Filed by sedaredgar.com - Silverado Gold Mines Ltd. - Exhibit 4.1






SILVERADO GOLD MINES LTD 

2009 EQUITY COMPENSATION PLAN 

I. ESTABLISHMENT OF PLAN; DEFINITIONS 

1.        Purpose.
The purpose of the Silverado Gold Mines Ltd. 2009 Equity Compensation Plan is to
encourage certain directors, officers, employees, and consultants of Silverado
Gold Mines Ltd., a company incorporated under the laws of British Columbia (the
"Company"), to acquire and hold stock in the Company as an added incentive to
remain with the Company and to increase their efforts in promoting the interests
of the Company and to enable the Company to attract and retain capable
individuals. 

2.      
 Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the meanings set forth below: 

          (a)      "Board"
shall mean the Board of Directors of the Company. 

          (b)      "Code"
shall mean the Internal Revenue Code of 1986, as it may be amended from time to
time. 

          (c)     
"Committee" shall mean a committee made up of at least three members of the
Board whose members shall, from time to time, be appointed by the Board;
provided, however, that such Committee shall at all times consist of at least
two non-employee Directors. 

          (d)      "Company"
shall mean Silverado Gold Mines Ltd., a company incorporated under the laws of
British Columbia. 

          (e)      "Consultants"
shall mean individuals who provide services to the Company who are not Employees
or Directors. 

          (f)     
"Directors" shall mean those members of the Board of Directors of the Company
who are not Employees. 

          (g)     
"Disability" shall mean a medically determinable physical or mental condition
which causes an Employee, Director or Consultant to be unable to engage in any
substantial gainful activity and which can be expected to result in death or to
be of long-continued and indefinite duration. 

          (h)     
"Employee" shall mean any common law employee, including officers, of the
Company as determined under the Code and the Treasury Regulations thereunder.


          (i)     
"Fair Market Value" shall mean the value of a share of Stock on a specified day (i) if the Stock is listed on a national
securities exchange or the NASDAQ system, the mean between the highest and
lowest sales prices for the Stock on such date, or, if no such prices are
reported for such day, then on the next preceding day on which there were
reported prices; (ii) if the Stock is not listed on a national securities
exchange or the NASDAQ system, the mean between the bid and asked prices for the
Stock on such date, or if no such prices are reported for such day, then on the
immediately preceding day (within 7 days of such specified day) on which there were reported prices; or (iii) if no prices are reported for such immediately preceeding day, as
determined in good faith by the Company’s Board.

          (j)     
"Grantee" shall mean an officer, Employee, Director or Consultant granted a
Stock Option or Stock Award under this Plan. 

          (k)      "Incentive
Stock Option" shall mean an option granted pursuant to the Incentive Stock
Option provisions as set forth in Part II of this Plan. 




          (l)      "Non-Qualified
Stock Option" shall mean an option granted pursuant to the Non-Qualified Stock
Option provisions as set forth in Part III of this Plan. 

          (m)     
"Plan" shall mean the Silverado Gold Mines Ltd. 2009 Equity Compensation Plan as
set forth herein and as amended from time to time. 

          (n)      "Restricted
Stock" shall mean Stock which is issued as Restricted Stock as set forth in Part
IV of this Plan. 

          (o)      "Stock"
shall mean authorized but unissued shares of the Common Stock of the Company or
reacquired shares of the Company's Common Stock. 

          (p)     
"Stock Appreciation Right" shall mean a stock appreciation right granted
pursuant to the Stock Appreciation Right provisions as set forth in Parts II and
III of this Plan. 

          (q)     
"Stock Award" shall mean an award of Restricted or Unrestricted Stock granted
pursuant to this Plan. 

          (r)      "Stock
Option" shall mean an option granted pursuant to the Plan to purchase shares of
Stock. 

          (s)     
“Subsidiary” shall mean any corporation (other than the Company) in an unbroken
chain of corporations beginning with and including the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50 percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

          (t)     
"Ten Percent Shareholder" shall mean an Employee who at the time a Stock Option
is granted owns stock possessing more than ten percent (10%) of the total
combined voting power of all stock of the Company or of its parent or
subsidiary. 

          (u)      "Unrestricted
Stock" shall mean Stock which is issued pursuant to the Unrestricted Stock
provisions as set forth in Part V of this Plan. 

3.        Shares of Stock
Subject to the Plan. Subject to the provisions of Paragraph 2 of Part VI of
the Plan, the Stock which may be issued or transferred pursuant to Stock Options
and Stock Awards granted under the Plan and the Stock which is subject to
outstanding but unexercised Stock Options under the Plan shall not exceed One
Hundred and Thirty Million (130,000,000) shares in the aggregate. If a Stock
Option shall expire and terminate for any reason, in whole or in part, without
being exercised or, if Stock Awards are forfeited because the restrictions with
respect to such Stock Awards shall not have been met or have lapsed, the number
of shares of Stock which are no longer outstanding as Stock Awards or subject to
Stock Options may again become available for the grant of Stock Awards or Stock
Options. There shall be no terms and conditions in a Stock Award or Stock Option
which provide that the exercise of an Incentive Stock Option reduces the number
of shares of Stock for which an outstanding Non-Qualified Stock Option may be
exercised; and there shall be no terms and conditions in a Stock Award or Stock
Option which provide that the exercise of a Non-Qualified Stock Option reduces
the number of shares of Stock for which an outstanding Incentive Stock Option
may be exercised. 

4.        Administration
of the Plan. The Plan shall be administered by the Committee. Subject to the
express provisions of the Plan, the Committee shall have authority to interpret
the Plan, to prescribe, amend, and rescind rules and regulations relating to it,
to determine the terms and provisions of Stock Option agreements, and to make
all other determinations necessary or advisable for the administration of the
Plan. Any controversy or claim arising out of or related to this Plan shall be
determined unilaterally by and at the sole discretion of the Committee. 

5.        Amendment or
Termination. The Board may, at any time, alter, amend, suspend, discontinue,
or terminate this Plan; provided, however, that such action shall not adversely
affect the right of Grantees to 

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Stock Awards or Stock Options previously granted and no
amendment, without the approval of the stockholders of the Company, shall
increase the maximum number of shares which may be awarded under the Plan in the
aggregate, materially increase the benefits accruing to Grantees under the Plan,
change the class of Employees eligible to receive options under the Plan, or
materially modify the eligibility requirements for participation in the Plan.


6.        Effective Date
and Duration of the Plan. This Plan shall become effective on January 29,
2009.This Plan shall terminate at such time as may be determined by the Board,
and no Stock Award or Stock Option may be issued or granted under the Plan
thereafter, but such termination shall not affect any Stock Award or Stock
Option theretofore issued or granted. 

II. INCENTIVE STOCK OPTIONS 

1.        Granting of
Incentive Stock Options. 

          (a)      Only
Employees of the Company shall be eligible to receive Incentive Stock Options
under the Plan. Officers, Directors and Consultants of the Company who are not
also Employees shall not be eligible to receive Incentive Stock Options. 

          (b)      The
purchase price of each share of Stock subject to an Incentive Stock Option shall
not be less than 100% of the Fair Market Value of a share of the Stock on the
date the Incentive Stock Option is granted; provided, however, that the purchase
price of each share of Stock subject to an Incentive Stock Option granted to a
Ten Percent Shareholder shall not be less than 110% of the Fair Market Value of
a share of the Stock on the date the Incentive Stock Option is granted. 

          (c)     
No Incentive Stock Option shall be exercisable more than ten years from the date
the Incentive Stock Option was granted; provided, however, that an Incentive
Stock Option granted to a Ten Percent Shareholder shall not be exercisable more
than five years from the date the Incentive Stock Option was granted. 

          (d)      The
Committee shall determine and designate from time to time those Employees who
are to be granted Incentive Stock Options and specify the number of shares
subject to each Incentive Stock Option. 

          (e)      The
Committee, in its sole discretion, shall determine whether any particular
Incentive Stock Option shall become exercisable in one or more installments,
specify the installment dates, and, within the limitations herein provided,
determine the total period during which the Incentive Stock Option is
exercisable. Further, the Committee may make such other provisions as may appear
generally acceptable or desirable to the Committee or necessary to qualify its
grants under the provisions of Section 422 of the Code. 

          (f)      The
Committee may grant at any time new Incentive Stock Options to an Employee who
has previously received Incentive Stock Options or other options whether such
prior Incentive Stock Options or other options are still outstanding, have
previously been exercised in whole or in part, or are canceled in connection
with the issuance of new Incentive Stock Options. The purchase price of the new
Incentive Stock Options may be established by the Committee without regard to
the existing Incentive Stock Options or other options. 

          (g)     
Notwithstanding any other provisions hereof, the aggregate fair market value
(determined at the time the option is granted) of the Stock with respect to
which Incentive Stock Options are exercisable for the first time by the Employee
during any calendar year (under all such plans of the Grantee's employer
corporation and its parent and subsidiary corporation) shall not exceed
$100,000. 

2.        Exercise of
Incentive Stock Options. The option price of an Incentive Stock Option shall
be payable on exercise of the option (i) in cash or by check, bank draft or
postal or express money order, (ii) by the surrender of Stock then owned by the
Grantee, (iii) the proceeds of a loan from an independent 

3




broker-dealer whereby the loan is secured by the option or the
stock to be received upon exercise, or (iv) any combination of the foregoing;
provided, that each such method and time for payment and each
such borrowing and terms and conditions of repayment shall then be permitted by
and be in compliance with applicable law. Shares of Stock so surrendered in
accordance with clause (ii) or (iv) shall be valued at the Fair Market Value
thereof on the date of exercise, surrender of such Stock to be evidenced by
delivery of the certificate(s) representing such shares in such manner, and
endorsed in such form, or accompanied by stock powers endorsed in such form, as
the Committee may determine. 

3.        Termination of
Employment. 

          (a)     
If a Grantee's employment with the Company is terminated other than by
Disability or death, the terms of any then outstanding Incentive Stock Option
held by the Grantee shall extend for a period ending on the earlier of the date
on which such Stock Option would otherwise expire or three months after such
termination of employment, and such Stock Option shall be exercisable to the
extent it was exercisable as of such last date of employment. 

          (b)     
If a Grantee's employment with the Company is terminated by reason of
Disability, the term of any then outstanding Incentive Stock Option held by the
Grantee shall extend for a period ending on the earlier of the date on which
such Stock Option would otherwise expire or twelve months after such termination
of employment, and such Stock Option shall be exercisable to the extent it was
exercisable as of such last date of employment. 

          (c)     
If a Grantee's employment with the Company is terminated by reason of death, the
representative of his estate or beneficiaries thereof to whom the Stock Option
has been transferred shall have the right during the period ending on the
earlier of the date on which such Stock Option would otherwise expire or twelve
months after such date of death, to exercise any then outstanding Incentive
Stock Options in whole or in part. If a Grantee dies without having fully
exercised any then outstanding Incentive Stock Options, the representative of
his estate or beneficiaries thereof to whom the Stock Option has been
transferred shall have the right to exercise such Stock Options in whole or in
part. 

4.        Stock
Appreciation Rights 

          (a)      Grant.
Stock Appreciation Rights related to all or any portion of an Incentive Stock
Option may be granted by the Committee to any Grantee in connection with the
grant of an Incentive Stock Option or unexercised portion thereof held by the
Grantee at any time and from time to time during the term thereof. Each Stock
Appreciation Right shall be granted at least at Fair Market Value on the date of
grant and be subject to such terms and conditions not inconsistent with the
provisions of this Part II as shall be determined by the Committee and included
in the agreement relating to such Stock Appreciation Right, subject in any
event, however, to the following terms and conditions of this Section 4. Each
Stock Appreciation Right may include limitations as to the time when such Stock
Appreciation Right becomes exercisable and when it ceases to be exercisable that
are more restrictive than the limitations on the exercise of the Incentive Stock
Option to which it relates. 

          (b)      Exercise.
No Stock Appreciation Right shall be exercisable with respect to such related
Incentive Stock Option or portion thereof unless such Incentive Stock Option or
portion shall itself be exercisable at that time. A Stock Appreciation Right
shall be exercised only upon surrender of the related Incentive Stock Option or
portion thereof in respect of which the Stock Appreciation Right is then being
exercised. 

          (c)      Amount
of Payment. On exercise of a Stock Appreciation Right, a Grantee shall be
entitled to receive an amount equal to the product of (i) the amount by which
the Fair Market Value of a share of Stock on the date of exercise of the Stock
Appreciation Right exceeds the option price per share specified in the related
Incentive Stock Option and (ii) the number of shares of Stock in respect of
which the Stock Appreciation Right shall have been exercised. 

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          (d)      Form
of Payment. Stock Appreciation Rights may only be settled in Stock. The
number of shares of Stock to be distributed shall be the largest whole number
obtained by dividing the amount otherwise distributable in respect of such
settlement by the Fair Market Value of a share of Stock on the date of exercise
of the Stock Appreciation Right. The value of fractional shares of Stock shall
be paid in cash. 

          (e)     
Effect of Exercise of Right or Related Option. If the related Incentive
Stock Option is exercised in whole or in part, then the Stock Appreciation Right
with respect to the Stock purchased pursuant to such exercise (but not with
respect to any unpurchased Stock) shall be terminated as of the date of exercise
if such Stock Appreciation Right is not exercised on such date. 

          (f)     
Non-transferability. A Stock Appreciation Right shall not be transferable
or assignable by the Grantee other than by will or the laws of descent and
distribution, and shall be exercisable during the Grantee's lifetime only by the
Grantee. 

          (g)     
Termination of Employment. If the Grantee ceases to be an Employee of the
Company for any reason, each outstanding Stock Appreciation Right shall be
exercisable for such period and to such extent as the related Incentive Stock
Option or portion thereof. 

III. NON-QUALIFIED STOCK OPTIONS 

1.        Granting of
Stock Options. 

          (a)      Officers,
Employees, Directors and Consultants shall be eligible to receive Non-Qualified
Stock Options under the Plan. 

          (b)     
The Committee shall determine and designate from time to time those officers,
Employees, Directors and Consultants who are to be granted Non-Qualified Stock
Options and the amount subject to each Non-Qualified Stock Option. 

          (c)     
The Committee may grant at any time new Non-Qualified Stock Options to an
Employee, Director or Consultant who has previously received Non-Qualified Stock
Options or other Stock Options, whether such prior Non-Qualified Stock Options
or other Stock Options are still outstanding, have previously been exercised in
whole or in part, or are canceled in connection with the issuance of new
Non-Qualified Stock Options. 

          (d)     
The Committee shall determine the purchase price of each share of Stock subject
to a Non-Qualified Stock Option. Such price shall not be less than 100% of the
Fair Market Value of such Stock on the date the Non-Qualified Stock Option is
granted. 

          (e)      The
Committee, in its sole discretion, shall determine whether any particular
Non-Qualified Stock Option shall become exercisable in one or more installments,
specify the installment dates, and, within the limitations herein provided,
determine the total period during which the Non-Qualified Stock Option is
exercisable. Further, the Committee may make such other provisions as may appear
generally acceptable or desirable to the Committee, including the extension of a
Non-Qualified Stock Option, provided that such extension does not extend the
option beyond the period specified in paragraph (f) below. 

          (f)      No
Non-Qualified Stock Option shall be exercisable more than ten years from the
date such option is granted. 

2.        Exercise of
Stock Options. The option price of a Non-Qualified Stock Option shall be
payable on exercise of the Stock Option (i) in cash or by check, bank draft or
postal or express money order, (ii) by the surrender of Stock then owned by the
Grantee, (iii) the proceeds of a loan from an independent broker-dealer whereby
the loan is secured by the option or the stock to be received upon exercise, or
(iv) any combination of the foregoing; provided, that each
such method and time for payment and each such 

5




borrowing and terms and conditions of repayment shall then be
permitted by and be in compliance with applicable law. Shares of Stock so
surrendered in accordance with clause (ii) or (iv) shall be valued at the Fair
Market Value thereof on the date of exercise, surrender of such Stock to be
evidenced by delivery of the certificate(s) representing such shares in such
manner, and endorsed in such form, or accompanied by stock powers endorsed in
such form, as the Committee may determine. 

3.        Termination of
Relationship. 

          (a)     
If a Grantee's employment with the Company is terminated, a Director Grantee
ceases to be a Director, or a Consultant Grantee ceases to be a Consultant,
other than by reason of Disability or death, the terms of any then outstanding
Non-Qualified Stock Option held by the Grantee shall extend for a period ending
on the earlier of the date established by the Committee at the time of grant or
three months after the Grantee's last date of employment or cessation of being a
Director or Consultant, and such Stock Option shall be exercisable to the extent
it was exercisable as of the date of termination of employment or cessation of
being a Director or Consultant. 

          (b)      If
a Grantee's employment is terminated by reason of Disability, a Director Grantee
ceases to be a Director by reason of Disability or a Consultant Grantee ceases
to be a Consultant by reason of Disability, the term of any then outstanding
Non-Qualified Stock Option held by the Grantee shall extend for a period ending
on the earlier of the date on which such Stock Option would otherwise expire or
twelve months after the Grantee's last date of employment or cessation of being
a Director or Consultant, and such Stock Option shall be exercisable to the
extent it was exercisable as of such last date of employment or cessation of
being a Director or Consultant. 

          (c)      If
a Grantee's employment is terminated by reason of death, a Director Grantee
ceases to be a Director by reason of death or a Consultant Grantee ceases to be
a Consultant by reason of death, the representative of his estate or
beneficiaries thereof to whom the Stock Option has been transferred shall have
the right during the period ending on the earlier of the date on which such
Stock Option would otherwise expire or twelve months following his death to
exercise any then outstanding Non-Qualified Stock Options in whole or in part.
If a Grantee dies without having fully exercised any then outstanding
Non-Qualified Stock Options, the representative of his estate or beneficiaries
thereof to whom the Stock Option has been transferred shall have the right to
exercise such Stock Options in whole or in part. 

4.        Stock
Appreciation Rights 

          (a)      Grant.
Stock Appreciation Rights related to all or any portion of a Non-Qualified Stock
Option may be granted by the Committee to any Grantee in connection with the
grant of a Non-Qualified Stock Option or unexercised portion thereof held by the
Grantee at any time and from time to time during the term thereof. Each Stock
Appreciation Right shall be granted at least at Fair Market Value on the date of
grant and be subject to such terms and conditions not inconsistent with the
provisions of this Part III as shall be determined by the Committee and included
in the agreement relating to such Stock Appreciation Right, subject in any
event, however, to the following terms and conditions of this Section 4. Each
Stock Appreciation Right may include limitations as to the time when such Stock
Appreciation Right becomes exercisable and when it ceases to be exercisable that
are more restrictive than the limitations on the exercise of the Non-Qualified
Stock Option to which it relates. 

          (b)     
Exercise. No Stock Appreciation Right shall be exercisable with respect
to such related Non-Qualified Stock Option or portion thereof unless such
Non-Qualified Stock Option or portion shall itself be exercisable at that time.
A Stock Appreciation Right shall be exercised only upon surrender of the related
Non-Qualified Stock Option or portion thereof in respect of which the Stock
Appreciation Right is then being exercised. 

          (c)      Amount
of Payment. On exercise of a Stock Appreciation Right, a Grantee shall be
entitled to receive an amount equal to the product of (i) the amount by which
the Fair Market Value of a share of Stock on the date of exercise of the Stock
Appreciation Right exceeds the option price per share 

6




specified in the related Non-Qualified Stock Option and (ii)
the number of shares of Stock in respect of which the Stock Appreciation Right
shall have been exercised. 

          (d)     
Form of Payment. Stock Appreciation Rights may only be settled in Stock.
The number of shares of Stock to be distributed shall be the largest whole
number obtained by dividing the amount otherwise distributable in respect of
such settlement by the Fair Market Value of a share of Stock on the date of
exercise of the Stock Appreciation Right. The value of fractional shares of
Stock shall be paid in cash.

          (e)      Effect
of Exercise of Right or Related Option. If the related Non-Qualified Stock
Option is exercised in whole or in part, then the Stock Appreciation Right with
respect to the Stock purchased pursuant to such exercise (but not with respect
to any unpurchased Stock) shall be terminated as of the date of exercise if such
Stock Appreciation Right is not exercised on such date. 

          (f)      Non-transferability.
A Stock Appreciation Right shall not be transferable or assignable by the
Grantee other than by will or the laws of descent and distribution, and shall be
exercisable during the Grantee's lifetime only by the Grantee. 

          (g)     
Termination of Employment. If the Grantee ceases to be an officer,
Employee, Director or Consultant of the Company for any reason, each outstanding
Stock Appreciation Right shall be exercisable for such period and to such extent
as the related Non-Qualified Stock Option or portion thereof. 

IV. RESTRICTED STOCK AWARDS 

1.        Grant of
Restricted Stock.

          (a)      Officers,
Employees, Directors and Consultants shall be eligible to receive grants of
Restricted Stock under the Plan. 

          (b)      The
Committee shall determine and designate from time to time those officers,
Employees, Directors and Consultants who are to be granted Restricted Stock and
the number of shares of Stock subject to such Stock Award. 

          (c)      The
Committee, in its sole discretion, shall make such terms and conditions
applicable to the grant of Restricted Stock as may appear generally acceptable
or desirable to the Committee. 

2.        Termination of
Relationship. 

          (a)     
If a Grantee's employment with the Company, a Director Grantee ceases to be a
Director, or a Consultant Grantee ceases to be a Consultant, prior to the lapse
of any restrictions applicable to the Restricted Stock such Stock shall be
forfeited and the Grantee shall return the certificates representing such Stock
to the Company. 

          (b)     
If the restrictions applicable to a grant of Restricted Stock shall lapse, the
Grantee shall hold such Stock free and clear of all such restrictions except as
otherwise provided in the Plan. 

V. UNRESTRICTED STOCK AWARDS 

1.        Grant of
Unrestricted Stock. 

          (a)     
Officers, Employees, Directors and Consultants shall be eligible to receive
grants of Unrestricted Stock under the Plan. 

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          (b)      The
Committee shall determine and designate from time to time those officers,
Employees, Directors and Consultants who are to be granted Unrestricted Stock
and number of shares of Stock subject to such Stock Award. 

2.        Issuance of
Stock. The Grantee shall hold Stock issued pursuant to an Unrestricted Stock
award free and clear of all restrictions except as otherwise provided in the
Plan. 

VI. GENERAL PROVISIONS 

1.        Substitution of
Options. In the event of a corporate merger or consolidation, or the
acquisition by the Company of property or stock of an acquired corporation or
any reorganization or other transaction qualifying under Section 424 of the
Code, the Committee may, in accordance with the provisions of that Section,
substitute Stock Options, Stock Awards and Stock Appreciation Rights under this
Plan for Stock Options, Stock Awards and Stock Appreciation Rights under the
plan of the acquired corporation provided (i) the excess of the aggregate fair
market value of the shares of Stock subject to Stock Option immediately after
the substitution over the aggregate option price of such Stock is not more than
the similar excess immediately before such substitution and (ii) the new Stock
Option does not give the Grantee additional benefits, including any extension of
the exercise period. Alternatively, the Committee may provide, that each Stock
Option, Stock Award and Stock Appreciation Right granted under the Plan shall
terminate as of a date to be fixed by the Board; provided, that no less
than thirty days written notice of the date so fixed shall be given to each
holder, and each holder shall have the right, during the period of thirty days
preceding such termination, to exercise the Stock Options, Stock Awards and
Stock Appreciation Rights as to all or any part of the Stock covered thereby,
including Stock as to which such would not otherwise be exercisable.

2.        Adjustment
Provisions. 

          (a)     
In the event that a dividend shall be declared upon the Stock payable in shares
of the Company's common stock, the number of shares of Stock then subject to any
Stock Option  outstanding under the Plan and the number of shares
reserved for the grant of Stock Options  pursuant to the Plan
shall be adjusted by adding to each such share the number of shares which would
be distributable in respect thereof if such shares had been outstanding on the
date fixed for determining the shareholders of the Company entitled to receive
such share dividend. 

          (b)     
If the shares of Stock outstanding are changed into or exchanged for a different
number or class or other securities of the Company or of another corporation,
whether through split-up, reverse stock split, merger, consolidation, reorganization,
reclassification or recapitalization then there shall be substituted for each
share of Stock subject to any such Stock Option  and for each
share of Stock reserved for the grant of Stock Options  pursuant
to the Plan the number and kind of shares or other securities into which each
outstanding share of Stock shall have been so changed or for which each share
shall have been exchanged. 

          (c)      In
the event there shall be any change, other than as specified above in this
Section 2, in the number or kind of outstanding shares of Stock or of any shares
or other securities into which such shares shall have been changed or for which
they shall have been exchanged, then if the Board shall, in its sole discretion,
determine that such change equitably requires an adjustment in the number or
kind of shares theretofore reserved for the grant of Stock Options  pursuant to the Plan and of the shares then subject to Stock Options , such adjustment shall be made by the Board and shall be effective
and binding for all purposes of the Plan and of each Stock Option  outstanding thereunder. 

          (d)      Each
Stock Appreciation Right outstanding at the time of any adjustment pursuant to
this Section 2 and the number of outstanding Stock Appreciation Rights, shall be
adjusted, changed or exchanged in the same manner as related Stock Options. 

8




          (e)     
In the case of any such substitution or adjustment as provided for in this
Section 2, the option price set forth in each outstanding Stock Option for each
share covered thereby prior to such substitution or adjustment will be the
option price for all shares or other securities which shall have been
substituted for such share or to which such share shall have been adjusted
pursuant to this Section 2, and the price per share shall be adjusted
accordingly. 

          (f)      No
adjustment or substitution provided for in this Section 2 shall require the
Company to sell a fractional share, and the total substitution or adjustment
with respect to each outstanding Stock Option shall be limited accordingly. 

          (g)      Upon
any adjustment made pursuant to this Section 2 the Company will, upon request,
deliver to the Grantee a certificate setting forth the option price thereafter
in effect and the number and kind of shares or other securities thereafter
purchasable on the exercise of such Stock Option. 

3.        General.


          (a)      Each
Stock Option, Stock Award and Stock Appreciation Right shall be evidenced by a
written instrument containing such terms and conditions, not inconsistent with
this Plan, as the Committee shall approve. 

          (b)      The
granting of a Stock Option, Stock Award or Stock Appreciation Right in any year
shall not give the Grantee any right to similar grants in future years or any
right to be retained in the employ of the Company, and all Employees shall
remain subject to discharge to the same extent as if the Plan were not in
effect. 

          (c)      No
officer, Employee, Director or Consultant and no beneficiary or other person
claiming under or through him, shall have any right, title or interest by reason
of any Stock Option or any Stock Award to any particular assets of the Company,
or any shares of Stock allocated or reserved for the purposes of the Plan or
subject to any Stock Option or any Stock Award except as set forth herein. The
Company shall not be required to establish any fund or make any other
segregation of assets to assure the payment of any Stock Option or Stock Award.


          (d)     
No right under the Plan shall be subject to anticipation, sale, assignment,
pledge, encumbrance, or charge except by will or the laws of descent and
distribution, and a Stock Option shall be exercisable during the Grantee's
lifetime only by the Grantee or his conservator. 

          (e)     
Notwithstanding any other provision of this Plan or agreements made pursuant
thereto, the Company's obligation to issue or deliver any certificate or
certificates for shares of Stock under a Stock Option or Stock Award, and the
transferability of Stock acquired by exercise of a Stock Option or grant of a
Stock Award, shall be subject to all of the following conditions: 

                    (i)      Any
registration or other qualification of such shares under any state or federal
law or regulation, or the maintaining in effect of any such registration or
other qualification which the Board shall, in its absolute discretion upon the
advice of counsel, deem necessary or advisable; and 

                    (ii)      The
obtaining of any other consent, approval, or permit from any state or federal
governmental agency which the Board shall, in its absolute discretion upon the
advice of counsel, determine to be necessary or advisable. 

          (f)      All
payments to Grantees or to their legal representatives shall be subject to any
applicable tax, community property, or other statutes or regulations of the
United States or of any state or country having jurisdiction thereof. The
Grantee may be required to pay to the Company the amount of any withholding
taxes which the Company is required to withhold with respect to a Stock Option
or its exercise or a Stock Award. In the event that such payment is not made
when due, the Company shall have the right to deduct, to the extent permitted by
law, from any payment of any kind otherwise due to such person all or part of
the amount required to be withheld. 

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          (g)      In
the case of a grant of a Stock Option or Stock Award to any Employee of a
subsidiary of the Company, the Company may, if the Committee so directs, issue
or transfer the shares, if any, covered by the Stock Option or Stock Award to
the subsidiary, for such lawful consideration as the Committee may specify, upon
the condition or understanding that the subsidiary will transfer the shares to
the Employee in accordance with the terms of the Stock Option or Stock Award
specified by the Committee pursuant to the provisions of the Plan. For purposes
of this Section, a subsidiary shall mean any subsidiary corporation of the
Company as defined in Section 424 of the Code. 

          (h)      A
Grantee entitled to Stock as a result of the exercise of a Stock Option or grant
of a Stock Award shall not be deemed for any purpose to be, or have rights as, a
shareholder of the Company by virtue of such exercise, except to the extent a
stock certificate is issued therefor and then only from the date such
certificate is issued. No adjustments shall be made for dividends or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued. The Company shall issue any stock certificates
required to be issued in connection with the exercise of a Stock Option with
reasonable promptness after such exercise. 

          (i)      The
grant or exercise of Stock Options granted under the Plan or the grant of a
Stock Award under the Plan shall be subject to, and shall in all respects comply
with, applicable law relating to such grant or exercise, or to the number of
shares of Stock which may be beneficially owned or held by any Grantee. 

          (j)      The
Company intends that the Plan shall comply with the requirements of Rule 16b-3
(the “Rule”) under the Securities Exchange Act of 1934, as amended, during the
term of this Plan. Should any additional provisions be necessary for the Plan to
comply with the requirements of the Rule, the Board may amend this Plan to add
to or modify the provisions of this Plan accordingly. 

          (k)      The
Company intends that the Plan shall comply with the requirements of Section 409A
of the Code, to the extent applicable. Should any changes to the Plan be
necessary for the Plan to comply with the requirements of Code Section 409A the
Board may amend this Plan to add to or modify the provisions of this Plan
accordingly. 

          The
Company will seek stockholder approval in the manner and to the degree required
under Applicable Laws. If the Company fails to obtain stockholder approval of
the Plan within twelve (12) months after the date this Plan is adopted by the
Board, pursuant to Section 422 of the Code, any Option granted as an Incentive
Option at any time under the Plan will not qualify as an Incentive Option within
the meaning of the Code and will be deemed to be a Non-Statutory Option. 

SILVERADO GOLD MINES LTD.

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