Document:

EXHIBIT
      10.1

    

    1999
      STOCK OPTION PLAN

    (as
      amended through September 13, 2006)

    

    1. Purpose.
      The
      purpose of the 1999 Stock Option Plan (the “Plan”)
      of
      Wits Basin Precious Minerals Inc., (the “Company”)
      is to
      increase shareholder value and to advance the interests of the Company by
      attracting, retaining and motivating employees and certain key consultants
      of
      the Company by furnishing opportunities to purchase or receive shares of Common
      Stock, $.01 par value, of the Company (“Common
      Stock”)
      pursuant to the Plan.

    

    2. Administration.
      The
      Plan shall be administered by the Board of Directors or by a stock option
      committee (the “Committee”)
      of the
      Board of Directors of the Company. The Committee shall consist of not less
      than
      two directors of the Company and shall be appointed from time to time by the
      Board of Directors of the Company. If the Company stock becomes the subject
      of a
      public offering, the Committee shall then consist of not less than two directors
      who shall be appointed from time to time by the Board, each of which such
      appointees shall be a “disinterested person” within the meaning of Rule 16b-3 of
      the Securities Exchange Act of 1934, and the regulations promulgated thereunder
      (the “1934
      Act”).
      The
      Board of Directors of the Company may from time to time appoint members of
      the
      Committee in substitution for, or in addition to, members previously appointed,
      and may fill vacancies, however caused, in the Committee. The Committee shall
      select one of its members as its chairman and shall hold its meetings at such
      times and places, as it shall deem advisable. A majority of the Committee’s
      members shall constitute a quorum. All action of the Committee shall be taken
      by
      the majority of its members. Any action may be taken by a written instrument
      signed by majority of the members and actions so taken shall be fully effective
      as if it had been made by a majority vote at a meeting duly called and held.
      The
      Committee may appoint a secretary, shall keep minutes of its meetings and shall
      make such rules and regulations for the conduct of its business as it shall
      deem
      advisable. The Committee shall have complete authority to award Incentives
      under
      the Plan, to interpret the Plan, and to make any other determination which
      it
      believes necessary and advisable for the proper administration of the Plan.
      The
      Committee’s decisions and matters relating to the Plan shall be final and
      conclusive on the Company and its participants.

    

    3. Eligible
      Participants.
      Employees of or consultants to the Company or its subsidiaries or affiliates
      (including officers and directors, but excluding directors who are not also
      employees of or consultants to the Company or its subsidiaries or affiliates),
      shall become eligible to receive Incentives under the Plan when designated
      by
      the Committee. Participants may be designated individually or by groups or
      categories (for example, by pay grade), as the Committee deems appropriate.
      Participation by officers of the Company or its subsidiaries or affiliates
      and
      any performance objectives relating to such officers must be approved by the
      Committee. Participation by others and any performance objectives relating
      to
      others may be approved by groups or categories (for example, by pay grade)
      and
      authority to designate participants who are not officers and to set or modify
      such targets may be delegated.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. Types
      of Incentives.
      Incentives under the Plan may be granted in any one or a combination of the
      following forms: (a) incentive stock options and non-statutory stock options
      (Section 6); (b) stock appreciation rights (“SARs”)
      (Section 7); (c) stock awards (Section 8); (d) restricted stock (Section 8);
      and
      (e) performance shares (Section 9).

    

    5. Shares
      Subject to the Plan.

    

    5.1. Number
      of Shares.
      Subject
      to adjustment as provided in Section 10.6, the number of shares of Common Stock
      which may be issued under the Plan shall not exceed Six Million Two Hundred
      Fifty Thousand (6,250,000) shares of Common Stock.

    

    5.2. Cancellation.
      To the
      extent that cash in lieu of shares of Common Stock is delivered upon the
      exercise of a SAR pursuant to Section 7.4, the Company shall be deemed, for
      purposes of applying the limitation on the number of shares, to have issued
      the
      greater of the number of shares of Common Stock which it was entitled to issue
      upon such exercise or on the exercise of any related option. In the event that
      a
      stock option or SAR granted hereunder expires or is terminated or canceled
      unexercised as to any shares of Common Stock, such shares may again be issued
      under the Plan either pursuant to stock options, SARs or otherwise. In the
      event
      that shares of Common Stock are issued as restricted stock or pursuant to a
      stock award and thereafter are forfeited or reacquired by the Company pursuant
      to rights reserved upon issuance thereof, such forfeited and reacquired shares
      may again be issued under the Plan, either as restricted stock, pursuant to
      stock awards or otherwise. The Committee may also determine to cancel, and
      agree
      to the cancellation of, stock options in order to make a participant eligible
      for the grant of a stock option at a lower price than the option to be
      canceled.

    

    5.3. Type
      of Common Stock.
      Common
      Stock issued under the Plan in connection with stock options, SARs, performance
      shares, restricted stock or stock awards, may be authorized and unissued
      shares.

    

    6. Stock
      Options.
      A stock
      option is a right to purchase shares of Common Stock from the Company. Each
      stock option granted by the Committee under this Plan shall be subject to the
      following terms and conditions:

    

    6.1. Price.
      The
      option price per share shall be determined by the Committee.

    

    6.2. Number.
      The
      number of shares of Common Stock subject to the option shall be determined
      by
      the Committee, subject to adjustment as provided in Section 10.6. The number
      of
      shares of Common Stock subject to a stock option shall be reduced in the same
      proportion that the holder thereof exercises a SAR if any SAR is granted in
      conjunction with or related to the stock option.

    

    6.3. Duration
      and Time for Exercise.
      Subject
      to earlier termination as provided in Section 10.4, the term of each stock
      option shall be determined by the Committee but shall not exceed ten years
      and
      one day from the date of grant. Each stock option shall become exercisable
      at
      such time or times during its term as shall be determined by the Committee
      at
      the time of grant. No stock option may be exercised during the first six months
      of its term. Except as provided by the preceding sentence, the Committee may
      accelerate the exercisability of any stock option. Subject to the foregoing
      and
      with the approval of the Committee, all or any part of the shares of Common
      Stock with respect to which the right to purchase has accrued may be purchased
      by the Company at the time of such accrual or at any time or times thereafter
      during the term of the option.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.4. Manner
      of Exercise.
      A stock
      option may be exercised, in whole or in part, by giving written notice to the
      Company, specifying the number of shares of Common Stock to be purchased and
      accompanied by the full purchase price for such shares. The option price shall
      be payable in United States dollars upon exercise of the option and may be
      paid
      by cash; uncertified or certified check; bank draft; by delivery of Mature
      Shares of Common Stock (held at least six months) in payment of all or any
      part
      of the option price, which shares shall be valued for this purpose at the Fair
      Market Value on the date such option is exercised; by instructing the Company
      to
      withhold from the shares of Common Stock issuable upon exercise of the stock
      option shares of Common Stock in payment of all or any part of the option price,
      which shares shall be valued for this purpose at the Fair Market Value or in
      such other manner as may be authorized from time to time by the Committee.
      Prior
      to the issuance of shares of Common Stock upon the exercise of a stock option,
      a
      participant shall have no rights as a shareholder.

    

    6.5. Incentive
      Stock Options.
      Notwithstanding anything in the Plan to the contrary, the following additional
      provisions shall apply to the grant of stock options which are intended to
      qualify as Incentive Stock Options (as such term is defined in Section 422
      of
      the Internal Revenue Code of 1986, as amended):

    

    (a) The
      aggregate Fair Market Value (determined as of the time the option is granted)
      of
      the shares of Common Stock with respect to which Incentive Stock Options are
      exercisable for the first time by any participant during any calendar year
      (under all of the Company’s plans) shall not exceed $100,000.

    

    (b) Any
      Incentive Stock Option certificate authorized under the Plan shall contain
      such
      other provisions as the Committee shall deem advisable, but shall in all events
      be consistent with and contain all provisions required in order to qualify
      the
      options as Incentive Stock Options.

    

    (c) All
      Incentive Stock Options must be granted within ten years from the earlier of
      the
      date on which this Plan was adopted by Board of Directors or the date this
      Plan
      was approved by the shareholders.

    

    (d) Unless
      sooner exercised, all Incentive Stock Options shall expire no later than 10
      years after the date of grant.

    

    (e) The
      option price for Incentive Stock Options shall be not less than the Fair Market
      Value of the Common Stock subject to the option on the date of
      grant.

    

    (f) No
      Incentive Stock Options shall be granted to any participant who, at the time
      such option is granted, would own (within the meaning of Section 422 of the
      Code) stock possessing more than 10% of the total combined voting power of
      all
      classes of stock of the employer corporation or of its parent or subsidiary
      corporation.

    

    7. Stock
      Appreciation Rights.
      A SAR
      is a right to receive, without payment to the Company, a number of shares of
      Common Stock, cash or any combination thereof, the amount of which is determined
      pursuant to the formula set forth in Section 7.4. A SAR may be granted (a)
      with
      respect to any stock option granted under this Plan, either concurrently with
      the grant of such stock option or at such later time as determined by the
      Committee (as to all or any portion of the shares of Common Stock subject to
      the
      stock option), or (b) alone, without reference to any related stock option.
      Each
      SAR granted by the Committee under this Plan shall be subject to the following
      terms and conditions:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.1. Number.
      Each
      SAR granted to any participant shall relate to such number of shares of Common
      Stock as shall be determined by the Committee, subject to adjustment as provided
      in Section 10.6. In the case of a SAR granted with respect to a stock option,
      the number of shares of Common Stock to which the SAR pertains shall be reduced
      in the same proportion that the holder of the option exercises the related
      stock
      option.

    

    7.2. Duration.
      Subject
      to earlier termination as provided in Section 10.4, the term of each SAR shall
      be determined by the Committee but shall not exceed ten years and one day from
      the date of grant. Unless otherwise provided by the Committee, each SAR shall
      become exercisable at such time or times, to such extent and upon such
      conditions as the stock option, if any, to which it relates is exercisable.
      No
      SAR may be exercised during the first twelve months of its term. Except as
      provided in the preceding sentence, the Committee may in its discretion
      accelerate the exercisability of any SAR.

    

    7.3. Exercise.
      A SAR
      may be exercised, in whole or in part, by giving written notice to the Company,
      specifying the number of SARs which the holder wishes to exercise. Upon receipt
      of such written notice, the Company shall, within 90 days thereafter, deliver
      to
      the exercising holder certificates for the shares of Common Stock or cash or
      both, as determined by the Committee, to which the holder is entitled pursuant
      to Section 7.4.

    

    7.4. Payment.
      Subject
      to the right of the Committee to deliver cash in lieu of shares of Common Stock
      (which, as it pertains to officers and directors of the Company, shall comply
      with all requirements of the 1934 Act), the number of shares of Common Stock
      which shall be issuable upon the exercise of a SAR shall be determined by
      dividing:

    

    (a) the
      number of shares of Common Stock as to which the SAR is exercised multiplied
      by
      the amount of the appreciation in such shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the shares
      of Common Stock subject to the SAR on the exercise date exceeds (1) in the
      case
      of a SAR related to a stock option, the purchase price of the shares of Common
      Stock under the stock option or (2) in the case of a SAR granted alone, without
      reference to a related stock option, an amount which shall be determined by
      the
      Committee at the time of grant, subject to adjustment under Section 10.6);
      by

    

    (b) the
      Fair
      Market Value of a share of Common Stock on the exercise date.

    

    In
      lieu
      of issuing shares of Common Stock upon the exercise of a SAR, the Committee
      may
      elect to pay the holder of the SAR cash equal to the Fair Market Value on the
      exercise date of any or all of the shares which would otherwise be issuable.
      No
      fractional shares of Common Stock shall be issued upon the exercise of a SAR;
      instead, the holder of the SAR shall be entitled to receive a cash adjustment
      equal to the same fraction of the Fair Market Value of a share of Common Stock
      on the exercise date or to purchase the portion necessary to make a whole share
      at its Fair Market Value on the date of exercise.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8. Stock
      Awards and Restricted Stock.
      A stock
      award consists of the transfer by the Company to a participant of shares of
      Common Stock, without other payment therefor, as additional compensation for
      services to the Company. A share of restricted stock consists of shares of
      Common Stock which are sold or transferred by the Company to a participant
      at a
      price determined by the Committee (which price shall be at least equal to the
      minimum price required by applicable law for the issuance of a share of Common
      Stock) and subject to restrictions on their sale or other transfer by the
      participant. The transfer of Common Stock pursuant to stock awards and the
      transfer and sale of restricted stock shall be subject to the following terms
      and conditions:

    

    8.1. Number
      of Shares.
      The
      number of shares to be transferred or sold by the Company to a participant
      pursuant to a stock award or as restricted stock shall be determined by the
      Committee.

    

    8.2. Sale
      Price.
      The
      Committee shall determine the price, if any, at which shares of restricted
      stock
      shall be sold to a participant, which may vary from time to time and among
      participants and which may be below the Fair Market Value of such shares of
      Common Stock at the date of sale.

    

    8.3. Restrictions.
      All
      shares of restricted stock transferred or sold hereunder shall be subject to
      such restrictions as the Committee may determine, including, without limitation
      any or all of the following:

    

    (a) a
      prohibition against the sale, transfer, pledge or other encumbrance of the
      shares of restricted stock, such prohibition to lapse at such time or times
      as
      the Committee shall determine (whether in annual or more frequent installments,
      at the time of the death, disability or retirement of the holder of such shares,
      or otherwise);

    

    (b) a
      requirement that the holder of shares of restricted stock forfeit, or (in the
      case of shares sold to a participant) resell back to the Company at his or
      her
      cost, all or a part of such shares in the event of termination of his or her
      employment or consulting engagement during any period in which such shares
      are
      subject to restrictions 

    

    (c) such
      other conditions or restrictions as the Committee may deem
      advisable.

    

    8.4. Escrow.
      In
      order to enforce the restrictions imposed by the Committee pursuant to Section
      8.3, the participant receiving restricted stock shall enter into an agreement
      with the Company setting forth the conditions of the grant. Shares of restricted
      stock shall be registered in the name of the participant and deposited, together
      with a stock power endorsed in blank, with the Company. Each such certificate
      shall bear a legend in substantially the following form:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    The
      shares represented by this certificate have not been registered under the
      Securities Act of 1933 or the securities law of any state. The shares have
      been
      acquired for investment and without a view to their distribution and may not
      be
      sold or otherwise disposed of in the absence of any effective registration
      statement for the shares under the Securities Act of 1933 or unless an exemption
      from registration is available under the securities laws.

    

    The
      transferability of this certificate and the shares of Common Stock represented
      by it are subject to the terms and conditions (including conditions of
      forfeiture) contained in the 1999 Stock Option Plan of Wits Basin Precious
      Minerals Inc. (the “Company”), and an agreement entered into between the
      registered owner and the Company. A copy of the Plan and the agreement is on
      file in the office of the secretary of the Company.

    

    8.5. End
      of
      Restrictions.
      Subject
      to Section 10.5, at the end of any time period during which the shares of
      restricted stock are subject to forfeiture and restrictions on transfer, such
      shares will be delivered free of all restrictions to the participant or to
      the
      participant’s legal representative, beneficiary or heir.

    

    8.6. Shareholder.
      Subject
      to the terms and conditions of the Plan, each participant receiving restricted
      stock shall have all the rights of a shareholder with respect to shares of
      stock
      during any period in which such shares are subject to forfeiture and
      restrictions on transfer, including without limitation, the right to vote such
      shares. Dividends paid in cash or property other than Common Stock with respect
      to shares of restricted stock shall be paid to the participant
      currently.

    

    9. Performance
      Shares.
      A
      performance share consists of an award which shall be paid in shares of Common
      Stock, as described below. The grant of performance share shall be subject
      to
      such terms and conditions as the Committee deems appropriate, including the
      following:

    

    9.1. Performance
      Objectives.
      Each
      performance share will be subject to performance objectives for the Company
      or
      one of its operating units to be achieved by the end of a specified period.
      The
      number of performance shares granted shall be determined by the Committee and
      may be subject to such terms and conditions, as the Committee shall determine.
      If the performance objectives are achieved, each participant will be paid in
      shares of Common Stock or cash. If such objectives are not met, each grant
      of
      performance shares may provide for lesser payments in accordance with formulas
      established in the award.

    

    9.2. Not
      Shareholder.
      The
      grant of performance shares to a participant shall not create any rights in
      such
      participant as a shareholder of the Company, until the payment of shares of
      Common Stock with respect to an award.

    

    9.3. No
      Adjustments.
      No
      adjustment shall be made in performance shares granted on account of cash
      dividends which may be paid or other rights which may be issued to the holders
      of Common Stock prior to the end of any period for which performance objectives
      were established.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.4. Expiration
      of Performance Share.
      If any
      participant’s employment or consulting engagement with the Company is terminated
      for any reason other than normal retirement, death or disability prior to the
      achievement of the participant’s stated performance objectives, all the
      participant’s rights on the performance shares shall expire and terminate unless
      otherwise determined by the Committee. In the event of termination of employment
      by reason of death, disability, or normal retirement, the Committee, in its
      own
      discretion may determine what portions, if any, of the performance shares should
      be paid to the participant.

    

    10. General.

    

    10.1. Effective
      Date.
      The
      Plan will become effective on June
      1, 1999.

    

    10.2. Duration.
      The
      Plan shall remain in effect until all Incentives granted under the Plan have
      either been satisfied by the issuance of shares of Common Stock or the payment
      of cash or been terminated under the terms of the Plan and all restrictions
      imposed on shares of Common Stock in connection with their issuance under the
      Plan have lapsed. No Incentives may be granted under the Plan after the tenth
      anniversary of the date the Plan is approved by the shareholders of the
      Company.

    

    10.3. Non-transferability
      of Incentives.
      No
      stock option, SAR, restricted stock or performance award may be transferred,
      pledged or assigned by the holder thereof (except, in the event of the holder’s
      death, by will or the laws of descent and distribution to the limited extent
      provided in the Plan or in the Incentive) or pursuant to a qualified domestic
      relations order as defined by the Code or Title I of the Employee Retirement
      Income Security Act, or the rules thereunder, and the Company shall not be
      required to recognize any attempted assignment of such rights by any
      participant. Notwithstanding the preceding sentence, stock options may be
      transferred by the holder thereof to family members, trusts or charities. During
      a participant’s lifetime, an Incentive may be exercised only by him or her, by
      his or her guardian or legal representative or, in the case of stock options,
      by
      the transferees permitted by the preceding sentence.

    

    10.4. Effect
      of Termination of Employment or Death.
      In the
      event that a participant ceases to be an employee of or consultant to the
      Company for any reason, including death, any Incentives may be exercised or
      shall expire at such times as may be determined by the Committee.

    

    10.5. Additional
      Condition.
      Notwithstanding anything in this Plan to the contrary: (a) the Company may,
      if
      it shall determine it necessary or desirable for any reason, at the time of
      award of any Incentive or the issuance of any shares of Common Stock pursuant
      to
      any Incentive, require the recipient of the Incentive, as a condition to the
      receipt thereof or to the receipt of shares of Common Stock issued pursuant
      thereto, to deliver to the Company a written representation of present intention
      to acquire the Incentive or the shares of Common Stock issued pursuant thereto
      for his own account for investment and not for distribution; and (b) if at
      any
      time the Company further determines, in its sole discretion, that the listing,
      registration or qualification (or any updating of any such document) of any
      Incentive or the shares of Common Stock issuable pursuant thereto is necessary
      on any securities exchange or under any federal or state securities or blue
      sky
      law, or that the consent or approval of any governmental regulatory body is
      necessary or desirable as a condition of, or in connection with the award of
      any
      Incentive, the issuance of shares of Common Stock pursuant thereto, or the
      removal of any restrictions imposed on such shares, such Incentive shall not
      be
      awarded or such shares of Common Stock shall not be issued or such restrictions
      shall not be removed, as the case may be, in whole or in part, unless such
      listing, registration, qualification, consent or approval shall have been
      effected or obtained free of any conditions not acceptable to the
      Company.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.6. Adjustment.
      In the
      event of any merger, consolidation or reorganization of the Company with any
      other corporation or corporations, there shall be substituted for each of the
      shares of Common Stock then subject to the Plan, including shares subject to
      restrictions, options, or achievement of performance share objectives, the
      number and kind of shares of stock or other securities to which the holders
      of
      the shares of Common Stock will be entitled pursuant to the transaction. In
      the
      event of any recapitalization, stock dividend, stock split, combination of
      shares or other change in the Common Stock, the number of shares of Common Stock
      then subject to the Plan, including shares subject to restrictions, options
      or
      achievements of performance shares, shall be adjusted in proportion to the
      change in outstanding shares of Common Stock. In the event of any such
      adjustments, the purchase price of any option, the performance objectives of
      any
      Incentive, and the shares of Common Stock issuable pursuant to any Incentive
      shall be adjusted as and to the extent appropriate, in the discretion of the
      Committee, to provide participants with the same relative rights before and
      after such adjustment.

    

    10.7. Incentive
      Plans and Agreements.
      Except
      in the case of stock awards or cash awards, the terms of each Incentive shall
      be
      stated in a plan or agreement approved by the Committee. The Committee may
      also
      determine to enter into agreements with holders of options to reclassify or
      convert certain outstanding options, within the terms of the Plan, as Incentive
      Stock Options or as non-statutory stock options and in order to eliminate SARs
      with respect to all or part of such options and any other previously issued
      options.

    

    10.8. Withholding.

    

    (a) The
      Company shall have the right to withhold from any payments made under the Plan
      or to collect as a condition of payment, any taxes required by law to be
      withheld. At any time when a participant is required to pay to the Company
      an
      amount required to be withheld under applicable income tax laws in connection
      with a distribution of Common Stock or upon exercise of an option or SAR, the
      participant may satisfy this obligation in whole or in part by electing (the
      “Election”)
      to
      have the Company withhold from the distribution shares of Common Stock having
      a
      value up to the amount required to be withheld. The value of the shares to
      be
      withheld shall be based on the Fair Market Value of the Common Stock on the
      date
      that the amount of tax to be withheld shall be determined (“Tax
      Date”).

    

    (b) Each
      Election must be made prior to the Tax Date. The Committee may disapprove of
      any
      Election, may suspend or terminate the right to make Elections, or may provide
      with respect to any Incentive that the right to make Elections shall not apply
      to such Incentive. An Election is irrevocable.

    

    (c) If
      a
      participant is an officer or director of the Company within the meaning of
      Section 16 of the 1934 Act, then an Election must comply with all of the
      requirements of the 1934 Act.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.9. No
      Continued Employment, Engagement or Right to Corporate Assets.
      No
      participant under the Plan shall have any right, because of his or her
      participation, to continue in the employ of, or to continue his or her
      consulting engagement for, the Company for any period of time or to any right
      to
      continue his or her present or any other rate of compensation. Nothing contained
      in the Plan shall be construed as giving an employee, a consultant, such
      person’s beneficiaries or any other person any equity or interests of any kind
      in the assets of the Company or creating a trust of any kind or a fiduciary
      relationship of any kind between the Company and any such person.

    

    10.10. Deferral
      Permitted.
      Payment
      of cash or distribution of any shares of Common Stock to which a participant
      is
      entitled under any Incentive shall be made as provided in the Incentive. Payment
      may be deferred at the option of the participant if provided in the
      Incentive.

    

    10.11. Amendment
      of the Plan.
      The
      Board may amend or discontinue the Plan at any time. However, no such amendment
      or discontinuance shall, subject to adjustment under Section 10.6, (a) change
      or
      impair, without the consent of the recipient, an Incentive previously granted,
      (b) increase the maximum number of shares of Common Stock which may be issued
      to
      all participants under the Plan, (c) change or expand the types of Incentives
      that may be granted under the Plan, (d) change the class of persons eligible
      to
      receive Incentives under the Plan, or (e) materially increase the benefits
      accruing to participants under the Plan.

    

    10.12 Immediate
      Acceleration of Incentives.
      Notwithstanding any provision in this Plan or in any Incentive to the contrary,
      (a) the restriction on all shares of restricted stock award shall lapse
      immediately, (b) all outstanding options and SARs will become exercisable
      immediately, and (c) all performance shares shall be deemed to be met and
      payment made immediately, if any of the following events occur unless otherwise
      determined by the Board of Directors and a majority of the Continuing Directors
      (as defined below):

    

    (1) any
      person or group of persons becomes the beneficial owner of 30% or more of any
      equity security of the Company entitled to vote for the election of directors;
      or

    

    (2) a
      majority of the members of the Board of Directors of the Company is replaced
      within the period of less than two years by directors not nominated and approved
      by the Board of Directors; or

    

    (3) the
      shareholders of the Company approve the sale or other disposition of all or
      substantially all of the Company’s assets (including a plan of liquidation);
      or

    

    (4) the
      shareholders of the Company approve the reorganization, merger or consolidation
      of the Company or a statutory exchange of outstanding voting securities of
      the
      Company, unless, immediately following such reorganization, merger,
      consolidation or exchange, all or substantially all of the persons who were
      the
      beneficial owners, respectively, of voting securities and Common Stock of the
      Company immediately prior to such reorganization, merger, consolidation or
      exchange beneficially own, directly or indirectly, more than 50% of,
      respectively, the combined voting power of the then outstanding voting
      securities entitled to vote generally in the election of directors and the
      then
      outstanding shares of common stock, as the case may be, of the corporation
      resulting from such reorganization, merger, consolidation or exchange in
      substantially the same proportions as their ownership, immediately prior to
      such
      reorganization, merger, consolidation or exchange, of the voting securities
      and
      Common Stock of the Company, as the case may be.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    For
      purposes of this Section 10.12, beneficial ownership by a person or group of
      persons shall be determined in accordance with Regulation 13D (or any similar
      successor regulation) promulgated by the Securities and Exchange Commission
      pursuant to the 1934 Act. Beneficial ownership of more than 30% of an equity
      security may be established by any reasonable method, but shall be presumed
      conclusively as to any person who files a Schedule 13D report with the
      Securities and Exchange Commission reporting such ownership. If the restrictions
      and forfeitability periods are eliminated by reason of provision (1), the
      limitations of this Plan shall not become applicable again should the person
      cease to own 30% or more of any equity security of the Company.

    

    For
      purposes of this Section 10.12, “Continuing
      Directors”
are
      directors (a) who were in office prior to the time of any of provisions (1),
      (2)
      or (3) occurred or any person publicly announced an intention to acquire 20%
      or
      more of any equity security of the Company, (b) directors in office for a period
      of more than two years, and (c) directors nominated and approved by the
      Continuing Directors.

    

    10.13. Dilution
      and Other Adjustments.
      In the
      event of any change in the outstanding Common Stock of the Company by reason
      of
      any stock split, stock dividend, split-up, split-off, spin-off,
      recapitalization, merger, consolidation, rights offering, reorganization,
      combination or exchange of shares, a sale by the Company of substantially all
      of
      its assets, any distribution to shareholders other than a normal cash dividend,
      or other extraordinary or unusual event, the number or kind of shares subject
      to
      an Incentive, and the option price per share under all outstanding options
      shall
      be automatically adjusted so that the proportionate interest of the participant
      shall be maintained as before the occurrence of such event; such adjustment
      in
      outstanding Incentives shall be made without change in any option exercise
      price
      applicable to the unexercised portion of such Incentive and with a corresponding
      adjustment in the option exercise price per share, if any, and such adjustment
      shall be conclusive and binding for all purposes of the Plan.

    

    10.14. Definition
      of Fair Market Value.
      For
      purposes of this Plan, the “Fair
      Market Value”
of
      a
      share of Common Stock at a specified date shall, unless otherwise expressly
      provided in this Plan, be the amount which the Committee determines in good
      faith to be 100% of the fair market value of such a share as of the date in
      question; provided, however, that notwithstanding the foregoing, if such shares
      are listed on a U.S. securities exchange or are quoted on the Nasdaq National
      Market System or Nasdaq SmallCap Stock Market (“Nasdaq”),
      then
      Fair Market Value shall be determined by reference to the last sale price of
      a
      share of Common Stock on such U.S. securities exchange or Nasdaq on the
      applicable date. If such U.S. securities exchange or Nasdaq is closed for
      trading on such date, or if the Common Stock does not trade on such date, then
      the last sale price used shall be the one on the date the Common Stock last
      traded on such U.S. securities exchange or Nasdaq.EXHIBIT
      10.2

    

    

    September
      14, 2006

    
 

    Mr.
      Clyde
      Smith

    #106-1680
      56th
      Street

    Delta,
      B.C. V4L 2L6

    Canada

    

    

    Dear
      Mr.
      Smith:

    

    On
      behalf
      of Wits Basin Precious Minerals Inc., (the “Company”),
      I am
      pleased to extend an offer of employment to you in the position of
      President.

     

    This
      letter (the “Letter”)
      shall
      confirm our understanding as to the terms of your employment with the
      Company.

     

    1. This
      Letter is being provided to you as an offer to begin work on September 14,
      2006,
      with an effective date being your date of acceptance written below (the
“Effective
      Date”),
      limited to the provisions of Section 8, as an employee of the Company and
      receive an annual base salary of U.S. $120,000, payable to you at U.S. $10,000
      per month on the last day of each month, for professional services as a U.S.
      citizen in accordance with the Company’s regular payroll practices. You will be
      eligible for an annual bonus, based on personal performance, as determined
      by
      the Company’s Board (the “Board”).
      The
      personal performance criteria are to be defined by the Board on an annual
      basis.

    

    2. You
      shall
      be entitled to receive stock options to purchase 1,500,000 shares of the
      Company’s Common Stock at a per share price equal to the closing sale price of
      the Company’s Common Stock on the OTC Bulletin Board on the Effective Date (the
“Standard
      Options”)
      (subject to adjustment for splits and/or other capital restructuring), such
      Standard Options to vest ratably, at 300,000 shares per year, over a five year
      period commencing on the Effective Date.

    

    You
      shall
      also be entitled to receive stock options to purchase an additional 500,000
      shares (the “Performance
      Based Stock Options”
and
      together with the Standard 

    Options,
      the “Options”)
      of the
      Company’s Common Stock at a per share price equal to the closing sale price of
      the Company’s Common Stock on the OTC Bulletin Board, on the Effective Date
      (subject to adjustment for splits and/or other capital restructuring), such
      Performance Based Stock Options to vest, at 100,000 shares per year on the
      anniversary of the Effective Date, over a five year period based on objective
      criteria determined by the Board from time to time prior to the commencement
      of
      each year.

    

    All
      terms
      of the Options will be issued pursuant to the Company’s 1999 Stock Option Plan.
      Options will only vest if you are an employee of the Company on the applicable
      vesting date. Upon the termination of your employment with the Company (for
      any
      reason), the unvested portions of all Options will be deemed
      expired.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. You
      shall
      be reimbursed for all of your out-of-pocket expenses incurred in connection
      with
      the Company’s business in accordance with Company policy.

    

    4. Your
      employment with the Company will be for an indefinite term and nothing in this
      Letter modifies at at-will employment relationship with the
      Company.

    

    5. Your
      title at the Company shall be President.

    

    6. You
      represent to the Company that your employment with the Company will not
      constitute a breach or other violation of any agreement or contract under which
      you are bound or any other obligation that you owe to any third party. You
      further represent that no approvals or consents are required in order for you
      to
      be employed by the Company as contemplated by this letter. The Company
      acknowledges that you have current consulting obligations to two other companies
      and that you will continue to meet those obligations.

    

    7. Your
      employment with the Company will also be subject to our established policies
      and
      procedures, including executing the Company’s form of Confidentiality Agreement.

    

    8. This
      offer for employment is valid until September 22, 2006. If the Company does
      not
      receive a response by you as of this date, the offer will expire.

     

    If
      you
      find the foregoing arrangement acceptable and believe that the foregoing
      accurately summarizes our understanding, please kindly so indicate by executing
      and dating the attached copy of this letter in the space provided and returning
      a copy to me.

    
      	 	 	 
	 	Very
              Truly
              Yours,
	 	 
	 	Wits Basin Precious Minerals Inc.
	 
 	 
 	 
 
	 	By:  	/s/ H.
              Vance
              White
	 	
              
H.
              Vance White
	 	Its:
              CEO

    

     

    Agreed
      to
      and accepted

    This
      -15
      day of September, 2006 (the Effective Date)

    

    /s/
      Clyde
      L. Smith

    
      
Clyde
      Smith

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