Exhibit 1
NON-QUALIFIED STOCK OPTION AGREEMENT
Battle Mountain Gold Exploration Corp., a Nevada corporation (the
"Company"), hereby grants to ▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Optionee") a non-qualified
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stock option (the "Option") to purchase a total of 800,000 shares (the "Shares")
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of the Company's common stock, par value $.001 per share (the "Common Stock"),
at the price determined as provided herein, and in all respects subject to the
terms and conditions of the Company's 2004 - 2005 Non-Qualified Stock Option
Plan (the "Plan"), which is incorporated herein in its entirety by reference.
Capitalized terms not otherwise defined in this agreement (the "Option
Agreement") shall have the meaning given to such terms in the Plan.
1. NATURE OF OPTION. This Option is intended to constitute a
non-qualified stock option.
2. EXERCISE PRICE. The exercise price of this Option is $0.40 per
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share of Common Stock acquired on exercise (the "Exercise Price").
3. TERM OF OPTION. This Option may not be exercised after April 15,
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2010 and may be exercised during such term only in accordance with the terms and
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conditions of the Plan and this Option Agreement, subject specifically to
Section 4 of this Option Agreement.
4. TERMINATION OF OPTIONEE'S EMPLOYMENT OR SERVICES. If the Optionee's
employment, contract, directorship or consulting work with the Company is
terminated for any reason other than Cause, then (i) 500,000 of the Shares that
had vested under the terms of this Option Agreement shall remain exercisable for
the term of this Option Agreement as set forth in Section 3 hereof; and (ii)
300,000 of the Shares that had vested under the terms of this Option Agreement
shall remain exercisable for a period of ninety days after the date of such
termination of the Optionee's employment, contract, directorship or consulting
work with the Company; provided, however, that after the expiration of such
ninety-day period, this Option Agreement, and the Optionee's right to exercise
any vested portion of this Option, except for the Optionee's right under
subsection (i) of this Section 4, shall terminate. If the Optionee's
employment, contract, directorship or consulting work with the Company
terminates for Cause, this Option Agreement, and the Optionee's right to
exercise any vested portion of this Option, shall terminate at the commencement
of business on the date of such termination.
5. EXERCISE OF OPTION. This Option shall be exercisable during its
term subject to the provisions of Sections 3 and 4 hereof, as follows:
(i) Vesting. This Option shall vest in its entirety and become
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exercisable on April 15, 2005 (the "Vesting Date"). If the Optionee's
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employment is terminated by the Company prior to April 15, 2005, this Option
will automatically vest with respect to 500,000 Shares on the date of
termination.
(ii) Right of Exercise. This Option is exercisable at any time during
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the term of this Option Agreement, in whole or in part, to acquire those Shares
that have vested in accordance with this Option Agreement; provided, however;
that this Option may only be exercisable to acquire whole shares of Common
Stock.
(iii) Method of Exercise. This Option is exercisable by delivery to
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the attention of the Secretary of the Company, no fewer than five business days
before the proposed effective date of exercise, of this Option Agreement and a
written notice, signed by the Optionee, specifying the number of Shares to be
acquired on, and the effective date of, such exercise. The Optionee may
withdraw notice of exercise of this Option at any time before close of business
on the business day preceding the proposed exercise date, and in this instance,
the Company will return this Option Agreement to the Optionee.
(iv) Method of Payment. Payment of the exercise price for the Shares
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purchased under this Option shall be delivered to the Company on the effective
date of exercise by one or any combination of the following:
(a) Cash;
(b) Certified check;
(c) Bank cashier's or certified check;
(d) Money order;
(e) Wire transfer; or
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(f) Cashless Exercise by delivery of written notice in the manner
provide for in subsection (iii) of this Section 5 that requests
the Company to issue to the Optionee the full number of Shares to
be acquired, less the number of Shares that have an aggregate
Fair Market Value equal to the aggregate purchase price of the
Shares to which such exercise relates. This method of exercise
allows the Optionee to use a portion of the Shares issuable at
the time of exercise as payment for the Shares. For example, if
the Optionee elects to exercise 1,000 Shares at an exercise price
of $0.25 and the current Fair Market Value of the Shares on the
date of exercise is $1.00, the Optionee can use 250 of the 1,000
Shares at $1.00 per share to pay for the exercise of the entire
Option (250 x $1.00 = $250.00) and receive only the remaining 750
Shares. For purposes of this section, " Fair Market Value" shall
be defined as the average closing price of the Common Stock (if
actual sales price information on any trading day is not
available, the closing bid price shall be used) for the five
trading days prior to the date of exercise of this Option (the
"Average Closing Bid Price"), as reported by the National
Association of Securities Dealers Automated Quotation System
("NASDAQ"), or if the Common Stock is not traded on NASDAQ, the
Average Closing Bid Price in the over-the-counter market;
provided, however, that if the Common Stock is listed on a stock
exchange, the Fair Market Value shall be the Average Closing Bid
Price on such exchange; and, provided further, that if the Common
Stock is not quoted or listed by any organization, the fair value
of the common stock, as determined by the Board of Directors of
the Company, whose determination shall be conclusive, shall be
used. In no event shall the Fair Market Value of any Share of
Common Stock be less than its par value.
As a condition to the exercise of the Option or the transfer of any Common
Stock, the Optionee hereby agrees to remit to the Company the amount of any
federal, state or local taxes required to be withheld in the transaction. The
Optionee may pay the taxes by 1) additional withholding if the Optionee is an
existing employee with respect to whom the Company withholds taxes on the date
of exercise (or such other time as the Company's obligation to withhold taxes
may accrue); or 2) direct payment of the required withholding to the Company.
The Compensation Committee of the Board of Directors, if such a committee
exists, or the Board of Directors, as applicable, in their sole discretion,
shall determine the amount of taxes that are required to be withheld.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares or the method of payment of this consideration for such
Shares would constitute a violation of any applicable federal or state
securities or other laws or regulations, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by
the Federal Reserve Board, or any rules or regulations of any stock exchange on
which the Common Stock may be listed.
This Option may only be exercised in accordance with the terms and
conditions of the Plan and this Option Agreement.
7. NON-TRANSFERABILITY OF OPTION. During the lifetime of the Optionee,
this Option may only be exercised by the Optionee. This Option is not
assignable or transferable otherwise than by will or by the laws of descent and
distribution or pursuant to certain domestic relations orders. The terms of
this Option Agreement shall be binding on the Optionee's heirs and successors
and on the administrators and executors of the Optionee's estate.
8. INDEPENDENT LEGAL AND TAX ADVICE. It is the Optionee's
responsibility to obtain independent legal and tax advice regarding
the grant and exercise of this Option and the disposition of any Shares acquired
thereby.
9. AMENDMENT. This Option Agreement may not be amended, modified or
waived except by a written instrument signed by the party against whom
enforcement of any such modification, amendment or waiver is sought, except to
the extent necessary to ensure the qualification of the Plan under Rule 16d-3
under the Securities Exchange Act of 1934, as amended.
10. GOVERNING LAW. This Option Agreement shall be governed by and
shall be construed and enforced in accordance with the corporate laws of the
State of Nevada as they apply to a Nevada corporation and the laws of the State
of Nevada.
11. SUPERSEDES PRIOR AGREEMENTS. This Option Agreement shall supersede
and replace all prior agreements and understandings, oral or written, between
the Company and the Optionee regarding the grant of any Options under the Plan
on December 15, 2004. All other option agreements relating to the grant by the
Company on December 15, 2004 of an Option under the Plan or predecessor employee
stock option plans maintained by the Company on such date, including the option
previously granted to purchase 500,000 shares of Common Stock with an exercise
price of $0.99 per share and a vesting date of May 31, 2005 (which terms were
amended to provide for an exercise price of $0.40 per share and a vesting date
of April 15, 2005), shall be null, void and of no further force and effect.
DATE OF GRANT: April 8, 2005.
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
VESTING OF SHARES PURSUANT TO SECTION 5 HEREOF IS EARNED ONLY BY CONTINUING
EMPLOYMENT OR SERVICES AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING
HIRED, APPOINTED OR ELECTED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER).
THIS OPTION AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREIN AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED EMPLOYMENT OR SERVICES FOR THE VESTING PERIOD, FOR ANY PERIOD OR AT
ALL.
The Optionee hereby acknowledges receipt of a copy of the Plan and
represents that he is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all the terms and provisions of the Plan. The
Optionee has reviewed the Plan and this Option Agreement in its entirety, has
had an opportunity to obtain the advice of counsel before executing this Option
Agreement, fully understands all terms and conditions of this Option Agreement
and specifically acknowledges that the vesting of the Shares granted hereby is
earned only by continuing employment or continued service as an employee,
officer, director, consultant or advisor at the will of the Company. The
Optionee further agrees that this Option Agreement supersedes any prior
agreements, oral or written, relating to the grant by the Company of any Options
under the Plan or predecessor stock option plans to the Optionee on December 15,
2004. The Optionee hereby acknowledges that he has read and understands the
terms of Section 11 of this Option Agreement. The Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Compensation Committee of the Board of Directors, if such a committee exists, or
the Board of Directors, as applicable, on any questions arising under the Plan.
DATED: Effective April 8, 2005.
OPTIONEE
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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