Exhibit 10.3

 

 

El Capitan Precious Metals, Inc.
Stock Option Agreement
(non-statutory stock option)

 

 

This Stock Option Agreement is made and entered into as of [
                         ,      ], by and between
[                                   ] (“Optionee”) and El Capitan Precious
Metals, Inc., a Nevada corporation (the “Company”).

Background

A.              The Company has adopted the El Capitan Precious Metals, Inc.
2005 Stock Incentive Plan (the “Plan”) pursuant to which shares of common stock
of the Company have been reserved for issuance under the Plan.

B.               Optionee is [a director serving on the Board of Directors of
the Company] and will perform substantial work on behalf of the Company.

C.               The Company desires to provide to Optionee an option to
purchase certain shares of common stock of the Company, upon the terms set forth
herein.

NOW, THEREFORE, the parties hereto agree as follows:

1.                Incorporation by Reference. The terms and conditions of the
Plan, a copy of which has been delivered to Optionee, are hereby incorporated
herein and made a part hereof by reference as if set forth in full. In the event
of any conflict or inconsistency between the provisions of this Agreement and
those of the Plan, the provisions of the Plan shall govern and control.

2.                Grant of Option; Exercise Price. Subject to the terms and
conditions herein set forth, the Company hereby irrevocably grants from the Plan
to Optionee the right and option, hereinafter called the “Option,” to purchase
all or any part of an aggregate of [ ]shares of common stock, $.001 par value,
of the Company (the “Shares”) at the exercise price per Share of [$ ](the
“Exercise Price”), which price is intended to be at least 100% of the fair
market value of the Company’s common stock on the grant date.

3.               Exercise and Vesting of Option. The Option shall be exercisable
only to the extent that all, or any portion thereof, has vested in the Optionee.
Except as provided herein in paragraph 4, the Option shall vest in Optionee [in
installments on the dates and in the amounts set forth below] so long as
Optionee continues to serve the Company, either as a director, officer or
employee.

No. of Shares To Be Vested Last Day of:                                        
       

 

 

 

 

4.                Term of Option. To the extent vested, and except as otherwise
provided in this Agreement, the Option shall be exercisable for [ten (10) years]
from the date of this Agreement.

5.                Method of Exercising Option. Subject to the terms and
conditions of this Agreement and the Plan, the Option may be exercised, in whole
or in part, by giving written notice to the Company, specifying the number of
Shares to be purchased and accompanied by the full purchase price for such
shares. The option price shall be payable (a) in United States dollars upon
exercise of the option and may be paid by cash, uncertified or certified check
or bank draft; (b) at the discretion of the Committee, by delivery of shares of
Common Stock in payment of all or any part of the option price, which shares
shall be valued for this purpose at the Fair Market Value on the date such
option is exercised; or (c) at Optionee’s election, by instructing the Company
to withhold from the Shares issuable upon exercise of the Option shares of
common stock in payment of all or any part of the exercise price (and/or any
related withholding tax obligations, if permissible under applicable law), which
shares shall be valued for this purpose at the Fair Market Value or in such
other manner as may be authorized from time to time by the Company’s board of
directors or a compensation committee thereof. Any such notice shall be deemed
given when received by the Company at the address provided in Section 9 herein.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable.

6.                Rights of Option Holder. Optionee, as holder of the Option,
shall not have any of the rights of a stockholder with respect to the Shares
covered by the Option except to the extent that one or more certificates for
such Shares shall be delivered to him or her upon the due exercise of all or any
part of the Option.

7.                Transferability. The Option shall not be transferable except
to the extent permitted by the Plan.

8.                Optionee Representations. Optionee hereby represents and
warrants that Optionee has reviewed with his or her own tax advisors the
federal, state, and local tax consequences of the transactions contemplated by
this Agreement. Optionee is relying solely on such advisors and not on any
statements or representation of the Company or any of its agents. Optionee
understands that he or she will be solely responsible for any tax liability that
may result to him or her as a result of the transactions contemplated by this
Agreement.

9.                Notices. All notices and other communications provided in this
Agreement will be in writing and will be deemed to have been duly given when
received by the party to whom it is directed at the following addresses: 

If to the Company:   If to Optionee:       El Capitan Precious Metals, Inc.    
           

 

10.             General.

(a)              The Option is granted pursuant to the Plan and is governed by
the terms thereof. The Company shall at all times during the term of the Option
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Option Agreement.

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(b)             Nothing herein expressed or implied is intended or shall be
construed as conferring upon or giving to any person, firm, or corporation other
than the parties hereto, any rights or benefits under or by reason of this
Agreement.

(c)              Each party hereto agrees to execute such further documents as
may be necessary or desirable to effect the purposes of this Agreement.

(d)              This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same agreement.

(e)              This Agreement, in its interpretation and effect, shall be
governed by the laws of the State of Nevada applicable to contracts executed and
to be performed therein.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

 

 

  OPTIONEE:                       El Capitan Precious Metals, Inc.           By:
                               

 

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El Capitan Precious Metals, Inc.
2005 Stock Incentive Plan

STOCK OPTION EXERCISE FORM

 

(To be signed only upon exercise of stock option)

Pursuant to a Stock Option Agreement dated as of [ ] (the “Option Agreement”),
the undersigned is the holder of an option (the “Option”) to purchase [ ] shares
of common stock, $.001 par value per share (the “Common Stock”), of El Capitan
Precious Metals, Inc., a Nevada corporation (the “Company”). In accordance with
the terms of the Option Agreement, the undersigned hereby irrevocably elects to
exercise the Option with respect to _________________ shares of Common Stock and
to purchase such shares from the Company, and herewith makes payment of
$_______________ therefor:

 

  ¨ by cash, uncertified or certified check or bank draft;       ¨ by delivery
of shares of Common Stock (if permitted by the Committee) or       ¨ by
instructing the Company to withhold from the shares issuable upon exercise of
the Option shares of Common Stock in payment of $___________ of the exercise
price (and/or any related withholding tax obligations, if permissible under
applicable law).

 

The undersigned requests that the certificate(s) for such shares be issued in
the name of _________________________________, and be delivered to
______________________________, whose address is set forth below the signature
of the undersigned.

 

Dated:  ____________________________

 

      (Signature)                             (Address)               (Social
Security or other Tax ID No.)