Exhibit 10.24
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U.S. GOLD CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of August 8, 2002 (the "Date of Grant"), by and between U.S. Gold
Corporation, a Colorado corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇ (the
"Optionee").
WITNESSETH:
WHEREAS, on August 8, 2002, the Board of Directors determined that the Optionee
should receive an Incentive Stock Option to purchase shares of the Company's
Common Stock under the Company's 2002 Stock Option and Stock Grant Plan (the
"Plan") in order to provide the Optionee with an opportunity for investment in
the Company and additional incentive to pursue the success of the Company, said
option to be for the number of shares, at the price per share and on the terms
set forth in this Agreement; and
WHEREAS, Optionee desires to receive an option on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Grant of Incentive Stock Option. The Company hereby grants to Optionee, as a
matter of separate agreement and not in lieu of salary or any other compensation
for service, the right and option (the "Option") to purchase all or any part of
an aggregate of 750,000 shares of reserved authorized and unissued $.10 par
value Common Stock of the Company (the "Option Shares") pursuant to the terms
and conditions set forth in this Agreement. This Option can not be exercised as
provided herein, in whole or in part, until and unless the Plan and this Option
are approved by the shareholders of the Company at a duly called and held
meeting of shareholders.
2. Option Price. At any time when shares are to be purchased pursuant to the
Option, the purchase price for each Option Share shall be $0.32 (the "Option
Price").
3. Option Period. The Option period shall commence as of the Date of Grant and
shall terminate ten years from the Date of Grant, unless terminated earlier as
provided in this Agreement. If an Optionee, for any reason, other than the
Optionee's death, ceases to be employed by either the Company or a Subsidiary of
the Company, any Option held by the Optionee at the time he ceases to be an
employee may be exercised within 180 days after the date of such cessation, but
only to the extent that the Option was exercisable according to its terms on the
date of such cessation. After such 180-day period, any unexercised portion of an
Option shall expire. Any Option held by an Optionee at the time of his death may
be exercised by his estate, subject to any limitation otherwise applicable to
such Option, only within twelve months of his death or such longer period as the
Board of Directors of the Company may determine.
This Option is exercisable by Optionee, cumulatively, over time, only as
follows:
(a) 250,000 shares on or after February 9, 2003.
(b) An additional 250,000 shares on or after January 2, 2004.
(c) An additional 250,000 shares on or after January 2, 2005.
4. Exercise of Option.
As noted above, the Plan and the Option must be approved by the shareholders of
the Company prior to any exercise of the Option. The Option can only be
exercised, in whole or in part, as determined by the Board of Directors with
written notice to Optionee, from reserved shares of authorized and unissued
Option Shares subsequent to such approval by shareholders of the Company.
(a) The Option may be exercised by delivering to the Company:
(i) a Notice and Agreement of Exercise of Option, substantially in the
form attached hereto as Exhibit A, specifying the number of Option
Shares with respect to which the Option is exercised, and the method
of payment, and
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(ii) payment of the total purchase price of the shares upon Exercise,
to the extent permitted by applicable statutes and regulations: (i) in
cash (including check, bank draft or money order); (ii) by such other
forms of payment as are acceptable to the Committee in its sole
discretion, (iii) whole shares of the Company's Common Stock, (iv) the
withholding of shares of Common Stock issuable upon such exercise of
the Option; or (v) any combination of the foregoing methods of
payment. Without limiting the foregoing, if a Optionee elects to have
shares of Common Stock issuable upon exercise of an Option withheld to
pay all or any part of the amounts payable in connection with such
exercise including provision for payment of or provision for payment
of any applicable withholding or similar taxes, then the Committee
shall have the sole discretion to approve or disapprove such election
at the time of any Exercise.
(c) Promptly upon receipt of the Notice of Agreement and Exercise and the
full payment of the Option Price by the Optionee the Company shall deliver
to the Optionee a properly executed certificate or certificates
representing the Option Shares being purchased.
5. Securities Laws Requirements. No Option Shares shall be issued unless and
until, in the opinion of the Company, any applicable registration requirements
of the Securities Act of 1933, any applicable listing requirements of any
securities exchange on which stock of the same class is listed, and any other
requirements of law or any regulatory bodies having jurisdiction over such
issuance and delivery have been fully complied with. Pursuant to the terms of
the Notice and Agreement of Exercise that shall be delivered to the Company upon
each exercise of the Option, the Optionee shall acknowledge, represent, warrant
and agree as follows:
(a) All Option Shares shall be acquired solely for the account of the
Optionee for investment purposes only and with no view to their resale or
other distribution of any kind;
(b) No Option Share shall be sold or otherwise distributed in violation of
the Securities Act of 1933 or any other applicable federal or state
securities laws;
(c) If the Optionee is subject to reporting requirements under Section
16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), he
shall:
(i) be aware that the actual accrual of any right under the Option to
purchase Option Shares is an event that requires reporting on Form 4
under Section 16(a) of the Exchange Act.
(ii) be aware that any sale by him or his immediate family of the
Company's Common Stock within six months before or after the granting
of any Option may create liability for him under Section 16(b) of the
Exchange Act,
(iii) consult with his counsel regarding the application of Section
16(b) of the Exchange Act prior to any exercise of the Option, and
prior to any sale of the Company's Common Stock,
(iv) assist the Company with the filing of a Form 3, 4 or 5 with the
Securities and Exchange Commission, and
(v) timely file all reports required under the federal securities
laws, and
(d) The Optionee shall report all sales of Option shares to the Company in
writing on a form prescribed by the Company, including pre-notification in
certain cases as provided in Section 6 below.
The forgoing restrictions or notices thereof may be placed on the certificates
representing the Option Shares purchased pursuant to the Option and the Company
may refuse to issue the certificates or to transfer the shares on its books
unless it is satisfied that no violation of such restrictions will occur.
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6. Taxation Related Issues and Reporting Obligations. The Optionee is aware that
the taxation issues related to Incentive Stock Options may be complicated and
Optionee agrees to and shall seek personal tax advice regarding such issues.
Prior to making a disposition (as defined in Section 424(c) of the Code) of any
shares of Common Stock acquired pursuant to the Exercise of this Option before
the expiration of two (2) years after its date of grant and before the
expiration of one (1) year after its date of exercise and the date on which such
shares of Common Stock were transferred to the Optionee pursuant to exercise of
the Option, the Optionee shall send written notice to the Company of the
proposed date of such disposition, the number of shares to be disposed of, the
amount of proceeds to be received from such disposition and any other
information relating to such disposition that the Company may reasonably
request. The right of a Optionee to make any such disposition shall be
conditioned on the receipt by the Company of all amounts necessary to satisfy
any Federal, state or local withholding and employment related tax requirements
attributable to such disposition. The Committee may, in its sole discretion,
endorse the certificates representing such Option shares with a legend
restricting transfer (and to cause a stop transfer order to be entered with the
Company's transfer agent) until such time as the Company receives the amounts
necessary to satisfy such withholding and employment-related tax requirements or
until the later of the expiration of 2 years from the date of grant of such
Incentive Stock Option and 1 year from its date of exercise and the date on
which such shares were transferred to the Participant pursuant to the exercise
of the Option.
7. Transferability of Option. The Option shall not be transferable except by
will or the laws of descent and distribution, and any attempt to do so shall
void the Option.
8. Adjustment By Stock Split, Stock Dividend, Etc. If at any time the Company
increases or decreases the number of its outstanding shares of Common Stock, or
changes in any way the rights and privileges of such shares, by means of the
payment of a stock dividend or the making of any other distribution on such
shares payable in its Common Stock, or through a stock split or subdivision of
shares, or a consolidation or combination of shares, or through a
reclassification or recapitalization involving its Common Stock, the numbers,
rights, and privileges of the shares of Common Stock included in the Option
shall be increased, decreased or changed in like manner as if such shares had
been issued and outstanding, fully paid and nonassessable at the time of such
occurrence.
9. Merger or Consolidation.
(a) Effect of Transaction. Upon the occurrence of any of the following
events, if the notice requirements by paragraph 8(b) has been given, the
Option shall automatically terminate and be of no further force or effect
whatsoever:
(i) the merger or consolidation of the Company with one or more other
corporations, regardless of which entity survives the transaction;
(ii) the dissolution or liquidation of the Company;
(iii) the appointment of a receiver for all, or substantially all, of
the Company's assets or business;
(iv) the appointment of a trustee for the Company after a petition has
been filed for the Company's reorganization under applicable statutes;
or
(v) the sale, lease or exchange of all, or substantially all, of the
Company's assets and business.
(b) Notice of Such Occurrence. At least 15 days' prior written notice of
any event described in Paragraph 8 (a), except the transactions described
in Subparagraphs 8 (a) (iii) and (iv) as to which no notice shall be
required, shall, at the Company's option, be given by the Company to the
Optionee. After receipt of such notice, the Optionee may at any time before
the occurrence of the event requiring the giving of notice exercise the
unexercised portion of the Option as to all the shares covered thereby.
Such notice shall be deemed to have been given when delivered personally to
the Optionee or pursuant to the provisions of Paragraph 11 of this
Agreement. If no such notice shall be given with respect to a transaction
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described in Subparagraphs 8(a) (i), (ii) or (v), the provisions of
Paragraph 8(a) shall not apply and the Option shall not terminate upon the
occurrence of such transaction.
10. Common Stock To Be Received Upon Exercise. Optionee understands that the
Company is under no obligation to register the Option Shares under the
Securities Act of 1933, as amended (the "Act") and that in the absence of any
such registration, the Option Shares cannot be sold unless they are sold
pursuant to an exemption from registration under the Act. The Company is under
no obligation to comply, or to assist the Optionee in complying with any
exemption from such registration requirement, including supplying the Optionee
with any information necessary to permit routine sales of the Stock under Rule
144 of the Securities and Exchange Commission. Optionee also understands that
with respect to Rule 144, routine sales of securities made in reliance upon such
Rule can only be made in limited amounts in accordance with the terms and
conditions of the Rule, and that in cases in which the Rule is inapplicable,
compliance with either Regulation A or another disclosure exemption under the
Act will be required. Thus, the Option Shares will have to be held indefinitely
in the absence of registration under the Act or an exemption from registration.
Furthermore, the Optionee fully understands that the Option Shares have not been
registered under the Act and that they will be issued in reliance upon an
exemption which is available only if Optionee acquires such shares for
investment and not with a view to distribution. Optionee is familiar with the
phrase "acquired for investment and not with a view to distribution" as it
relates to the Act and the special meaning given to such term in various release
of the Securities and Exchange Commission.
11. Privilege of Ownership. Optionee shall not have any of the rights of a
shareholder with respect to the shares covered by the Option except to the
extent that one or more certificates for such shares shall be delivered to him
upon exercise of the Option.
12. Notices. Any notices required or permitted to be given under this Agreement
shall be in writing and they shall be deemed to be given upon receipt by sender
of sender's return receipt for acknowledgement of delivery of said notice by
postage prepaid registered mail. Such notice shall be addressed to the party to
be notified as shown below:
Company: U.S. Gold Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Optionee: At the address listed below his name on the last page of this
Agreement.
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
13. General Provisions. This instrument:
(a) contains the entire agreement among the parties,
(b) may not be amended nor may any rights hereunder be waived except by an
instrument in writing signed by the parties sought to be charged with such
amendment or waiver, (c) shall be constructed in accordance with, and
governed by, the laws of the State of Colorado, (d) shall be binding upon
and shall inure to the benefit of the parties and their respective personal
representatives and assigns, except as above set forth and (e) shall be
subject to the provisions of the Plan, which Plan provisions shall govern
if they conflict herein and any variations thereof shall be deemed to refer
to the masculine, feminine or neuter, singular or plural as the identity of
the parties hereto may require.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth below, to be effective as of the date and year first above written.
U.S. GOLD CORPORATION
Date: August 8, 2002
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President and Chairman of the Board
OPTIONEE:
Date: August 8, 2002
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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