Exhibit 4.4
2006 STOCK INCENTIVE PLAN
OF
WESTERN GOLDFIELDS INC.
1.
Purposes of the Plan . This stock incentive plan (the " Plan
") is intended to provide an incentive to employees (including
directors and officers who are employees), consultants and
non-employee directors of Western Goldfields Inc., an Ontario
corporation (the " Company "), or any Parent or Subsidiaries
(as such terms are defined in Paragraph 16), and to offer an
additional inducement in obtaining the services of such
individuals. The Plan provides for the grant of "incentive stock
options" (" ISOs ") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the " Code ") and
stock options which do not qualify as ISOs (" NQSOs ", and
collectively, with an ISO, each an “ Award ”).
The Company makes no representation or warranty, express or
implied, as to the qualification of any option as an "incentive
stock option" or any other treatment of an Award under the
Code.
2.
Shares Subject to the Plan
. Subject to the provisions of
Paragraph 9, the aggregate number of common shares of the Company
("Common Shares"), for which Awards may be granted under the Plan
shall not exceed 5,000,000 shares, all of which may be granted as
ISOs. The maximum number of Common Shares that may be reserved for
issuance to “insiders” (as defined under the Securities
Act (Ontario)) under the Plan and any other share compensation
arrangement shall be 10% of the Common Shares outstanding at the
date of issuance. The maximum number of Common Shares that may be
issued to all insiders under the Plan and any other compensation
arrangement in any 12 month period shall be 10% of the Common
Shares outstanding at the date of issuance. Subject to the
termination provisions of Paragraph 10, any Common Shares subject
to an Award which for any reason expires or is forfeited, canceled,
or terminated unexercised or which ceases for any reason to be
exercisable, shall again become available for the granting of
Awards under the Plan. The Company shall at all times during the
term of the Plan reserve and keep available such number of Common
Shares as will be sufficient to satisfy the requirements of the
Plan. As further set forth in Paragraph 8 hereof, all Awards shall
be granted by one or more written instruments or grant letter (the
"Contract") which shall set forth all terms and conditions of the
Award.
3.
Administration of the Plan
. The Plan will be administered by
the Board of Directors, or by a committee (the “
Committee ”) consisting of two or more directors
appointed by the Board of Directors. Those administering the Plan
shall be referred to herein as the " Administrators ."
Notwithstanding the foregoing, if the Company is or becomes a
corporation issuing any class of common equity securities required
to be registered under Section 12 of the Securities Exchange Act of
1934, as amended (the " Exchange Act "), to the extent
necessary to preserve any deduction under Section 162(m) of the
Code or to comply with Rule 16b-3 promulgated under the Exchange
Act, or any successor rule (" Rule 16b-3 "), any Committee
appointed by the Board of Directors to administer the Plan shall be
comprised of two or more directors each of whom shall be a
"non-employee director," within the meaning of Rule 16b-3, and an
"outside director," within the meaning of Treasury Regulation
Section 1.162 -27(e)(3), and the delegation of powers to the
Committee shall be consistent with applicable laws and regulations
(including, without limitation, applicable state law and Rule
16b-3). Unless otherwise provided in the By-Laws of the Company, by
resolution of the Board of Directors or applicable law, a majority
of the members of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a
quorum is present, and any acts approved in writing by all members
without a meeting, shall be the acts of the Committee.
-2-
Subject to the express provisions of the Plan,
the Administrators shall have the authority, in their sole
discretion, to determine each person who shall be granted an Award;
the type of Award to be granted, the times when an Award shall be
granted; whether an option granted to an Award Holder (as such term
is defined in Paragraph 4) shall be an ISO or a NQSO; the term of
each Award; the date each Award shall become exercisable; whether
an Award shall be exercisable in whole or in installments, and, if
in installments, the number of Common Shares to be subject to each
installment; whether the installments shall be cumulative; the date
each installment shall become exercisable and the term of each
installment; whether to accelerate the date of exercise of any
Award or installment thereof in the event of the death of the Award
Holder or upon other conditions to be specified by the
Administrators in the applicable Contract or subsequent thereto;
whether Common Shares may be issued upon the exercise of an Award
as partly paid, and, if so, the dates when future installments of
the exercise price shall become due and the amounts of such
installments; the exercise price or other amount to be paid in
connection with the exercise of an Award; the form of payment of
the exercise price; subject to Paragraph 6 of the Plan, the fair
market value of a share of Common Shares; the restrictions, if any,
imposed with respect to an Award and whether and under what
conditions to waive any such restrictions; whether and under what
conditions to restrict the sale or other disposition of the Common
Shares acquired upon the grant or exercise of an Award and, if so,
whether and under what conditions to waive any such restriction;
whether and under what conditions to subject the grant or exercise
of all or any portion of an Award, the vesting of an Award, or the
shares acquired pursuant to the exercise of an Award, to the
fulfillment of certain restrictions or contingencies all as
specified in the Contract, including without limitation
restrictions or contingencies relating to (a) entering into a
covenant not to compete with the Company, any Parent (if any) (as
such term is defined in Paragraph 16) and any of its Subsidiaries
(as such term is defined in Paragraph 16), (b) financial objectives
for the Company, any of its Subsidiaries, a division, a product
line or other category and/or (c) the period of continued
employment, consultancy or directorship with the Company or any of
its Subsidiaries, and to determine whether such restrictions or
contingencies have been met; the amount, if any, necessary to
satisfy the obligation of the Company, any of its Subsidiaries or
any Parent to withhold taxes or other amounts; whether an Award
Holder has a Disability (as such term is defined in Paragraph 16);
with the consent of the Award Holder, to cancel or modify an Award,
provided , however , that the modified provision is
permitted to be included in an Award granted under the Plan on the
date of the modification; provided , further ,
however , that in the case of a modification (within the
meaning of Section 424(h) of the Code) of an ISO, such option as
modified would be permitted to be granted on the date of such
modification under the terms of the Plan; to construe the
respective Contracts and the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to approve any
provision of the Plan or any Award granted under the Plan or any
amendment to either which, under Rule 16b-3 or Section 162(m) of
the Code, requires the approval of the Board of Directors, a
committee of non-employee directors or the shareholders, in order
to be exempt under Section 16(b) of the Exchange Act (unless
otherwise specifically provided herein) or to preserve any
deduction under Section 162(m) of the Code; and to make all other
determinations necessary or advisable for administering the Plan.
Any controversy or claim arising out of or relating to the Plan,
any Award granted under the Plan or any Contract shall be
determined unilaterally by the Administrators in their sole
discretion. The determinations of the Administrators on matters
referred to in this Paragraph 3 shall be conclusive and binding on
all parties. No Administrator or former Administrator shall be
liable for any action or determination made in good faith with
respect to the Plan or any Award granted hereunder.
4.
Eligibility . The Administrators may from time to time,
consistent with the purposes of the Plan, grant Awards to (a)
employees (including officers and directors who are employees) of
the Company, any Parent or any of its Subsidiaries, (b) consultants
to the Company, any Parent or any of its Subsidiaries, and/or (c)
to such directors of the Company who, at the time of grant, are not
common law employees of the Company or of any of its Subsidiaries,
as the Administrators may determine in their sole discretion (each,
an “ Award Holder ”). Such Awards granted shall
cover such number of Common Shares as the Administrators may
determine in their sole discretion; provided ,
however , that the aggregate market value (determined at the
time the option is granted) of the Common Shares for which any
eligible employee may be granted ISOs under the Plan or any other
plan of the Company, or of a Parent or a Subsidiary of the Company,
which are exercisable for the first time by such employee during
any calendar year shall not exceed $100,000. The $100,000 ISO
limitation amount shall be applied by taking ISOs into account in
the order in which they were granted. Any option (or portion
thereof) granted in excess of such ISO limitation amount shall be
treated as a NQSO to the extent of such excess.
-3-
5.
Options .
(a)
Grant . The Administrators may from time to time, in
their sole discretion, consistent with the purposes of the Plan,
grant options to one or more Award Holders.
(b)
Exercise Price . The exercise price of the Common Shares under
each option shall be determined by the Administrators in their sole
discretion; provided , however , that the exercise
price of each option, shall not be less than the fair market value
of the Common Shares subject to such option on the date of grant;
and provided , further , however , that if, at
the time an ISO is granted, the Award Holder owns (or is deemed to
own under Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes
of stock of the Company, of any of its Subsidiaries or of a Parent,
the exercise price of such ISO shall not be less than one hundred
ten percent (110%) of the fair market value of the Common Shares
subject to such ISO on the date of grant.
(c)
Term .
Each option granted pursuant to the Plan shall be for such term as
is established by the Administrators, in their sole discretion, at
or before the time such option is granted; provided,
however , that the term of each option granted pursuant to
the Plan shall be for a period not exceeding ten (10) years from
the date of grant thereof, and provided further, that if, at
the time an ISO is granted, the Award Holder owns (or is deemed to
own under Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes
of stock of the Company, of any of its Subsidiaries or of a Parent,
the term of the ISO shall be for a period not exceeding five (5)
years from the date of grant and provided further, that if the term
of any option is to expire within, or immediately after a black out
period imposed by the Company on participants under the Plan
preventing Options from being exercised during such period, then
the term of the options shall be extended until the date that is
ten business days following the expiration of the black out period.
Options shall be subject to earlier termination as hereinafter
provided.
(d)
Termination of Relationship
. Except as may otherwise be
expressly provided in the applicable Contract or the Award Holder's
written employment or consulting or termination contract, any Award
Holder, whose employment or consulting or advisory relationship
with the Company, any Parent or any of its Subsidiaries, has
terminated for any reason other than the death or Disability of the
Award Holder, may exercise any option granted to the Award Holder
as an employee or consultant, to the extent exercisable on the date
of such termination, at any time within three (3) months after the
date of termination, but not thereafter and in no event after the
date the option would otherwise have expired under paragraph 5(c);
provided , however , that if such relationship is
terminated for Cause (as defined in Paragraph 16), such option
shall terminate immediately. A change of status from that of an
employee to that of a consultant, or from consultant to employee,
shall not be deemed to trigger a termination of Award Holder's
status as an employee or consultant, except that if an Award Holder
who was an employee and becomes a consultant does not exercise
vested options within the above specified time period, such options
will, if applicable, no longer have the status of ISOs.
For
the purposes of the Plan, an employment or consulting relationship
shall be deemed to exist between an individual and the Company, and
not interrupted or terminated, if, at the time of the
determination, the individual was an employee or consultant of the
Company, its Parent, or any of its Subsidiaries. As a result, an
individual on military leave, sick leave or other bona fide leave
of absence shall continue to be considered an employee or
consultant for purposes of the Plan during such leave if the period
of the leave does not exceed ninety (90) days, or, if longer, so
long as the individual's right to re-employment with the Company,
any of its Subsidiaries or a Parent or consultant is guaranteed
either by statute or by contract. If the period of leave exceeds
ninety (90) days and the individual's right to re-employment is not
guaranteed by statute or by contract, the employment or consulting
relationship shall be deemed to have terminated on the ninety-first
(91 st ) day of such leave.
-4-
Except
as may otherwise be expressly provided in the applicable Contract,
an Award Holder whose directorship with the Company has terminated
for any reason other than the Award Holder’s death or
Disability, may exercise the options granted to the Award Holder as
a director who was not an employee of or consultant to the Company
or any of its Subsidiaries, to the extent exercisable on the date
of such termination, at any time within three (3) months after the
date of termination, but not thereafter and in no event after the
date the option would otherwise have expired; provided ,
however , that if the Award Holder’s directorship is
terminated for Cause, such option shall terminate
immediately.
Except
as may otherwise be expressly provided in the applicable Contract,
options granted under this Plan to a director, officer, employee,
consultant or advisor shall not be affected by any change in the
status of the Award Holder so long as such Award Holder continues
to be a director of the Company, or an officer or employee of, or a
consultant or advisor to, the Company or any of its Subsidiaries or
a Parent (regardless of having changed from one to the other or
having been transferred from one entity to another).
Nothing in the Plan or in any option granted
under the Plan shall confer on any person any right to continue in
the employ of or as a consultant or advisor of the Company, its
Parent or any of its Subsidiaries, or as a director of the Company,
or interfere in any way with any right of the Company, any Parent
or any of its Subsidiaries to terminate such relationship at any
time for any reason whatsoever without liability to the Company,
any Parent or any of its Subsidiaries.
(e)
Death or Disability of an Award
Holder . Except as may
otherwise be expressly provided in the applicable Contract or the
Award Holder's written employment or consulting or termination
contract, if an Award Holder dies (a) while the Award Holder is
employed by, or is a consultant to, the Company, any Parent or any
of its Subsidiaries, (b) within three (3) months after the
termination of the Award Holder's employment or consulting
relationship with the Company, any Parent and its Subsidiaries
(unless such termination was for Cause) or (c) within one (1) year
following the termination of such employment or consulting
relationship by reason of the Award Holder's Disability, the
options granted to the Award Holder as an employee of, or
consultant to, the Company or any Parent or any of its
Subsidiaries, may be exercised, to the extent exercisable on the
date of the Award Holder's death, by the Award Holder's Legal
Representative (as such term is defined in Paragraph 16), at any
time within one (1) year after death, but not thereafter and in no
event after the date the option would otherwise have expired under
Paragraph 5(c). Except as may otherwise be expressly provided in
the applicable Contract or the Award Holder's written employment or
consulting or termination contract, any Award Holder whose
employment or consulting relationship with the Company, any Parent
and its Subsidiaries has terminated by reason of the Award Holder's
Disability may exercise such options, to the extent exercisable
upon the effective date of such termination, at any time within one
(1) year after such date, but not thereafter and in no event after
the date the option would otherwise have expired under Paragraph
5(c).
Except
as may otherwise be expressly provided in the applicable Contract,
if an Award Holder dies (a) while the Award Holder is a director of
the Company, (b) within three (3) months after the termination of
the Award Holder's directorship with the Company (unless such
termination was for Cause) or (c) within one (1) year after the
termination of the Award Holder's directorship by reason of the
Award Holder's Disability, the options granted to the Award Holder
as a director who was not an employee of or consultant to the
Company or any Parent or any of its Subsidiaries, may be exercised,
to the extent exercisable on the date of the Award Holder's death,
by the Award Holder's Legal Representative at any time within one
(1) year after death, but not thereafter and in no event after the
date the option would otherwise have expired. Except as may
otherwise be expressly provided in the applicable Contract, an
Award Holder whose directorship with the Company has
