SILVERADO GOLD MINES LTD
2009-II EQUITY COMPENSATION PLAN
I. ESTABLISHMENT OF PLAN; DEFINITIONS
1. Purpose . The purpose
of the Silverado Gold Mines Ltd. 2009-II Equity Compensation Plan
is to encourage certain directors, officers, employees, and
consultants of Silverado Gold Mines Ltd., a company incorporated
under the laws of British Columbia (the "Company"), to acquire and
hold stock in the Company as an added incentive to remain with the
Company and to increase their efforts in promoting the interests of
the Company and to enable the Company to attract and retain capable
individuals.
2. Definitions . Unless
the context clearly indicates otherwise, the following terms shall
have the meanings set forth below:
(a)
"Board" shall mean the Board of Directors of the
Company.
(b)
"Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
(c)
"Committee" shall mean a committee made up of at least three
members of the Board whose members shall, from time to time, be
appointed by the Board; provided, however, that such Committee
shall at all times consist of at least two non-employee
Directors.
(d)
"Company" shall mean Silverado Gold Mines Ltd., a company
incorporated under the laws of British Columbia.
(e)
"Consultants" shall mean individuals who provide services to the
Company who are not Employees or Directors.
(f)
"Directors" shall mean those members of the Board of Directors of
the Company who are not Employees.
(g)
"Disability" shall mean a medically determinable physical or mental
condition which causes an Employee, Director or Consultant to be
unable to engage in any substantial gainful activity and which can
be expected to result in death or to be of long-continued and
indefinite duration.
(h)
"Employee" shall mean any common law employee, including officers,
of the Company as determined under the Code and the Treasury
Regulations thereunder.
(i)
"Fair Market Value" shall mean the value of a share of Stock on a
specified day (i) if the Stock is listed on a national securities
exchange or the NASDAQ system, the mean between the highest and
lowest sales prices for the Stock on such date, or, if no such
prices are reported for such day, then on the next preceding day on
which there were reported prices; (ii) if the Stock is not listed
on a national securities exchange or the NASDAQ system, the mean
between the bid and asked prices for the Stock on such date, or if
no such prices are reported for such day, then on the immediately
preceding day (within 7 days of such specified day) on which there
were reported prices; or (iii) if no prices are reported for such
immediately preceding day, as determined in good faith by the
Company’s Board.
(j)
"Grantee" shall mean an officer, Employee, Director or Consultant
granted a Stock Option or Stock Award under this Plan.
(k)
"Incentive Stock Option" shall mean an option granted pursuant to
the Incentive Stock Option provisions as set forth in Part II of
this Plan.
(l) "Non-Qualified
Stock Option" shall mean an option granted pursuant to the
Non-Qualified Stock Option provisions as set forth in Part III of
this Plan.
(m)
"Plan" shall mean the Silverado Gold Mines Ltd. 2009-II Equity
Compensation Plan as set forth herein and as amended from time to
time.
(n)
"Restricted Stock" shall mean Stock which is issued as Restricted
Stock as set forth in Part IV of this Plan.
(o)
"Stock" shall mean authorized but unissued shares of the Common
Stock of the Company or reacquired shares of the Company's Common
Stock.
(p)
"Stock Appreciation Right" shall mean a stock appreciation right
granted pursuant to the Stock Appreciation Right provisions as set
forth in Parts II and III of this Plan.
(q)
"Stock Award" shall mean an award of Restricted or Unrestricted
Stock granted pursuant to this Plan.
(r)
"Stock Option" shall mean an option granted pursuant to the Plan to
purchase shares of Stock.
(s)
“Subsidiary” shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with and
including the Company, if each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.
(t)
"Ten Percent Shareholder" shall mean an Employee who at the time a
Stock Option is granted owns stock possessing more than ten percent
(10%) of the total combined voting power of all stock of the
Company or of its parent or subsidiary.
(u)
"Unrestricted Stock" shall mean Stock which is issued pursuant to
the Unrestricted Stock provisions as set forth in Part V of this
Plan.
3. Shares of Stock Subject to
the Plan . Subject to the provisions of Paragraph 2 of Part VI
of the Plan, the Stock which may be issued or transferred pursuant
to Stock Options and Stock Awards granted under the Plan and the
Stock which is subject to outstanding but unexercised Stock Options
under the Plan shall not exceed Eighty Million (80,000,000) shares
in the aggregate. If a Stock Option shall expire and terminate for
any reason, in whole or in part, without being exercised or, if
Stock Awards are forfeited because the restrictions with respect to
such Stock Awards shall not have been met or have lapsed, the
number of shares of Stock which are no longer outstanding as Stock
Awards or subject to Stock Options may again become available for
the grant of Stock Awards or Stock Options. There shall be no terms
and conditions in a Stock Award or Stock Option which provide that
the exercise of an Incentive Stock Option reduces the number of
shares of Stock for which an outstanding Non-Qualified Stock Option
may be exercised; and there shall be no terms and conditions in a
Stock Award or Stock Option which provide that the exercise of a
Non-Qualified Stock Option reduces the number of shares of Stock
for which an outstanding Incentive Stock Option may be
exercised.
4. Administration of the
Plan . The Plan shall be administered by the Committee. Subject
to the express provisions of the Plan, the Committee shall have
authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the terms and
provisions of Stock Option agreements, and to make all other
determinations necessary or advisable for the administration of the
Plan. Any controversy or claim arising out of or related to this
Plan shall be determined unilaterally by and at the sole discretion
of the Committee.
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5.
Amendment or Termination . The Board may, at any time,
alter, amend, suspend, discontinue, or terminate this Plan;
provided, however, that such action shall not adversely affect the
right of Grantees to Stock Awards or Stock Options previously
granted and no amendment, without the approval of the stockholders
of the Company, shall increase the maximum number of shares which
may be awarded under the Plan in the aggregate, materially increase
the benefits accruing to Grantees under the Plan, change the class
of Employees eligible to receive options under the Plan, or
materially modify the eligibility requirements for participation in
the Plan.
6. Effective Date and Duration
of the Plan . This Plan shall become effective on May 26, 2009.
This Plan shall terminate at such time as may be determined by the
Board, and no Stock Award or Stock Option may be issued or granted
under the Plan thereafter, but such termination shall not affect
any Stock Award or Stock Option theretofore issued or
granted.
II. INCENTIVE STOCK OPTIONS
1. Granting of Incentive Stock
Options .
(a)
Only Employees of the Company shall be eligible to receive
Incentive Stock Options under the Plan. Officers, Directors and
Consultants of the Company who are not also Employees shall not be
eligible to receive Incentive Stock Options.
(b)
The purchase price of each share of Stock subject to an Incentive
Stock Option shall not be less than 100% of the Fair Market Value
of a share of the Stock on the date the Incentive Stock Option is
granted; provided, however, that the purchase price of each share
of Stock subject to an Incentive Stock Option granted to a Ten
Percent Shareholder shall not be less than 110% of the Fair Market
Value of a share of the Stock on the date the Incentive Stock
Option is granted.
(c)
No Incentive Stock Option shall be exercisable more than ten years
from the date the Incentive Stock Option was granted; provided,
however, that an Incentive Stock Option granted to a Ten Percent
Shareholder shall not be exercisable more than five years from the
date the Incentive Stock Option was granted.
(d)
The Committee shall determine and designate from time to time those
Employees who are to be granted Incentive Stock Options and specify
the number of shares subject to each Incentive Stock
Option.
(e)
The Committee, in its sole discretion, shall determine whether any
particular Incentive Stock Option shall become exercisable in one
or more installments, specify the installment dates, and, within
the limitations herein provided, determine the total period during
which the Incentive Stock Option is exercisable. Further, the
Committee may make such other provisions as may appear generally
acceptable or desirable to the Committee or necessary to qualify
its grants under the provisions of Section 422 of the
Code.
(f)
The Committee may grant at any time new Incentive Stock Options to
an Employee who has previously received Incentive Stock Options or
other options whether such prior Incentive Stock Options or other
options are still outstanding, have previously been exercised in
whole or in part, or are canceled in connection with the issuance
of new Incentive Stock Options. The purchase price of the new
Incentive Stock Options may be established by the Committee without
regard to the existing Incentive Stock Options or other
options.
(g)
Notwithstanding any other provisions hereof, the aggregate fair
market value (determined at the time the option is granted) of the
Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Employee during any calendar year (under
all such plans of the Grantee's employer corporation and its parent
and subsidiary corporation) shall not exceed $100,000.
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2.
Exercise of Incentive Stock Options . The option price of an
Incentive Stock Option shall be payable on exercise of the option
(i) in cash or by check, bank draft or postal or express money
order, (ii) by the surrender of Stock then owned by the Grantee,
(iii) the proceeds of a loan from an independent broker-dealer
whereby the loan is secured by the option or the stock to be
received upon exercise, or (iv) any combination of the foregoing;
provided, that each such method and time for payment
and each such borrowing and terms and conditions of repayment shall
then be permitted by and be in compliance with applicable law.
Shares of Stock so surrendered in accordance with clause (ii) or
(iv) shall be valued at the Fair Market Value thereof on the date
of exercise, surrender of such Stock to be evidenced by delivery of
the certificate(s) representing such shares in such manner, and
endorsed in such form, or accompanied by stock powers endorsed in
such form, as the Committee may determine.
3. Termination of
Employment .
(a)
If a Grantee's employment with the Company is terminated other than
by Disability or death, the terms of any then outstanding Incentive
Stock Option held by the Grantee shall extend for a period ending
on the earlier of the date on which such Stock Option would
otherwise expire or three months after such termination of
employment, and such Stock Option shall be exercisable to the
extent it was exercisable as of such last date of
employment.
(b)
If a Grantee's employment with the Company is terminated by reason
of Disability, the term of any then outstanding Incentive Stock
Option held by the Grantee shall extend for a period ending on the
earlier of the date on which such Stock Option would otherwise
expire or twelve months after such termination of employment, and
such Stock Option shall be exercisable to the extent it was
exercisable as of such last date of employment.
(c)
If a Grantee's employment with the Company is terminated by reason
of death, the representative of his estate or beneficiaries thereof
to whom the Stock Option has been transferred shall have the right
during the period ending on the earlier of the date on which such
Stock Option would otherwise expire or twelve months after such
date of death, to exercise any then outstanding Incentive Stock
Options in whole or in part. If a Grantee dies without having fully
exercised any then outstanding Incentive Stock Options, the
representative of his estate or beneficiaries thereof to whom the
Stock Option has been transferred shall have the right to exercise
such Stock Options in whole or in part.
4. Stock Appreciation
Rights
(a)
Grant . Stock Appreciation Rights related to all or any
portion of an Incentive Stock Option may be granted by the
Committee to any Grantee in connection with the grant of an
Incentive Stock Option or unexercised portion thereof held by the
Grantee at any time and from time to time during the term thereof.
Each Stock Appreciation Right shall be granted at least at Fair
Market Value on the date of grant and be subject to such terms and
conditions not inconsistent with the provisions of this Part II as
shall be determined by the Committee and included in the agreement
relating to such Stock Appreciation Right, subject in any event,
however, to the following terms and conditions of this Section 4.
Each Stock Appreciation Right may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and
when it ceases to be exercisable that are more restrictive than the
limitations on the exercise of the Incentive Stock Option to which
it relates.
(b)
Exercise . No Stock Appreciation Right shall be exercisable
with respect to such related Incentive Stock Option or portion
thereof unless such Incentive Stock Option or portion shall itself
be exercisable at that time. A Stock Appreciation Right shall be
exercised only upon surrender of the related Incentive Stock Option
or portion thereof in respect of which the Stock Appreciation Right
is then being exercised.
(c)
Amount of Payment . On exercise of a Stock Appreciation
Right, a Grantee shall be entitled to receive an amount equal to
the product of (i) the amount by which the Fair Market Value of a
share of Stock on the date of exercise of the Stock Appreciation
Right exceeds the option pric
