PIEDMONT MINING COMPANY, INC. NONQUALIFIED STOCK OPTION AGREEMENT
Date
of Grant: April 9,
2008
THE
GRANT OF THIS OPTION SHALL NOT IMPOSE AN OBLIGATION UPON THE OPTIONEE TO
EXERCISE THIS OPTION.
THIS AGREEMENT is made by and
between Piedmont Mining Company, Inc., a North Carolina corporation (the
“Company”), and V. Xxxxxxx
Xxxxxxx (“Optionee”), effective as of April 9, 2008 (the "Effective
Date").
In
consideration of the mutual covenants contained herein and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Grant of
Option. The Company hereby grants to Optionee, in the manner
and, subject to the conditions hereinafter provided, the right, privilege and
option to purchase (the “Option”) an aggregate of One Hundred Fifty Thousand (150,000)
Shares of the Company’s common stock, no par value (the “Shares” or
“Common Stock”).
2. Term of Option. Subject to the
terms, conditions and restrictions set forth herein, the term of this Option
shall be Three (3) years
from the date of grant (the “Expiration Date”). Any portion of this
Option not exercised prior to the Expiration Date shall thereupon become null
and void.
3. Exercise of
Option.
3.1. Vesting of
Option. This Option shall become exercisable as
follows:
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Number of
Shares
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Vesting
Date
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75,000
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April
9, 2008
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75,000
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April
9, 2009
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Each of
the foregoing dates shall be referred to as a “Vesting Date” for that portion of
this Option vested on such date (“Vested Portion”).
All or
any portion of the Shares underlying a Vested Portion of this Option may be
purchased during the term of this Option, but not as to less than 1,000 Shares
(unless the remaining Shares then constituting the Vested Portion of this Option
is less than 1,000 Shares) at any time.
3.2. Manner of
Exercise. The
Vested Portion of this Option may be exercised from time to time, in whole or in
part, by presentation of a Request to Exercise Form, in substantially the form
attached hereto (the "Form"), to the Company at its principal office, which Form
must be duly executed by the Optionee and accompanied by payment, subject to any
legal restrictions, in the form of: (a) cash; (b) check payable to
the Company; (c) the surrender of Option Shares
equal to the value of the Exercise Price pursuant to a so-called "cashless
exercise," which Option Shares so surrendered shall be valued at Fair Market
Value as of the date of exercise of the Option for any Vested Portion, less the
Exercise Price; (d) a "same day sale" or "margin" commitment from the Optionee
and a NASD Dealer or other acceptable intermediary whereby the Optionee
irrevocably elects to exercise the Option and to sell a portion of the shares so
purchased to pay for the Exercise Price and whereby the NASD Dealer or other
acceptable intermediary irrevocably commits to forward the Exercise Price
directly to the Company; or (e) any combination of the foregoing, in the
aggregate amount of the Exercise Price, multiplied by the number of shares of
Common Stock the Optionee is purchasing at such time, subject to reduction for
withholding for tax obligations as provided in Section 14.
Upon receipt and acceptance by the
Company of such Form, accompanied by any payment method specified above, the
Optionee shall be deemed to be the record owner of the Common Stock purchased,
notwithstanding that the stock transfer books of the Company may then be closed
or that certificates representing the Common Stock purchased under this Option
may not then be actually delivered to the Optionee.
3.3. Exercise Price. The
exercise price (the “Exercise Price”) payable upon exercise of this Option shall
be Twenty Eight Cents (US
$0.28) per Share.
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4).
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Exercise After Certain
Events.
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4.1. Termination of
Employment/Consulting/Directorship. If for any reason, other
than permanent and total disability (as defined below) or death of the Optionee,
the Optionee ceases to be employed by or to be a consultant or director or
member of the Advisory Board of the Company or a Subsidiary, this Option, if
held at the date of such termination (to the extent then exercisable), may be
exercised, in whole or in part, at any time prior to the expiration of ninety
(90) days from the date of termination or prior to the Expiration Date,
whichever shall first occur.
4.2. Permanent Disability and
Death. If Optionee becomes permanently and totally disabled
(within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended), or dies while employed by the Company, (or if the Optionee dies within
the period that the Option remains exercisable after termination of employment
or affiliation), any Vested Portion of the Shares then held may be exercised by
the Optionee, the Optionee’s personal representative, or by the person to whom
the Option is transferred by will or the laws of descent and distribution, in
whole or in part, at any time within one (1) year after the disability or death
(but in no event after the Expiration Date).
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5. Restrictions on Transfer of
Option. Except as otherwise provided below, this Option shall
not be transferable other than by will or by the laws of descent and
distribution, and during the lifetime of the Optionee, only the Optionee, his or
her guardian or legal representative or authorized assignee may exercise the
Option. The Optionee may designate a beneficiary to exercise his or
her Option after the Optionee's death. The Company may provide for
transfer of the Option, with or without payment of consideration, to: (i) the
following family members of the Optionee, including adoptive relationships: a
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
sister-in-law, niece, nephew, former spouse (whether by gift or pursuant to a
domestic relations order); (ii) any person sharing the Optionee's household
(other than a tenant or employee); (iii) a family controlled or nonfamily
controlled partnership, corporation, limited liability company, or trust; or
(iv) a foundation in which family members (as described above) control the
management of assets. The assigned portion may only be exercised by the person
or persons who acquire a proprietary interest in the Option pursuant to the
assignment. The terms applicable to the assigned portion shall be the
same as those in effect for the Option immediately prior to such assignment and
shall be set forth in such documents issued to the assignee as the Company may
be deemed appropriate.
6. Adjustment for Changes in
Capitalization. The existence of this Option shall not affect
the Company’s right to effect adjustments, recapitalizations, reorganizations or
other changes in its or any other corporation’s capital structure or business,
any merger or consolidation, any issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Shares, the dissolution or
liquidation of the Company’s or any other corporation’s assets or business, or
any other corporate act, whether similar to the events described above or
otherwise. If the outstanding number of shares of the Company’s
Common Stock are increased or decreased in number or changed into or exchanged
for a different number or kind of securities of the Company or any other
corporation by reason of a recapitalization, reclassification, stock split,
reverse stock split, combination of shares, stock dividend or other similar
event, an appropriate adjustment of the number and kind of securities with
respect to which this Option may be exercised and the Exercise Price at which
this Option may be exercised will be made.
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7.
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Dissolution, Liquidation and
Merger.
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7.1. Company Not The
Survivor. In the event of a dissolution or liquidation of the
Company, a merger, consolidation, combination or reorganization in which the
Company is not the surviving corporation, or a sale of substantially all of the
assets of the Company (as determined in the sole discretion of the Board of
Directors), the Company, in its absolute discretion, may cancel each outstanding
Option upon payment in cash to the Optionee of the amount by which any cash and
the fair market value of any other property which the Optionee would have
received as consideration for the Shares of Common Stock covered by the Option
if the Option had been exercised before such liquidation, dissolution, merger,
consolidation or sale, exceeds the exercise price of the Option. In
addition to the foregoing, in the event of a dissolution or liquidation of the
Company, or a merger, consolidation, combination or reorganization, in which the
Company is not the surviving corporation, the Company, in its absolute
discretion, may accelerate the time within which each outstanding Option may be
exercised.
7.2. Company is the
Survivor. In the event of a merger, consolidation, combination
or reorganization in which the Company is the surviving corporation, the Board
of Directors shall determine the appropriate adjustment of the number and kind
of securities with respect to which outstanding Options may be exercised, and
the exercise price at which outstanding Options may be exercised. The
Board of Directors shall determine, in its sole and absolute discretion, when
the Company shall be deemed to survive for purposes of this
Agreement.
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8. Change of
Control. If there is a change of control in the Company, all
outstanding Options shall fully vest immediately upon the Company's public
announcement of such a change. A "change of control" shall mean an
event involving one transaction or a related series of transactions, in which
(i) the Company issues securities equal to 25% or more of the Company's issued
and outstanding voting securities, determined as a single class, to any
individual, firm, partnership, limited liability company, or other entity,
including a "group" within the meaning of SEC Exchange Act Rule 13d-3, (ii) the
Company issues voting securities equal to 25% or more of the issued and
outstanding voting stock of the Company in connection with a merger,
consolidation other business combination, (iii) the Company is acquired in a
merger or other business combination transaction in which the Company is not the
surviving company, or (iv) all or substantially all of the Company's assets are
sold or transferred. See Section 7 with respect to Options vesting
upon the occurrence of either of the events described in (iii) or (iv) of this
Section 8, and the result upon non-exercise of any Shares underlying this
Option.
9. Reservation of
Shares. The Company agrees that prior to the earlier of the
expiration of this Option and the exercise and purchase of the total number of
Shares represented by this Option, there shall be reserved for issuance and
delivery upon exercise of this Option such number of the Company’s authorized
and unissued Shares as shall be necessary to satisfy the terms and conditions of
this Agreement.
10. No Rights as
Stockholder. The Optionee shall have no rights as a
stockholder with respect to any Shares underlying this Option unless the
Optionee shall have exercised any Vested Portion of this Option, and then only
with respect such Shares so exercised. The Optionee shall have no
right to vote any Shares, or to receive distributions of dividends or any assets
or proceeds from the sale of Company's assets upon liquidation until Optionee
has effectively exercised this Option and fully paid for any Vested Portion of
the Shares. Subject to Section 6, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date title
to the Shares has been acquired by the Optionee.
11. No Rights to Employment or Continued
Employment. The grant of this Option shall in no way be
construed so as to confer on Optionee the right to employment or continued
employment by the Company. Nothing hereunder shall confer upon
Optionee any right to employment or to continue in the employ of the Company, or
to interfere with or restrict in any way the rights of the Company, which are
hereby expressly reserved, to terminate or discharge Optionee at any time for
any reason whatsoever, with or without cause.
12. Suspension and
Termination. In the event the Board reasonably believes that
the Optionee has committed an act of misconduct specified hereafter, the Company
may suspend the Optionee’s right to exercise the Option pending final
determination by the Board, which final determination shall be made within five
(5) business days of such suspension. If the Board determines that an
Optionee has committed an act of embezzlement, fraud, breach of fiduciary
duty, or deliberate disregard of the Company rules resulting in loss, damage or
injury to the Company, or if Optionee makes an unauthorized disclosure of any
Company trade secret or confidential information, engages in any conduct
constituting unfair competition, induces any Company customer to breach a
contract with the Company, or induces any principal for whom the Company acts as
agent to terminate such agency relationship, neither the Optionee nor his or her
estate shall be entitled to exercise any Vested Portion of the Option
hereunder. In making such determination, the Board shall act fairly
and in good faith and shall give the Optionee an opportunity to appear and
present evidence on the Optionee’s behalf.
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13. Participation in Company Option
Plans. The grant of this Option shall not prevent Optionee
from participating or being granted options under any other Company equity
incentive plans; provided, however, that the Optionee meets the eligibility
requirements, and such participation or grant does not prevent such plans from
meeting the requirements of the Internal Revenue Code of 1986, as
amended.
14. Payment of
Taxes. Upon the exercise of the Option, the Company shall have
the right to require the Optionee or such other person to pay by cash, or check
payable to the Company, the amount of any required withholding on applicable
federal, state, and local taxes and FICA with respect to such
transactions. Any such payment must be made promptly when the amount
of such obligation becomes determinable (the "Tax Date"). To the
extent permissible under applicable tax, securities and other laws, the Board
may, in its sole discretion and upon such terms and conditions as it may deem
appropriate, permit the Optionee to satisfy his or her obligation to pay any
such tax, in whole or in part, up to an amount not greater than the employer's
minimum statutory withholding based on the minimum statutory withholding rates,
by (a) directing the Company to apply shares of Stock to which the Optionee is
entitled as a result of the exercise of this Option, or (b) delivering to the
Company shares of Stock owned by the Optionee. The shares of Stock so
applied or delivered in satisfaction of the Optionee's tax withholding
obligation shall be valued at their Fair Market Value as of the date of
measurement of the amount of income subject to withholding.
15. Issue and Transfer
Tax. The Company will pay all issuance taxes, if any,
attributable to the initial issuance of Shares upon the exercise of the Option;
provided, however, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue or
delivery of any certificates for Shares in a name other than that of the
Optionee.
16. Arbitration. Any
controversy, dispute or claim arising out of or relating to this Option which
cannot be amicably settled including, but not limited to, the suspension or
termination of Optionee’s right in accordance with Section 11 above, shall be
settled by arbitration. Said arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association at a time and place as selected by the arbitrator(s).
16.1. Initiation of
Arbitration. After seven (7) days prior written notice to the
other, either party hereto may formally initiate arbitration under this
Agreement by filing a written request therefor, and paying the appropriate
filing fees, if any.
16.2. Hearing and Determination
Dates. The hearing before the arbitrator shall occur within
thirty (30) days from the date the matter is submitted to
arbitration. Further, a determination by the arbitrator shall be made
within forty-five (45) days from the date the matter is submitted to
arbitration. Thereafter, the arbitrator shall have fifteen (15) days
to provide the parties with his or her decision in writing. However,
any failure to meet the deadlines in this section will not affect the validity
of any decision or award.
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16.3. Binding Nature of
Decision. The decision of the arbitrator shall be binding on
the parties. Judgment thereon shall be entered in a court of
competent jurisdiction.
16.4. Injunctive
Actions. Nothing herein contained shall bar the right of
either party to seek to obtain injunctive relief or other provisional remedies
against threatened or actual conduct that will cause loss or damages under the
usual equity rules including the applicable rules for obtaining preliminary
injunctions and other provisional remedies.
16.5. Costs. The cost of
arbitration, including the fees of the arbitrator, shall initially be borne
equally by the parties; provided, the prevailing party shall be entitled to
recover such costs, in addition to attorneys’ fees and other costs, in
accordance with Section 19 of this Agreement.
17. Notices. All
notices to be given by either party to the other shall be in writing and may be
transmitted by personal delivery, facsimile transmission, overnight courier or
mail, registered or certified, postage prepaid with return receipt requested;
provided, however, that notices
of change of address or telex or facsimile number shall be effective only upon
actual receipt by the other party. Notices shall be delivered at the
following addresses, unless changed as provided for herein:
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To the
Optionee:
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V.
Xxxxxxx Xxxxxxx
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000 Xxxx
00xx
Xxxxxx, Xxxxx 0-X
Xxx Xxxx,
XX 00000
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To the
Company:
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00000
Xxxxx Xxxxxxx, Xxx 000
Xxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxxx, Xx.
President
and CEO
With
a copy to:
000 Xxxx
00xx
Xxxxxx, #000
Xxx Xxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxxx, Xx.
President
and CEO
18. Applicable
Law. This Option and the relationship of the parties in
connection with its subject matter shall be governed by, and construed under,
the laws of the state of Nevada.
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19. Attorneys Fees. In
the event of any litigation, arbitration or other proceeding arising out of this
Option, the prevailing party shall be entitled to an award of costs, including
an award of reasonable attorneys’ fees. Any judgment, order or award
entered in any such proceeding shall designate a specific sum as such an award
of attorneys’ fees and costs incurred. This attorneys’ fee provision
is intended to be severable from the other provisions of this Agreement, shall
survive any judgment or order entered in any proceeding, and shall not be deemed
merged into any such judgment or order, so that such further fees and costs as
may be incurred in the enforcement of an award or judgment or in defending it on
appeal shall likewise be recoverable by further order of a court or panel or in
a separate action as may be appropriate.
20. Binding
Effect. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, executors and
successors.
21. Tax Effect. The
federal tax consequences of stock options are complex and subject to
change. Each person should consult with his or her tax advisor before
exercising any Option or disposing of any Shares acquired upon the exercise of
an Option.
IN
WITNESS WHEREOF, this Option Agreement has been executed as of the date first
above written.
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"COMPANY"
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/s/ Xxxxxx
X. Xxxxxxx,
Xx.
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Xxxxxx
X. Xxxxxxx, Xx.
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President
and CEO
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"OPTIONEE"
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_____________________________________
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V.
Xxxxxxx Xxxxxxx
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7
REQUEST
TO EXERCISE FORM
Dated: __________________,
20___
The
undersigned hereby irrevocably elects to exercise all or part, as specified
below, of the Vested Portion of the Option granted to him or her pursuant to
that certain Non-qualified Stock Option Agreement effective April 9, 2008
between the undersigned and Piedmont Mining Company, Inc. (the “Company”), to
purchase an aggregate of One
Hundred Fifty Thousand (150,000) shares of the Company’s Common Stock
(the “Shares”).
Please
check method of payment:
□ Cash: The
undersigned hereby tenders cash in the amount of $0.____ per Share multiplied
by ____________________ , the number of Shares he or she is purchasing at this
time, for a total of $______________ , which constitutes full payment of the
total exercise price thereof.
- or
-
□ Cashless
Exercise: The
undersigned hereby forfeits a Vested Portion of ___________
Shares,
multiplied by the fair market value of $____________ on the date hereof, for a
total of $____________ , which constitutes full payment for the total exercise
price of $__________ per Share, multiplied by _____________________ the number
of Shares he or she is purchasing at this time.
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INSTRUCTIONS
FOR REGISTRATION OF SHARES
IN
COMPANY’S TRANSFER BOOKS
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Name:
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____________________________________
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(Please
typewrite or print in block letters)
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Address:
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____________________________________
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____________________________________
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Signature:
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____________________________________
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Accepted
by Piedmont Mining Company, Inc.:
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By:
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______________________________
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______________________________
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Name
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______________________________
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Title
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