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Date of Grant: April 9,
2008
PIEDMONT MINING COMPANY, INC.
NONQUALIFIED STOCK
OPTION AGREEMENT
THE GRANT OF THIS OPTION SHALL NOT IMPOSE AN OBLIGATION UPON THE
OPTIONEE TO EXERCISE THIS OPTION.
THIS AGREEMENT is made by and between Piedmont Mining
Company, Inc., a North Carolina corporation (the
“Company”), and V. Richard Rabbito
(“Optionee”), effective as of April 9, 2008 (the
"Effective Date").
In
consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as
follows:
1 .
Grant of Option.
The Company hereby grants to Optionee, in the manner
and, subject to the conditions hereinafter provided, the right,
privilege and option to purchase (the “Option”) an
aggregate of One
Hundred Fifty Thousand (150,000) Shares of the
Company’s common stock, no par value (the
“Shares” or “Common Stock”).
2 .
Term of Option. Subject
to the terms, conditions and restrictions set forth herein, the
term of this Option shall be Three (3) years from
the date of grant (the “Expiration
Date”). Any portion of this Option not exercised
prior to the Expiration Date shall thereupon become null and
void.
3 .
Exercise of
Option.
3.1.
Vesting of
Option. This Option shall become exercisable as
follows:
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Number of Shares
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Vesting Date
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75,000
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April
9, 2008
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75,000
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April
9, 2009
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Each
of the foregoing dates shall be referred to as a
“Vesting Date” for that portion of this Option
vested on such date (“Vested
Portion”).
All
or any portion of the Shares underlying a Vested Portion of
this Option may be purchased during the term of this Option,
but not as to less than 1,000 Shares (unless the remaining
Shares then constituting the Vested Portion of this Option is
less than 1,000 Shares) at any time.
3.2.
Manner of
Exercise. The Vested Portion
of this Option may be exercised from time to time, in whole or in
part, by presentation of a Request to Exercise Form, in
substantially the form attached hereto (the "Form"), to the Company
at its principal office, which Form must be duly executed by the
Optionee and accompanied by payment, subject to any legal
restrictions, in the form of: (a) cash; (b) check
payable to the Company;
(c) the surrender of
Option Shares equal to the value of the Exercise Price pursuant to
a so-called "cashless exercise," which Option Shares so surrendered
shall be valued at Fair Market Value as of the date of exercise of
the Option for any Vested Portion, less the Exercise Price; (d) a
"same day sale" or "margin" commitment from the Optionee and a NASD
Dealer or other acceptable intermediary whereby the Optionee
irrevocably elects to exercise the Option and to sell a portion of
the shares so purchased to pay for the Exercise Price and whereby
the NASD Dealer or other acceptable intermediary irrevocably
commits to forward the Exercise Price directly to the Company; or
(e) any combination of the foregoing, in the aggregate amount of
the Exercise Price, multiplied by the number of shares of Common
Stock the Optionee is purchasing at such time, subject to reduction
for withholding for tax obligations as provided in Section
14 .
Upon receipt and acceptance by the Company of such Form,
accompanied by any payment method specified above, the Optionee
shall be deemed to be the record owner of the Common Stock
purchased, notwithstanding that the stock transfer books of the
Company may then be closed or that certificates representing the
Common Stock purchased under this Option may not then be actually
delivered to the Optionee .
3.3.
Exercise
Price. The exercise price (the “Exercise
Price”) payable upon exercise of this Option shall be
Twenty Eight Cents
(US $0.28) per Share.
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4)
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Exercise After Certain Events.
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4.1.
Termination of
Employment/Consulting/Directorship . If for any
reason, other than permanent and total disability (as defined
below) or death of the Optionee, the Optionee ceases to be employed
by or to be a consultant or director or member of the Advisory
Board of the Company or a Subsidiary, this Option, if held at the
date of such termination (to the extent then exercisable), may be
exercised, in whole or in part, at any time prior to the expiration
of ninety (90) days from the date of termination or prior to the
Expiration Date, whichever shall first occur.
4.2.
Permanent
Disability and Death. If Optionee becomes
permanently and totally disabled (within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986, as amended), or dies
while employed by the Company, (or if the Optionee dies within the
period that the Option remains exercisable after termination of
employment or affiliation), any Vested Portion of the Shares then
held may be exercised by the Optionee, the Optionee’s
personal representative, or by the person to whom the Option is
transferred by will or the laws of descent and distribution, in
whole or in part, at any time within one (1) year after the
disability or death (but in no event after the Expiration
Date).
5 .
Restrictions on Transfer of
Option. Except as otherwise provided below, this
Option shall not be transferable other than by will or by the laws
of descent and distribution, and during the lifetime of the
Optionee, only the Optionee, his or her guardian or legal
representative or authorized assignee may exercise the
Option. The Optionee may designate a beneficiary to
exercise his or her Option after the Optionee's
death. The Company may provide for transfer of the
Option, with or without payment of consideration, to: (i) the
following family members of the Optionee, including adoptive
relationships: a child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, sister-in-law, niece,
nephew, former spouse (whether by gift or pursuant to a domestic
relations order); (ii) any person sharing the Optionee's household
(other than a tenant or employee); (iii) a family controlled or
nonfamily controlled partnership, corporation, limited liability
company, or trust; or (iv) a foundation in which family members (as
described above) control the management of assets. The assigned
portion may only be exercised by the person or persons who acquire
a proprietary interest in the Option pursuant to the
assignment. The terms applicable to the assigned portion
shall be the same as those in effect for the Option immediately
prior to such assignment and shall be set forth in such documents
issued to the assignee as the Company may be deemed
appropriate.
6 .
Adjustment for Changes in
Capitalization. The existence of this Option
shall not affect the Company’s right to effect adjustments,
recapitalizations, reorganizations or other changes in its or any
other corporation’s capital structure or business, any merger
or consolidation, any issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Shares, the
dissolution or liquidation of the Company’s or any other
corporation’s assets or business, or any other corporate act,
whether similar to the events described above or
otherwise. If the outstanding number of shares of the
Company’s Common Stock are increased or decreased in number
or changed into or exchanged for a different number or kind of
securities of the Company or any other corporation by reason of a
recapitalization, reclassification, stock split, reverse stock
split, combination of shares, stock dividend or other similar
event, an appropriate adjustment of the number and kind of
securities with respect to which this Option may be exercised and
the Exercise Price at which this Option may be exercised will be
made.
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7 .
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Dissolution, Liquidation and Merger.
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7.1.
Company Not The
Survivor. In the event of a dissolution or
liquidation of the Company, a merger, consolidation, combination or
reorganization in which the Company is not the surviving
corporation, or a sale of substantially all of the assets of the
Company (as determined in the sole discretion of the Board of
Directors), the Company, in its absolute discretion, may cancel
each outstanding Option upon payment in cash to the Optionee of the
amount by which any cash and the fair market value of any other
property which the Optionee would have received as consideration
for the Shares of Common Stock covered by the Option if the Option
had been exercised before such liquidation, dissolution, merger,
consolidation or sale, exceeds the exercise price of the
Option. In addition to the foregoing, in the event of a
d
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