Exhibit 10.1

 

MAGELLAN GOLD CORPORATION

 

RESTRICTED STOCK UNIT AGREEMENT

 

 

To DAVID DRIPS:

 

MAGELLAN GOLD CORPORATION, a Nevada corporation (the “Company”), has granted you
an award (this “Award”) of restricted stock units (the “Stock Units”) under the
Magellan Gold Corporation Deferred Compensation and Equity Award Plan, as
amended from time to time (the “Plan”), conditioned upon your agreement to the
terms and conditions described below. Each Stock Unit represents an unfunded
promise by the Company to issue to you, upon a specified future event, one share
of the Company’s common stock, $0.001 par value (the “Common Stock”). The
effective date of grant will be June 1, 2019 (the “Grant Date”), subject to your
promptly signing and returning a copy of this Agreement (as defined below) to
the Company. The Award has been made in fulfillment of:

 

  i. ¨ your election under the Plan to defer receipt of your Annual Retainer
payment that was otherwise payable in cash on the Grant Date.

 

  ii. ☒ your election under the Plan to receive your Equity Grant in the form of
Restricted Stock Units.

 

This Agreement (the “Agreement”) evidences the Award of the Stock Units. The
Award is subject in all respects to and incorporates by reference the terms and
conditions of the Plan and the Magellan Gold Corporation 2017 Equity Incentive
Plan, as amended from time to time (the “EIP”). By executing this Agreement, you
acknowledge that you have received a copy of the Plan. This Agreement and the
Award of the Stock Units are made in consideration of your service as CEO,
President and a member of the Board of Directors of the Company.

 

1.Terminology; Conflicts. The Glossary at the end of this Agreement includes
definitions of capitalized words used in this Agreement. Unless otherwise
specifically provided in this Agreement, in the event of any conflict, ambiguity
or inconsistency between or among any defined term in this Agreement, the Plan
or the EIP, the provisions of, first, the Plan, second, the EIP, and lastly,
this Agreement, will control in that order of priority.

 

2. Terms and Conditions of this Award. The following terms and conditions will
apply:

 

(a)Terms of Stock Unit Grants. You will be entitled to receive, and we agree to
grant to you, an aggregate of 10,000 Stock Units (subject to adjustment as
provided for herein) for each completed calendar month that you are performing
services for the Company in any capacity. The grants will continue on a month to
month basis provided you continue to provide services to the Company and may be
terminated for any reason by either the Company or yourself, with or without
cause, upon ten (10) days’ prior written notice. Unless sooner terminated by
either party, this Agreement will terminate on November 30, 2019 unless extended
by mutual written agreement.

 

(b)Credit to Bookkeeping Account. The Stock Units shall be credited to a
bookkeeping account maintained by the Company on your behalf (“Account”) as of
the Grant Date. The crediting of the Stock Units to your Account will not
entitle you to voting or other rights as a stockholder until shares of Common
Stock are issued upon settlement, but will entitle you to receive Dividend
Equivalents.

 

(c)Vesting. Each grant of Stock Units is subject to vesting. Vesting shall occur
as to all Stock Units upon the Company consummating on or before November 30,
2019 an offering of securities, either debt or equity, on terms acceptable to
the Company, in its sole discretion, in the aggregate amount of not less than
$1.25 million (a “Qualified Financing”)(the “Vesting Date”). There shall be no
proportionate vesting in the event the Company consummates a financing in an
amount less than $1.25 million.

 

 

 

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(d)Price Protection. If, on the Vesting Date, the aggregate Market Price of the
shares of Common Stock issuable upon settlement of the Units, is less than $1.50
per share, then the Company agrees to grant and issue to you, for no additional
consideration, additional Units (“Additional Units”) such that the aggregate
Market Price of the Common Stock underlying the Units previously issued, when
added to the Market Price of the Common Stock underlying such Additional Units,
shall equal at least $15,000 for each completed month of service. For the
purposes hereof, “Market Price” at any date shall be deemed to be (i) if the
principal trading market for such securities is any exchange, the last reported
sale price, on each Trading Day for which determination is made as officially
reported on any consolidated tape, (ii) if the principal market for such
securities is the over-the-counter market, the closing prices (or, if no closing
price, the closing bid price) on such Trading Days as set forth by Nasdaq or the
OTC.QB of the OTC Markets Group, Inc. (whichever is the principal market for the
Company’s Common Shares) as reported at http://finance.yahoo.com or, (iii) if
the security is not quoted on Nasdaq or the OTC.QB, the average bid and asked
price as set forth on OTC.Pink of the OTC Markets Group, Inc. listing such
securities for such day. Notwithstanding the foregoing, if there is no reported
closing price or bid price, as the case may be, on any of the ten trading days
preceding the event requiring a determination of Market Price hereunder, then
the Market Price shall be determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it.

 

  (e) Settlement.

 

i.Issuance of Shares of Common Stock. Vested Stock Units will be settled in
shares of Common Stock upon or as soon as practicable (A) upon your written
request any time after November 30, 2019 or (B) following your Termination Date,
whichever occurs first. Upon settlement, subject to Section 2(d)(iv) of this
Agreement, the Company shall issue to you, or your estate as applicable, a
number of shares of Common Stock equal to the number of vested Stock Units
credited to your Account on your Termination Date, taking into account the
provisions of Section 2(c) of this Agreement. Notwithstanding anything in the
Plan or in this Agreement to the contrary, upon the occurrence of a Change in
Control Event, all Stock Units then credited to your Account will be settled and
paid out to you on or as soon as practicable after the occurrence of the Change
in Control Event, in accordance with the provisions of Code section 409A.

 

ii.Forfeiture of Unvested Stock Units. Any Stock Units that are unvested as of
your Termination Date shall be forfeited to the Company for no consideration on
such Termination Date.

 

iii.Registration of Shares. The shares of Common Stock issued in settlement of
the Stock Units shall be registered in your name, or, if applicable, in the
names of your heirs. In the Company’s discretion, such shares may be issued
either in certificated form or in uncertificated, book entry form. The
certificate or book entry account shall bear such restrictive legends or
restrictions as the Company, in its sole discretion, shall require.

 

iv.Restrictions on Grant of Stock Units and Issuance of Shares of Common Stock.
The grant of the Stock Units and issuance of shares of Common Stock upon
settlement of the Stock Units will be subject to and in compliance with all
applicable requirements of federal, state or foreign law with respect to such
securities. No shares of Common Stock may be issued hereunder if the issuance of
such shares would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the requirements of any
stock exchange or market system upon which the Common Stock may then be listed.
The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance of any shares subject to the Stock Units shall
relieve the Company of any liability in respect of the failure to issue such
shares as to which such requisite authority shall not have been obtained. As a
condition to the settlement of the Stock Units, the Company may require you to
satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the Company.

 

 

 

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v.Fractional Shares. The Company will not be required to issue fractional shares
of Common Stock upon settlement of the Stock Units.

 

(f)Dividend Equivalents. If the Company declares a cash dividend payable to the
holders of its Common Stock, as of the payment date for each cash dividend, your
Account will be credited with dividend equivalents in the form of additional
Stock Units, which shall be fully vested and nonforfeitable when credited and
shall otherwise be subject to the same terms and conditions as the Stock Units
granted pursuant to this Agreement. The number of additional Stock Units
credited to your Account shall be equal to the quotient, rounded down to the
nearest whole share, determined by dividing (i) the product of (A) the amount of
cash dividend per share of Common Stock multiplied by (B) the number of whole
Stock Units credited to your Account as of the record date of the cash dividend,
by (ii) the Fair Market Value of a share of Common Stock on the payment date of
the dividend.

 

3.Restrictions on Transfer. Prior to settlement, you may not sell, assign,
transfer, pledge, hypothecate, encumber or dispose of in any way (whether by
operation of law or otherwise) any Stock Units, and Stock Units may not be
subject to execution, attachment or similar process. The Company will not be
required to recognize on its books any action taken in contravention of these
restrictions.

 

4.Legends. The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing shares of Common Stock issued pursuant to this Agreement. You will,
at the request of the Company, promptly present to the Company any and all
certificates representing shares acquired pursuant to this Agreement in your
possession in order to carry out the provisions of this Section.

 

5.Tax Withholding. Since you are not an employee of the Company or any
Affiliate, the Company is not required to, and the Company will not, deduct from
any compensation or any other payment of any kind due you the amount of any
federal, state, local or foreign taxes required to be paid by you as a result of
the grant, vesting or settlement of the Stock Units in whole or in part. You
expressly acknowledge that you are solely responsible for the payment of any
such federal, state, local or foreign taxes, and you may not rely on the Company
for any assistance with regard to withholding or paying such taxes.

 

6.Adjustments for Corporate Transactions and Other Events.

 

(a)Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend
of, or stock split or reverse stock split affecting, the Common Stock, the
number and class of securities subject to the Stock Units that are nonvested and
forfeitable will, without further action of the Committee, be adjusted to
reflect such event. The Committee may make adjustments, in its discretion, to
address the treatment of fractional shares with respect to the Stock Units as a
result of the stock dividend, stock split or reverse stock split. Adjustments
under this Section 6 will be made by the Committee, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive.

 

(b)Binding Nature of Agreement. The terms and conditions of this Agreement will
apply with equal force to any additional and/or substitute rights to receive
securities received by you in exchange for, or by virtue of your ownership of,
the Stock Units, whether as a result of any spin-off, stock split-up, stock
dividend, stock distribution, other reclassification of the Common Stock of the
Company, or other similar event, except as otherwise determined by the
Committee. If the Stock Units are converted into or exchanged for, or
stockholders of the Company receive by reason of any distribution in total or
partial liquidation or pursuant to any merger of the Company or acquisition of
its assets, rights to receive securities of another entity, or other property
(including cash), then the rights of the Company under this Agreement will inure
to the benefit of the Company’s successor, and this Agreement will apply to the
rights to receive securities or other property received upon such conversion,
exchange or distribution in the same manner and to the same extent as the Stock
Units.

 

 

 

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7.Non-Guarantee of Service Relationship. Nothing in the Plan, the EIP or this
Agreement alters your service relationship with the Company or shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain you as an officer, director or key employee for any period
of time. This Agreement is not to be construed as a contract of service
relationship between the Company and you. This Agreement does not limit in any
way the possibility of your separation from the Company in accordance with the
By-Law provisions in effect at the relevant time, whether or not such removal
results in the forfeiture of any Award Shares or any other adverse effect on
your interests under the Plan.

 

8.Rights as Stockholder. You shall not have any of the rights of a stockholder
with respect to any shares of Common Stock that may be issued in settlement of
the Stock Units until such shares of Common Stock have been issued to you upon
settlement of the Stock Units. No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date
such certificate or certificates are issued, except as provided in Sections 2(e)
and 6 of this Agreement.

 

9.The Company’s Rights. The existence of the Stock Units does 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, including that of its
subsidiaries, or any merger or consolidation of the Company or any Affiliate, or
any issue of bonds, debentures, preferred or other stocks with preference ahead
of or convertible into, or otherwise affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company or any Affiliate, or
any sale or transfer of all or any part of the Company’s or any Affiliate’s
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

 

10.Entire Agreement. This Agreement, inclusive of the Plan and the EIP
incorporated into this Agreement, contains the entire agreement between you and
the Company with respect to the Stock Units. Any and all existing oral or
written agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement by any person with
respect to the Award or the Stock Units are superseded by this Agreement and are
void and ineffective for all purposes.

 

11.Conformity with Plan. This Agreement is intended to conform in all respects
with, and is subject to all applicable provisions of, the Plan and the EIP. In
the event of any ambiguity in this Agreement or any matters as to which this
Agreement is silent, the Plan or the EIP, as applicable, will govern.

 

12.Amendment. This Agreement may be amended from time to time by the Committee
in its discretion; provided, however, that this Agreement may not be modified in
a manner that would have a materially adverse effect on the Stock Units as
determined in the discretion of the Committee, except as provided in the Plan,
the EIP or in any other written document signed by you and the Company.

 

13.Governing Law. The validity, construction and effect of this Agreement, and
of any determinations or decisions made by the Committee relating to this
Agreement, and the rights of any and all persons having or claiming to have any
interest under this Agreement, will be determined exclusively in accordance with
the laws of the State of Colorado, without regard to its provisions concerning
the applicability of laws of other jurisdictions. Any suit with respect to the
Award or the Stock Units will be brought in the federal or state courts in the
districts which include Denver, Colorado, and you agree and submit to the
personal jurisdiction and venue thereof.

 

14.Unfunded Status. The Stock Units and the Account to which they are credited
are intended to constitute and at all times shall be interpreted and
administered so as to qualify as an unfunded deferred compensation arrangement
for a select group of management of the Company under the Employee Retirement
Income Security Act of 1974, as amended. Your settlement rights pursuant to this
Agreement shall be no greater than the right of any unsecured general creditor
of the Company.

 

 

 

 

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15.Headings. Section headings are used in this Agreement for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.

 

16.Counterparts. This Agreement may be executed in counterparts (including
electronic signatures or facsimile copies), each of which will be deemed an
original, but all of which together will constitute the same instrument.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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GLOSSARY

 

(a) “Affiliate” means any entity, whether now or hereafter existing, which
controls, is controlled by, or is under common control with, the Company
(including, but not limited to, joint ventures, limited liability companies and
partnerships), as determined by the Committee.

 

(b) “Annual Retainer” has the meaning ascribed thereto in the Plan.

 

(c) “Board” or “Board of Directors” means the Board of Directors of the Company.

 

(d) “Change in Control” means (1) the acquisition (other than from the Company)
in one or more transactions by any Person of the beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
(A) the then outstanding shares of the securities of the Company, or (B) the
combined voting power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the “Company Voting Stock”); (2)
the closing of a sale or other conveyance of all or substantially all of the
assets of the Company; or (3) the effective time of any merger, share exchange,
consolidation, or other business combination involving the Company if
immediately after such transaction persons who hold a majority of the
outstanding voting securities entitled to vote generally in the election of
directors of the surviving entity (or the entity owning 100% of such surviving
entity) are not persons who, immediately prior to such transaction, held the
Company Voting Stock.

 

(e) “Change in Control Event” has the meaning ascribed thereto under Code
section 409A(a)(2)(A)(v) with respect to a change in the ownership or effective
control of the Company, or in the ownership of a substantial portion of the
assets of the Company.

 

(f) “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations and guidance promulgated thereunder.

 

(g) “Committee” means the “Plan Administrator” as defined under the Plan.

 

(h) “Company” means Magellan Gold Corporation., a Nevada corporation.

 

(i) “Cyclical Equity Grant” has the meaning ascribed thereto in the Plan.

 

(j) “Disability” means the inability to perform services on the Board by reason
of any medically determinable physical or mental impairment that is expected to
result in death or last for a continuous period of not less than twelve months.
The Committee may require such proof of Disability as the Committee in its sole
discretion deems appropriate and the Committee’s good faith determination as to
whether and when you are totally and permanently disabled will be final and
binding on all parties concerned.

 

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
any successor thereto.

 

(l) “Fair Market Value” means, with respect to a share of the Common Stock on
the relevant date, the closing price, regular way, reported on the New York
Stock Exchange or if no sales of the Common Stock are reported on the New York
Stock Exchange for that date, the closing price for the last previous day for
which sales were reported on the New York Stock Exchange. If the Common Stock is
no longer listed on the New York Stock Exchange, the Committee may designate
such other exchange, market or source of data as it deems appropriate for
determining such value for the purposes of the Plan. For all purposes under the
Plan, the term “relevant date” as used in this definition of Fair Market Value
means the date as of which Fair Market Value is to be determined.

 

 

 

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(m) “Non-Employee Director” means a member of the Board who, at the time of his
or her service, is not an employee of the Company or any Affiliate.

 

(n) “Person” means any individual, entity or group within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, other than employee benefit plans
sponsored or maintained by the Company or by entities controlled by the Company.

 

(o) “Termination Date” means the date on which you cease your service
relationship with the Company.

 

(p) “You”; “Your”. You means the recipient of the Stock Units as reflected in
the first paragraph of this Agreement. Whenever the word “you” or “your” is used
in any provision of this Agreement under circumstances where the provision
should logically be construed, as determined by the Committee, to apply to the
estate, personal representative, or beneficiary to whom the Stock Units may be
transferred by will or by the laws of descent and distribution, the words “you”
and “your” will be deemed to include such person.

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer this      day of                      , 20      .

 

              MAGELLAN GOLD CORPORATION           By:___________________________
              Date: _________________________    

 

The undersigned hereby acknowledges that he/she has carefully read this
Agreement and agrees to be bound by all of the provisions set forth herein.

 

              AWARD RECIPIENT        

 

_________________________________________

          Date: ________________________________________________   

 

 

 

 

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