STOCK OPTION AGREEMENT

LIBERTY STAR URANIUM & METALS CORP.

THIS AGREEMENT is entered into as of the 21st day of May, 2008 (the "Date of
Grant").

BETWEEN:

LIBERTY STAR URANIUM & METALS CORP., a company incorporated pursuant to the laws
of the State of Nevada, of 3024 E. Fort Lowell Rd., Tucson, Arizona 85716

(the "Company")

AND:

__________________, of _______________________

(the "Optionee")

WHEREAS:

A.                         The Board of Directors of the Company (the "Board")
has approved and adopted the 2007 Stock Option Plan (the "Plan"), a copy of
which is attached hereto as Exhibit B, pursuant to which the Board is authorized
to grant to employees and other selected persons stock options to purchase
common stock of the Company (the "Common Stock");

B.                          The Plan provides for the granting of stock options
that either (i) are intended to qualify as "Incentive Stock Options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or (ii) do not qualify under Section 422 of the Code ("Non-Qualified
Stock Options"); and

C.                          The Board has authorized the grant to Optionee of
options to purchase a total of ________________________ (____________) shares of
Common Stock (the "Options"), which Options are intended to be (select one):

 

x

Incentive Stock Options

 

o

Non-Qualified Stock Options;

NOW THEREFORE, the Company agrees to offer to the Optionee the option to
purchase, upon the terms and conditions set forth herein and in the Plan, up to
an aggregate of _____________________ (_________) shares of Common Stock.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Plan.

 

 

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1.                          Exercise Price. The exercise price (the "Exercise
Price") of the Options shall be $0.22 per share of Common Stock.

2.                          Expiry Date. The Options shall expire on May 21,
2018.

3.                          Vesting Schedule. The Options shall vest in
accordance with the vesting provisions contained in Section 5.1(e) of the Plan.
Options which have vested are referred to as "Vested Options".

4.                           Options not Transferable. The Options may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) except in accordance with Section 5.1(k) of the
Plan.

5.                          Investment Intent. By accepting the Options, the
Optionee represents and agrees that none of the shares of Common Stock purchased
upon exercise of the Options will be distributed in violation of applicable
federal, state and provincial laws and regulations. In addition, the Company may
require, as a condition of exercising the Options, that the Optionee execute an
undertaking, in such a form as the Company shall reasonably specify, that the
shares of Common Stock are being purchased only for investment and without any
then-present intention to sell or distribute such shares of Common Stock.

6.                          Termination of Employment and Options. The Options
shall terminate in accordance with Section 5.1(g) of the Plan.

7.                           Common Stock. In the case of any stock split, stock
dividend or like change in the nature of shares of Common Stock covered by this
Agreement, the number of shares of Common Stock issueable upon exercise of the
Options and the Exercise Price shall be proportionately adjusted as set forth in
Section 5.1(m) of the Plan.

8.                          Exercise of Option. The Options shall be
exercisable, in full or in part, at any time after vesting, until termination;
provided however, that any Optionee who is subject to the reporting and
liability provisions of Section 16 of the Securities Exchange Act of 1934 with
respect to the Common Stock shall be precluded from selling or transferring any
Common Stock or other security underlying the Options during the six (6) months
immediately following the grant of the Options. If less than all of the shares
of Common Stock included in the vested portion of any Option are purchased, the
remainder may be purchased at any subsequent time prior to the expiration of the
Option term. No portion of any Option for less than fifty (50) shares (as
adjusted pursuant to Section 5.1(m) of the Plan) may be exercised; provided,
that if the vested portion of any Option is less than fifty (50) shares, it may
be exercised with respect to all shares for which it is vested. Only whole
shares of Common Stock may be issued pursuant to an Option, and to the extent
that an Option covers less than one (1) share, it is unexercisable.

Each exercise of the Options shall be by means of delivery of a notice of
election to exercise (which may be in the form attached hereto as Exhibit A) to
the President of the Company at its principal executive office, specifying the
number of shares of Common Stock to be purchased and accompanied by payment in
cash by certified check or cashier's check in the amount of the full exercise
price for the Common Stock to be purchased. In addition to payment in cash by
certified check or cashier's check, an Optionee or transferee of an Option may
pay for

 

 

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all or any portion of the aggregate exercise price by complying with one or more
of the alternatives specified in Section 5.1(i) of the Plan.

It is a condition precedent to the issuance of shares of Common Stock upon
exercise of the Options that the Optionee execute and deliver to the Company an
Investment Representation Letter, in a form acceptable to the Company, to the
extent required pursuant to the terms thereof.

9.                          Holding period for Incentive Stock Options. In order
to obtain the tax treatment provided for Incentive Stock Options by Section 422
of the Code, the shares of Common Stock received upon exercising any Incentive
Stock Options received pursuant to this Agreement must be sold, if at all, after
a date which is the later of two (2) years from the date this Agreement is
entered into or one (1) year from the date upon which the Options are exercised.
The Optionee agrees to report sales of shares of Common Stock prior to the above
determined date to the Company within one (1) business day after such sale is
concluded. The Optionee also agrees to pay to the Company, within five (5)
business days after such sale is concluded, the amount necessary for the Company
to satisfy its withholding requirement required by the Code in the manner
specified in Section 5.1(l) of the Plan. Nothing in this Section 9 is intended
as a representation that Common Stock may be sold without registration under
provincial, state and federal securities laws or an exemption therefrom or that
such registration or exemption will be available at any specified time.

10.                        Subject to 2007 Stock Option Plan. The terms of the
Options are subject to the provisions of the Plan, as the same may from time to
time be amended, and any inconsistencies between this Agreement and the Plan, as
the same may be from time to time amended, shall be governed by the provisions
of the Plan, a copy of which has been delivered to the Optionee, and which is
available for inspection at the principal offices of the Company.

11.                        Professional Advice. The acceptance of the Options
and the sale of shares of Common Stock issued pursuant to the exercise of
Options may have consequences under federal, state and provincial tax and
securities laws which may vary depending upon the individual circumstances of
the Optionee. Accordingly, the Optionee acknowledges that he or she has been
advised to consult his or her personal legal and tax advisor in connection with
this Agreement and his or her dealings with respect to Options for the shares of
Common Stock. Without limiting other matters to be considered, the Optionee
should consider whether upon the exercise of Options, the Optionee will file an
election with the Internal Revenue Service pursuant to Section 83(b) of the
Code.

12.                        No Employment Relationship. Whether or not any
Options are to be granted under this Plan shall be exclusively within the
discretion of the Plan Administrator, and nothing contained in this Plan shall
be construed as giving any person any right to participate under this Plan. The
grant of an Option shall in no way constitute any form of agreement or
understanding binding on the Company or any Related Company, express or implied,
that the Company or any Related Company will employ or contract with an Optionee
for any length of time, nor shall it interfere in any way with the Company's or,
where applicable, a Related Company's right to terminate the Optionee's
employment at any time, which right is hereby reserved.

 

 

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13.                        Entire Agreement. This Agreement is the only
agreement between the Optionee and the Company with respect to the Options, and
this Agreement and the Plan supersede all prior and contemporaneous oral and
written statements and representations and contain the entire agreement between
the parties with respect to the Options.

14.                        Notices. Any notice required or permitted to be made
or given hereunder shall be mailed or delivered personally to the addresses set
forth below, or as changed from time to time by written notice to the other:

 

The Company:

Liberty Star Uranium & Metals Corp.

3024 E. Fort Lowell Rd.

Tucson, Arizona 85716

 

Attention: President

 

With a copy to:

Clark Wilson LLP

Barristers and Solicitors

Suite 800 – 885 West Georgia Street

Vancouver, BC

Canada V6C 3H1

 

Attention: Bernard Pinsky

 

The Optionee:

_______________________

_______________________

_______________________

15.                        Counterparts. This Agreement may be executed in
several counterparts, each of which will be deemed to be an original and all of
which will together constitute one and the same instrument.

16.                        Currency. Unless otherwise provided, all dollar
amounts referred to in this Agreement are in lawful money of the United States
of America.

17.                        Electronic Means. Delivery of an executed copy of
this Agreement by electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy will be deemed to be execution
and delivery of this Agreement as of the date first above written.

18.

 

 

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Proper Law. This Agreement will be governed by and construed in accordance with
the law of Arizona.

IN WITNESS WHEREOF the parties have duly executed and delivered this Agreement
as of the date first above written.

LIBERTY STAR GOLD CORP.

 

 

Per:

                                                               

 

Authorized Signatory

 

SIGNED, SEALED and DELIVERED by _______________________ in the presence of:

                                                                         
Signature
                                                                       
Print Name
                                                                       
Address
                                                                       

                                                                       
Occupation

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EXHIBIT A

Notice of Election to Exercise

This Notice of Election to Exercise shall constitute proper notice pursuant to
Section 5.1(h) of the Liberty Star Uranium & Metals Corp. 2007 Stock Option Plan
(the "Plan") and Section 8 of that certain Stock Option Agreement (the
"Agreement") dated as of the _______day of ______ 20_____, between Liberty Star
Uranium & Metals Corp. (the "Company") and the undersigned.

The undersigned hereby elects to exercise Optionee's option to purchase
__________________ shares of the common stock of the Company at a price of
US$_______ per share, for an aggregate consideration of US$__________, on the
terms and conditions set forth in the Agreement and the Plan. Such aggregate
consideration, in the form specified in Section 8 of the Agreement, accompanies
this notice.

The Optionee hereby directs the Company to issue, register and deliver the
certificates representing the shares as follows:

Registration Information:

 

Delivery Instructions:

 

 

 

Name to appear on certificates

 

Name

 

 

 

Address

 

Address

 

 

 

 

 

 

 

 

 

 

 

Telephone Number

DATED at ____________________________________, the _______ day of
_____________________, _______.

 

                                          
                                             

 

(Name of Optionee – Please type or print)

 

                                          
                                             

 

(Signature and, if applicable, Office)

 

                                          
                                             

 

(Address of Subscriber)

 

                                          
                                             

 

(City, State, and Zip Code of Subscriber)

 

                                          
                                             

 

(Fax Number)

 

 

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EXHIBIT B

Insert Stock Option Plan

See Attached

 

 

D/ljm/598099.1