Exhibit 10.1

Texas Rare Earth Resources Corp.
Amended and Restated
2008 Stock Option Plan
(effective May 3, 2011)

ARTICLE I - PLAN
 
1.1           Purpose.  This Plan is a plan for key employees, officers,
directors, and consultants of the Company and its Affiliates and is intended to
advance the best interests of the Company, its Affiliates, and its stockholders
by providing those persons who have substantial responsibility for the
management and growth of the Company and its Affiliates with additional
incentives and an opportunity to obtain or increase their proprietary interest
in the Company, thereby encouraging them to continue in the employ of the
Company or any of its Affiliates.

1.2           Rule 16b-3 Plan.  The Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”), and therefore the Plan is intended to comply with all applicable
conditions of Rule 16b-3 (and all subsequent revisions thereof) promulgated
under the 1934 Act.  To the extent any provision of the Plan or action by the
Board of Directors or Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.  In
addition, the Board of Directors may amend the Plan from time to time, as it
deems necessary in order to meet the requirements of any amendments to Rule
16b-3 without the consent of the shareholders of the Company.

1.3           Effective Date of Plan.   The Plan, as amended and restated, shall
be effective May 3, 2011 (the “Effective Date”).  No Award shall be granted
pursuant to the Plan more than ten years after the Effective Date.

ARTICLE II - DEFINITIONS

The words and phrases defined in this Article shall have the meaning set out in
these definitions throughout this Plan, unless the context in which any such
word or phrase appears reasonably requires a broader, narrower, or different
meaning.

2.1           “Affiliate” means any subsidiary corporation.  The term
“subsidiary corporation” means any corporation (other than the Company) or other
entity in an unbroken chain of corporations or other entities beginning with the
Company if, at the time of the action or transaction, each of the corporations
or other entities other than the last corporation or other entity in the
unbroken chain owns a controlling interest in one of the other corporations or
other entities in the chain.  For this purpose, controlling interest has the
meaning provided in Final Treasury Regulation 1.409A-1(b)(5)(iii)(E)(1).

           2.2                “Award” means each of the following granted under
this Plan: Incentive Option, Nonqualified Option, Stock Appreciation Right,
Restricted Stock Award, Performance Stock Award or Stock Award.

2.3           “Board of Directors” means the board of directors of the Company.

 
 

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2.4           “Code” means the Internal Revenue Code of 1986, as amended.

2.5           “Committee” means the Compensation Committee of the Board of
Directors, or if no Compensation Committee has been formed, then it shall mean
the entire Board of Directors.

2.6           “Company” means Texas Rare Earth Resources Corp., a Nevada
corporation.

2.7           “Consultant” means any person (other than an Employee), including
an advisor, engaged by the Company or Affiliate to render services and who is
compensated for such services.

2.8           “Eligible Persons” shall mean, with respect to the Plan, those
persons who, at the time that an Award is granted, are (i) Employees and all
other key personnel, including officers and directors, of the Company or
Affiliate, or (ii) Consultants or independent contractors who provide valuable
services to the Company or Affiliate as determined by the Committee.

2.9           “Employee” means a common law employee of the Company or any
Affiliate.

2.10           “Fair Market Value” of the Stock as of any date means (a) the
average of the high and low sale prices of the Stock on that date on the
principal securities exchange on which the Stock is listed; or (b) if the Stock
is not listed on a securities exchange, the average of the high and low bid
quotations for the Stock on that date as reported by the National Quotation
Bureau Incorporated or other quotation system on which transactions in Stock are
principally reported; or (c) if none of the foregoing is applicable, an amount
at the election of the Committee equal to (x), the average between the closing
bid and ask prices per share of Stock on the last preceding date on which those
prices were reported or (y) that amount as determined by the Committee in good
faith in accordance with Code Section 409A and the guidance promulgated
thereunder.

2.11           “Incentive Option” means an option to purchase Stock granted
under this Plan which is designated as an “Incentive Option” and which is
intended to satisfy the requirements of Section 422 of the Code.

2.12           “Non-Employee Directors” means that term as defined in Rule 16b-3
under the 1934 Act.

2.13           “Nonqualified Option” means an option to purchase Stock granted
under this Plan other than an Incentive Option.

2.14           “Option” means both an Incentive Option and a Nonqualified Option
granted under this Plan to purchase shares of Stock.

2.15           “Option Agreement” means the written agreement by and between the
Company and an Eligible Person, which sets out the terms of an Option.

2.16           “Outside Director” shall mean a member of the Board of Directors
serving on the Committee who satisfies Section 162(m) of the Code.
 
2.17            “Plan” means this Texas Rare Earth Resources Corp. Amended and
Restated 2008 Stock Option Plan, as set out in this document and as it may be
amended from time to time.

 
 

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           2.18           “Plan Year” means the Company’s fiscal year.

           2.19           “Performance Stock Award” means an award denominated
in shares of Stock to be issued to an Eligible Person if specified predetermined
performance goals are satisfied as described in Article VII.
 
           2.20           “Restricted Stock” means Stock awarded or purchased
under a Restricted Stock Agreement entered into pursuant to this Plan, together
with (i) all rights, warranties or similar items attached or accruing thereto or
represented by the certificate representing the stock and (ii) any stock or
securities into which or for which the stock is thereafter converted or
exchanged.  The terms and conditions of the Restricted Stock Agreement shall be
determined by the Committee consistent with the terms of the Plan.

           2.21           “Restricted Stock Agreement” means an agreement
between the Company or any Affiliate and the Eligible Person pursuant to which
the Eligible Person receives a Restricted Stock Award subject to Article VI.

           2.22           “Restricted Stock Award” means an Award of Restricted
Stock.

           2.23           “Restricted Stock Purchase Price” means the purchase
price, if any, per share of Restricted Stock subject to an Award.  The Committee
shall determine the Restricted Stock Purchase Price.  It may be greater than or
less than the Fair Market Value of the Stock on the date of the Stock Award.

            2.24           “Stock” means the common stock of the Company, $.01
par value, or, in the event that the outstanding shares of common stock are
later changed into or exchanged for a different class of stock or securities of
the Company or another corporation, that other stock or security.

           2.25           “Stock Appreciation Right” and “SAR” means the right
to receive the difference between the Fair Market Value of a share of Stock on
the grant date and the Fair Market Value of the share of Stock on the exercise
date.
 
   2.26           “Stock Award” means an Award of Stock to an Eligible Person.

           2.27           “10% Stockholder” means an individual who, at the time
the Option is granted, owns Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any Affiliate, as
determined for purposes of Code Sections 422 and 424.

 
 

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ARTICLE III - ELIGIBILITY

The individuals who shall be eligible to receive Awards shall be those Eligible
Persons of the Company or any of its Affiliates as the Committee shall determine
from time to time. However, no member of the Committee shall be eligible to
receive any Award or to receive Stock, Options, Stock Appreciation Rights, or
any Performance Stock Award under any other plan of the Company or any of its
Affiliates, if to do so would cause the individual not to be a Non-Employee
Director or Outside Director.  The Board of Directors may designate one or more
individuals who shall not be eligible to receive any Award under this Plan or
under other similar plans of the Company.

ARTICLE IV - GENERAL PROVISIONS RELATING TO AWARDS

           4.1           Authority to Grant Awards.   The Committee may grant to
those Eligible Persons of the Company or any of its Affiliates, as it shall from
time to time determine, Awards under the terms and conditions of this Plan.  The
Committee shall determine subject only to any applicable limitations set out in
this Plan, the number of shares of Stock to be covered by any Award to be
granted to an Eligible Person.

           4.2           Dedicated Shares.   The total number of shares of Stock
with respect to which Awards may be granted under the Plan shall be 5,000,000
shares.  The shares may be treasury shares or authorized but unissued
shares.  The number of shares stated in this Section 4.2 shall be subject to
adjustment in accordance with the provisions of Section 4.5.  In the event that
any outstanding Award shall expire or terminate for any reason or any Award is
surrendered, the shares of Stock allocable to the unexercised portion of that
Award may again be subject to an Award under the Plan.   Shares withheld in
order to cover tax withholding obligations shall reduce the number of shares of
Stock available for issuance under the Plan.  The Committee may adopt reasonable
counting procedures to ensure appropriate counting, avoid double counting, and
make adjustments pursuant to the Plan.   Subject to adjustment as provided in
Section 4.5, the maximum number of shares that may be covered by Options or SARs
(other than a substitution Award granted pursuant to Section 5.14) issued to an
Eligible Person in any calendar year shall not exceed 3,000,000 shares.

           4.3           Non-transferability.  Awards shall not be transferable
by the Eligible Person otherwise than by will or under the laws of descent and
distribution, or (with respect to Awards other than Incentive Options) pursuant
to a qualified domestic relations order (as defined by the Code or the rules
thereunder), and shall be exercisable, during the Eligible Person’s lifetime,
only by him or a transferee permitted by this Section 4.  Any attempt to
transfer an Award other than under the terms of the Plan and the Agreement shall
terminate the Award and all rights of the Eligible Person to that Award.

           4.4           Requirements of Law.  The Company shall not be required
to sell or issue any Stock under any Award if issuing that Stock would
constitute or result in a violation by the Eligible Person or the Company of any
provision of any law, statute, or regulation of any governmental authority.
Specifically, in connection with any applicable statute or regulation relating
to the registration of securities, upon exercise of any Option or pursuant to
any Award, the Company shall not be required to issue any Stock unless the
Committee has received evidence satisfactory to it to the effect that the holder
of that Option or Award will not transfer the Stock except in accordance with
applicable law, including receipt of an opinion of counsel satisfactory to the
Company to the effect that any proposed transfer complies with applicable
law.  The determination by the Committee on this matter shall be final, binding,
and conclusive. The Company may, but shall in no event be obligated to, register
any Stock covered by this Plan pursuant to applicable securities laws of any
country or any political subdivision.  In the event the Stock issuable on
exercise of an Option or pursuant to an Award is not registered, the Company may
imprint on the certificate evidencing the Stock any legend that counsel for the
Company considers necessary or advisable to comply with applicable law. The
Company shall not be obligated to take any other affirmative action in order to
cause the exercise of an Option or vesting under an Award, or the issuance of
shares pursuant thereto, to comply with any law or regulation of any
governmental authority.

 
 

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           4.5           Changes in the Company’s Capital Structure.

           (a)           The existence of outstanding Options or Awards shall
not affect in any way the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the Company’s capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Stock or its rights, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.  If the Company shall effect a
subdivision or consolidation of shares or other capital readjustment, the
payment of a Stock dividend, or other increase or reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money,
services or property, then (a) the number, class, and per share price of shares
of Stock subject to outstanding Options under this Plan shall be appropriately
adjusted in such a manner as to entitle an Eligible Person to receive upon
exercise of an Option, for the same aggregate cash consideration, the equivalent
total number and class of shares he would have received had he exercised his
Option in full immediately prior to the event requiring the adjustment; (b) the
applicable share limits under Article VII and the number and class of shares of
Stock then reserved to be issued under the Plan, shall each be adjusted by
substituting for the total number and class of shares of Stock at issue that
number and class of shares of Stock that would have been received by the owner
of an equal number of outstanding shares of each class of Stock as the result of
the event requiring the adjustment.

              (b)           If the Company is merged or consolidated with
another corporation and the Company is not the surviving corporation, or if the
Company is liquidated or sells or otherwise disposes of substantially all of its
assets while Options remain outstanding under this Plan (each of the foregoing
referred to as a “Corporate Transaction”):

   (i)           Subject to the provisions of clause (ii) below, in the event of
such a Corporate Transaction, any unexercised Options shall automatically
accelerate so that they shall, immediately prior to the specified effective date
for the Corporate Transaction become 100% vested and exercisable; provided,
however, that any unexercised Options shall not accelerate if and to the extent
such Option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof (the “Successor
Corporation”) or to be replaced with a comparable award for the purchase of
shares of the capital stock of the Successor Corporation or parent
thereof.  Whether or not any unexercised Option is assumed or replaced shall be
determined by the Company and the Successor Corporation in connection with the
Corporate Transaction.  The Board of Directors shall make the determination of
what constitutes a comparable award to the unexercised Option, and its
determination shall be conclusive and binding.  The unexercised Option shall
terminate and cease to remain outstanding immediately following the consummation
of the Corporate Transaction, except to the extent assumed by the Successor
Corporation.
 

 
 
 

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(ii)           All outstanding Options may be canceled by the Board of Directors
as of the effective date of any Corporate Transaction, if (i) notice of
cancellation shall be given to each holder of an Option and (ii) either (x) the
Company shall pay in cash to each holder of an Option the excess (if any) of the
value of the consideration received per share of Stock in the Corporate
Transaction over the exercise price per share of the Option (multiplied by the
number of shares of Stock then subject to the Option), which amount may be paid
immediately upon the closing of the Corporate Transaction or may be paid subject
to the same terms and conditions (such as escrows, holdbacks, or earnouts) as is
the consideration payable to the holders of Stock (provided that any such cash
payment or payments shall comply with the rules of Final Treasury Regulation
Section 1.409A-3(i)(5)(iv)), or (y) each holder of an Option shall have the
right to exercise that Option in full (without regard to any limitations set out
in or imposed under this Plan or the Option Agreement granting that Option)
during a period set by the Board of Directors preceding the effective date of
the merger, consolidation, liquidation, sale, or other disposition and, if in
the event all outstanding Options may not be exercised in full under applicable
securities laws without registration of the shares of Stock issuable on exercise
of the Options, the Board of Directors may limit the exercise of the Options to
the number of shares of Stock, if any, as may be issued without
registration.  The method of choosing which Options may be exercised, and the
number of shares of Stock for which Options may be exercised, shall be solely
within the discretion of the Board of Directors.

               (c)           After a merger of one or more corporations into the
Company or after a consolidation of the Company and one or more corporations in
which the Company shall be the surviving corporation, each Eligible Person shall
be entitled to have his Restricted Stock and shares earned under a Performance
Stock Award appropriately adjusted based on the manner the Stock was adjusted
under the terms of the agreement of merger or consolidation.

(d)           In each situation described in this Section 4.5, the Committee
will make similar adjustments, as appropriate, in outstanding Stock Appreciation
Rights.

(e)           The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe for them, or upon conversion of shares or obligations
of the Company convertible into shares or other securities, shall not affect,
and no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Awards.
 
 

 
 
 

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4.6      Election under Section 83(b) of the Code.  No Employee shall exercise
the election permitted under Section 83(b) of the Code without written approval
of the Committee.  Any Employee doing so shall forfeit all Awards issued to him
under this Plan.

4.7      Book Entry.  Notwithstanding any other provision of this Plan to the
contrary, the Company may elect to satisfy any requirement under this Plan for
the delivery of stock certificates through the use of electronic or other form
of book-entry.

ARTICLE V - OPTIONS AND STOCK APPRECIATION RIGHTS

           5.1           Type of Option.  The Committee shall specify at the
time of grant whether a given Option shall constitute an Incentive Option or a
Nonqualified Option.  Incentive Stock Options may only be granted to Employees.

5.2      Option Exercise Price.  The price at which Stock may be purchased under
an Incentive Option shall not be less than the greater of:  (a) 100% of the Fair
Market Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is
granted.  The Committee in its discretion may provide that the price at which
shares of Stock may be purchased under an Incentive Option shall be more than
100% of Fair Market Value.  In the case of any 10% Stockholder, the price at
which shares of Stock may be purchased under an Incentive Option shall not be
less than 110% of the Fair Market Value of the Stock on the date the Incentive
Option is granted.   The price at which shares of Stock may be purchased under a
Nonqualified Option shall be such price as shall be determined by the Committee
in its sole discretion but in no event lower than the par value of the shares of
Stock on the date the Option is granted; provided, however, that in the event
that shares of Stock subject to a Nonqualified Option are or may by the terms of
the Option become purchasable at a price that is less than the Fair Market Value
of the shares of Stock on the date the Option is granted, such Option shall be
subject to the provisions of Section 5.17 below and shall be intended to comply
with (as opposed to be exempt from) the requirements of Section 409A of the
Code.

5.3      Duration of Options and SARS.  No Option or SAR shall be exercisable
after the expiration of ten (10) years from the date the Option or SAR is
granted.  In the case of a 10% Stockholder, no Incentive Option shall be
exercisable after the expiration of five years from the date the Incentive
Option is granted.

5.4      Amount Exercisable -- Incentive Options.   Subject to the provisions of
Section 5.17, each Option may be exercised from time to time, in whole or in
part, in the manner and subject to the conditions the Committee, in its sole
discretion, may provide in the Option Agreement, as long as the Option is valid
and outstanding.  To the extent that the aggregate Fair Market Value (determined
as of the time an Incentive Option is granted) of the Stock with respect to
which Incentive Options first become exercisable by the optionee during any
calendar year (under this Plan and any other incentive stock option plan(s) of
the Company or any Affiliate) exceeds $100,000, the portion in excess of
$100,000 of the Incentive Option shall be treated as a Nonqualified Option.  In
making this determination, Incentive Options shall be taken into account in the
order in which they were granted.

 
 

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5.5      Exercise of Options.  Each Option shall be exercised by the delivery of
written notice to the Committee setting forth the number of shares of Stock with
respect to which the Option is to be exercised, together with:

                (a)           cash, certified check, bank draft, or postal or
express money order payable to the order of the Company for an amount equal to
the option price of the shares;

(b)           stock at its Fair Market Value on the date of exercise (if
approved in advance in writing by the Committee);

                (c)           an election to make a cashless exercise through a
registered broker-dealer (if approved in advance in writing by the Committee);

(d)           an election to have shares of Stock, which otherwise would be
issued on exercise, withheld in payment of the exercise price (if approved in
advance in writing by the Committee); and/or

(e)           any other form of payment which is acceptable to the Committee,
including without limitation, payment in the form of a promissory note, and
specifying the address to which the certificates for the shares are to be
mailed.

As promptly as practicable after receipt of written notification and payment,
the Company shall deliver to the Eligible Person certificates for the number of
shares with respect to which the Option has been exercised, issued in the
Eligible Person’s name. If shares of Stock are used in payment, the aggregate
Fair Market Value of the shares of Stock tendered must be equal to or less than
the aggregate exercise price of the shares being purchased upon exercise of the
Option, and any difference must be paid by cash, certified check, bank draft, or
postal or express money order payable to the order of the Company.  Delivery of
the shares shall be deemed effected for all purposes when a stock transfer agent
of the Company shall have deposited the certificates in the United States mail,
addressed to the Eligible Person, at the address specified by the Eligible
Person.

Whenever an Option is exercised by exchanging shares of Stock owned by the
Eligible Person, the Eligible Person shall deliver to the Company certificates
registered in the name of the Eligible Person representing a number of shares of
Stock legally and beneficially owned by the Eligible Person, free of all liens,
claims, and encumbrances of every kind, accompanied by stock powers duly
endorsed in blank by the record holder of the shares represented by the
certificates (with signature guaranteed by a commercial bank or trust company or
by a brokerage firm having a membership on a registered national stock
exchange).  The delivery of certificates upon the exercise of Options is subject
to the condition that the person exercising the Option provides the Company with
the information the Company might reasonably request pertaining to exercise,
sale or other disposition.  Notwithstanding the foregoing, to the extent
approved by the Committee, an Eligible Person may choose to deliver shares of
Stock to the Company via any reasonable attestation process meeting the
requirements of the Code and other applicable law.

 
 

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5.6           Stock Appreciation Rights.  All Eligible Persons shall be eligible
to receive Stock Appreciation Rights.  The Committee shall determine the SAR to
be awarded from time to time to any Eligible Person.  The grant of a SAR to be
awarded from time to time shall neither entitle such person to, nor disqualify
such person from, participation in any other grant of Awards by the Company,
whether under this Plan or any other plan of the Company.  If granted as a
stand-alone SAR Award, the terms of the Award shall be provided in a Stock
Appreciation Rights Agreement.

5.7           Stock Appreciation Rights in Tandem with Options.  Stock
Appreciation Rights may, at the discretion of the Committee, be included in each
Option granted under the Plan to permit the holder of an Option to surrender
that Option, or a portion of the part which is then exercisable, and receive in
exchange, upon the conditions and limitations set by the Committee, an amount
equal to the excess of the Fair Market Value of the Stock covered by the Option,
or the portion of it that was surrendered, determined as of the date of
surrender, over the aggregate exercise price of the Stock.  In the event of the
surrender of an Option, or a portion of it, to exercise the Stock Appreciation
Rights, the shares represented by the Option or that part of it which is
surrendered, shall not be available for reissuance under the Plan.  Each Stock
Appreciation Right issued in tandem with an Option (a) will expire not later
than the expiration of the underlying Option, (b) may be for no more than 100%
of the difference between the exercise price of the underlying Option and the
Fair Market Value of a share of Stock at the time the Stock Appreciation Right
is exercised, (c) is transferable only when the underlying Option is
transferable, and under the same conditions, and (d) may be exercised only when
the underlying Option is eligible to be exercised.

5.8           Conditions of Stock Appreciation Rights.  All Stock Appreciation
Rights shall be subject to such terms, conditions, restrictions or limitations
as the Committee deems appropriate, including by way of illustration but not by
way of limitation, restrictions on transferability, requirement of continued
employment, individual performance, financial performance of the Company, or
payment of any applicable employment or withholding taxes.

5.9           Payment of Stock Appreciation Rights.  The amount of payment to
which the Eligible Person who reserves an SAR shall be entitled upon the
exercise of each SAR shall be equal to the amount, if any by which the Fair
Market Value of the specified shares of Stock on the exercise date exceeds the
Fair Market Value of the specified shares of Stock on the date of grant of the
SAR.  The SAR shall be paid in either cash or Stock, as determined in the
discretion of the Committee as set forth in the SAR agreement.  If the payment
is in Stock, the number of shares to be paid shall be determined by dividing the
amount of such payment by the Fair Market Value of Stock on the exercise date of
such SAR.

5.10         Exercise on Termination of Employment.  Unless it is expressly
provided otherwise in the Option or SAR agreement, Options and SAR’s granted to
Employees shall terminate three months after severance of employment of the
Employee from the Company and all Affiliates for any reason, with or without
Cause (defined below), other than death, retirement under the then established
rules of the Company, or severance for disability.  The Committee shall
determine whether authorized leave of absence or absence on military or
government service shall constitute severance of the employment of the Employee
at that time.  Notwithstanding anything contained herein, no Option or SAR may
be exercised after termination of employment for any reason (whether by death,
disability, retirement or otherwise) if it has not vested as at the date of
termination of employment.  Cause shall mean any of the following: (A)
conviction of a crime (including conviction on a nolo contendere plea) involving
a felony or dishonesty, or moral turpitude; (B) deliberate and continual refusal
to perform employment duties reasonably requested by the Company or an affiliate
after thirty (30) days’ written notice by certified mail of such failure to
perform, specifying that the failure constitutes cause (other than as a result
of vacation, sickness, illness or injury); (C) fraud or embezzlement as
determined by an independent certified public accountant firm; or (D) gross
misconduct or gross negligence in connection with the business of the Company or
an affiliate which has substantial effect on the Company or the affiliate.

 
 

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                5.11         Death.  If, before the expiration of an Option or
SAR, the Eligible Person, whether in the employ of the Company or after he has
retired or was severed for disability, or otherwise dies, the Option or SAR may
be exercised until the earlier of the Option’s or SAR’s expiration date or six
months following the date of his death, unless it is expressly provided
otherwise in the Option or SAR agreement.  After the death of the Eligible
Person, his executors, administrators, or any persons to whom his Option or SAR
may be transferred by will or by the laws of descent and distribution shall have
the right, at any time prior to the Option’s or SAR’s expiration or termination,
whichever is earlier, to exercise it, to the extent to which he was entitled to
exercise it immediately prior to his death, unless it is expressly provided
otherwise in the Option or SAR’s agreement.

5.12         Retirement.  Unless it is expressly provided otherwise in the
Option Agreement, before the expiration of an Option or SAR, the Employee shall
be retired in good standing from the employ of the Company under the then
established rules of the Company, the Option or SAR may be exercised until the
earlier of the Option’s or SAR’s expiration date or three months following the
date of his retirement, unless it is expressly provided otherwise in the Option
or SAR agreement.

5.13         Disability.  If, before the expiration of an Option or SAR, the
Employee shall be severed from the employ of the Company for disability, the
Option or SAR shall terminate on the earlier of the Option’s or SAR’s expiration
date or six months after the date he was severed because of disability, unless
it is expressly provided otherwise in the Option or SAR agreement.

5.14           Substitution Options.  Options may be granted under this Plan
from time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company.  The terms and
conditions of the substitute Options granted may vary from the terms and
conditions set out in this Plan to the extent the Committee, at the time of
grant, may deem appropriate to conform, in whole or in part, to the provisions
of the stock options in substitution for which they are granted.   Any
substitute Options granted pursuant to this paragraph shall meet the
requirements set forth in Final Treasury Regulation Sections 1.424-1 and
1.409A-1(b)(5)(v)(D), as applicable.

5.15         Reload Options.   Without in any way limiting the authority of the
Board of Directors or Committee to make or not to make grants of Options
hereunder, the Board of Directors or Committee shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision entitling
the Eligible Person to a further Option (a “Reload Option”) in the event the
Eligible Person exercises the Option evidenced by the Option Agreement, in whole
or in part, by surrendering other shares of Stock in accordance with this Plan
and the terms and conditions of the Option Agreement.  Any such Reload Option
(a) shall be for a number of shares equal to the number of shares surrendered as
part or all of the exercise price of such Option; (b) shall have an expiration
date which is the greater of (i) the same expiration date of the Option the
exercise of which gave rise to such Reload Option or (ii) one year from the date
of grant of the Reload Option; and (c) shall have an exercise price which is
equal to one hundred percent (100%) of the Fair Market Value of the Stock
subject to the Reload Option on the date of exercise of the original
Option.   Notwithstanding the foregoing, a Reload Option which is an Incentive
Option and which is granted to a 10% Stockholder, shall have an exercise price
which is equal to one hundred ten percent (110%) of the Fair Market Value of the
Stock subject to the Reload Option on the date of exercise of the original
Option and shall have a term which is no longer than five (5) years.

 
 

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Any such Reload Option may be an Incentive Option or a Nonqualified Option, as
the Board of Directors or Committee may designate at the time of the grant of
the original Option; provided, however, that the designation of any Reload
Option as an Incentive Option shall be subject to the provisions of the Code.
There shall be no Reload Options on a Reload Option.  Any such Reload Option
shall be subject to the availability of sufficient shares under Section 4.2
herein and shall be subject to such other terms and conditions as the Board of
Directors or Committee may determine which are not inconsistent with the express
provisions of the Plan regarding the terms of Options.

5.16           No Rights as Stockholder.  No Eligible Person shall have any
rights as a stockholder with respect to Stock covered by his Option until the
date a stock certificate is issued for the Stock.

5.17           Options Subject to Code Section 409A.  Notwithstanding anything
to the contrary herein, Options granted under this Article V that are intended
to provide for the deferral of compensation and to be subject to the
requirements of Code Section 409A shall contain such terms and conditions
(including, by example and not by way of limitation, fixed exercise dates) as
may be necessary or desirable for the Option to comply with the requirements of
Code Section 409A.

ARTICLE VI - AWARDS

6.1           Restricted Stock Awards.  The Committee may issue shares of Stock
to an Eligible Person subject to the terms of a Restricted Stock Agreement. The
Restricted Stock may be issued for no payment by the Eligible Person or for a
payment below the Fair Market Value on the date of grant.  Restricted Stock
shall be subject to restrictions as to sale, transfer, alienation, pledge or
other encumbrance and generally will be subject to vesting over a period of time
specified in the Restricted Stock Agreement.  The Committee shall determine the
period of vesting, the number of shares, the price, if any, of Stock included in
a Restricted Stock Award, and the other terms and provisions which are included
in a Restricted Stock Agreement.

6.2           Restrictions.  Restricted Stock shall be subject to the terms and
conditions as determined by the Committee, including without limitation, any or
all of the following:
 
 
(a)           a prohibition against the sale, transfer, alienation, pledge, or
other encumbrance of the shares of Restricted Stock, such prohibition to lapse
at such time or times as the Committee shall determine (whether in annual or
more frequent installments, at the time of the death, disability, or retirement
of the holder of such shares, or otherwise);

(b)           a requirement that the holder of shares of Restricted Stock
forfeit, or in the case of shares sold to an Eligible Person, resell back to the
Company at his cost, all or a part of such shares in the event of termination of
the Eligible Person’s employment during any period in which the shares remain
subject to restrictions;

(c)           a prohibition against employment of the holder of Restricted Stock
by any competitor of the Company or its Affiliates, or against such holder’s
dissemination of any secret or confidential information belonging to the Company
or an Affiliate;

(d)           unless stated otherwise in the Restricted Stock Agreement, (i) if
restrictions remain at the time of severance of employment with the Company and
all Affiliates, other than for reason of disability or death, the Restricted
Stock shall be forfeited; and (ii) if severance of employment is by reason of
disability or death, the restrictions on the shares shall lapse and the Eligible
Person or his heirs or estate shall be 100% vested in the shares subject to the
Restricted Stock Agreement.
 
 
6.3           Stock Certificate.   Shares of Restricted Stock shall be
registered in the name of the Eligible Person receiving the Restricted Stock
Award and deposited, together with a stock power endorsed in blank, with the
Company. Each such certificate shall bear a legend in substantially the
following form:

“The transferability of this certificate and the shares of Stock represented by
it is restricted by and subject to the terms and conditions (including
conditions of forfeiture) contained in the Texas Rare Earth Resources Corp.
Amended and Restated 2008 Stock Option Plan, and an agreement entered into
between the registered owner and the Company.  A copy of the Plan and agreement
is on file in the office of the Secretary of the Company.”

 
 

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6.4           Rights as Stockholder.   Subject to the terms and conditions of
the Plan, each Eligible Person receiving a certificate for Restricted Stock
shall have all the rights of a stockholder with respect to the shares of Stock
included in the Restricted Stock Award during any period in which such shares
are subject to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares.  Dividends paid with respect to
shares of Restricted Stock in cash or property other than Stock in the Company
or rights to acquire stock in the Company shall be paid to the Eligible Person
currently.  Dividends paid in Stock in the Company or rights to acquire Stock in
the Company shall be added to and become a part of the Restricted Stock.

6.5           Lapse of Restrictions.  At the end of the time period during which
any shares of Restricted Stock are subject to forfeiture and restrictions on
sale, transfer, alienation, pledge, or other encumbrance, such shares shall vest
and will be delivered in a certificate, free of all restrictions, to the
Eligible Person or to the Eligible Person’s legal representative, beneficiary or
heir; provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably required by applicable law.  By accepting a Stock Award
and executing a Restricted Stock Agreement, the Eligible Person agrees to remit
when due any federal and state income and employment taxes required to be
withheld.

6.6           Restriction Period.  No Restricted Stock Award may provide for
restrictions continuing beyond ten (10) years from the date of grant.

6.7           Award of Stock.  The Committee may award shares of Stock, without
any cash payment for such shares or without any restrictions, to designated
Eligible Persons for services rendered to the Company. The Stock may be subject
to purchase at, above or below the Fair Market Value on the date of grant (or
for no amount at all).  The designation of a Stock Award shall be made by the
Committee in writing at any time after such Eligible Person has provided value
to the Company (or within such period as permitted by IRS regulations).  The
Committee reserves the right to make adjustments in the amount of an Award if in
its discretion unforeseen events make such adjustment appropriate.

ARTICLE VII - PERFORMANCE STOCK AWARDS

7.1           Award of Performance Stock.  The Committee may award shares of
Stock, without any payment for such shares, to designated Eligible Persons if
specified performance goals established by the Committee are satisfied. The
terms and provisions herein relating to these performance-based awards are
intended to satisfy Section 162(m) of the Code and regulations issued
thereunder.  The designation of an employee eligible for a specific Performance
Stock Award shall be made by the Committee in writing prior to the beginning of
the period for which the performance is measured (or within such period as is
permitted by IRS regulations).  The Committee shall establish the maximum number
of shares of Stock to be issued to a designated Employee if the performance goal
or goals are met; provided, however, that no individual may receive Performance
Stock Awards in any calendar year covering more than 300,000 shares of
Stock.  The Committee reserves the right to make downward adjustments in the
maximum amount of an Award if in its discretion unforeseen events make such
adjustment appropriate.

 
 

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7.2           Performance Goals.  Performance goals determined by the Committee
shall be established in writing prior to the beginning of the period for which
performance is measured (or within such period as is permitted by IRS
regulations) based on one or more of the following criteria: specified increases
in cash flow; net profits; Stock price; Company, segment, or Affiliate sales;
market share; earnings per share; return on assets; and/or return on
stockholders’ equity.

7.3           Eligibility.  The employees eligible for Performance Stock Awards
are the senior officers (i.e., chief executive officer, president, vice
presidents, secretary, treasurer, and similar positions) of the Company and its
Affiliates, and such other key Employees of the Company and its Affiliates as
may be designated by the Committee.

7.4           Certificate of Performance.  The Committee must certify in writing
that a performance goal has been attained prior to issuance of any certificate
for a Performance Stock Award to any Employee.  If the Committee certifies the
entitlement of an Employee to the Performance Stock Award, the certificate will
be issued to the Employee as soon as administratively practicable, and subject
to other applicable provisions of the Plan, including but not limited to, all
legal requirements and tax withholding.  However, payment may be made in shares
of Stock, in cash, or partly in cash and partly in shares of Stock, as the
Committee shall decide in its sole discretion.  If a cash payment is made in
lieu of shares of Stock, the number of shares represented by such payment shall
not be available for subsequent issuance under this Plan.

7.5           Committee to Comply with Section 162(m).  Notwithstanding anything
to the contrary herein, the “Committee,” for purposes of this Article VII shall
consist solely of two or more Outside Directors.

ARTICLE VIII - ADMINISTRATION

The Committee shall administer the Plan.   All questions of interpretation and
application of the Plan and Awards shall be subject to the determination of the
Committee.  A majority of the members of the Committee shall constitute a
quorum.  All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by a
majority of the members shall be as effective as if it had been made by a
majority vote at a meeting properly called and held.  In carrying out its
authority under this Plan, the Committee shall have full and final authority and
discretion, including but not limited to the following rights, powers and
authorities, to:

(a)           determine the Eligible Persons to whom and the time or times at
which Options or Awards will be made;

                (b)           determine the number of shares and the purchase
price of Stock covered in each Option or Award, subject to the terms of the
Plan;
 
(c)           determine the terms, provisions, and conditions of each Option and
Award, which need not be identical;

 
 

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(d)           accelerate the time at which any outstanding Option or SAR may be
exercised, or Restricted Stock Award will vest;

(e)           define the effect, if any, on an Option or Award of the death,
disability, retirement, or termination of employment of the Employee;

(f)           prescribe, amend and rescind rules and regulations relating to
administration of the Plan; and

(g)           make all other determinations and take all other actions deemed
necessary, appropriate, or advisable for the proper administration of this Plan.

The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.

The Committee may, from time to time, delegate to specified officers of the
Company or other committees of the Board of Directors (including Board
committees of one) the power and authority to grant or document Awards under the
Plan to specified groups of Eligible Persons, subject to such restrictions and
conditions as the Committee, in its sole discretion, may impose.  The delegation
shall be as broad or as narrow as the Committee shall determine; provided,
however, that no such delegation shall result in the loss of an exemption under
Rule 16b-3 of the Exchange Act not cause any award to fail to be
“performance-based” compensation for purposes of Code Section 162(m).  To the
extent that the Committee has delegated the authority to determine certain terms
and conditions of an Award, all references in the Plan to the Committee’s
exercise of authority in determining such terms and conditions shall be
construed to include the person to whom the Committee has delegated the power
and authority to make such determination.

ARTICLE IX - AMENDMENT OR TERMINATION OF PLAN

Except as specifically provided otherwise, the Board of Directors may at any
time terminate, and from time to time may amend or modify this Plan provided,
however, that no amendment or modification may become effective without approval
of the stockholders of the Company if stockholder approval is required to enable
the Plan to satisfy any applicable statutory or regulatory requirements, of if
the Company, on the advice of counsel, determines that stockholder approval is
otherwise necessary or desirable.

Except as specifically provided otherwise, no such amendment, modification, or
termination of the Plan shall affect adversely in any material way any Award
previously granted without the written consent of the Eligible Person holding
such Award.
 
 
 

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ARTICLE X - MISCELLANEOUS

10.1           No Establishment of a Trust Fund.   No property shall be set
aside nor shall a trust fund of any kind be established to secure the rights of
any Eligible Person under this Plan.  All Eligible Persons shall at all times
rely solely upon the general credit of the Company for the payment of any
benefit which becomes payable under this Plan.

10.2           No Employment Obligation.  The granting of any Option or Award
shall not constitute an employment contract, express or implied, nor impose upon
the Company or any Affiliate any obligation to employ or continue to employ any
Eligible Person.  The right of the Company or any Affiliate to terminate the
employment of any person shall not be diminished or affected by reason of the
fact that an Option or Award has been granted to him.

10.3           Forfeiture.  Notwithstanding any other provisions of this Plan,
if the Committee finds by a majority vote after full consideration of the facts
that an Eligible Person, before or after termination of his employment with the
Company or an Affiliate for any reason (a) committed or engaged in fraud,
embezzlement, theft, commission of a felony, or proven dishonesty in the course
of his employment by the Company or an Affiliate, which conduct damaged the
Company or Affiliate, or disclosed trade secrets of the Company or an Affiliate,
or (b) participated, engaged in or had a material, financial, or other interest,
whether as an employee, officer, director, consultant, contractor, stockholder,
owner, or otherwise, in any commercial endeavor in the United States which is
competitive with the business of the Company or an Affiliate without the written
consent of the Company or Affiliate, the Eligible Person shall forfeit all
outstanding Options and all outstanding Awards, and including all exercised
Options and other situations pursuant to which the Company has not yet delivered
a stock certificate.  Clause (b) shall not be deemed to have been violated
solely by reason of the Eligible Person’s ownership of stock or securities of
any publicly owned corporation, if that ownership does not result in effective
control of the corporation.

The decision of the Committee as to the cause of an Employee’s discharge, the
damage done to the Company or an Affiliate, and the extent of an Eligible
Person’s competitive activity shall be final.  No decision of the Committee,
however, shall affect the finality of the discharge of the Employee by the
Company or an Affiliate in any manner.

10.4           Tax Withholding.  The Company or any Affiliate shall be entitled
to deduct from other compensation payable to each Eligible Person any sums
required by federal, state, or local tax law to be withheld with respect to the
grant or exercise of an Option or SAR, lapse of restrictions on Restricted
Stock, or award of Performance Stock or other Award.  In the alternative, the
Company may require the Eligible Person (or other person exercising the Option,
SAR or receiving the Stock) to pay the sum directly to the employer corporation.
If the Eligible Person (or other person exercising the Option or SAR or
receiving the Stock) is required to pay the sum directly, payment in cash or by
check of such sums for taxes shall be delivered on the date on which the
withholding is due.  Alternatively, and subject to the prior approval of the
Committee, which may be withheld by the Committee in its sole discretion, the
Eligible Person may elect to have share of Stock withheld or to deliver shares
of Stock previously held by the Eligible Person (for six months or such minimum
amount of time as may be required by the Committee to avoid adverse accounting
consequences), to satisfy the minimum statutory withholding taxes due.  The
shares of Stock delivered or withheld (i) shall not be subject to any
repurchase, forfeiture, vesting or similar requirements, and (ii) shall have an
aggregate Fair Market Value not in excess of such minimum withholding
obligations, with Fair Market Value determined as of the date on which such
withholding is required to be performed.  The Company’s obligation to deliver
shares upon exercise of any Option or lapse of restrictions on Stock or pursuant
to any other Award shall be subject in its entirety to the Eligible Person
making arrangements acceptable to the Company to cover all applicable tax
withholding.  The Company and its Affiliates shall not be obligated to advise an
Eligible Person of the existence of the tax or the amount which the employer
corporation will be required to withhold.

 
 

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10.5          Written Agreement or Course of Conduct.  Each Option and Award
shall be embodied in a written agreement which shall be subject to the terms and
conditions of this Plan and shall be signed by the Eligible Person and by a
member of the Committee on behalf of the Committee and the Company or an
executive officer of the Company, other than the Eligible Person, on behalf of
the Company.  The agreement may contain any other provisions that the Committee
in its discretion shall deem advisable which are not inconsistent with the terms
of this Plan.  Notwithstanding the foregoing, a written agreement is not
required if the Option or Award is granted in the ordinary course of conduct of
the business and the Company has sufficient accounting records reflecting the
services rendered in connection with the grant.

10.6          Indemnification of the Committee and the Board of Directors.  With
respect  to administration of this Plan, the Company shall indemnify each
present and future member of the Committee and the Board of Directors against,
and each member of the Committee and the Board of Directors shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including attorney’s fees, the amount of judgments, and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses,
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors.  However, this indemnity shall not include any expenses incurred by
any member of the Committee and/or the Board of Directors in respect of matters
as to which he shall be finally adjudged in any action, suit or proceeding to
have been guilty of gross negligence or willful misconduct in the performance of
his duty as a member of the Committee and the Board of Directors.  In addition,
no right of indemnification under this Plan shall be available to or enforceable
by any member of the Committee and the Board of Directors unless, within 60 days
after institution of any action, suit or proceeding, he shall have offered the
Company, in writing, the opportunity to handle and defend same at its own
expense.  This right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each member of the Committee and the Board of
Directors and shall be in addition to all other rights to which a member of the
Committee and the Board of Directors may be entitled as a matter of law,
contract, or otherwise.

10.7          Gender.  If the context requires, words of one gender when used in
this Plan shall include the others and words used in the singular or plural
shall include the other.

10.8          Headings.  Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms of the Plan.

10.9          Other Compensation Plans.  The adoption of this Plan shall not
affect any other stock option, incentive or other compensation or benefit plans
in effect for the Company or any Affiliate, nor shall the Plan preclude the
Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.

                10.10        Other Options or Awards.  The grant of an Option or
Award shall not confer upon the Eligible Person the right to receive any future
or other Options or Awards under this Plan, whether or not Options or Awards may
be granted to similarly situated Eligible Persons, or the right to receive
future Options or Awards upon the same terms or conditions as previously
granted.

                 10.11       Governing Law.  The provisions of this Plan shall
be construed, administered, and governed under the laws of the State of Texas.

10.12        Section 409A.  Notwithstanding anything in this Plan to the
contrary, the Plan and Awards made under the Plan are intended to comply with
the requirements imposed by Section 409A of the Code, and both the Plan and all
Awards issued hereunder shall be interpreted accordingly.  The Committee shall
have full power and authority, without the consent of any Eligible Person, to
modify in its sole and absolute discretion any outstanding Award or delay the
payment of any amounts payable pursuant to an outstanding Award to the minimum
extent necessary to meet the requirements of Code Section 409A.  Notwithstanding
the foregoing, in no event shall the Company have any liability for failure of
any Award to satisfy the requirements of Code Section 409A.

10.13        Changes in Accounting or Tax Rules.  Except a provided otherwise at
the time an Award is granted, notwithstanding any other provision of the Plan to
the contrary, if, during the term of the Plan, any changes in the financial or
tax accounting rules applicable to any Award shall occur which, in the sole
judgment of the Committee, nay have a material adverse effect on the reported
earnings, assets or liabilities of the Company, the Committee shall have the
right and power to modify as necessary and then outstanding Award as to which
the applicable services or other restrictions have not been satisfied.

 
 

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