control with
the
Company.
2.3 “Affiliated
SAR”
means an
SAR that is granted in connection with a related Option, and which automatically
will be deemed to be exercised at the same time that the related Option is
exercised.
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2.4 “Applicable
Laws”
means
the requirements relating to the administration of equity plans under U. S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Shares are is listed or quoted
and the applicable laws of any foreign country or jurisdiction where Awards
are,
or will be, granted under the Plan.
2.5 “Award”
means,
individually or collectively, a grant under the Plan of Nonqualified Stock
Options, Incentive Stock Options, SARs, Restricted Stock, Performance Units,
or
Performance Shares.
2.6 “Award
Agreement”
means
the written agreement setting forth the terms and provisions applicable to
each
Award granted under the Plan.
2.7 “Board”
or “Board of Directors”
means
the Board of Directors of the Company.
2.8 “Code”
means
the Internal Revenue Code of 1986, as amended. Reference to a specific section
of the Code or regulation thereunder shall include such section or regulation,
any valid regulation promulgated under such section, and any comparable
provision of any future legislation or regulation amending, supplementing or
superseding such section or regulation.
2.9 “Committee”
means
the committee appointed by the Board to administer the Plan pursuant to
Section 3.1.
2.10 “Company”
means
Adera Mines Limited, a Nevada corporation, or any successor thereto.
2.11 “Consultant”
means an
individual who provides significant services to the Company and/or an Affiliate,
including a Director who is not an Employee.
2.12 “Director”
means
any individual who is a member of the Board of Directors of the Company.
2.13 “Disability”
means a
permanent and total disability within the meaning of Code Section 22(e)(3).
2.14 “Employee”
means an
employee of the Company or of an Affiliate, whether such employee is so employed
at the time the Plan is adopted or becomes so employed subsequent to the
adoption of the Plan.
2.15 “ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended. Reference
to a
specific section of ERISA shall include such section, any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.
2.16 “Fair
Market Value”
means as
of any date, the value of a Share determined as follows:
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(a) If
the
Shares are listed on any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The Nasdaq Capital
Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such Share (or the closing bid, if no sales were reported)
as
quoted on such exchange or system on the day of, or the last market trading
day
prior to, the day of determination, as reported in The Wall Street Journal
or
such other source as the Committee deems reliable;
(b) If
the
Shares are regularly quoted by a recognized securities dealer but selling prices
are not reported, the Fair Market Value of the Share shall be the mean between
the high bid and low asked prices for the Shares on the day of, or the last
market trading day prior to, the day of determination, as reported in The Wall
Street Journal or such other source as the Committee deems reliable; or
(c) In
the
absence of an established market for the Shares, the Fair Market Value shall
be
determined in good faith by the Committee.
2.17 “Freestanding
SAR”
means a
SAR that is granted independently of any Option.
2.18 “Incentive
Stock Option” or “ISO”
means an
option to purchase Shares, which is designated as an Incentive Stock Option
and
is intended to meet the requirements of Section 422 of the Code.
2.19 “Nonqualified
Stock Option”
means an
option to purchase Shares which is not intended to be an Incentive Stock Option.
2.20 “Option”
means an
Incentive Stock Option or a Nonqualified Stock Option.
2.21 “Option
Price”
means
the price at which a Share may be purchased pursuant to an Option.
2.22 “Participant”
means an
Employee, Consultant or Director who has an outstanding Award.
2.23 “Performance
Share”
means an
Award granted to an Employee pursuant to SECTION
8
having
an initial value equal to the Fair Market Value of a Share on the date of
grant.
2.24 “Performance
Unit”
means an
Award granted to an Employee pursuant to SECTION
8
having
an initial value (other than the Fair Market Value of a Share) that is
established by the Committee at the time of grant.
2.25 “Period
of Restriction”
means
the period during which the transfer of Shares of Restricted Stock are subject
to restrictions.
2.26 “Plan”
means
the Adera Mines Limited 2006 Equity Incentive Plan, as set forth in this
instrument and as hereafter amended from time to time.
2.27 “Restricted
Stock”
means an
Award granted to a Participant pursuant to SECTION
7.
2.28 “Retirement”
means,
in the case of an Employee, a Termination of Employment by reason of the
Employee’s retirement at or after age 62.
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2.29 “Rule
16b-3”
means
Rule 16b-3 promulgated under the 1934 Act, and any future regulation amending,
supplementing or superseding such regulation.
2.30 “Section
16 Person”
means a
person who, with respect to the Shares, is subject to Section 16 of the
1934 Act.
2.31 “Shares”
means
the shares of common stock of the Company.
2.32 “Stock
Appreciation Right” or “SAR”
means an
Award, granted alone or in connection with a related Option, that pursuant
to
the terms of SECTION
7
is
designated as an SAR.
2.33 “Subsidiary”
means
any “subsidiary corporation” (other than the Company) as defined in Code
Section 424(f).
2.34 “Tandem
SAR”
means an
SAR that is granted in connection with a related Option, the exercise of which
shall require forfeiture of the right to purchase an equal number of Shares
under the related Option (and when a Share is purchased under the Option, the
SAR shall be canceled to the same extent).
2.35 “Termination
of Employment”
means a
cessation of the employee-employer or director or other service arrangement
relationship between an Employee, Consultant or Director and the Company or
an
Affiliate for any reason, including, but not by way of limitation, a termination
by resignation, discharge, death, Disability, Retirement, or the disaffiliation
of an Affiliate, but excluding any such termination where there is a
simultaneous reemployment or re-engagement by the Company or an Affiliate.
SECTION
3
ADMINISTRATION
3.1 The
Committee.
The
Plan
shall be administered by the Board of Directors or by a committee of the Board
that meets the requirements of this Section 3.1
(hereinafter referred to as the “Committee”).
The
Committee shall consist of not less than two (2) Directors. The members of
the
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors. At such time as the Company has independent
directors, any Committee shall be comprised solely of Directors who are both
“outside directors” under Rule 16b-3 and “independent directors” under the
requirements of any national securities exchange or system upon which the Shares
are then listed and/or traded.
3.2 Authority
of the Committee.
The
Committee shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but not limited
to,
the power (a) to determine which Employees, Consultants and Directors shall
be
granted Awards, (b) to prescribe the terms and conditions of such Awards, (c)
to
interpret the Plan and the Awards, (d) to adopt rules for the administration,
interpretation and application of the Plan as are consistent therewith, and
(e)
to interpret, amend or revoke any such rules.
The
Committee, in its sole discretion and on such terms and conditions as it may
provide, may delegate all or any part of its authority and powers under the
Plan
to one or more directors and/or officers of the Company; provided,
however,
that
the Committee may not delegate its authority and powers with respect to Section
16 Persons.
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3.3 Decisions
Binding.
All
determinations and decisions made by the Committee shall be final, conclusive,
and binding on all persons, and shall be given the maximum deference permitted
by law.
SECTION
4
SHARES
SUBJECT TO THE PLAN
4.1 Shares
Available.
4.1.1 Maximum
Shares Available under Plan.
The
aggregate number of Shares available for issuance under the Plan may not exceed
Ten Million (10,000,000) Shares. Such shares may be authorized but unissued
shares or treasury shares.
4.1.2 Adjustments.
All
Share numbers in this Section 4.1
are
subject to adjustment as provided in SECTION
15.
4.2 Number
of Shares.
The
following rules will apply for purposes of the determination of the number
of
Shares available for grant under the Plan:
(a) While
an
Award is outstanding, it shall be counted against the authorized pool of Shares,
regardless of its vested status.
(b) The
grant
of an Option or Restricted Stock shall reduce the Shares available for grant
under the Plan by the number of Shares subject to such Award.
(c) The
grant
of a Tandem SAR shall reduce the number of Shares available for grant by the
number of Shares subject to the related Option (i.e., there is no double
counting of Options and their related Tandem SARs); provided,
however,
that,
upon the exercise of such Tandem SAR, the authorized Share pool shall be
credited with the appropriate number of Shares representing the number of shares
reserved for such Tandem SAR less the number of Shares actually delivered upon
exercise thereof or the number of Shares having a Fair Market Value equal to
the
cash payment made upon such exercise.
(d) The
grant
of an Affiliated SAR shall reduce the number of Shares available for grant
by
the number of Shares subject to the SAR, in addition to the number of Shares
subject to the related Option; provided, however, that, upon the exercise of
such Affiliated SAR, the authorized Share pool shall be credited with the
appropriate number of Shares representing the number of shares reserved for
such
Affiliated SAR less the number of Shares actually delivered upon exercise
thereof or the number of Shares having a Fair Market Value equal to the cash
payment made upon such exercise.
(e) The
grant
of a Freestanding SAR shall reduce the number of Shares available for grant
by
the number of Freestanding SARs granted; provided,
however,
that,
upon the exercise of such Freestanding SAR, the authorized Share pool shall
be
credited with the appropriate number of Shares representing the number of shares
reserved for such Freestanding SAR less the number of Shares actually delivered
upon exercise thereof or the number of Shares having a Fair Market Value equal
to the cash payment made upon such exercise.
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(f) The
Committee shall in each case determine the appropriate number of Shares to
deduct from the authorized pool in connection with the grant of Performance
Units and/or Performance Shares.
(g) To
the
extent that an Award is settled in cash rather than in Shares, the authorized
Share pool shall be credited with the appropriate number of Shares having a
Fair
Market Value equal to the cash settlement of the Award.
4.3 Lapsed
Awards.
If an
Award is cancelled, terminates, expires, or lapses for any reason (with the
exception of the termination of a Tandem SAR upon exercise of the related
Option, or the termination of a related Option upon exercise of the
corresponding Tandem SAR), any Shares subject to such Award again shall be
available to be the subject of an Award.
SECTION
5
STOCK
OPTIONS
5.1 Grant
of Options.
Options
may be granted to Employees, Consultants and Directors at any time and from
time
to time, as determined by the Committee in its sole discretion. The Committee,
in its sole discretion, shall determine the number of Shares subject to Options
granted to each Participant. The Committee may grant ISOs, NQSOs, or a
combination thereof.
5.2 Award
Agreement.
Each
Option shall be evidenced by an Award Agreement that shall specify the Option
Price, the expiration date of the Option, the number of Shares to which the
Option pertains, any conditions to exercise of the Option, and such other terms
and conditions as the Committee, in its discretion, shall determine. The Award
Agreement also shall specify whether the Option is intended to be an ISO or
a
NQSO.
5.3 Option
Price.
Subject
to the provisions of this Section 5.3,
the
Option Price for each Option shall be determined by the Committee in its sole
discretion.
5.3.1 Nonqualified
Stock Options.
In the
case of a Nonqualified Stock Option, the Option Price shall be not less than
Eighty Five Percent (85%) of the Fair Market Value of a Share on the date that
the Option is granted.
5.3.2 Incentive
Stock Options.
In the
case of an Incentive Stock Option, the Option Price shall be not less than
one
hundred percent (100%) of the Fair Market Value of a Share on the date that
the
Option is granted; provided,
however,
that if
at the time that the Option is granted, the Employee (together with persons
whose stock ownership is attributed to the Employee pursuant to Section 424(d)
of the Code) owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any of its Subsidiaries, the
Option Price shall be not less than one hundred and ten percent (110%) of the
Fair Market Value of a Share on the date that the Option is granted.
5.3.3 Substitute
Options.
Notwithstanding the provisions of Sections 5.3.1
and
5.3.2,
in the
event that the Company or an Affiliate consummates a transaction described
in
Section 424(a) of the Code (e.g., the acquisition of property or stock from
an
unrelated corporation), persons who become Employees, Consultants or Directors
on account of such transaction may be granted Options in substitution for
options granted by their former employer. If such substitute Options are
granted, the Committee, in its sole discretion, may determine that such
substitute Options shall have an exercise price less than 100% of the Fair
Market Value of the Shares on the date the Option is granted.
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5.4 Expiration
of Options.
Unless
the applicable stock option agreement provides otherwise, each Option shall
terminate upon the first to occur of the events listed in Section 5.4.1,
subject
to Section 5.4.2.
5.4.1 Expiration
Dates.
(a) The
date
for termination of the Option set forth in the Award Agreement;
(b) The
expiration of ten years from the date the Option was granted, or
(c) The
expiration of three months from the date of the Participant’s Termination of
Employment for a reason other than the Participant’s death, Disability or
Retirement, or
(d) The
expiration of twelve months from the date of the Participant’s Termination of
Employment by reason of Disability, or
(e) The
expiration of twelve months from the date of the Participant’s death, if such
death occurs while the Participant is in the employ or service of the Company
or
an Affiliate.
5.4.2 Committee
Discretion.
The
Committee shall provide, in the terms of each individual Option, when such
Option expires and becomes unexercisable. After the Option is granted, the
Committee, in its sole discretion may extend the maximum term of such
Option.
The
foregoing discretionary authority is subject to the limitations and restrictions
on Incentive Stock Options set forth in Section 5.8.
5.5 Exercise
of Options.
Options
granted under the Plan shall be exercisable at such times, and subject to such
restrictions and conditions, as the Committee shall determine in its sole
discretion. After an Option is granted, the Committee, in its sole discretion,
may accelerate the exercisability of the Option.
5.6 Payment.
The
Committee shall determine the acceptable form of consideration for exercising
an
Option, including the method of payment. In the case of an Incentive Stock
Option, the Committee shall determine the acceptable form of consideration
at
the time of grant. Such consideration may consist entirely of:
(a) cash;
(b) check;
(c) promissory
note;
(d) other
Shares which (i) in the case of Shares acquired upon exercise of an Option,
have been owned by the Participant for more than six (6) months on the date
of
surrender, and (ii) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option shall
be
exercised;
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(e) consideration
received by the Company from a licensed broker under a cashless exercise program
implemented by the Company to facilitate “same day” exercises and sales of
Options;
(f) a
reduction in the amount of any Company liability to the Participant, including
any liability attributable to the Participant's participation in any
Company-sponsored deferred compensation program or arrangement;
(g) any
combination of the foregoing methods of payment; or
(h) such
other consideration and method of payment for the issuance of Shares to the
extent permitted by applicable laws.
5.7 Restrictions
on Share Transferability.
The
Committee may impose such restrictions on any Shares acquired pursuant to the
exercise of an Option, as it may deem advisable, including, but not limited
to,
restrictions related to Federal securities laws, the requirements of any
national securities exchange or system upon which such Shares are then listed
and/or traded, and/or any blue sky or state securities laws.
5.8 Certain
Additional Provisions for Incentive Stock Options.
5.8.1 Exercisability.
The
aggregate Fair Market Value (determined at the time the Option is granted)
of
the Shares with respect to which Incentive Stock Options are exercisable for
the
first time by any Employee during any calendar year (under all plans of the
Company and its Subsidiaries) shall not exceed $100,000.
5.8.2 Termination
of Employment.
No
Incentive Stock Option may be exercised more than three months after the
Participant’s termination of employment for any reason other than Disability or
death, unless (a) the Participant dies during such three-month period, and
(b)
the Award Agreement and/or the Committee permits later exercise. No Incentive
Stock Option may be exercised more than one year after the Participant’s
termination of employment on account of Disability, unless (a) the Participant
dies during such one-year period, and (b) the Award Agreement and/or the
Committee permit later exercise.
5.8.3 Company
and Subsidiaries Only.
Incentive Stock Options may be granted only to persons who are Employees of
the
Company and/or a Subsidiary at the time of grant.
5.8.4 Expiration.
No
Incentive Stock Option may be exercised after the expiration of 10 years from
the date such Option was granted; provided,
however,
that if
the Option is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code,
owns stock possessing more than 10% of the total combined voting power of all
classes of the stock of the Company or any of its Subsidiaries, the Option
may
not be exercised after the expiration of 5 years from the date that it was
granted.
5.9 Nontransferability
of Options.
No
Option granted under the Plan may be sold, transferred, pledged, assigned,
or
otherwise alienated or hypothecated, other than by will, the laws of descent
and
distribution, or as provided under SECTION
9.
All
Options granted to a Participant under the Plan shall be exercisable during
his
or her lifetime only by such Participant.
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SECTION
6
STOCK
APPRECIATION RIGHTS
6.1 Grant
of SARs.
An SAR
may be granted to an Employee, Consultant or Director at any time and from
time
to time as determined by the Committee, in its sole discretion. The Committee
may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination
thereof. The Committee shall have complete discretion to determine the number
of
SARs granted to any Participant, and consistent with the provisions of the
Plan,
the terms and conditions pertaining to such SARs. However, the xxxxx xxxxx
of a
Freestanding SAR shall be at least equal to the Fair Market Value of a Share
on
the date of grant. The xxxxx xxxxx of Tandem or Affiliated SARs shall equal
the
Option Price of the related Option.
6.2 Exercise
of Tandem SARs.
Tandem
SARs may be exercised for all or part of the Shares subject to the related
Option upon the surrender of the right to exercise the equivalent portion of
the
related Option. A Tandem SAR may be exercised only with respect to the Shares
for which its related Option is then exercisable.
6.2.1 ISOs.
Notwithstanding any contrary provision of the Plan, with respect to a Tandem
SAR
granted in connection with an ISO: (i) the Tandem SAR shall expire no later
than
the expiration of the underlying ISO; (ii) the value of the payout with respect
to the Tandem SAR shall be for no more than one hundred percent (100%) of the
difference between the Option Price of the underlying ISO and the Fair Market
Value of the Shares subject to the underlying ISO at the time the Tandem SAR
is
exercised; and (iii) the Tandem SAR shall be exercisable only when the Fair
Market Value of the Shares subject to the ISO exceeds the Option Price of the
ISO.
6.3 Exercise
of Affiliated SARs.
An
Affiliated SAR shall be deemed to be exercised upon the exercise of the related
Option. The deemed exercise of an Affiliated SAR shall not necessitate a
reduction in the number of Shares subject to the related Option.
6.4 Exercise
of Freestanding SARs.
Freestanding SARs shall be exercisable on such terms and conditions as the
Committee, in its sole discretion, shall determine.
6.5 SAR
Agreement.
Each
SAR shall be evidenced by an Award Agreement that shall specify the xxxxx xxxxx,
the term of the SAR, the conditions of exercise, and such other terms and
conditions as the Committee, in its sole discretion, shall determine.
6.6 Expiration
of SARs.
An SAR
granted under the Plan shall expire upon the date determined by the Committee,
in its sole discretion, and set forth in the Award Agreement. Notwithstanding
the foregoing, the rules of Section 5.4
(pertaining to Options) also shall apply to SARs.
6.7 Payment
of SAR Amount.
Upon
exercise of an SAR, a Participant shall be entitled to receive payment from
the
Company in an amount determined by multiplying:
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(a) The
difference between the Fair Market Value of a Share on the date of exercise
over
the xxxxx xxxxx; times
(b) The
number of Shares with respect to which the SAR is exercised.
At
the
discretion of the Committee, the payment upon SAR exercise may be in cash,
in
Shares of equivalent value, or in some combination thereof.
6.8 Nontransferability
of SARs.
No SAR
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will, the laws of descent and
distribution, or as permitted under SECTION
9.
An SAR
granted to a Participant shall be exercisable during the Participant’s lifetime
only by such Participant.
SECTION
7
RESTRICTED
STOCK
7.1 Grant
of Restricted Stock.
Subject
to the terms and provisions of the Plan, the Committee, at any time and from
time to time, may grant Shares of Restricted Stock to Employees, Consultants
or
Directors in such amounts as the Committee, in its sole discretion, shall
determine.
7.2 Restricted
Stock Agreement.
Each
Award of Restricted Stock shall be evidenced by an Award Agreement that shall
specify the Period of Restriction, the number of Shares granted, and such other
terms and conditions as the Committee, in its sole discretion, shall determine.
Unless the Committee determines otherwise, shares of Restricted Stock shall
be
held by the Company as escrow agent until the restrictions on such Shares have
lapsed.
7.3 Transferability.
Except
as provided in this SECTION
7,
Shares
of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period
of
Restriction. All rights with respect to the Restricted Stock granted to a
Participant under the Plan shall be available during his or her lifetime only
to
such Participant.
7.4 Other
Restrictions.
The
Committee, in its sole discretion, may impose such other restrictions on any
Shares of Restricted Stock as it may deem advisable including, without
limitation, restrictions based upon the achievement of specific performance
goals (Company-wide, divisional, and/or individual), and/or restrictions under
applicable Federal or state securities laws; and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
For example, the Committee may determine that some or all certificates
representing Shares of Restricted Stock shall bear the following
legend:
“The
sale
or other transfer of the shares of stock represented by this certificate,
whether voluntary, involuntary, or by operation of law, is subject to certain
restrictions on transfer as set forth in the Adera Mines Limited 2006 Equity
Incentive Plan, and in a Restricted Stock Agreement. A copy of the Plan and
such
Restricted Stock Agreement may be obtained from the Secretary of Adera Mines
Limited”
7.5 Removal
of Restrictions.
Except
as otherwise provided in this SECTION
7,
Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan
shall be released from escrow as soon as practicable after the last day of
the
Period of Restriction. The Committee, in its discretion, may accelerate the
time
at which any restrictions shall lapse, and/or remove any restrictions. After
the
restrictions have lapsed, the Participant shall be entitled to have any legend
or legends under Section 7.4
removed
from his or her Share certificate, and the Shares shall be freely transferable
by the Participant.
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7.6 Voting
Rights.
During
the Period of Restriction, Participants holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those Shares,
unless the Committee determines otherwise.
7.7 Dividends
and Other Distributions.
During
the Period of Restriction, Participants holding Shares of Restricted Stock
shall
be entitled to receive all dividends and other distributions paid with respect
to such Shares, unless otherwise provided in the Award Agreement. If any such
dividends or distributions are paid in Shares, the Shares shall be subject
to
the same restrictions on transferability and forfeitability as the Shares of
Restricted Stock with respect to which they were paid.
7.8 Return
of Restricted Stock to Company.
Subject
to the applicable Award Agreement and Section 7.5,
upon
the earlier of (a) the Participant’s Termination of Employment, or (b) the date
set forth in the Award Agreement, the Restricted Stock for which restrictions
have not lapsed shall revert to the Company and, subject to Section 4.3,
again
shall become available for grant under the Plan.
7.9 Repurchase
Option.
Unless
the Committee determines otherwise, the Restricted Stock Purchase Agreement
shall grant the Company a repurchase option exercisable upon the voluntary
or
involuntary termination of the Participant's service with the Company for any
reason (including death or Disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall be the
original price paid by the Participant and may be paid by cancellation of any
indebtedness of the Participant to the Company. The repurchase option shall
lapse at a rate determined by the Committee.
SECTION
8
PERFORMANCE
UNITS AND PERFORMANCE SHARES
8.1 Grant
of Performance Units/Shares.
Performance Units and Performance Shares may be granted to Employees,
Consultants or Directors at any time and from time to time, as shall be
determined by the Committee, in its sole discretion. The Committee shall have
complete discretion in determining the number of Performance Units and
Performance Shares granted to each Participant.
8.2 Value
of Performance Units/Shares.
Each
Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. The
Committee shall set performance goals in its discretion which, depending on
the
extent to which they are met, will determine the number and/or value of
Performance Units/Shares that will be paid out to the Participants. The time
period during which the performance goals must be met shall be called the
“Performance
Period”.
8.3 Earning
of Performance Units/Shares.
After
the applicable Performance Period has ended, the holder of Performance
Units/Shares shall be entitled to receive a payout of the number of Performance
Units/Shares earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding performance
goals have been achieved. After the grant of a Performance Unit/Share, the
Committee, in its sole discretion, may adjust and/or waive the achievement
of
any performance goals for such Performance Unit/Share.
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8.4 Form
and Timing of Payment of Performance Units/Shares.
Payment
of earned Performance Units/Shares shall be made as soon as practicable after
the expiration of the applicable Performance Period. The Committee, in its
sole
discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.
8.5 Cancellation
of Performance Units/Shares.
Subject
to the applicable Award Agreement, upon the earlier of (a) the Participant’s
Termination of Employment, or (b) the date set forth in the Award Agreement,
all
remaining Performance Units/Shares shall be forfeited by the Participant to
the
Company, and subject to Section 4.3,
the
Shares subject thereto shall again be available for grant under the Plan.
8.6 Nontransferability.
Performance Units/Shares may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will, the laws of descent
and
distribution, or as permitted under SECTION
9.
A
Participant’s rights under the Plan shall be exercisable during the
Participant’s lifetime only by the Participant or the Participant’s legal
representative.
SECTION
9
BENEFICIARY
DESIGNATION
If
permitted by the Committee, a Participant may name a beneficiary or
beneficiaries to whom any unpaid vested Award shall be paid in event of the
Participant’s death. Each such designation shall revoke all prior designations
by the same Participant and shall be effective only if given in a form and
manner acceptable to the Committee. In the absence of any such designation,
benefits remaining unpaid at the Participant’s death shall be paid to the
Participant’s estate and, subject to the terms of the Plan, any unexercised
vested Award may be exercised by the Committee or executor of the Participant’s
estate.
SECTION
10
DEFERRALS
The
Committee, in its sole discretion, may permit a Participant to defer receipt
of
the payment of cash or the delivery of Shares that would otherwise be due to
such Participant under an Award. Any such deferral elections shall be subject
to
such rules and procedures as shall be determined by the Committee in its sole
discretion.
SECTION
11
RIGHTS
OF
EMPLOYEES AND CONSULTANTS
11.1 No
Effect on Employment or Service.
Nothing
in the Plan shall interfere with or limit in any way the right of the Company
to
terminate any Participant’s employment or service at any time, with or without
cause.
11.2 Participation.
No
Employee, Consultant or Director shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to receive
a future Award.
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SECTION
12
AMENDMENT,
SUSPENSION, OR TERMINATION
The
Board, in its sole discretion, may alter, amend or terminate the Plan, or any
part thereof, at any time and for any reason. However, as required by Applicable
Laws, no alteration or amendment shall be effective without further stockholder
approval. Neither the amendment, suspension, nor termination of the Plan shall,
without the consent of the Participant, alter or impair any rights or
obligations under any Award theretofore granted. No Award may be granted during
any period of suspension nor after termination of the Plan.
SECTION
13
TAX
WITHHOLDING
13.1 Withholding
Requirements.
Prior
to the delivery of any Shares or cash pursuant to an Award, the Company shall
have the power and the right to deduct or withhold, or require a Participant
to
remit to the Company, an amount sufficient to satisfy Federal, state, and local
taxes required to be withheld with respect to such Award.
13.2 Shares
Withholding.
The
Committee, in its sole discretion and pursuant to such procedures as it may
specify from time to time, may permit a Participant to satisfy the minimum
statutory tax withholding obligation, in whole or in part, by delivering to
the
Company Shares already owned for more than six (6) months having a value equal
to the amount required to be withheld. The value of the Shares to be delivered
will be based on their Fair Market Value on the date of delivery.
SECTION
14
INDEMNIFICATION
Each
person who is or shall have been a member of the Committee, or of the Board,
shall be indemnified and held harmless by the Company against and from any
loss,
cost, liability, or expense that may be imposed upon or reasonably incurred
by
him or her in connection with or resulting from any claim, notion, suit, or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan or
any
Award Agreement and against and from any and all amounts paid by him or her
in
settlement thereof, with the Company’s approval, or paid by him or her in
settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against
him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle
and
defend it on his or her own behalf. The foregoing right of indemnification
shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
SECTION
15
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,
DISSOLUTION, MERGER OR ASSET SALE
15.1 Changes
in Capitalization; No Award Repricing.
Subject
to any required action by the shareholders of the Company, the number of Shares
covered by each outstanding Award, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Award, as well as the price per Share covered by each such outstanding
Award, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split,
stock
dividend, combination or reclassification of the Shares, or any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided,
however,
that
conversion of any convertible securities of the Company shall not be deemed
to
have been “effected without receipt of consideration.” Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of Shares subject to an Award. Further,
except for the adjustments provided herein, no Award may be amended to reduce
its initial exercise price, and no Award may be cancelled and replaced with
an
Award with a lower price.
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15.2
Dissolution or Liquidation.
In the
event of the proposed dissolution or liquidation of the Company, the Committee
shall notify each Participant as soon as practicable prior to the effective
date
of such proposed transaction. The Committee in its discretion may provide for
a
Participant to have the right to exercise his or her Award until ten (10) days
prior to such transaction as to all of the Shares covered thereby, including
Shares as to which the Award would not otherwise be exercisable. In addition,
the Committee may provide that any Company repurchase option applicable to
any
Shares purchased upon exercise of an Award shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and
in
the manner contemplated. To the extent it has not been previously exercised,
an
Award will terminate immediately prior to the consum-mation of such proposed
action.
15.3 Merger
or Asset Sale.
In the
event of a merger of the Company with or into another corporation, or the sale
of substantially all of the assets of the Company, each outstanding Award shall
be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event
that the successor corporation refuses to assume or substitute for the Award,
the Participant shall fully vest in and have the right to exercise the Award
as
to all of the Shares as to which it would not otherwise be vested or
exercisable. If an Award becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Committee shall notify the Participant in writing or electronically that the
Award shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Award shall terminate upon the expiration
of such period. For the purposes of this paragraph, the Award shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share subject to the
Award immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger
or
sale of assets by holders of Shares for each Share held on the effective date
of
the transaction (and if holders were offered a choice of consideration, the
type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided,
however,
that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Committee may, with the
consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Award, for each Share subject to the Award,
to
be solely common stock of the successor corporation or its Parent equal in
fair
market value to the per share consideration received by holders of Shares in
the
merger or sale of assets.
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CONDITIONS
UPON ISSUANCE OF SHARES
15.4 Legal
Compliance.
Shares
shall not be issued pursuant to the exercise of an Award unless the exercise
of
such Award and the issuance and delivery of Shares shall comply with Applicable
Laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
15.5 Investment
Representations.
As a
condition to the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.
SECTION
16
INABILITY
TO OBTAIN AUTHORITY
The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company's counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.
SECTION
17
RESERVATION OF SHARES
The
Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
SECTION
18
LEGAL
CONSTRUCTION
18.1 Gender
and Number.
Except
where otherwise indicated by the context, any masculine term used herein also
shall include the feminine; the plural shall include the singular and the
singular shall include the plural.
18.2 Severability.
In the
event any provision of the Plan shall be held illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining parts of the Plan,
and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.
18.3 Requirements
of Law.
The
granting of Awards and the issuance of Shares under the Plan shall be subject
to
all Applicable Laws.
18.4 Securities
Law Compliance.
With
respect to Section 16 Persons, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3. To the extent any provision
of the Plan, Award Agreement or action by the Committee fails to so comply,
it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
18.5 Governing
Law.
The
Plan and all Award Agreements shall be construed in accordance with and governed
by the laws of the State of California.
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18.6 Captions.
Captions are provided herein for convenience only, and shall not serve as a
basis for interpretation or construction of the Plan.
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