Unassociated Document


    Desert
Hawk Gold Corp.

    


    2008  STOCK  OPTION/STOCK  ISSUANCE  PLAN

    (As
Adopted by the Board of Directors on July 12, 2008,

    and by
the Shareholders on August 5, 2008)

    (As
Amended by the Board of Directors and

    the
Shareholders on February 28, 2010)

    


    
      	
              I.

            	
              GENERAL
      PROVISIONS

            


    

    


    
      	
               
      

            	
              A.

            	
              Purpose
      of the Plan

            


    

    


    This 2008
Stock Option/Stock Issuance Plan (the “Plan”) is intended to aid the Corporation
(or any Parent or Subsidiary) in maintaining and developing a management team,
attracting qualified officers and Employees capable of assisting in the future
success of the Corporation, and rewarding those individuals who have
contributed, or may contribute in the future, to the success of the Corporation
(or any Parent or Subsidiary).  It is designed to aid the Corporation
(and any Parent or Subsidiary) in retaining the services of executives and
Employees and in attracting new personnel when needed for future operations and
growth and to provide such personnel with an incentive to remain Employees of
the Corporation, to use their best efforts to promote the success of the
Corporation’s business, and to provide them with an opportunity to obtain or
increase a proprietary interest in the Corporation.  It is further
designed to attract and retain the best available personnel for service as
directors of the Corporation (or any Parent or Subsidiary), whether or not such
individuals may otherwise be Employees.  It is also designed to permit
the Corporation to reward those consultants or other independent advisors who
are not Employees but who are perceived by management as having contributed to
the success of the Corporation (or any Parent or Subsidiary) or who are
important to the continued business and operations of the Corporation (or any
Parent or Subsidiary).

    


    Capitalized
terms herein shall have the meanings assigned to such terms in the attached
Appendix.

    


    
      	
               
      

            	
              B.

            	
              Structure
      of the Plan

            


    

    


    
      	
               
      

            	
              1.

            	
              The
      Plan shall be divided into two (2) separate equity
    programs:

            


    

    


    
      	
               
      

            	
              a.

            	
              the
      Option Grant Program under which eligible persons may, at the discretion
      of the Plan Administrator, be granted options to purchase shares of Common
      Stock, and

            


    

    


    
      	
               
      

            	
              b.

            	
              the
      Stock Issuance Program under which eligible persons may, at the discretion
      of the Plan Administrator, be issued shares of Common Stock directly,
      either through the immediate purchase of such shares or as a bonus for
      services rendered to the Corporation (or any Parent or Subsidiary) or as
      an incentive to perform services for the Corporation (or any Parent or
      Subsidiary).

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              2.

            	
              The
      provisions of Sections I and IV shall apply to both equity programs under
      the Plan and shall accordingly govern the interests of all persons under
      the Plan.

            


    

    


    
      	
               
      

            	
              C.

            	
              Administration
      of the Plan

            


    

    


    
      	
               
      

            	
              1.

            	
              The
      Plan shall be administered by the Board.  However, any or all
      administrative functions otherwise exercisable by the Board may be
      delegated to the Committee.  Members of the Committee shall
      serve for such period of time as the Board may determine and shall be
      subject to removal by the Board at any time.  The Board may also
      at any time terminate the functions of the Committee and reassume all
      powers and authority previously delegated to the
  Committee.

            


    

    


    
      	
               
      

            	
              2.

            	
              The
      Plan Administrator shall have full power and authority (subject to the
      provisions of the Plan) to establish such rules and regulations as it may
      deem appropriate for proper administration of the Plan and to make such
      determinations under, and issue such interpretations of, the Plan and any
      outstanding options thereunder as it may deem necessary or
      advisable.  Decisions of the Plan Administrator shall be final
      and binding on all parties who have an interest in the Plan or any option
      thereunder.

            


    

    


    
      	
               
      

            	
              D.

            	
              Eligibility

            


    

    


    
      	
               
      

            	
              1.

            	
              The
      persons eligible to participate in the Plan are as
      follows:  Employees; non-employee members of the Board or
      non-employee members of the board of directors of any Subsidiary; officers
      of the Corporation or any Subsidiary; and consultants and other
      independent advisors who provide a Service.  Options granted, or
      shares issued, to consultants or other independent advisors shall be made
      only to individuals who are natural persons (unless waived by the Plan
      Administrator) and who provide a bona fide Service, provided that the
      Service is not in connection with the offer or sale of securities in a
      capital-raising transaction, and does not directly or indirectly promote
      or maintain a market for the Corporation’s
  securities.

            


    

    


    
      	
            	
              
                2.

              

            	
              The
      Plan Administrator shall have full authority to determine, (i) with
      respect to the option grants under the Option Grant Program, which
      eligible persons are to receive option grants, the time or times when such
      option grants are to be made, the number of shares to be covered by each
      such grant, the status of the granted option as either an Incentive Option
      or a Non-Statutory Option, the time or times at which each option is to
      become exercisable, the vesting schedule (if any) applicable to the option
      shares and the maximum term for which the option is to remain outstanding,
      and (ii) with respect to stock issuances under the Stock Issuance Program,
      which eligible persons are to receive stock issuances, the time or times
      when such issuances are to be made, the number of shares to be issued to
      each Participant, the vesting schedule (if any) applicable to the issued
      shares and the consideration to be paid or given by the Participant for
      such shares.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              3.

            	
              The
      Plan Administrator shall have the absolute discretion either to grant
      options in accordance with the Option Grant Program or to effect stock
      issuances in accordance with the Stock Issuance
  Program.

            


    

    


    
      	
               
      

            	
              E.

            	
              Stock
      Subject to the Plan

            


    

    


    
      	
               
      

            	
              1.

            	
              The
      stock issuable under the Plan shall be shares of authorized but unissued
      or reacquired Common Stock.  The maximum number of shares of
      Common Stock which may be issued over the term of the Plan shall not
      exceed 3,000,000 shares.

            


    

    


    
      	
               
      

            	
              2.

            	
              Shares
      of Common Stock subject to outstanding options shall be available for
      subsequent issuance under the Plan to the extent (i) the options expire or
      terminate for any reason prior to exercise in full or (ii) the
      options are canceled in accordance with the cancellation-re-grant
      provisions of Section II(E).

            


    

    


    
      	
               
      

            	
              3.

            	
              Should
      any change be made to the Common Stock by reason of any stock split, stock
      dividend, recapitalization, combination of shares, exchange of shares or
      other change affecting the outstanding Common Stock as a class without the
      Corporation’s receipt of consideration, appropriate adjustments shall be
      made to the maximum number and/or class of securities issuable under the
      Plan.  The adjustments determined by the Plan Administrator
      shall be final, binding and
conclusive.

            


    

    


    
      	
              II.

            	
              OPTION GRANT
      PROGRAM

            


    

    


    
      	
               
      

            	
              A.

            	
              Types
      of Options

            


    

    


    The
Option Grant Program shall be comprised of two types of options as
follows:

    


    
      	
               
      

            	
              1.

            	
              Incentive
      Options which are options intended to qualify under the Code, subject to
      limiting conditions, for favorable tax treatment in respect of the
      recognition of ordinary income, gain, or loss and withholding requirements
      applicable to the exercise of the options and disposition of the shares of
      Common Stock acquired upon exercise of Incentive
  Options.

            


    

    


    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              2.

            	
              Non-Statutory
      Options which are those options that are not intended to qualify under the
      Code for favorable tax treatment in respect of the recognition of ordinary
      income, gain, or loss and withholding requirements applicable to the
      exercise of options and disposition of shares of Common Stock acquired
      pursuant to the exercise of the Non-Statutory options.  The
      Option Grant Program intends that the treatment of such transactions in
      respect of Non-Statutory Options will be governed by the taxation rules
      applicable to the transfer of property in connection with the performance
      of services.

            


    

    


    
      	
               
      

            	
              B.

            	
              Option
      Terms Applicable to Both Incentive and Non-Statutory
    Options

            


    

    


    
      	
               
      

            	
              1.

            	
              Option
      Agreements.

            


    

    


    Each
option shall be evidenced by one or more option agreements between the
Corporation and the Optionee.  Option agreements shall designate the
number of shares and the exercise price of the Option to which it pertains, and
shall set forth the vesting schedule of the Option or state that the Option is
vested immediately.  The option agreements shall be in writing, dated
as of the date the option is granted, and shall be executed on behalf of the
Corporation by such officers as the Board shall authorize.  Option
agreements shall be in such form and contain such additional provisions as the
Plan Administrator shall prescribe, but in no event shall they contain
provisions inconsistent with the provisions of this Plan.

    


    
      	
               
      

            	
              2.

            	
              Exercise
      Price.

            


    

    


    
      	
               
      

            	
              a.

            	
              The
      exercise price per share shall be fixed by the Plan Administrator for
      Incentive and Non-Statutory Options as set forth
  below.

            


    

    


    
      	
               
      

            	
              b.

            	
              The
      exercise price shall become immediately due upon exercise of the option
      and shall, subject to the provisions of Section IV(A) and the documents
      evidencing the option, be payable in cash or check made payable to the
      Corporation.  The Plan Administrator, in its discretion, may
      also permit the exercise price to be paid partly in cash and/or as
      follows:

            


    

    


    
      	
               
      

            	
              (1)

            	
              in
      shares of Common Stock valued at Fair Market Value on the Exercise
      Date;

            


    

    


    
      	
            	
              
                (2)

              

            	
              to
      the extent the option is exercised for vested shares, through a special
      sale and remittance procedure pursuant to which the Optionee shall
      concurrently provide irrevocable written instructions (A) to a
      Corporation-designated brokerage firm to effect the immediate sale of the
      purchased shares and remit to the Corporation, out of the sale proceeds
      available on the settlement date, sufficient funds to cover the aggregate
      exercise price payable for the purchased shares plus all applicable
      Federal, state and local income and employment taxes required to be
      withheld by the Corporation by reason of such exercise, and (B) to the
      Corporation to deliver the certificates for the purchased shares directly
      to such brokerage firm in order to complete the
  sale;

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (3)

            	
              with
      options granted  hereby valued at the amount by which the Fair
      Market Value of the Common Stock subject to these options exceeds the
      exercise or purchase price provided on such options; provided that options
      used to satisfy the exercise price shall be surrendered to and cancelled
      by the Corporation;

            


    

    


    
      	
               
      

            	
              (4)

            	
              by
      cancellation of debt owed by the Corporation to the Optionee, including
      debt incurred for professional services rendered, employment
      relationships, or otherwise, upon presentation of an invoice for services
      provided to the Corporation; or

            


    

    


    
      	
               
      

            	
              (5)

            	
              by
      means of an early exercise program adopted by the Plan Administrator
      permitting exercise of options prior to
vesting.

            


    

    


    
      	
               
      

            	
              c.

            	
              Except
      to the extent such sale and remittance procedure is utilized, payment of
      the exercise price for the purchased shares must be made on the Exercise
      Date.

            


    

    


    
      	
               
      

            	
              3.

            	
              Exercise and Term of
      Options.

            


    

    


     Each
option shall be exercisable at such time or times, during such period and for
such number of shares as shall be determined by the Plan Administrator and set
forth in the documents evidencing the option grant.  However, no
option shall have a term in excess of ten (10) years measured from the option
grant date.  The terms of Incentive and Non-Qualified Options shall be
fixed by the Plan Administrator within the limits specified below.

    


    
      	
               
      

            	
              4.

            	
              Effect of Termination
      of Service.

            


    

    


    
      	
               
      

            	
              a.

            	
              The
      following provisions shall govern the exercise of any options held by the
      Optionee at the time of cessation of Service or
  death:

            


    

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              (1)

            	
              Should
      the Optionee cease to remain in Service for Misconduct, then the options
      shall terminate on the date of cessation of the
  Service.

            


    

    


    
      	
               
      

            	
              (2)

            	
              Should
      the Optionee cease to remain in Service for any reason other than
      Misconduct, Disability or death, then the Optionee shall have a period of
      three (3) months following the date of such cessation of Service during
      which to exercise each outstanding option held by such
      Optionee.

            


    

    


    
      	
               
      

            	
              (3)

            	
              Should
      Optionee’s Service terminate by reason of Disability, then the Optionee
      shall have a period of twelve (12) months following the date of such
      cessation of Service during which to exercise each outstanding option held
      by such Optionee.

            


    

    


    
      	
               
      

            	
              (4)

            	
              If
      the Optionee dies while holding an outstanding option, then the personal
      representative of his or her estate or the person or persons to whom the
      option is transferred pursuant to the Optionee’s will or the laws of
      inheritance shall have a twelve (12) month period following the date of
      the Optionee’s death to exercise such
option.

            


    

    


    
      	
               
      

            	
              (5)

            	
              Under
      no circumstances, however, shall any such option be exercisable after the
      specified expiration of the option
term.

            


    

    


    
      	
               
      

            	
              (6)

            	
              During
      the applicable post-Service exercise period, the option may not be
      exercised in the aggregate for more than the number of vested shares for
      which the option is exercisable on the date of the Optionee’s cessation of
      Service.  Upon the expiration of the applicable exercise period
      or (if earlier) upon the expiration of the option term, the option shall
      terminate and cease to be outstanding for any vested shares for which the
      option has not been exercised.  However, the option shall,
      immediately upon the Optionee’s cessation of Service, terminate and cease
      to be outstanding with respect to any and all option shares for which the
      option is not otherwise at the time exercisable or in which the Optionee
      is not otherwise at that time
vested.

            


    

    


    
      	
               
      

            	
              b.

            	
              The
      Plan Administrator shall have the discretion, exercisable either at the
      time an option is granted or at any time while the option remains
      outstanding, to:

            


    

    


    
      	
            	
              
                (1)

              

            	
              extend
      the period of time for which the option is to remain exercisable following
      Optionee’s cessation of Service or death from the limited period otherwise
      in effect for that option to such greater period of time as the Plan
      Administrator shall deem appropriate, but in no event beyond the
      expiration of the option term;
and/or

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    


    
      	
               
      

            	
              (2)

            	
              permit
      the option to be exercised, during the applicable post-Service exercise
      period, not only with respect to the number of vested shares of Common
      Stock for which such option is exercisable at the time of the Optionee’s
      cessation of Service but also with respect to one or more additional
      installments in which the Optionee would have vested under the option had
      the Optionee continued in Service.

            


    

    


    
      	
               
      

            	
              5.

            	
              Shareholder
      Rights.  The holder of an option shall have no
      shareholder rights with respect to the shares subject to the option until
      such person shall have exercised the option, paid the exercise price, and
      become a holder of record of the purchased
  shares.

            


    

    


    
      	
               
      

            	
              6.

            	
              [RESERVED]

            


    

    


    
      	
               
      

            	
              7.

            	
              Limited
      Transferability of Options.  During the lifetime of the
      Optionee, the option shall be exercisable only by the Optionee and shall
      not be assignable or transferable other than by will or by the laws of
      descent and distribution following the Optionee’s
  death.

            


    

    


    
      	
               
      

            	
              8.

            	
              Withholding.  The
      Corporation’s obligation to deliver shares of Common Stock upon the
      exercise of any options granted under the Plan shall be subject to the
      satisfaction of all applicable Federal, state and local income and
      employment tax withholding
requirements.

            


    

    


    
      	
               
      

            	
              C.

            	
              Incentive
      Options

            


    

    


    The terms
specified below shall be applicable to all Incentive Options.  Except
as modified by the provisions of this Section II(C), all the provisions of the
Plan shall be applicable to Incentive Options.  Options which are
specifically designated as Non-Statutory Options shall not be subject to the
terms of this Section II (C).

    


    
      	
               
      

            	
              1.

            	
              Eligibility.  Incentive
      Options may only be granted to
Employees.

            


    

    


    
      	
               
      

            	
              2.

            	
              Exercise
      Price.  The exercise price per share shall not be less
      than one hundred percent (100%) of the Fair Market Value per share of
      Common Stock on the option grant date.  For options granted to a
      10% Shareholder, the exercise price per share shall not be less than one
      hundred ten percent (110%) of the Fair Market Value per share of Common
      Stock on the option grant date.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              3.

            	
              Dollar
      Limitation.  The aggregate Fair Market Value of the
      shares of Common Stock (determined as of the respective date or dates of
      grant) for which one or more options granted to any Employee under the
      Plan (or any other option plan of the Corporation or any Parent or
      Subsidiary) may for the first time become exercisable as Incentive Options
      during any one (1) calendar year shall not exceed the sum of One Hundred
      Thousand Dollars ($100,000).  To the extent the Employee holds
      two (2) or more such options which become exercisable for the first time
      in the same calendar year, the foregoing limitation on the exercisability
      of such options as Incentive Options shall be applied on the basis of the
      order in which such options are
granted.

            


    

    


    
      	
               
      

            	
              4.

            	
              Option
      Term for 10% Shareholder.  If any Employee
      to whom an Incentive Option is granted is a 10% Shareholder, then the
      option term shall not exceed five (5) years measured from the option grant
      date.

            


    

    


    
      	
               
      

            	
              D.

            	
              Non-Statutory
      Options

            


    

    


    The terms
specified below shall be applicable to all Non-Statutory
Options.  Except as modified by the provisions of this Section II(D),
all the provisions of the Plan shall be applicable to Non-Statutory
Options.

    


    
      	
               
      

            	
              1.

            	
              Eligibility.  Non-Statutory
      Options may be granted to the following
persons:

            


    

    


    
      	
               
      

            	
              a.

            	
              Employees,

            


    

    


    
      	
               
      

            	
              b.

            	
              non-employee
      members of the Board or the non-employee members of the board of directors
      of any Parent or Subsidiary, and

            


    

    


    
      	
               
      

            	
              c.

            	
              consultants
      and other independent advisors who provide services to the Corporation (or
      any Parent or Subsidiary), provided that such consultants or advisors are
      natural persons; that they provide bona fide services to the Corporation
      (or the Parent or Subsidiary); and that the services are not in connection
      with the offer or sale of securities in a capital-raising transaction, and
      do not directly or indirectly promote or maintain a market for the
      Corporation’s securities.

            


    

    


    
      	
               
      

            	
              2.

            	
              Exercise
      Price.  The exercise price per share covered by a
      Non-Statutory Option shall not be less than eighty-five percent (85%) of
      the Fair Market Value per share of Common Stock on the option grant
      date.

            


    

    


    
      
        
           


        

        
          8

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              E.

            	
              Corporate
      Transaction

            


    

    


    
      	
               
      

            	
              1.

            	
              The
      Plan and each option outstanding under the Plan at the time of a Corporate
      Transaction shall terminate and cease to be outstanding, but only after
      each Optionee (or the successor in interest) has been given, for the
      period of ten (10) days ending five (5) days before the effective date of
      the Corporate Transaction (or such longer period as the Board may
      specify), the right to exercise any unexpired option in full or in part,
      as if such option was fully vested and exercisable notwithstanding
      anything to the contrary contained in any option agreement between the
      Corporation and any optionee.  However, the outstanding options
      shall not terminate and cease to be outstanding on such an accelerated
      basis if and to the extent such options are assumed by the successor
      corporation (or parent thereof) in the Corporate
    Transaction.

            


    

    


    
      	
               
      

            	
              2.

            	
              Each
      option which is assumed in connection with a Corporate Transaction shall
      be appropriately adjusted, immediately after such Corporate Transaction,
      to apply to the number and class of securities which would have been
      issuable to the Optionee in consummation of such Corporate Transaction,
      had the option been exercised immediately prior to such Corporate
      Transaction.  Appropriate adjustments shall also be made to (i)
      the number and class of securities available for issuance under the Plan
      following the consummation of such Corporate Transaction and (ii) the
      exercise price payable per share under each outstanding option, provided
      the aggregate exercise price payable for such securities shall remain the
      same.

            


    

    


    
      	
               
      

            	
              3.

            	
              The
      Plan Administrator shall have the discretion, exercisable either at the
      time the option is granted or at any time while the option remains
      outstanding, to provide for the automatic acceleration (in whole or in
      part) of one or more outstanding options upon the occurrence of a
      Corporate Transaction, whether or not those options are to be assumed or
      replaced in the Corporate
Transaction.

            


    

    


    
      	
               
      

            	
              4.

            	
              The
      portion of any Incentive Option accelerated in connection with a Corporate
      Transaction shall remain exercisable as an Incentive Option only to the
      extent the applicable One Hundred Thousand Dollar ($100,000) limitation is
      not exceeded.  To the extent such dollar limitation is exceeded,
      the accelerated portion of such option shall be exercisable as a
      Non-Statutory Option under the Federal tax
laws.

            


    

    


    
      	
               
      

            	
              5.

            	
              Subject
      to Section II(F) below, the grant of options under the Plan shall in no
      way affect the right of the Corporation to adjust, reclassify, reorganize
      or otherwise change its capital or business structure or to merge,
      consolidate, dissolve, liquidate or sell or transfer all or any part of
      its business or assets.

            


    

    


    
      
        
           


        

        
          9

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              F.

            	
              Adjustments

            


    

    


    
      	
               
      

            	
              1.

            	
              If
      the Corporation shall at any time subdivide its outstanding shares of
      Common Stock by recapitalization, reclassification or split-up thereof, or
      if the Corporation shall declare a stock dividend or distribute shares of
      Common Stock to its stockholders, the number of shares of Common Stock
      purchasable upon exercise of the options immediately prior to such
      subdivision shall be proportionately increased in each instance, and if
      the Corporation shall at any time combine the outstanding shares of Common
      Stock by  recapitalization, reclassification or combination
      thereof, the number of shares of Common Stock purchasable upon exercise of
      the options immediately prior to such combination shall be proportionately
      decreased in each instance.  Any adjustment which is the result
      of a stock dividend or distribution shall be effective on the record date
      therefor.

            


    

    


    
      	
               
      

            	
              2.

            	
              Whenever
      the number of shares of Common Stock purchasable upon the exercise of any
      of the options is required to be adjusted as provided in Section II(F)(1)
      above, the exercise price per share shall be adjusted (to the nearest
      cent) in each instance by multiplying such exercise price per share
      immediately prior to such adjustment by a fraction (x) the numerator of
      which shall be the number of shares of Common Stock purchasable upon the
      exercise of the options immediately prior to such adjustment, and (y) the
      denominator of which shall be the number of shares of Common Stock so
      purchasable immediately thereafter.

            


    

    


    
      	
               
      

            	
              3.

            	
              In
      case the Corporation shall, at any time prior to the expiration date of
      the options, and prior to the exercise thereof, offer to the holders of
      its Common Stock any right to subscribe for additional shares of any class
      of the Corporation, then the Corporation shall give written notice thereof
      to the registered holders of the options not less than thirty (30) days
      prior to the date on which the books of the Corporation are
      closed  or a record date fixed for the determination of
      stockholders entitled to such subscription rights.  Such notice
      shall specify the date as to which the books shall be closed or record
      date be fixed with respect to such offer or subscription, and the right of
      the holders to participate in such offer or subscription shall terminate
      if the options shall not be exercised on before the date of such closing
      of the books or such record date.

            


    

    


    
      	
               
      

            	
              4.

            	
              If
      the Corporation shall take any action affecting the shares of its Common
      Stock, other than that action described in this Plan, which, in the
      opinion of the Plan Administrator, would materially affect the rights of
      the holders of the options or the exercise price per share, the number of
      shares of Common Stock purchasable on exercise of the options shall be
      adjusted in each instance and at such time as the Plan Administrator, in
      good faith, may determine to be equitable under the
      circumstances.  The adjustments determined by the Plan
      Administrator shall be final, binding, and
  conclusive.

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    


    
      	
               
      

            	
              5.

            	
              Any
      changes or adjustments in the number of shares of Common Stock purchasable
      upon the exercise of the options or in the exercise price of options, as
      required or authorized by this Section II(F), shall be made with respect
      to all authorized options whether or not they have yet been issued or
      outstanding at the time of the occurrence of the circumstance leading to
      such change or adjustment.

            


    

    


    
      	
               
      

            	
              G.

            	
              Cancellation
      and Re-Grant of Options

            


    

    


    The Plan
Administrator shall have the authority to effect, at any time and from time to
time, with the consent of the affected option holders and subject to approval of
the shareholders of the Corporation, the cancellation of any or all outstanding
options under the Plan and to grant in substitution therefor new options
covering the same or different number of shares of Common Stock but with an
exercise price per share based on the Fair Market Value per share of Common
Stock on the new option grant date.  The type and amount of
consideration for the substituted options shall be subject to the approval of
the Plan Administrator.

    


    
      	
              III.

            	
              STOCK ISSUANCE
      PROGRAM

            


    

    


    
      	
               
      

            	
              A.

            	
              Stock
      Issuance Terms

            


    

    


    Shares of
Common Stock may be issued under the Stock Issuance Program through direct and
immediate issuances without any intervening option grants.  Each such
stock issuance shall be evidenced by a Stock Issuance Agreement which complies
with the terms specified below.

    


    
      	
               
      

            	
              1.

            	
              Cost
      of Shares.  Grants of shares
      of Common Stock under the Stock Issuance Program shall be made at such
      cost as the Plan Administrator shall determine and may be issued for no
      monetary consideration, subject to applicable state
  law.

            


    

    


    
      	
               
      

            	
              2.

            	
              Vesting
      Provisions.

            


    

    


    
      	
               
      

            	
              a.

            	
              Shares
      of Common Stock issued under the Stock Issuance Program may, in the
      discretion of the Plan Administrator, be fully and immediately vested upon
      issuance or may vest in one or more installments over the Participant’s
      period of Service or upon attainment of specified performance
      objectives.

            


    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                b.

              

            	
              Any
      new, substituted or additional securities or other property (including
      money paid other than as a regular cash dividend) which the Participant
      may have the right to receive with respect to the Participant’s unvested
      shares of Common Stock by reason of any stock dividend, stock split,
      recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the
      Corporation’s receipt of consideration shall be issued subject to (i) the
      same vesting requirements applicable to the Participant’s unvested shares
      of Common Stock and (ii) such escrow arrangements as the Plan
      Administrator shall deem
appropriate.

            


    

    


    
      	
               
      

            	
              c.

            	
              Unless
      specified otherwise in the Stock Issuance Agreement, the Participant shall
      have full shareholder rights with respect to any shares of Common Stock
      issued to the Participant under the Stock Issuance Program, whether or not
      the Participant’s interest in those shares is vested, and accordingly, the
      Participant shall have the right to vote such shares and to receive any
      regular cash dividends paid on such
shares.

            


    

    


    
      	
               
      

            	
              d.

            	
              Should
      the Participant cease to remain in Service while holding one or more
      unvested shares of Common Stock issued under the Stock Issuance Program or
      should the performance objectives not be attained with respect to one or
      more such unvested shares of Common Stock, then those shares shall be
      immediately surrendered to the Corporation for cancellation, and the
      Participant shall have no further shareholder rights with respect to those
      shares.  To the extent the surrendered shares were previously
      issued to the Participant for consideration paid in cash or cash
      equivalent (including the Participant’s purchase-money indebtedness), the
      Corporation shall repay to the Participant the cash consideration paid for
      the surrendered shares and shall cancel the unpaid principal balance of
      any outstanding purchase-money note of the Participant attributable to
      such surrendered shares.

            


    

    


    
      	
               
      

            	
              e.

            	
              The
      Plan Administrator may in its discretion waive the surrender and
      cancellation of one or more unvested shares of Common Stock (or other
      assets attributable thereto) which would otherwise occur upon the
      non-completion of the vesting schedule applicable to such
      shares.  Such waiver shall result in the immediate vesting of
      the Participant’s interest in the shares of Common Stock as to which the
      waiver applies.  Such waiver may be effected at any time,
      whether before or after the Participant’s cessation of Service or the
      attainment or non-attainment of the applicable performance
      objectives.

            


    

    


    
      	
               
      

            	
              3.

            	
              Non-transferability.  Shares
      of Common Stock granted under the Stock Issuance program shall not be
      transferable until the shares are
vested.

            


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              B.

            	
              Corporate
      Transaction

            


    

    


    
      	
               
      

            	
              1.

            	
              Upon
      the occurrence of a Corporate Transaction all unvested shares not assumed
      by the successor corporation (or parent thereof) shall be immediately
      surrendered to the Corporation for cancellation, and the Participant shall
      have no further shareholder rights with respect to those
      shares.  To the extent the surrendered shares were previously
      issued to the Participant for consideration paid in cash or cash
      equivalent (including the Participant’s purchase-money indebtedness), the
      Corporation shall repay to the Participant the cash consideration paid for
      the surrendered shares and shall cancel the unpaid principal balance of
      any outstanding purchase-money note of the Participant attributable to
      such surrendered shares.

            


    

    


    
      	
               
      

            	
              2.

            	
              The
      Plan Administrator shall have the discretionary authority, exercisable
      either at the time the unvested shares are issued or any time while the
      Corporation’s repurchase rights with respect to those shares remaining
      outstanding, to provide that those rights shall automatically terminate on
      an accelerated basis, and the shares of Common Stock subject to those
      terminated rights shall immediately vest, in the event of a Corporate
      Transaction or in the event that the Participant’s Service should
      subsequently terminate by reason of an Involuntary Termination within a
      period designated by the Plan Administrator following the effective date
      of any Corporate Transaction in which those repurchase rights are assumed
      by the successor corporation (or parent
  thereof).

            


    

    


    
      	
               
      

            	
              C.

            	
              Share
      Escrow/Legends

            


    

    


    Unvested
shares may, in the Plan Administrator’s discretion, be held in escrow by the
Corporation until the Participant’s interest in such shares vests or may be
issued directly to the Participant with restrictive legends on the certificates
evidencing those unvested shares.

    


    
      	
              IV.

            	
              MISCELLANEOUS

            


    

    


    
      	
               
      

            	
              A.

            	
              Financing

            


    

    


    The Plan
Administrator may permit any Optionee or Participant to pay the option exercise
price or the purchase price for shares issued to such person under the by
delivering a full-recourse, interest-bearing promissory note payable in one or
more installments and secured by the purchased shares.  In no event
shall the maximum credit available to the Optionee or Participant exceed the sum
of (i) the aggregate option exercise price or purchase price payable for the
purchased shares plus (ii) any Federal, state and local income and employment
tax liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.

    


    
      
        
           


        

        
          13

          
            

          

        

        
           


        

      

    

    
 

    
      	
               
      

            	
              B.

            	
              Effective
      Date and Term of Plan

            


    

    


    
      	
               
      

            	
              1.

            	
              The
      Plan shall become effective when adopted by the Board, but no option
      granted under the Plan may be exercised, and no shares shall be issued
      under the Plan, until the Plan is approved by the Corporation’s
      shareholders.  If such shareholder approval is not obtained
      within twelve (12) months after the date of the Board’s adoption of the
      Plan, then all options previously granted under the Plan shall terminate
      and cease to be outstanding, and no further options shall be granted and
      no shares shall be issued under the Plan.  Subject to such
      limitation, the Plan Administrator may grant options and issue shares
      under the Plan at any time after the effective date of the Plan and before
      the date fixed herein for termination of the
  Plan.

            


    

    


    
      	
               
      

            	
              2.

            	
              The
      Plan shall terminate upon the earliest of (i) ten years after the Plan was
      adopted by the Board or was approved by the Corporation’s shareholders,
      whichever was earlier, (ii) the date on which all shares available for
      issuance under the Plan shall have been issued, or (iii) the termination
      of all outstanding options in connection with a Corporate
      Transaction.  All options and unvested stock issuances
      outstanding at that time under the Plan shall continue to have full force
      and effect in accordance with the provisions of the documents evidencing
      such options or issuances.

            


    

    


    
      	
               
      

            	
              C.

            	
              Amendment
      of the Plan

            


    

    


    
      	
               
      

            	
              1.

            	
              The
      Board shall have complete and exclusive power and authority to amend or
      modify the Plan in any or all respects, except as set forth
      herein.  However, no such amendment or modification shall
      adversely affect the rights and obligations with respect to options or
      unvested stock issuances at the time outstanding under the Plan unless the
      Optionee or the Participant consents to such amendment or
      modification.  The Board shall not be required to submit any
      amendment to the Plan to a vote of the Corporation’s shareholders unless
      it is required by applicable statues or regulations.  An
      amendment that does not require shareholder approval may nevertheless not
      be effective unless such approval is obtained if the Board, in passing
      upon the amendment, so determines.  Notwithstanding the
      foregoing, the Board shall not amend the Plan, without approval of the
      shareholders of the Corporation, in a manner which
  would:

            


    

    


    
      	
               
      

            	
              a.

            	
              Cause
      Options which are intended to qualify as Incentive Options to fail to
      qualify;

            


    

    
      	
               
      

            	
              b.

            	
              increase
      the number of shares of Common Stock issuable over the term of the
      Plan;

            


    

    
      	
               
      

            	
              c.

            	
              extend
      the duration of the Plan;

            


    

    
      	
               
      

            	
              d.

            	
              cause
      the Plan to fail to meet the requirements of Rule 16b-3;
  or

            


    

    
      	
               
      

            	
              e.

            	
              violate
      applicable law.

            


    

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
              2.

            	
              Options
      may be granted under the Option Grant Program and shares may be issued
      under the Stock Issuance Program which are in each instance in excess of
      the number of shares of Common Stock then available for issuance under the
      Plan, provided any excess shares actually issued under those programs
      shall be held in escrow until there is obtained shareholder approval of an
      amendment sufficiently increasing the number of shares of Common Stock
      available for issuance under the Plan.  If such shareholder
      approval is not obtained within twelve (12) months after the date the
      first such excess issuances are made, then (i) any unexercised options
      granted on the basis of such excess shares shall terminate and cease to be
      outstanding and (ii) the Corporation shall promptly refund to the
      Optionees and the Participants the exercise or purchase price paid for any
      excess shares issued under the Plan and held in escrow, together with
      interest (at the applicable Short Term Federal Rate) for the period the
      shares were held in escrow, and such shares shall thereupon be
      automatically canceled and cease to be
  outstanding.

            


    

    


    
      	
               
      

            	
              D.

            	
              Use
      of Proceeds

            


    

    


    Any cash
proceeds received by the Corporation from the sale of shares of Common Stock
under the Plan shall be used for general corporate purposes.

    


    
      	
               
      

            	
              E.

            	
              Withholding

            


    

    


    The
Corporation’s obligation to deliver shares of Common Stock upon the exercise of
any options or upon the vesting of any shares issued under the Plan shall be
subject to the satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements.

    


    
      	
               
      

            	
              F.

            	
              Regulatory
      Approvals

            


    

    


    The
implementation of the Plan, the granting of any options under the Plan and the
issuance of any shares of Common Stock (i) upon the exercise of any option or
(ii) under the Stock Issuance Program shall be subject to the Corporation’s
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the options granted under it and the shares
of Common Stock issued pursuant to it.

    


    
      	
               
      

            	
              G.

            	
              No
      Employment or Service Rights

            


    

    


    Nothing
in the Plan shall confer upon the Optionee or the Participant any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee or the
Participant, which rights are hereby expressly reserved by each, to terminate
such person’s Service at any time for any reason, with or without
cause.

    


    
      
        
           


        

        
          15

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              H.

            	
              Indemnification

            


    

    


    In
addition to such other rights as they may have as directors or as members of the
Committee, the members of the Plan Administrator shall be indemnified by the
Corporation against the reasonable expenses, including attorneys’ fees, actually
and necessarily incurred in connection with the defense of any action, suit, or
proceeding, and in connection with any appeal therein, to which they or any of
them may be a party by reason of any action or failure to act under or in
connection with this Plan or any option or stock award granted hereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Corporation) or paid by
them in satisfaction of a judgment in any such action, suit, or proceeding,
except in relation to matters as to which it shall be finally adjudged in such
action, suit, or proceeding that such member of the Plan Administrator is liable
for gross negligence or willful misconduct in the performance of his duties;
provided that within 60 days after institution of any such action, suit, or
proceeding (or within 30 days after service upon such member of legal process in
such case, if later) a member of the Plan Administrator shall in writing offer
the Corporation the opportunity, at its own expense, to handle and defend the
same.

    


    
      	
               
      

            	
              I.

            	
              Rule
      16b-3

            


    

    


    With
respect to Participates subject to Rule 16b-3, transactions under the Plan are
intended to comply with all applicable provisions of Rule 16b-3.  To
the extent any provision of the Plan or action by the Plan Administrator fails
to so comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Plan Administrator.

    


    
      	
               
      

            	
              J.

            	
              Relationship
      to Other Plans

            


    

    


    Nothing
in this Plan shall prevent the Corporation (or any Parent or Subsidiary) from
adopting or continuing other or additional compensation arrangements, including
without limitation plans providing for the granting of restricted stock awards,
options, cash, or Common Stock performance bonuses.  Grants under the
Plan may form a part of or otherwise be related to such other or additional
compensation arrangements.

    


    
      
        
           


        

        
          16

          
            

          

        

        
           


        

      

    

     

    APPENDIX

    


    The
following definitions shall be in effect under the Plan:

    


    Board
shall mean the Corporation’s Board of Directors.

    


    Code
shall mean the Internal Revenue Code of 1986, as amended.

    


    Committee
shall mean a committee of two (2) or more non-employee Board members appointed
by the Board to exercise one or more administrative functions under the
Plan.

    


    Common
Stock shall mean the Corporation’s common stock.

    


    Corporate
Transaction shall mean either of the following shareholder approved
transactions to which the Corporation is a party:

    


    (a)           a
merger or consolidation in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation’s outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction, or

    


    (b)           the
sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the
Corporation.

    


    Corporation
shall mean Desert Hawk Gold Corp. (formerly known as Lucky Joe Mining Company),
a Nevada corporation.

    


    Disability
shall mean the inability of the Optionee or the Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment and shall be determined by the Plan Administrator on the basis
of such medical evidence as the Plan Administrator deems warranted under the
circumstances.

    


    Employee
shall mean an individual who is in the employ of the Corporation (or any Parent
or Subsidiary), subject to the control and direction of the employer entity as
to both the work to be performed and the manner and method of
performance.

    


    Exercise
Date shall mean the date on which the Corporation shall have received
written notice of the option exercise.

    


    Fair
Market Value per share of Common Stock on any relevant date shall be
determined as prescribed by the Code and regulations promulgated thereunder, or
as otherwise determined by the Plan Administrator.

    


    
      
        
           


        

        
          17

          
            

          

        

        
           


        

      

    

    


    Incentive
Option shall mean an option which satisfies the requirements of Code
Section 422.

    


    Involuntary
Termination shall mean the termination of the Service of any individual
which occurs by reason of:

    


    (a)           such
individual’s involuntary dismissal or discharge by the Corporation for reasons
other than Misconduct, or

    


    (b)           such
individual’s voluntary resignation following (A) a change in his or her position
with the Corporation which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of compensation (including
base salary, fringe benefits and target bonuses under any corporate performance
based bonus or incentive programs) by more than fifteen percent (15%), or (c) a
relocation of such individual’s place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is effected
without the individual’s consent.

    


    The Plan
Administrator shall be entitled to revise the definition of Involuntary
Termination and Misconduct with respect to individual Optionees or Participants
under the Plan.

    


    Misconduct
shall mean the commission of any act of fraud, embezzlement or dishonesty by the
Optionee or Participant, any unauthorized use or disclosure by such person of
confidential information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by such person adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner.  The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee, Participant or other person in the Service of the Corporation
(or any Parent or Subsidiary).

    


    1934
Act shall mean the Securities Exchange Act of 1934, as
amended.

    


    Non-Statutory
Option shall mean an option not intended to satisfy the requirements of
Code Section 422.

    


    Option
Grant Program shall mean the option grant program in effect under the
Plan.

    


    Optionee
shall mean any person to whom an option is granted under the Plan.

    


    Parent
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

    


    
      
        
           


        

        
          18

          
            

          

        

        
           


        

      

    

    


    


    Participant
shall mean any person who is issued shares of Common Stock under the Stock
Issuance Program.

    


    Plan
shall mean the Corporation’s 2008 Stock Option/Stock Issuance Plan, as set forth
in this document.

    


    Plan
Administrator shall mean either the Board or the Committee acting in its
capacity as administrator of the Plan.

    


    Rule
16b-3 shall mean Rule 16b-3 promulgated under the 1934 Act by the U.S.
Securities and Exchange Commission, as amended, or any successor rule in effect
from time to time.

    


    Service
shall mean the provision of services to the Corporation (or any Parent or
Subsidiary) by a person in the capacity of an Employee, a non-employee member of
the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option
grant.

    


    Stock
Issuance Agreement shall mean the agreement entered into by the
Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.

    


    Stock
Issuance Program shall mean the stock issuance program in effect under
the Plan.

    


    Subsidiary
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

    


    10%
Shareholder shall mean the owner of
stock (as determined under Code Section 424(d)) possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation (or any Parent or Subsidiary).

    


    
      
        
           


        

        
          19

          
            

          

        

        
           


        

      

    

    


    THESE SECURITIES HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION BECAUSE
THEY ARE BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER SECTION 4(2) AND/OR 4(6)
OF THE SECURITIES ACT OF 1933.

    


    THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION.  NEITHER THE
SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER AUTHORITY HAS PASSED UPON OR
ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE
INFORMATION PROVIDED TO THE INVESTORS.  ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.  INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY, AND THE RISKS, MERITS AND TERMS OF THIS OFFERING IN
MAKING AN INVESTMENT DECISION.

    


    DESERT
HAWK GOLD CORP

    GRANT
OF STOCK OPTION

    


    This Grant of Stock Option is hereby
offered to Optionee with respect to the following option grant (the “Option”) to
purchase shares of the Common Stock of Desert Hawk Gold Corp. (the
“Corporation”):

    
      


      
        
          
            
              
                
                  	
                          Optionee:

                        	 
      	 
      


                

              

            

          

        

      

      


      
        
          
            
              	
                      Grant Date:

                    	  	  


            

          

        

      

      


      
        
          
            
              
                	
                        Vesting Commencement:

                      	  	  


              

            

          

        

      

      


      
        
          	
                  Exercise Price:  $_____ per share

                	  


        

      

      


      
        
          	
                  Number of Option Shares:                                       shares

                	
                    

                


        

      

      


      
        
          
            
              	
                      Expiration Date:

                    	  	  


            

          

        

      

      


      
        
          
            
              	
                      Type of Option:

                    	______ Non-Statutory	
                       

                    
	 	
                      
                        ______ Incentive Stock Option

                      

                    	
                       

                    


            

          

        

      

      


      
        
          	
                  Date Exercisable:  Following Vesting

                	  


        

      

      


      
        
          
            
              
                	
                        Vesting Schedule:

                      	   	  


              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    Optionee understands and agrees that
the Option is granted subject to and in accordance with the terms of the
Company’s 2008 Stock Option/Stock Issuance Plan (the
“Plan”).  Optionee further agrees to be bound by the terms of the Plan
and the terms of the Option as set forth in the Stock Option Agreement, a copy
of which is attached hereto as Exhibit A.

    


    
      
        
           


        

        
          20

          
            

          

        

        
           


        

      

    

    


    Optionee understands that any Option
Shares purchased under the Option will be subject to the terms set forth in the
Stock Purchase Agreement attached hereto as Exhibit B.  Optionee
hereby acknowledges receipt of a copy of the Plan in the form attached hereto as
Exhibit C.

    


    All capitalized terms in this Grant
form shall have the meaning assigned to them in this form or in the attached
Plan.

    


    Assuming that you are in agreement with
the terms of this Grant of Stock Option, please sign your name in the space
indicated below.

     

    
      
        
          	 
      	
                  Desert
      Hawk Gold Corp.

                
	 
      	 
      	 
      
	 
      	
                  By

                	
                   

                
	 
      	 
      	
                  Robert
      E. Jorgensen, CEO

                


        

      

      


      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  AGREED:

                                	 
      
	 
      	 
      
	 
      	 
      
	
                                  Optionee

                                	 
      
	 
      	 
      
	 
      	 
      
	
                                  Print
      Name

                                	 
      
	 
      	 
      
	
                                  Address:

                                	 
      	 
      
	 	 	 
	 	 	 


                        

                      

                    

                  

                

              

            

          

        

      

      


      
        	
                Exhibit
      A

              	
                Stock
      Option Agreement

              


      

      
        	
                Exhibit
      B

              	
                Stock
      Purchase Agreement

              


      

      
        	
                Exhibit
      C

              	
                2008
      Stock Option/Stock Issuance
Plan

              


      

    

     

    
      
        
           


        

        
          21

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
A

    


    DESERT
HAWK GOLD CORP.

    STOCK
OPTION AGREEMENT

    


    RECITALS

    


    A.           The
Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board or the Board of Directors of any
Parent or Subsidiary and consultants and other independent advisors in the
service of the Corporation (or any Parent or Subsidiary).

    


    B.           Optionee
is to render valuable services to the Corporation (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation’s grant of an option to
Optionee.

    


    C.           All
capitalized terms in this Agreement shall have the meaning assigned to them in
the attached Appendix.

    


    NOW, THEREFORE, it is hereby agreed as
follows:

    


    1.           Grant of
Option.  The Corporation hereby grants to Optionee, as of the
Grant Date, an option to purchase up to the number of Option Shares specified in
the Grant Form.  The Option Shares shall be purchasable from time to
time during the option term specified in Paragraph 2 at the Exercise
Price.

    


    2.           Option
Term.  This option shall have a term commencing on the Grant
Date and shall accordingly expire at the close of business on the Expiration
Date, unless sooner terminated in accordance with Paragraph 5 or 6.

    


    3.           Limited
Transferability.  During Optionee’s lifetime, this option shall
be exercisable only by Optionee and shall not be assignable or transferable
other than by will or by the laws of descent and distribution following
Optionee’s death.

    


    4.           Dates of
Exercise.  This option shall become exercisable for the Option
Shares in one or more installments as specified in the Grant Form.  As
the option becomes exercisable for such installments, those installments shall
accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.

    


    5.           Cessation of
Service.  Except as provided in the Grant Form or the Plan, the
option term specified in Paragraph 2 shall terminate (and this option shall
cease to be outstanding) prior to the Expiration Date should the Optionee cease
to remain in Service as provided in the Plan.  Except as provided in
the Grant Form or the Plan, during the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for more than
the number of Option Shares in which Optionee is, at the time of Optionee’s
cessation of Service, vested pursuant to the Vesting Schedule specified in the
Grant Form.  Upon the expiration of such limited exercise period or
(if earlier) upon the Expiration Date, this option shall terminate and cease to
be outstanding for any vested Option Shares for which the option has not been
exercised.  To the extent Optionee is not vested in the Option Shares
at the time of Optionee’s cessation of Service, this option shall immediately
terminate and cease to be outstanding with respect to those
shares.  In the event of a Corporate Transaction, the provisions of
Paragraph 6 shall govern the period for which this option is to remain
exercisable following Optionee’s cessation of Service and shall supersede any
provisions to the contrary in this paragraph.

    


    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    6.           Corporate
Transaction

    


    (a)           The
vesting provisions set forth in the Grant Form shall apply in the event of a
Corporate Transaction (as defined in the appendix to this
Agreement).

    


    (b)           Any
unvested option shall immediately vest in its entirety effective upon the time
immediately prior to the consummation of a Corporate Transaction .

    


    (c)           If
this option is assumed in connection with a Corporate Transaction, then this
option shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to Optionee in consummation of such Corporate Transaction had the
option been exercised immediately prior to such Corporate Transaction, and
appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction and (ii) the Exercise Price, provided, the aggregate
Exercise Price shall remain the same.

    


    (d)           This
Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

    


    7.           Adjustment in Option
Shares.  Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation’s receipt of consideration, appropriate
adjustments shall be made to (i) the total number and/or class of securities
subject to this option and (ii) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits
hereunder.

    


    8.           Shareholder
Rights.  The holder of this option shall not have any
shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

    


    
      
        
           


        

        
          23

          
            

          

        

        
           


        

      

    

    


    9.           Manner of Exercising
Option.

    


    (a)           In
order to exercise this option with respect to all or any part of the Option
Shares for which this option is at the time exercisable, Optionee (or any other
person or persons exercising the option) must take the following
actions:

    


    (i)           Execute
and deliver to the Corporation a Purchase Agreement for the Option Shares for
which the option is exercised.

    


    (ii)           Pay
the aggregate Exercise Price for the purchased shares in one or more of the
following forms:

    


    (A)           cash
or check made payable to the Corporation; or

    


    (B)           a
promissory note payable to the Corporation, but only to the extent authorized by
the Plan Administrator in accordance with Paragraph 13.

    


    (C)           in
shares of Common Stock held by Optionee (or any other person or persons
exercising the option) for the requisite period necessary to avoid a charge to
the Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or

    


    (D)           to
the extent the option is exercised for vested Option Shares, through a special
sale and remittance procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide irrevocable
instructions (a) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by
the Corporation by reason of such exercise and (b) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale.

    


    Except to the extent the sale and
remittance procedure is utilized in connection with the option exercise, payment
of the Exercise Price must accompany the Purchase Agreement delivered to the
Corporation in connection with the option exercise.

    


    (iii)         Furnish
to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this
option.

    


    (iv)         Execute
and deliver to the Corporation such written representations as may be requested
by the Corporation in order for it to comply with the applicable requirements of
Federal and state securities laws.

    
 

    
      
        
           


        

        
          24

          
            

          

        

        
           


        

      

    

    


    (v)          Make
appropriate arrangements with the Corporation (or Parent or Subsidiary employing
or retaining Optionee) for the satisfaction of all federal, state and local
income and employment tax withholding requirements applicable to the option
exercise.

    


    (b)         As
soon as practical after the Exercise Date, the Corporation shall issue to or on
behalf of Optionee (or any other person or persons exercising this option) a
certificate for the purchased Option Shares, with the appropriate legends
affixed thereto.

    


    (c)         In
no event may this option be exercised for any fractional shares.

    


    10.           Compliance with Laws and
Regulations.

    


    (a)         The
exercise of this option and the issuance of the Option Shares upon such exercise
shall be subject to compliance by the Corporation and Optionee with all
applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the NASDAQ National Market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.

    


    (b)         The
inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and
sale of any Common Stock pursuant to this option shall relieve the Corporation
of any liability with respect to the non-issuance or sale of the Common Stock as
to which such approval shall not have been obtained.  The Corporation,
however, shall use its best efforts to obtain all such approvals.

    


    11.           Successors and
Assigns.  Except to the extent otherwise provided in Paragraphs
3 and 6, the provisions of this Agreement shall inure to the benefit of, and be
binding upon, the Corporation and its successors and assigns and Optionee,
Optionee’s assigns and the legal representatives, heirs and legatees of
Optionee’s estate.

    


    12.           Notices.  Any
notice required to be given or delivered to the Corporation under the terms of
this Agreement shall be in writing and addressed to the Corporation at its
principal corporate offices.  Any notice required to be given or
delivered to Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee’s signature line on the Grant
Form.  All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.

    


    13.           Financing.  The
Plan Administrator may, in its absolute discretion and without any obligation to
do so, permit Optionee to pay the Exercise Price for the purchased Option Shares
by delivering a full-recourse, interest-bearing promissory note secured by those
Option Shares.  The payment schedule in effect for any such promissory
note shall be established by the Plan Administrator in its sole
discretion.

    


    14.           Construction.  This
Agreement and the option evidenced hereby are made and granted pursuant to the
Plan and are in all respects limited by and subject to the terms of the
Plan.  All decisions of the Plan Administrator with respect to any
question or issue arising under the Plan or this Agreement shall be conclusive
and binding on all persons having an interest in this option.

    


    
      
        
           


        

        
          25

          
            

          

        

        
           


        

      

    

    


    15.           Shareholder
Approval.  If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may be
issued under the Plan as last approved by the shareholders, then this option
shall be void with respect to such excess shares, unless shareholder approval of
an amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of the
Plan.

    


    16.           Additional Terms Applicable
to an Incentive Option.  To the extent any option designated in
the Grant Form as an Incentive Option would not qualify in whole or in part for
favorable tax treatment as an Incentive Option at the time of exercise, such
option may nevertheless be exercised by the Optionee as a Non-Statutory
Option.

    


    APPENDIX

    


    The
following definitions shall be in effect under the Agreement:

    


    1.           Agreement shall mean
this Stock Option Agreement.

    


    2.           Board shall mean the
Corporation’s Board of Directors.

    


    3.           Code shall mean the
Internal Revenue Code of 1986, as amended.

    


    4.           Committee shall mean
a committee of two (2) or more non-employee Board members appointed by the Board
to exercise one or more administrative functions under the Plan.

    


    5.           Common Stock shall
mean the Corporation’s common stock.

    


    
      	
              6.

            	
              Corporate
      Transaction shall mean either of the following shareholder approved
      transactions to which the Corporation is a
  party:

            


    

    


    (a)           a
merger or consolidation in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation’s outstanding
securities are transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction, or

    


    (b)           the
sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the
Corporation.

    


    
      	
              7.

            	
              Corporation
      shall mean Desert Hawk Gold Corp., an Nevada corporation, and any
      successor corporation to all or substantially all of the assets or voting
      stock of Desert Hawk Gold Corp. which shall by appropriate action adopt
      the Plan.

            


    

    


    
      
        
           


        

        
          26

          
            

          

        

        
           


        

      

    

    


    
      	
              8.

            	
              Disability
      shall mean the inability of the Optionee or the Participant to engage in
      any substantial gainful activity by reason of any medically determinable
      physical or mental impairment and shall be determined by the Plan
      Administrator on the basis of such medical evidence as the Plan
      Administrator deems warranted under the
  circumstances.

            


    

    


    
      	
              9.

            	
              Employee shall
      mean an individual who is in the employ of the Corporation (or any Parent
      or Subsidiary), subject to the control and direction of the employer
      entity as to both the work to be performed and the manner and method of
      performance.

            


    

    


    
      	
              10.

            	
              Exercise Date
      shall mean the date on which the option shall have been exercised in
      accordance with Paragraph 9 of the
Agreement.

            


    

    


    
      	
              11.

            	
              Exercise Price
      shall mean the exercise price payable per Option Share as specified in the
      Grant Form.

            


    

    


    
      	
              12.

            	
              Expiration Date
      shall mean the date on which the option expires as specified in the Grant
      Form.

            


    

    


    
      	
              13.

            	
              Fair Market
      Value per share of Common Stock on any relevant date shall be
      determined in accordance with the following
  provisions:

            


    

    


    (a)    If
the Common Stock is at the time traded on the NASDAQ National Market, then the
Fair Market Value shall be the closing selling price per share of Common Stock
on the date in question, as such price is reported by the National Association
of Securities Dealers on the NASDAQ National Market or any successor
system.  If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.

    


    (b)           If
the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock on the
date in question on the Stock Exchange determined by the Plan Administrator to
be the primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange.  If there is
no closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.

    


    (c)           If
the Common Stock is at the time neither listed on any Stock Exchange nor traded
on the NASDAQ National Market, then the Fair Market Value shall be determined by
the Plan Administrator after taking into account such factors as the Plan
Administrator shall deem appropriate.

    


    14.           Grant Date shall mean
the date of grant of the option as specified in the Grant Form.

    
      
 

      
        	
                15.

              	
                Grant Form
      shall mean the Grant of Stock Option accompanying the Agreement, pursuant
      to which Optionee has been informed of the basic terms of the option
      evidenced hereby.

              


      

       

    

    
      
        
           


        

        
          27

          
            

          

        

        
           


        

      

    

    


    
      	
              16.

            	
              Incentive
      Option shall mean an option which satisfies the requirements of
      Code Section 422.

            


    

    


    
      	
              17.

            	
              Involuntary
      Termination shall mean the termination of the Service of any
      individual which occurs by reason of
:

            


    

    


    (a)           such
individual’s involuntary dismissal or discharge by the Corporation for reasons
other than Misconduct, or

    (b)           such
individual’s voluntary resignation following (A) a change in his or her position
with the Corporation which materially reduces his or her level of
responsibility, (B) a reduction in his or her level of compensation (including
base salary, fringe benefits and target bonuses under any corporate performance
based bonus or incentive programs) by more than fifteen percent (15%), or (C) a
relocation of such individual’s place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is effected
without the individual’s consent.

    


    The Plan
Administrator shall be entitled to revise the definition of Involuntary
Termination and Misconduct with respect to individual Optionees or Participants
under the Plan.

    


    
      	
              18.

            	
              Misconduct
      shall mean (i) the final conviction of Employee of, or Employee’s plea of
      guilty or nolo contendere to, any felony involving moral turpitude, (ii)
      fraud, misappropriation or embezzlement by Employee in connection with
      Employee’s duties to the Corporation (or any Parent of Subsidiary), or
      (iii) Employee’s willful failure or gross misconduct in the performance of
      his duties to the Corporation (or any Parent or
    Subsidiary).

            


    

    


    19.           1934 Act shall mean
the Securities Exchange Act of 1934, as amended.

    


    
      	
              20.

            	
              Non-Statutory
      Option shall mean an option not intended to satisfy the
      requirements of Code Section 422.

            


    

    


    
      	
              21.

            	
              Option Shares
      shall mean the number of shares of Common Stock subject to the
      option.

            


    

    


    
      	
              22.

            	
              Optionee shall
      mean the person to whom the option is granted as specified in the Grant
      Form.

            


    

    


    
      	
              23.

            	
              Parent shall
      mean any corporation (other than the Corporation) in an unbroken chain of
      corporations ending with the Corporation, provided each corporation in the
      unbroken chain (other than the Corporation) owns, at the time of the
      determination, stock possessing fifty percent (50%) or more of the total
      combined voting power of all classes of stock in one of the other
      corporations in such chain.

            


    

    


    
      
        
           


        

        
          28

          
            

          

        

        
           


        

      

    

    


    24.           Plan shall mean the
Corporation’s 2008 Stock Option/Stock Issuance Plan.

    


    
      	
              25.

            	
              Plan
      Administrator shall mean either the Board or the Committee of the
      Board acting in its capacity as administrator of the
  Plan.

            


    

    


    
      	
              26.

            	
              Purchase
      Agreement shall mean the stock purchase agreement in substantially
      the form of Exhibit B to the Grant
Form.

            


    

    


    
      	
              27.

            	
              Service shall
      mean the provision of services to the Corporation (or any Parent or
      Subsidiary) by a person in the capacity of an Employee, a non-employee
      member of the board of directors or a consultant or independent advisor,
      except to the extent otherwise specifically provided in the documents
      evidencing the option grant.

            


    

    


    
      	
              28.

            	
              Stock Exchange
      shall mean the American Stock Exchange or the New York Stock
      Exchange.

            


    

    


    
      	
              29.

            	
              Subsidiary
      shall mean any corporation (other than the Corporation) in an unbroken
      chain of corporations beginning with the Corporation, provided each
      corporation (other than the last corporation) in the unbroken chain owns,
      at the time of the determination, stock possessing fifty percent (50%) or
      more of the total combined voting power of all classes of stock in one of
      the other corporations in such
chain.

            


    

    


    
      	
              30.

            	
              Vesting
      Schedule shall mean the vesting schedule specified in the Grant
      Form pursuant to which the Optionee is to vest in the Option Shares in a
      series of installments over his or her period of
  Service.

            


    

    


    
      
        
           


        

        
          29

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
B

    


    DESERT
HAWK GOLD COMPANY

    STOCK
PURCHASE AGREEMENT

    


    AGREEMENT made this            
 day of                                            ,
20      
, by and between Desert Hawk Gold Corp., an Nevada corporation, and
_____________________,  Optionee under the Corporation’s 2008 Stock
Option/Stock Issuance Plan.

    


    All capitalized terms in this Agreement
shall have the meaning assigned to them in this Agreement or in the attached
Appendix.

    


    A.           EXERCISE OF
OPTION

    


    1.           Exercise.  Optionee
hereby purchases                                                  shares
of Common Stock (the “Purchased Shares”) pursuant to that certain option (the
“Option”) granted Optionee on _______________, 20___ (the “Grant Date”) to
purchase up to ______________ shares of Common Stock (the “Option Shares”)
under the Plan at the exercise price of $                
 per share (the “Exercise Price”).

    


    2.           Payment.  Concurrently
with the delivery of this Agreement to the Corporation, Optionee shall pay the
Exercise Price for the Purchased Shares in accordance with the provisions of the
Option Agreement and shall deliver whatever additional documents may be required
by the Option Agreement as a condition for exercise.

    


    3.           Shareholder
Rights.  Optionee (or any successor in interest) shall have all
the rights of a shareholder (including voting, dividend and liquidation rights)
with respect to the Purchased Shares, subject, however, to the transfer
restrictions of Sections B and C.

    


    
      	
              B.

            	
              SPECIAL TAX
      ELECTION

            


    

    


    In the event the Purchased Shares
include Option Shares which have not yet vested as of the date hereof, the
acquisition of the Purchased Shares may result in adverse tax consequences which
may be avoided or mitigated by filing an election under Code Section
83(b).  Such election must be filed within thirty (30) days after the
date of this Agreement.  OPTIONEE SHOULD CONSULT WITH HIS OR
HER TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE PURCHASED
SHARES AND THE ADVANTAGES AND DISADVANTAGES OF FILING THE CODE SECTION 83(b)
ELECTION.  OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE’S SOLE
RESPONSIBILITY, AND NOT THE CORPORATION’S, TO FILE A TIMELY ELECTION UNDER CODE
SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE CORPORATION OR ITS REPRESENTATIVES
TO MAKE THIS FILING ON HIS OR HER BEHALF.

    


    
      
        
           


        

        
          30

          
            

          

        

        
           


        

      

    

    


    C.          GENERAL
PROVISIONS

    


    1.           No Employment or Service
Contract.  Nothing in this Agreement or in the Plan shall
confer upon Optionee any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of
Optionee, which rights are hereby expressly reserved by each, to terminate
Optionee’s Service at any time for any reason, with or without
cause.

    


    2.           Notices.  Any
notice required to be given under this Agreement shall be in writing and shall
be deemed effective upon personal delivery or upon deposit in the U.S. mail,
registered or certified, postage prepaid and properly addressed to the party
entitled to such notice at the address indicated below such party’s signature
line on this Agreement or at such other address as such party may designate by
ten (10) days advance written notice under this paragraph to all other parties
to this Agreement.

    


    3.           No
Waiver.  No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.

    


    D.          MISCELLANEOUS
PROVISIONS

    


    1.           Optionee
Undertaking.  Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Optionee or the Purchased Shares
pursuant to the provisions of this Agreement.

    


    2.           Agreement is Entire
Contract.  This Agreement constitutes the entire contract
between the parties hereto with regard to the subject matter
hereof.  This Agreement is made pursuant to the provisions of the Plan
and shall in all respects be construed in conformity with the terms of the
Plan.

    


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

    


    4.           Successors and
Assigns.  The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and upon Optionee, Optionee’s permitted assigns and the legal representatives,
heirs and legatees of Optionee’s estate, whether or not any such person shall
have become a party to this Agreement and have agreed in writing to join herein
and be bound by the terms hereof

    


    
      
        
           


        

        
          31

          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, the parties have
executed this Agreement on the day and year first indicated above.

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	 
      	
                                                                      Desert
      Hawk Gold Corp.

                                                                    
	 
      	 
      	 
      
	 
      	

                                                                      By:  

                                                                    	
                                                                       

                                                                    	 
      
	 
      	

                                                                      Title:  

                                                                    	
                                                                       

                                                                    	 
      
	 
      	 
      	 
      
	 
      	
                                                                      Address: 
        

                                                                    	 
      
	 
      	
                                                                       

                                                                    	 
      
	 
      	 
      	 
      
	 
      	
                                                                      OPTIONEE

                                                                    
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                                                      (Signature)

                                                                    
	 	 	 
	 
      	 
      	 
      
	 
      	
                                                                      (Print
      Name)

                                                                    
	 
      	 
      	 
      
	 
      	
                                                                      Address: 
      

                                                                    	 
      
	 
      	 
      	 
      


                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      
                                                   

    
      
        
           


        

        
          32

          
            

          

        

        
           


        

      

    

    


    SPOUSAL
ACKNOWLEDGMENT

    


    The undersigned spouse of Optionee has
read and hereby approves the foregoing Stock Purchase Agreement.  In
consideration of the Corporation’s granting Optionee the right to acquire the
Purchased Shares in accordance with the terms of such Agreement, the undersigned
hereby agrees to be irrevocably bound by all the terms of such Agreement,
including (without limitation) the right of the Corporation (or its assigns) to
purchase any Purchased Shares in which Optionee is not vested at time of his or
her cessation of Service.

     

    
      
        
          
            
              
                
                  
                    
                      	 
      	 
      	 
      
	 
      	
                              OPTIONEE’S
      SPOUSE

                            
	 
      	 
      	 
      
	 
      	
                              Address: 
      

                            	 
      
	 	 	 


                    

                  

                

              

            

          

        

      

    

    


    APPENDIX

    


    The following definitions shall be in
effect under the Agreement:

    


    
      	
              1.

            	
              Agreement shall
      mean this Stock Purchase Agreement.

            


    

    


    
      	
              2. 

            	
              Board shall
      mean the Corporation’s Board of
Directors.

            


    

    


    
      	
              3. 

            	
              Code shall mean
      the Internal Revenue Code of 1986, as
amended.

            


    

    


    
      	
              4.

            	
              Committee shall
      mean a committee of two (2) or more non-employee Board members appointed
      by the Board to exercise one or more administrative functions under the
      Plan.

            


    

    


    
      	
              5. 

            	
              Common Stock
      shall mean the Corporation’s common
stock.

            


    

    


    
      	
              6.

            	
              Corporate
      Transaction shall mean either of the following shareholder approved
      transactions to which the Corporation is a
  party:

            


    

    


    (a)           a
merger or consolidation in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation’s outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction, or

    


    (b)           the
sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the
Corporation.

    


    
      	
              7. 

            	
              Corporation
      shall mean Desert Hawk Gold Corp., a Nevada
  corporation.

            


    

    


    
      
        
           


        

        
          33

          
            

          

        

        
           


        

      

    

    


    
      	
              8. 

            	
              Exercise Price
      shall have the meaning assigned to such term in Section
    A.1.

            


    

    


    
      	
              9.

            	
              Fair Market
      Value per share of Common Stock on any relevant date shall be
      determined in accordance with the following
  provisions:

            


    

    


    (a)    If
the Common Stock is at the time traded on the NASDAQ National Market, then the
Fair Market Value shall be the closing selling price per share of Common Stock
on the date in question, as such price is reported by the National Association
of Securities Dealers on the NASDAQ National Market or any successor
system.  If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.

    


    (b)           If
the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock on the
date in question on the Stock Exchange determined by the Plan Administrator to
be the primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange.  If there is
no closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.

    


    (c)           If
the Common Stock is at the time neither listed on any Stock Exchange nor traded
on the NASDAQ National Market, then the Fair Market Value shall be determined by
the Plan Administrator after taking into account such factors as the Plan
Administrator shall deem appropriate.

    


    
      	
              10.

            	
              Grant Date
      shall have the meaning assigned to such term in Section
    A.1.

            


    

    


    
      	
              11.

            	
              Grant Form
      shall mean the Grant of Stock Option pursuant to which Optionee has been
      informed of the basic terms of the
Option.

            


    

    


    
      	
              12.

            	
              Incentive
      Option shall mean an option which satisfies the requirements of
      Code Section 422.

            


    

    


    
      	
              13. 

            	
              1933 Act shall
      mean the Securities Act of 1933, as
amended.

            


    

    


    
      	
              14. 

            	
              1934 Act shall
      mean the Securities Exchange Act of 1934, as
  amended.

            


    

    


    
      	
              15.

            	
              Non-Statutory
      Option shall mean an option not intended to satisfy the
      requirements of Code Section 422.

            


    

    


    
      
        
           


        

        
          34

          
            

          

        

        
           


        

      

    

    


    
      	
              16. 

            	
              Option shall
      have the meaning assigned to such term in Section
  A.1.

            


    

    


    
      	
              17.

            	
              Option
      Agreement shall mean all agreements and other documents evidencing
      the Option.

            


    

    


    
      	
              18. 

            	
              Optionee shall
      mean the person to whom the Option is granted under the
    Plan.

            


    

    


    
      	
              19.

            	
              Parent shall
      mean any corporation (other than the Corporation) in an unbroken chain of
      corporations ending with the Corporation, provided each corporation in the
      unbroken chain (other than the Corporation) owns, at the time of the
      determination, stock possessing fifty percent (50%) or more of the total
      combined voting power of all classes of stock in one of the other
      corporations in such chain.

            


    

    


    
      	
              20. 

            	
              Plan shall mean
      the Corporation’s 2002 Stock Option/Stock Issuance
  Plan.

            


    

    


    
      	
              21.

            	
              Plan
      Administrator shall mean either the Board or the Committee acting
      in its capacity as administrator of the
Plan.

            


    

    


    
      	
              22. 

            	
              Purchased
      Shares shall have the meaning assigned to such term in Section
      A.1.

            


    

    


    
      	
              23.

            	
              Recapitalization
      shall mean any stock split, stock dividend, recapitalization, combination
      of shares, exchange of shares or other change affecting the Corporation’s
      outstanding Common Stock as a class without the Corporation’s receipt of
      consideration.

            


    

    


    
      	
              24. 

            	
              SEC shall mean
      the Securities and Exchange
Commission.

            


    

    


    
      	
              25.

            	
              Service shall
      mean the provision of services to the Corporation (or any Parent or
      Subsidiary) by a person in the capacity of an Employee, a non-employee
      member of the board of directors or a consultant or independent advisor,
      except to the extent otherwise specifically provided in the documents
      evidencing the option grant.

            


    

    


    
      	
              26.

            	
              Subsidiary
      shall mean any corporation (other than the Corporation) in an unbroken
      chain of corporations beginning with the Corporation, provided each
      corporation (other than the last corporation) in the unbroken chain owns,
      at the time of the determination, stock possessing fifty percent (50%) or
      more of the total combined voting power of all classes of stock in one of
      the other corporations in such
chain.

            


    

    


    
      	
              27.

            	
              Vesting
      Schedule shall mean the vesting schedule specified in the Grant
      Form pursuant to which the Optionee is to vest in the Option Shares in a
      series of installments over his or her period of
  Service.

            


    

    


    
      
        
           


        

        
          35

          
            

          

        

        
           


        

      

    

    


    THESE SECURITIES HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION BECAUSE
THEY ARE BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER SECTION 4(2) AND/OR 4(6)
OF THE SECURITIES ACT OF 1933.

    


    THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION.  NEITHER THE
SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER AUTHORITY HAS PASSED UPON OR
ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE
INFORMATION PROVIDED TO THE INVESTORS.  ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.  INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY, AND THE RISKS, MERITS AND TERMS OF THIS OFFERING IN
MAKING AN INVESTMENT DECISION.

    


    DESERT
HAWK GOLD CORP.

    STOCK
ISSUANCE FORM

    


    This
Stock Issuance Form is furnished to the designated participant in the stock
issuance program of the 2008 Stock Option/Stock Issuance Plan of Desert Hawk
Gold Corp., an Nevada corporation (the “Corporation”):

    


    Participant:                                                                                                                    

    


    Issuance Date:                                                                                                                

    


    Number of Shares:                                                                                                         

    


    Consideration for
Shares:                                                                                            

    


    Vesting of Shares:                                                                                                          

    


    The
Participant understands and agrees that the stock is issued subject to and in
accordance with the terms of the Desert Hawk Gold Corp. 2008 Stock Option/Stock
Issuance Plan (the “Plan”).  The participant further agrees to be
bound by the terms of the Plan, a copy of which is attached hereto as
Exhibit A.

    


    All
capitalized terms in this Stock Issuance Form shall have the meaning assigned to
them in this form or in the attached Plan.

    


    
      
        
           


        

        
          36

          
            

          

        

        
           


        

      

    

    


    Assuming
that you are in agreement with the terms of this Stock Issuance Form, please
sign your name in the space indicated below.

    


    
      
        	 
      	
                Deseret
      Hawk Gold Corp.

              
	 
      	 
      	 
      
	 
      	
                By: 
      

              	 
      
	 
      	 
      	
                Robert
      E. Jorgensen, CEO

              


      

    

    


    AGREED:

    


    ____________________________________

    Participant

    


    Address:                                                                

    


    Exhibit
A         2008 Stock Option/Stock
Issuance Plan

    


    
      
        
           


        

        
          37