Exhibit 4.2
STOCK OPTION AGREEMENT
FIRST AMERICAN SILVER CORP.
THIS AGREEMENT is entered into as of _____________________ (the "Date of Grant")
BETWEEN:
FIRST AMERICAN SILVER CORP., a company incorporated pursuant to the
laws of the State of Nevada, of 10597 Double R Blvd, Suite 2, Reno,
NV, 89521
(the "Company")
AND:
_____________________, of ________________________________
(the "Optionee")
WHEREAS:
A. The Board of Directors of the Company (the "Board") has approved and adopted
the 2011 Stock Option Plan (the "Plan"), pursuant to which the Board is
authorized to grant to employees and other selected persons stock options to
purchase common shares of the Company (the "Common Stock");
B. The Plan provides for the granting of stock options that either (i) are
intended to qualify as "Incentive Stock Options" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or (ii) do
not qualify under Section 422 of the Code ("Non-Qualified Stock Options"); and
C. The Board has authorized the grant to the Optionee of options to purchase a
total of _________ shares of Common Stock (the "Options"), which Options are
intended to be (select one):
[ ] Incentive Stock Options;
[ ] on Non-Qualified Stock Options
NOW THEREFORE, the Company agrees to offer to the Optionee the option to
purchase, upon the terms and conditions set forth herein and in the Plan,
_____________ shares of Common Stock. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Plan.
1. Exercise Price. The exercise price of the options shall be US $__________ per
share.
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2. Limitation on the Number of Shares. If the Options granted hereby are
Incentive Stock Options, the number of shares which may be acquired upon
exercise thereof is subject to the limitations set forth in Section 5.1 of the
Plan.
3. Vesting Schedule. The Options shall vest in accordance with Exhibit A.
4. Options not Transferable. The Options may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will, by applicable laws of descent and distribution or, in the
case of a Non-Qualified Stock Option, pursuant to a qualified domestic relations
order, and shall not be subject to execution, attachment or similar process;
PROVIDED, HOWEVER, that if the Options represent a Non-Qualified Stock Option,
such Option is transferable without payment of consideration to immediate family
members of the Optionee or to trusts or partnerships established exclusively for
the benefit of the Optionee and Optionee's immediate family members. Upon any
attempt to transfer, pledge, hypothecate or otherwise dispose of any Option or
of any right or privilege conferred by the Plan contrary to the provisions
thereof, or upon the sale, levy or attachment or similar process upon the rights
and privileges conferred by the Plan, such Option shall thereupon terminate and
become null and void.
5. Investment Intent. By accepting the Options, the Optionee represents and
agrees that none of the shares of Common Stock purchased upon exercise of the
Options will be distributed in violation of applicable federal and state laws
and regulations. In addition, the Company may require, as a condition of
exercising the Options, that the Optionee execute an undertaking, in such a form
as the Company shall reasonably specify, that the Stock is being purchased only
for investment and without any then-present intention to sell or distribute such
shares.
6. Termination of Employment and Options. Vested Options shall terminate, to the
extent not previously exercised, upon the occurrence of the first of the
following events:
(a) Expiration. Five (5) years from the Date of Grant.
(b) Termination for Cause. The date of the first discovery by the Company
of any reason for the termination of an Optionee's employment or
contractual relationship with the Company or any related company for
cause (as determined in the sole discretion of the Plan
Administrator), and, if an Optionee's employment is suspended pending
any investigation by the Company as to whether the Optionee's
employment should be terminated for cause, the Optionee's rights under
this Agreement and the Plan shall likewise be suspended during the
period of any such investigation.
(c) Termination Due to Death or Disability. The expiration of one (1) year
from the date of the death of the Optionee or cessation of an
Optionee's employment or contractual relationship by reason of
disability (as defined in Section 5.1(g) of the Plan). If an
Optionee's employment or contractual relationship is terminated by
death, any Option held by the Optionee shall be exercisable only by
the person or persons to whom such Optionee's rights under such Option
shall pass by the Optionee's will or by the laws of descent and
distribution.
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(d) Termination for Any Other Reason. The expiration of three (3) months
from the date of an Optionee's termination of employment or
contractual relationship with the Company or any Related Corporation
for any reason whatsoever other than termination of service as a
director, cause, death or Disability (as defined in Section 5.1(g) of
the Plan).
Each unvested Option granted pursuant hereto shall terminate immediately upon
termination of the Optionee's employment or contractual relationship with the
Company for any reason whatsoever, including Disability unless vesting is
accelerated in accordance with Section 5.1(f) of the Plan.
7. Stock. In the case of any stock split, stock dividend or like change in the
nature of shares of Stock covered by this Agreement, the number of shares and
exercise price shall be proportionately adjusted as set forth in Section 5.1(m)
of the Plan.
8. Exercise of Option. Options shall be exercisable, in full or in part, at any
time after vesting, until termination; PROVIDED, HOWEVER, that any Optionee who
is subject to the reporting and liability provisions of Section 16 of the
SECURITIES EXCHANGE ACT of 1934 with respect to the Common Stock shall be
precluded from selling or transferring any Common Stock or other security
underlying an Option during the six (6) months immediately following the grant
of that Option. If less than all of the shares included in the vested portion of
any Option are purchased, the remainder may be purchased at any subsequent time
prior to the expiration of the Option term. No portion of any Option for less
than fifty (50) shares (as adjusted pursuant to Section 5.1(m) of the Plan) may
be exercised; provided, that if the vested portion of any Option is less than
fifty (50) shares, it may be exercised with respect to all shares for which it
is vested. Only whole shares may be issued pursuant to an Option, and to the
extent that an Option covers less than one (1) share, it is unexercisable.
Each exercise of the Option shall be by means of delivery of a notice of
election to exercise (which may be in the form attached hereto as Exhibit B) to
the President of the Company at its principal executive office, specifying the
number of shares of Common Stock to be purchased and accompanied by payment in
cash by certified check or cashier's check in the amount of the full exercise
price for the Common Stock to be purchased. In addition to payment in cash by
certified check or cashier's check, an Optionee or transferee of an Option may
pay for all or any portion of the aggregate exercise price by complying with one
or more of the following alternatives:
(a) by delivering to the Company shares of Common Stock previously held by
such person, duly endorsed for transfer to the Company, or by the
Company withholding shares of Common Stock otherwise deliverable
pursuant to exercise of the Option, which shares of Common Stock
received or withheld shall have a fair market value at the date of
exercise (as determined by the Plan Administrator) equal to the
aggregate purchase price to be paid by the Optionee upon such
exercise; or
(b) by complying with any other payment mechanism approved by the Plan
Administrator at the time of exercise.
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It is a condition precedent to the issuance of shares of Common Stock that the
Optionee execute and/or deliver to the Company all documents and withholding
taxes required in accordance with Section 5.1 of the Plan.
9. Holding period for Incentive Stock Options. In order to obtain the tax
treatment provided for Incentive Stock Options by Section 422 of the Code, the
shares of Common Stock received upon exercising any Incentive Stock Options
received pursuant to this Agreement must be sold, if at all, after a date which
is later of two (2) years from the date of this agreement is entered into or one
(1) year from the date upon which the Options are exercised. The Optionee agrees
to report sales of shares prior to the above determined date to the Company
within one (1) business day after such sale is concluded. The Optionee also
agrees to pay to the Company, within five (5) business days after such sale is
concluded, the amount necessary for the Company to satisfy its withholding
requirement required by the Code in the manner specified in Section 5.1(l) of
the Plan. Nothing in this Section 9 is intended as a representation that Common
Stock may be sold without registration under state and federal securities laws
or an exemption therefrom or that such registration or exemption will be
available at any specified time.
10. Resale restrictions may apply. Any resale of the shares of Common Stock
received upon exercising any Options will be subject to resale restrictions
contained in the securities legislation applicable to the Optionee. The Optionee
acknowledges and agrees that the Optionee is solely responsible (and the Company
is not in any way responsible) for compliance with applicable resale
restrictions.
11. Subject to 2011 Stock Option Plan. The terms of the Options are subject to
the provisions of the Plan, as the same may from time to time be amended, and
any inconsistencies between this Agreement and the Plan, as the same may be from
time to time amended, shall be governed by the provisions of the Plan, a copy of
which has been delivered to the Optionee, and which is available for inspection
at the principal offices of the Company.
12. Professional Advice. The acceptance of the Options and the sale of Common
Stock issued pursuant to the exercise of Options may have consequences under
federal and state tax and securities laws which may vary depending upon the
individual circumstances of the Optionee. Accordingly, the Optionee acknowledges
that he or she has been advised to consult his or her personal legal and tax
advisor in connection with this Agreement and his or her dealings with respect
to Options. Without limiting other matters to be considered with the assistance
of the Optionee's professional advisors, the Optionee should consider: (a)
whether upon the exercise of Options, the Optionee will file an election with
the Internal Revenue Service pursuant to Section 83(b) of the Code and the
implications of alternative minimum tax pursuant to the Code; (b) the merits and
risks of an investment in the underlying shares of Common Stock; and (c) any
resale restrictions that might apply under applicable securities laws.
13. No Employment Relationship. Whether or not any Options are to be granted
under this Plan shall be exclusively within the discretion of the Plan
Administrator, and nothing contained in this Plan shall be construed as giving
any person any right to participate under this Plan. The grant of an Option
shall in no way constitute any form of agreement or understanding binding on the
Company or any Related Company, express or implied, that the Company or any
Related Company will employ or contract with an Optionee, for any length of
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time, nor shall it interfere in any way with the Company's or, where applicable,
a Related Company's right to terminate Optionee's employment at any time, which
right is hereby reserved.
14. Entire Agreement. This Agreement is the only agreement between the Optionee
and the Company with respect to the Options, and this Agreement and the Plan
supersede all prior and contemporaneous oral and written statements and
representations and contain the entire agreement between the parties with
respect to the Options.
15. Notices. Any notice required or permitted to be made or given hereunder
shall be mailed or delivered personally to the addresses set forth below, or as
changed from time to time by written notice to the other:
The Company:
First American Silver Corp.
10597 Double R Blvd, Suite 2,
Reno, NV, 89521
Attention: President
The Optionee:
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FIRST AMERICAN SILVER CORP.
Per:
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Authorized Signatory
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[Insert Optionee Name]
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EXHIBIT A
TERMS OF THE OPTION
Name of the Optionee: *
Date of Grant: *
Designation: Non Qualified Stock Options
1. Number of Options granted: * stock options
2. Purchase Price: $* per share
3. Vesting Dates: *
4. Expiration Date: *
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EXHIBIT B
To:
First American Silver Corp.
10597 Double R Blvd, Suite 2,
Reno, NV, 89521
Attention: President
NOTICE OF ELECTION TO EXERCISE
This Notice of Election to Exercise shall constitute proper notice pursuant to
Section 5.1(h) of First American Silver Corp.'s (the "Company") 2011 Stock
Option Plan (the "Plan") and Section 8 of that certain Stock Option Agreement
(the "Agreement") dated as of the _____ day of _________________, 20___, between
the Company and the undersigned.
The undersigned hereby elects to exercise Optionee's option to purchase
__________shares of the common stock of the Company at a price of US$________
per share, for aggregate consideration of US$______, on the terms and conditions
set forth in the Agreement and the Plan. Such aggregate consideration, in the
form specified in Section 8 of the Agreement, accompanies this notice.
The Optionee hereby directs the Company to issue, register and deliver the
certificates representing the shares as follows:
Registration Information: Delivery Instructions:
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Name to appear on certificates Name
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Address Address
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Telephone Number
DATED at _____________________________, the day of _________________, 20___.
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(Name of Optionee - Please type or print)
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(Signature and, if applicable, Office)
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(Address of Optionee)
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(City, State, and Zip Code of Optionee)