Exhibit 4.6
NONOUALIFIED STOCK OPTION CONTRACT
#179
THIS
NONQUALIFIED STOCK OPTION CONTRACT entered into as of February 13,
2006 (the “ Contract ”) between Western
Goldfields, Inc, an Idaho corporation (the “ Company
”), and Karen Dietrich (“ Optionee
”).
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1.
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The Company, subject to the terms
and conditions set forth herein, hereby grants to the Optionee an
option to purchase an aggregate of 100,000 shares of common stock,
par value $0.01 per share, of the Company (the “ Common
Stock ”) at an exercise price of $0.34 per share (the
“Exercise Price”). This option is not intended to
constitute an incentive stock option within the meaning of section
422 of the Internal Revenue Code of 1986, as amended (the “
Code ”).
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2.
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The term of this option shall
expire on February 12, 2013, subject to earlier termination as
provided herein. This option shall vest and become exercisable as
to all of the shares of Common Stock subject hereto upon the terms
and conditions set forth on Exhibit A attached hereto.
Notwithstanding the foregoing, the Optionee may not exercise this
option until the shareholders of the Company approve an amendment
to the Company’s Articles of Incorporation (the
“Amendment”) at the 2006 annual meeting (the
“2006 Annual Meeting”) increasing the number of
authorized shares of Common Stock in an amount greater than
115,000,000 shares, subject to any other restrictions on exercise
as set forth in this Contract. In the event that the shareholders
of the Company fail to approve the Amendment at the 2006 Annual
Meeting, the Company shall pay to the Optionee an amount in cash
equal to (i) the number of Options granted to the Optionee pursuant
to this Agreement multiplied by (ii) the closing price of
the Common Stock on the trading day immediately preceding the date
of exercise minus the Exercise Price.
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3.
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Upon the termination of the
Optionee’s employment with the Company for any reason other
than his death or Disability (as defined in Paragraph 5), the
Optionee may exercise such option, to the extent exercisable on the
date of such termination, at any time within three months after the
date of termination, but not thereafter and in no event after the
date this option would otherwise have expired; provided, however,
that if the Optionee’s employment shall be terminated either
(a) for cause, or (b) without the consent of the Company, this
option shall terminate immediately.
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4.
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If the Optionee dies (a) while he
is employed by the Company or any of its Subsidiaries, (b) within
three months after the termination of his employment (unless such
termination was for cause or without the consent of the Company) or
(c) within one year following the termination of his employment by
reason of Disability, this option may be exercised, to the extent
exercisable on the date of the Optionee’s death, by his
executor, administrator or other person at the time entitled by law
to his rights under this option, at any time within one year after
death, but not thereafter and in no event after the date this
option would otherwise have expired.
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5.
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If the Optionee’s
employment terminates by reason of Disability, the Optionee may
exercise this option, to the extent exercisable upon the effective
date of such termination, at any time within one year after such
date, but not thereafter and in no event after the date this option
would otherwise have expired. The term “ Disability
” shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Code.
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6.
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This option (or any part or
installment thereof) shall be exercised by giving written notice to
the Company at its then principal office, stating that the Optionee
is exercising this option, (a) specifying the number of shares
being purchased and accompanied by payment in full of the aggregate
purchase price therefor in cash or by certified check.
Notwithstanding the foregoing, the purchase price may be paid by
delivery by the Optionee of a properly executed notice, together
with a copy of his irrevocable instructions to a broker acceptable
to the Company’s Boa
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