Document:

Exhibit 10.01

                  MINING LEASE AND OPTION TO PURCHASE AGREEMENT
                              MOUNT JACKSON PROJECT

     This Mining Lease and Option to Purchase  Agreement  Mount Jackson  Project
("Agreement")  is made and entered into by and among  Pyramid Lake LLC, a Nevada
limited liability  company,  and Anthony A. Longo  (collectively  "Owner"),  and
First American Silver Corp., a Nevada corporation ("FAS").

                                    RECITALS

     A. Owner owns the MJR 1 to MJR 32 unpatented  mining  claims,  BLM NMC Nos.
1034281 to 103412, MJR 33 to MJR 103 unpatented mining claims, the SA 1 to SA 21
unpatented mining claims,  BLM NMC Nos. 1034260 to 1034280,  and the SA 22 to SA
50 unpatented  mining claims,  in Esmeralda  County,  Nevada  (collectively  the
"Property").

     B. Owner  desires to lease the  Property  and to grant to FAS the option to
purchase the Property on the terms and conditions of this Agreement.

     Now,  therefore,  in consideration  of their mutual  promises,  the parties
agree as follows:

1. DEFINITIONS.  The following  defined terms,  wherever used in this Agreement,
shall have the meanings described below:

     1.1 "Area of  Interest"  means the  geographic  area  within  the  exterior
boundaries of the Property and within the following lands:

            T5S, R41E: Section 13, 14, E1/2 of 15, 22-27, 35, 36, & E1/2
            of 34; T5S,  R42E:  Sections W1/2 of 14, 15-22,  W1/2 of 23,
            W1/2 of 26, 31-34 &  W1/2 of 35;  T6S,  R42E:  Sections N1/2
            of 5, & N1/2 of 4

     1.2 "Closing  Date" means the date on which FAS's  purchase of the Property
is closed in accordance with Section 5.

     1.3 "Effective Date" means April 15, 2011, or the date on which the parties
execute this Agreement, whichever first occurs.

     1.4 "FAS" means First American Silver Corp., a Nevada corporation,  and its
successors and assigns.

     1.5  "Governmental   Regulations"  means  all  directives,   laws,  orders,
ordinances,  regulations  and  statutes of any federal,  state or local  agency,
court or office.

     1.6 "Interest Rate" means LIBOR plus two percent (2%) per annum.

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     1.7 "Lease  Year"  means each one (1) year  period  beginning  on April 15,
2011, and on the like date of each succeeding year.

     1.8 "Minerals"  means all minerals and mineral  materials,  including gold,
silver,  platinum and platinum group metals,  base metals  (including  antimony,
chromium,   cobalt,  copper,  lead,  manganese,   mercury,  nickel,  molybdenum,
titanium,  tungsten, zinc), and other metals and mineral materials which are on,
in or under the Property.

     1.9 "Minimum Payments" means the cash payments payable by FAS in accordance
with Section 4.1.

     1.10  "Net  Smelter  Returns"  means  the  net  smelter  returns  from  the
production  of  Minerals  from the  Property as  calculated  and  determined  in
accordance  with Exhibit 1 to the  conveyance  to be executed  and  delivered in
accordance with Section 5.4.

     1.11  "Option"  means the Option  granted by Owner to FAS to  purchase  the
Property.

     1.12  "Owner"  means  collectively  Pyramid  Lake  LLC,  a  Nevada  limited
liability company and Anthony A. Longo, and their successors and assigns.

     1.13 "Property"  means the MJR and SA unpatented  mining claims situated in
Esmeralda  County,  Nevada,  which are made  described  in  Recital  A, plus any
additional  unpatented mining claims which are made subject to this Agreement in
accordance with its terms.

     1.14 "Purchase  Price" means the purchase price for the Property  described
in Section 5.

     1.15  "Royalty"  means the  production  royalty  payable by FAS to Owner in
accordance with Section 4.2.

     2. LEASE AND GRANT OF RIGHTS.  Owner  leases the Property to FAS and grants
FAS the rights and privileges described in this Section.

     2.1 LEASE. Owner leases the Property exclusively to FAS for the purposes of
exploration  for Minerals,  provided,  however,  that FAS shall have no right to
construct,  develop  or  operate a mine on the  Property  without  first  having
exercised and closed the Option.

     2.2  WATER  RIGHTS.  Subject  to the  regulations  of the  State of  Nevada
concerning the  appropriation  and taking of water,  FAS shall have the right to
appropriate  and use water,  to drill wells for the water on the Property and to
lay and  maintain  all  necessary  water  lines as may be required by FAS in its
operations  on the  Property.  If FAS  acquires  or files  any  application  for
appropriation or a permit, it shall cause each such application and permit to be
taken jointly in the names of Owner and FAS. On termination  of this  Agreement,
except on FAS's exercise and closing of the Option,  FAS shall assign and convey
to Owner all permits and water  rights  appurtenant  to the  Property  which are
acquired by FAS during the term of this  Agreement.  If FAS exercises and closes

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the Option,  Owner shall  assign and convey to FAS all permits and water  rights
appurtenant to the Property.

     3. TERM. The initial term of this Agreement shall commence on the Effective
Date and  shall  expire on April  15,  2031,  unless  this  Agreement  is sooner
terminated,  canceled or extended.  Before expiration of the initial term or any
extension  term FAS shall have the right to extend this Agreement for additional
one (1) year terms, provided that FAS has fully performed all of its obligations
under this Agreement and is conducting exploration or pre-development activities
on the  Property  on  the  expiration  of the  term  immediately  preceding  the
extension  term.  FAS shall deliver  written  notice to Owner of FAS's intent to
extend this Agreement.

4. PAYMENTS.

     4.1 MINIMUM PAYMENTS.

     4.1.1 On the  dates  described  below,  FAS  shall  pay to  Owner  the sums
described below (the "Minimum Payments"):

                       Date                          Payment Amount
                       ----                          --------------
             Execution date of this Agreement         $ 15,000.00
             April 15, 2012                           $ 40,000.00
             April 15, 2013                           $ 50,000.00
             April 15, 2014                           $ 60,000.00
             April 15, 2015                           $ 70,000.00
             April 15, 2016                           $ 80,000.00
             April 15, 2017                           $ 90,000.00
             April 15, 2018                           $100,000.00
             and the like day of each subsequent year

Beginning  on April 15,  2019,  the  amount  of the  Minimum  Payments  shall be
increased  (and  never  decreased)  for  inflation.  The base  price  index  for
computing the annual  increase shall be the Consumer's  Price Index,  all items,
published by the United States  Department of Labor,  Bureau of Labor Statistics
(the "Index") for the month of March 2019 (the "Beginning Index").  The month of
June preceding the Minimum  Payment due date shall be the  adjustment  date (the
"Adjustment Date"). If the Index published  immediately preceding the adjustment
date (the "Extension  Index") is increased above the Beginning  Index,  then the
Minimum  Payment for the Lease Year shall be the product  reached by multiplying
the Minimum Payment by a fraction, the numerator of which is the Extension Index
and the  denominator of which is the Beginning  Index.  If the Index is changed,
the Index shall be converted in accordance with the applicable conversion factor
published by the United States Department of Labor,  Bureau of Labor Statistics.
If the Index is discontinued or revised during the term of this Agreement,  such
other government index or computation with which it is replaced shall be used in
order to obtain  substantially  the same  result as would be  obtained as if the
Index had not been discontinued or revised.

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     Owner  acknowledges  that FAS has paid to Owner the sum of Fifteen Thousand
Dollars ($15,000.00) which shall constitute a Minimum Payment.

     The cash Minimum  Payments  shall be credited  cumulatively  against  FAS's
Royalty  payment  obligations,  but shall not be credited  against the  Purchase
Price.

     4.1.2 SHARES. On the parties' execution of this Agreement,  FAS shall issue
and deliver to Owner One Hundred  Thousand  (100,000) shares of the common stock
of FAS (the "Shares").

     The Shares shall be subject to the  requirements  of all applicable  United
States and state laws and  regulations and the rules of each exchange or trading
association on which the Shares are listed for trading or are traded. Owner also
acknowledges that the Shares will be "restricted securities," as defined in Rule
144 under the United States Securities Act of 1933, as amended (the "1933 Act"),
and may only be  transferred  pursuant to an  effective  registration  statement
under  the  1933  Act or  pursuant  to a  transaction  that is  exempt  from the
registration  requirements of the 1933 Act. Owner acknowledges that, in addition
to the legends  required  under United States  securities  laws, the Shares will
bear legends to that effect.  Owner understands and acknowledges that FAS is not
obligated to file and has no present  intention of filing with the United States
Securities and Exchange  Commission or with any state  securities  administrator
any  registration  statement  in  respect  of resale of the Shares in the United
States. FAS covenants, however, that it will timely file all reports required to
be filed by it under United States securities laws.

     Owner  represents and warrants to FAS that it is an "accredited  investor",
as such term is defined in Rule 501(a) of  Regulation  D under the 1933 Act, and
acknowledges  that FAS will be relying on this  representation  and  warranty in
issuing and delivering the Shares to Owner.

     4.2 PRODUCTION  ROYALTY.  FAS shall pay to Owner a production royalty based
on the Net Smelter  Returns  from the  production  or sale of Minerals  from the
Property,  including any additions to the Property  resulting  from the parties'
location  of  unpatented  mining  claims in the Area of  Interest.  The  Royalty
percentage rate shall be three percent (3%) of the Net Smelter Returns

     4.3 METHOD OF PAYMENT.  One-half  (1/2) of each  Minimum  Payment and Share
payment  shall be paid to each of Pyramid Lake LLC and Anthony A. Longo.  Except
for the delivery of the Shares and as otherwise provided in this Agreement,  all
payments by FAS to Owner shall be paid by wire transfer to an account designated
by Owner.

     4.4 LATE  CHARGE  AND  INTEREST.  If FAS does not  timely  pay any  Minimum
Payment  or any other  amount  payable by FAS under  this  Agreement  within ten
business (10) days after the date on which such payment is due, FAS shall pay to
Owner a late charge equal to ten percent  (10%) of such overdue  amount.  If any
Minimum  Payment or other amount payable by FAS remains  delinquent for a period
in excess of thirty (30) days,  FAS shall pay to Owner,  in addition to the late
charge, interest from and after the due date at the Interest Rate.

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     4.5 CURRENCY.  All sums referred to in this  Agreement are in United States
currency.

5. OPTION.  Owner grants to FAS the  exclusive  right to purchase the  Property,
subject to the Royalty reserved by Owner and subject to FAS's  obligations under
the conveyance executed and delivered by Owner on the closing of the Option. FAS
may exercise the Option only after FAS commits to commence development of a mine
or mining  on the  Property  and  completes  a  positive  feasibility  study for
development or mining on the Property. The Purchase Price for the Property shall
be Two Million Dollars ($2,000,000.00).

     5.1 NOTICE OF  ELECTION.  If FAS elects to exercise  the Option,  FAS shall
deliver  written notice to Owner. On Owner's receipt of FAS's notice of exercise
of the Option,  the parties shall make diligent  efforts to close the conveyance
of the Property,  as applicable,  within thirty (30) days after Owner's delivery
of the notice.

     5.2 REAL PROPERTY  TRANSFER TAXES. FAS shall pay the real property transfer
taxes,  if any, the costs of escrow and all recording  costs incurred in closing
of the Option. The parties acknowledge that there are presently no real property
transfer  taxes  assessed on the transfer of title to unpatented  mining claims,
including the unpatented mining claims which constitute the Property.

     5.3  PAYMENT  ON  CLOSING.  On  closing  of the  Option,  FAS shall pay the
Purchase  Price to Owner in cash or by wire transfer in accordance  with Section
4.3

     5.4  CONVEYANCE ON CLOSING.  If FAS exercises and closes the Option,  Owner
shall execute and deliver to FAS a conveyance of the Property which contains the
reservation  of the Royalty and obligates  FAS to make the Minimum  Payments and
the Royalty.  The conveyance shall be in the form of Exhibit 5.4 attached to and
by this reference incorporated in this Agreement.  On the closing of the Option,
the parties shall complete the conveyance by inserting the description of all of
the  unpatented  mining  claims  which  comprise  the Property on closing of the
Option.  The  execution,  delivery  and  recording of the  conveyance  shall not
constitute  a merger of FAS's  obligations  under  this  Agreement  which  shall
survive the closing of the Option.  Owner and FAS shall execute and deliver such
other written  assurances and  instruments  as are reasonably  necessary for the
purpose of closing the purchase of the Property.

     5.5  EFFECT  OF  CLOSING.  On  closing  of the  Option,  FAS  shall own the
Property,  subject to the Royalty reserved by Owner and FAS's obligations stated
in the conveyance of the Property.

6. COMPLIANCE WITH THE LAW. FAS shall, at FAS's sole cost,  promptly comply with
all Governmental  Regulations relating to the condition, use or occupancy of the
Property by FAS,  including but not limited to all  exploration  and development
work performed by FAS during the term of this Agreement.  FAS shall, at its sole
cost,  promptly comply with all applicable  Governmental  Regulations  regarding
reclamation  of the Property and FAS shall  defend,  indemnify and hold harmless
Owner from any and all actions, assessments, claims, costs, fines, liability and

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penalties  arising  from or  relating  to  FAS's  failure  to  comply  with  any
applicable Governmental Regulations. Owner agrees to cooperate with FAS in FAS's
application for governmental licenses, permits and approvals, the costs of which
shall be borne by FAS.

7. FAS'S WORK PRACTICES AND REPORTING.

     7.1 WORK PRACTICES. FAS shall work the Property in a miner-like fashion.

     7.2 INSPECTION OF DATA. During the term of this Agreement, Owner shall have
the right to examine and make copies of all data, including interpretative data,
regarding the Property in FAS's possession during reasonable  business hours and
upon prior notice,  provided,  however, that the rights of Owner to examine such
data shall be exercised in a manner that does not interfere  with the operations
of FAS.

     7.3 REPORTS.  On or before  February 1 following  each calendar year during
which this  Agreement is effective,  FAS shall deliver to Owner a  comprehensive
report,  which includes all factual data in digital and hard copy format, of all
of FAS's  activities  conducted on the Property for the previous  calendar year.
Within thirty (30) days  following the end of each calendar  quarter  during the
term of this  Lease,  FAS  shall  deliver  to Owner a  summary  report  of FAS's
operations,  including exploration and development activities, on or relating to
the Property during the preceding calendar quarter.

8. SCOPE OF AGREEMENT. This Agreement shall extend to and include the unpatented
mining claims described in Recital A, and all other interests, mining claims and
property  rights made part of and subject to this  Agreement in accordance  with
this  Section.  FAS  shall  pay for the costs of  filing  and  recording  of the
certificates of location and mining claim maps for any of the unpatented  mining
claims which  constitute  the Property for which filing and  recording  have not
been completed.  All unpatented  mining claims located by Owner or FAS which are
partially or wholly in the Area of Interest shall be located in Owner's name and
shall  be part  of and  subject  to  this  Agreement.  If a  party  locates  any
unpatented  mining claims in the Area of Interest,  the locator  shall  promptly
notify the other party.  The parties  shall  execute and deliver an amendment of
this  Agreement,  in  recordable  form,  which  provides  that the newly located
unpatented  mining  claims  are part of the  Property  and are  subject  to this
Agreement.  The amendment  may be recorded by either party.  If FAS acquires any
fee lands,  patented mining claims,  unpatented  mining claims or other property
interests  in the  area  of  interest  by  agreement  with  a  third  party  and
subsequently  FAS  intends  to  surrender  or  terminate  any such  third  party
agreement,  FAS shall notify Owner of FAS's intent to surrender or terminate the
third party agreement. Owner shall have thirty (30) days during which to request
that FAS assign and  transfer  the third party  agreement  to Owner,  subject to
Owner's  obligation  to assume  the  obligations  of FAS  under the third  party
agreement  which  accrue or arise  after FAS's  assignment  and subject to FAS's
obligation to defend, indemnify and hold harmless Owner from and against any and
all claims,  damages,  liabilities  or losses  arising  from or  relating  FAS's
operations on,  possession of or use of the property  subject to the third party
agreement before FAS's assignment of the agreement.

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9. LIENS AND NOTICES OF  NON-RESPONSIBILITY.  FAS agrees to keep the Property at
all times free and clear of all liens, charges and encumbrances of any and every
nature  and  description  done made or caused by FAS,  and to pay,  and  defend,
indemnify  and hold  harmless  Owner  from and  against,  all  indebtedness  and
liabilities  incurred by or for FAS which may or might become a lien,  charge or
encumbrance; except that FAS need not discharge or release any such lien, charge
or  encumbrance  so long  as FAS  disputes  or  contests  the  lien,  charge  or
encumbrance  and posts a bond  sufficient to discharge lien acceptable to Owner.
Subject to FAS's right to post a bond in accordance  with the foregoing,  if FAS
does not within  thirty (30) days  following  the  imposition  of any such lien,
charge or  encumbrance,  cause the same to be  released  of record,  Owner shall
have, in addition to Owner's contractual and legal remedies,  the right, but not
the  obligation,  to cause the lien to be released by such manner as Owner deems
proper,  including  payment of the claim  giving  rise to such  lien,  charge or
encumbrance.  All sums  paid by Owner  for and all  expenses  incurred  by it in
connection with such purpose,  including court costs and attorney's  fees, shall
be payable by FAS to Owner on demand with interest at the Interest Rate.

10. TAXES.

     10.1 REAL PROPERTY  TAXES.  FAS shall pay promptly  before  delinquency all
taxes and assessments, general, special, ordinary and extraordinary, that may be
levied or assessed during the term of this Agreement upon the Property.  Neither
Owner nor FAS shall be responsible  for the payment of any taxes which are based
upon income,  net proceeds,  production  or revenues from the Property  assessed
solely to the other party.  The parties  acknowledge that there are presently no
real property taxes assessed  against  unpatented  mining claims,  including the
unpatented mining claims which constitute the Property.

     10.2 PERSONAL  PROPERTY  TAXES.  Each party shall promptly when due pay all
taxes  assessed  against  such  party's  personal   property,   improvements  or
structures placed or used on the Property.

     10.3 INCOME  TAXES.  Owner  shall not be liable for any taxes  levied on or
measured by income or net proceeds, or other taxes applicable to FAS, based upon
payments under this Agreement or under the conveyance  executed and delivered by
Owner on the Closing of the Option.

     10.4 DELIVERY OF TAX NOTICES.  If Owner  receives tax bills or claims which
are FAS's responsibility, Owner shall promptly forward them to FAS for payment.

11. INSURANCE AND INDEMNITY.

     11.1 FAS'S  LIABILITY  INSURANCE.  FAS shall,  at FAS's sole cost,  keep in
force  during  this  Agreement  term a policy of  commercial  general  liability
insurance  covering  property damage and liability for personal injury occurring
on or about the  Property,  with  limits in the  amount of at least Two  Million
Dollars  ($2,000,000)  per  occurrence  for injuries to or death of person,  One
Million  Dollars  ($1,000,000)  per occurrence for property  damage,  and with a
contractual  liability endorsement insuring FAS's performance of FAS's indemnity

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obligations  of this  Agreement.  The  amounts of coverage  required  under this
Section  shall be  increased by one hundred  percent  (100%) on the tenth (10th)
anniversary  of the  Effective  Date and by two  hundred  percent  (200%) on the
fifteenth (15th) anniversary of the Effective Date.

     11.2 FORM AND CERTIFICATES.  The policy of insurance required to be carried
by FAS  pursuant to this Section  shall be with a company  approved by Owner and
shall have a Best's Insurance  Rating of at least A-VII.  Such policy shall name
Owner as an additional  insured and contain a  cross-liability  and severability
endorsement.  FAS's  insurance  policy shall also be primary  insurance  without
right of  contribution  from any  policy  carried  by Owner.  A  certificate  of
insurance and a copy of FAS's insurance policy shall be provided to Owner before
any entry by FAS or its agents or employees  on the  Property and shall  provide
that such policy is not subject to  cancellation,  expiration or change,  except
upon thirty (30) days prior written notice to Owner.

     11.3 WAIVER OF SUBROGATION. FAS and Owner each waives any and all rights of
recovery  against  the other,  and  against  the  partners,  members,  officers,
employees, agents and representatives of the other, for loss of or damage to the
Property  or injury to person to the extent  such damage or injury is covered by
proceeds  received  under any  insurance  policy  carried by Owner or FAS and in
force at the time of such loss or damage.

     11.4 WAIVER AND  INDEMNIFICATION.  Owner shall not be liable to FAS and FAS
waives  all  claims  against  Owner for any  injury to or death of any person or
damage to or  destruction  of any  personal  property or  equipment  or theft of
property occurring on or about the Property or arising from or relating to FAS's
business  conducted  on the  Property.  FAS  shall  defend,  indemnify  and hold
harmless Owner and its members, officers,  directors,  agents and employees from
and against any and all claims,  judgments,  damage, demands,  losses, expenses,
costs or liability  arising in connection with injury to person or property from
any  activity,  work,  or things  done,  permitted  or  suffered by FAS or FAS's
agents, partners, servants,  employees,  invitees or contractors on or about the
Property,  or from  any  breach  or  default  by FAS in the  performance  of any
obligation on the part of FAS to be performed  under the terms of this Agreement
(all of the foregoing  collectively  referred to as "General Indemnity Claims").
FAS  agrees to defend  all  General  Indemnity  Claims on behalf of Owner,  with
counsel reasonably acceptable to Owner. The obligations of FAS contained in this
Section shall survive the  expiration of the term or other  termination  of this
Agreement.

12. ENVIRONMENTAL.

     12.1 DEFINITIONS.  Hazardous Materials means any material, waste, chemical,
mixture or  byproduct  which:  (a) is or is  subsequently  defined,  listed,  or
designated under Applicable  Environmental  Laws (defined below) as a pollutant,
or as a contaminant, or as toxic or hazardous; or (b) is harmful to or threatens
to harm public  health,  safety,  ecology,  or the  environment  and which is or
hereafter  becomes  subject  to  regulation  by  any  federal,  state  or  local
governmental  authority  or  agency.  Applicable  Environmental  Laws  means any
applicable  federal,  state,  or local  government law  (including  common law),
statute, rule, regulation, ordinance, permit, license, requirement, agreement or
approval,  or any applicable  determination,  judgment,  injunction,  directive,

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prohibition  or order of any  governmental  authority with  jurisdiction  at any
level  of  federal,  state,  or  local  government,  relating  to  pollution  or
protection of the environment,  ecology,  natural resources, or public health or
safety.

     12.2  FAS  HAZARDOUS  MATERIAL   ACTIVITIES.   FAS  shall  limit  any  use,
generation,  storage,  treatment,  transportation,  and  handling  of  Hazardous
Materials  in  connection  with  FAS's use of the  Property  (collectively  "FAS
Hazardous Materials Activities") to those Hazardous Materials, and to quantities
of  them,  that  are  necessary  to  perform  activities  permitted  under  this
Agreement. FAS Hazardous Materials Activities include,  without limitation,  all
such activities on or about the Property by FAS's employees,  partners,  agents,
invitees,  contractors and their  subcontractors.  FAS shall not cause or permit
any Hazardous  Materials to be disposed or abandoned at the Property.  FAS shall
cause  all  FAS  Hazardous  Materials  Activities  to  be  performed  in  strict
conformance to Applicable Environmental Laws. FAS shall promptly notify Owner of
any actual or claimed violation of Applicable  Environmental  Laws in connection
with FAS Hazardous Materials  Activities,  and FAS shall promptly and thoroughly
cure any  violation of  Applicable  Environmental  Laws in  connection  with FAS
Hazardous Materials Activities.  If any governmental approval,  consent, license
or permit is required under Applicable Environmental Laws for FAS to perform any
portion  of its  work at the  Property,  including  without  limitation  any air
emission  permits,  before  commencing  any  such  work,  FAS  shall  be  solely
responsible,  at FAS's  expense,  for obtaining and  maintaining,  and providing
copies  of,  each  approval,  consent,  license  or  permit.  All FAS  Hazardous
Materials Activities shall be performed by qualified personnel who have received
proper training with respect to Hazardous  Materials,  including compliance with
applicable OSHA laws and  regulations.  FAS shall cause all Hazardous  Materials
present at the Property in connection with FAS Hazardous Materials Activities to
be safely and securely stored, using double containment. FAS agrees that neither
its use of the Property nor FAS Hazardous  Materials  Activities shall result in
contamination of the environment.

     12.3 SPILLS OF HAZARDOUS  MATERIALS.  FAS shall  promptly  notify Owner and
each governmental  regulatory entity with jurisdiction of any spills,  releases,
or leaks of Hazardous  Materials  that occur in  connection  with FAS  Hazardous
Materials Activities or FAS's use of the Property,  including but not limited to
any   resulting   contamination   of   the   environment    (collectively   "FAS
Contamination").  FAS further shall promptly notify Owner of any claims of which
FAS becomes aware regarding any actual or alleged FAS  Contamination.  FAS shall
be solely  responsible  at its expense for promptly,  diligently  and thoroughly
investigating,  monitoring,  reporting  on,  responding  to, and  cleaning up to
completion any and all such FAS Contamination, in full conformance to Applicable
Environmental Laws (collectively the "FAS Environmental Response Work"). All FAS
Environmental  Response Work shall be reported to each  governmental  regulatory
entity with  jurisdiction on an ongoing basis, and FAS shall diligently  attempt
to obtain  written  concurrence  from each such  regulatory  entity that all FAS
Environmental Response Work has been satisfactorily performed and completed. FAS
at its expense shall keep Owner timely  informed of FAS's progress in responding
to any FAS  Contamination,  including  but not limited to  providing  Owner with
copies, at FAS's expense,  of all reports,  work plans, and communications  with
governmental regulatory entities.

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<PAGE>
     12.4  REMOVAL  OF STORED  HAZARDOUS  MATERIALS.  Before the  expiration  or
termination of this Agreement,  and  notwithstanding any other provision of this
Agreement,  and in full conformance to Applicable Environmental Laws, FAS shall:
(a) cause to be properly  removed  from the  Property  all  Hazardous  Materials
stored at the  Property  in  connection  with  FAS's use of the  Property  or in
connection with FAS Hazardous Materials Activities; and (b) cause to be properly
dismantled,  closed and removed from the Property all devices,  drums, equipment
and  containments  used for handling,  storing or treating  Hazardous  Materials
Activities.  As part of the  closure  and removal  activities  described  in the
preceding sentence, FAS shall cause to be performed representative environmental
sampling of areas of the Property  where such  handling,  storing or treating of
Hazardous  Materials   occurred,   to  confirm  that  no  contamination  of  the
environment  has resulted  from any FAS  Hazardous  Materials  Activities.  Such
sampling shall be performed by a qualified  environmental  consultant acceptable
to Owner,  and such  consultant  shall  promptly  issue a written  report  which
describes the consultant's  data,  findings,  and  conclusions,  a copy of which
shall  be  provided  to  Owner at FAS's  expense.  If any FAS  Contamination  is
discovered,  FAS shall immediately  initiate FAS Environmental  Response Work as
prescribed in this Agreement.

     12.5  ENVIRONMENTAL  INDEMNITY.  FAS  shall  promptly  reimburse,   defend,
indemnify  (with legal  counsel  acceptable  to Owner,  whose  consent shall not
unreasonably  be withheld)  and hold harmless  Owner,  its  employees,  assigns,
successors-in-interest,  agents  and  representatives  from any and all  claims,
liabilities,  obligations,  losses,  causes  of  action,  demands,  governmental
proceedings or directives, fines, penalties,  expenses, costs (including but not
limited to reasonable attorney's fees, consultant's fees and other expert's fees
and  costs),  and  damages,  which  arise from or relate  to: (a) FAS  Hazardous
Materials  Activities;  (b)  FAS  Contamination;  (c)  any  non-compliance  with
Applicable  Environmental Laws in connection with FAS's use of the Property;  or
(d) a breach of any obligation of FAS under this Section.

     12.6 SURVIVAL.  The provisions of this Section shall survive  expiration or
termination of this Agreement.

13. PROPERTY MAINTENANCE.

     13.1 CLAIM MAINTENANCE.

     13.1.1 ANNUAL  ASSESSMENT  WORK. To the extent  required by law,  beginning
with the annual  assessment  work period of September  1, 2011,  to September 1,
2012, and for each succeeding  annual assessment work year commencing during the
term of this Agreement, and not less than thirty (30) days before the applicable
deadline,  FAS shall  perform  for the  benefit of the  Property  work of a type
customarily  deemed  applicable  as assessment  work and of sufficient  value to
satisfy the annual assessment work requirements of all applicable federal, state
and local laws,  regulations and ordinances,  if any, and shall prepare evidence
of the same in form proper for recordation  and filing,  and shall timely record
and/or file such evidence in the appropriate federal,  state and local office as
required  by  applicable  federal,   state  and  local  laws,   regulations  and
ordinances.  FAS shall  deliver  to Owner  proof of FAS's  compliance  with this
Section not less than fifteen (15) days before the applicable deadline.  If this

                                       10
<PAGE>
Agreement is  terminated  and the  effective  date of  termination  is more than
forty-five  (45) days before the deadline for  performance of annual  assessment
work for the succeeding  annual assessment year, FAS shall have no obligation to
perform annual  assessment  work nor to prepare,  record and/or file evidence of
the same for the following annual assessment year. The parties  acknowledge that
there are presently no annual  assessment work  requirements  for the unpatented
mining claims which constitute the Property.

     13.1.2 FEDERAL MINING CLAIM MAINTENANCE  FEES. If under applicable  federal
laws and regulations  federal annual mining claim  maintenance fees are required
to be paid for the unpatented  mining claims which constitute all or part of the
Property, beginning with the annual assessment work period of September 1, 2011,
to September 1, 2012,  and not less than thirty (30) days before the  applicable
deadline,  FAS shall  timely and properly  pay the federal  annual  mining claim
maintenance fees, and shall execute and record or file, as applicable,  proof of
payment of the  federal  annual  mining  claim  maintenance  fees and of Owner's
intention to hold the  unpatented  mining claims which  constitute the Property.
FAS shall pay all mining claim fees and other fees  imposed  under Nevada law on
the recording of the notice of intent to hold the unpatented mining claims which
constitute  the  Property  or  otherwise  required  for the  maintenance  of the
Property. FAS shall deliver to Owner proof of FAS's compliance with this Section
not less  than  fifteen  (15)  days  before  the  applicable  deadline.  If this
Agreement is  terminated  and the  effective  date of  termination  is more than
forty-five  (45) days before the  deadline  for  payment of the  federal  annual
mining claim  maintenance  fees for the succeeding  annual  assessment year, FAS
shall have no obligation to pay the federal annual mining claim maintenance fees
for the Property for the succeeding assessment year.

     13.2 AMENDMENT OF MINING LAWS. The parties acknowledge that legislation for
the  amendment or repeal of the mining laws of the United  States  applicable to
the Property has been, and in the future may be, considered by the United States
Congress. The parties desire to insure that any and all interests of the parties
in the lands subject to the unpatented  mining claims which comprise all or part
of the Property,  including any rights or interests acquired in such lands under
the  mining  laws as  amended,  repealed  or  superseded,  shall  be part of the
Property and shall be subject to the Agreement. If the mining laws applicable to
the unpatented mining claims subject to this Agreement are amended,  repealed or
superseded,  the conversion or  termination of Owner's  interest in the Property
pursuant to such amendment,  repeal or supersession of the mining laws shall not
be considered a deficiency  or defect in Owner's title in the Property,  and FAS
shall  have no right or  claim  against  Owner  resulting  from the  conversion,
diminution,  or loss of  Owner's  interest  in and to the  Property,  except  as
expressly provided in this Agreement.

     If pursuant to any  amendment or  supersession  of the mining laws Owner is
granted  the right to convert  its  interest  in the  unpatented  mining  claims
comprising the Property to a permit, license, lease, or other right or interest,
all  converted  interests  or rights  shall be deemed to be part of the Property
subject  to this  Agreement.  Upon  the  grant  or  issuance  of such  converted
interests or rights,  the parties  shall execute and deliver an addendum to this
Agreement,  in recordable form, by which such converted  interests or rights are
made subject to this Agreement.

                                       11
<PAGE>
14. RELATIONSHIP OF THE PARTIES.

     14.1 NO  PARTNERSHIP.  This Agreement shall not be deemed to constitute any
party, in its capacity as such, the partner,  agent or legal  representative  of
any other party, or to create any joint venture, partnership, mining partnership
or other partnership relationship between the parties.

     14.2  COMPETITION.  Except as expressly  provided in this  Agreement,  each
party shall have the free and unrestricted right  independently to engage in and
receive the full benefits of any and all business  endeavors of any sort outside
the Property or outside the scope of this Agreement,  whether or not competitive
with the endeavors contemplated under this Agreement,  without consultation with
or  participation  of the other  party.  In  particular,  without  limiting  the
foregoing,  neither  party to this  Agreement  shall have any  obligation to the
other as to any  opportunity to acquire any interest,  property or right offered
to it outside the scope of this Agreement.

15.  INSPECTION.  Owner or  Owner's  duly  authorized  representatives  shall be
permitted to enter on the Property and FAS's  workings at all  reasonable  times
for the purpose of inspection, but they shall enter on the Property at their own
risk and in such a manner which does not unreasonably hinder, delay or interfere
with FAS's operations.

16.  TITLE.  Owner  represents  in respect of  unpatented  mining  claims  which
constitute the Property that: (a) the claims were properly located in accordance
with applicable federal and state laws and regulations;  (b) all assessment work
requirements  for the claims have been  performed and all filings and recordings
of proof of  performance  have been made properly and the federal  annual mining
claim maintenance and rental fees have been paid properly; (c) the claims are in
good standing;  (d) subject to the paramount  title of the United States,  Owner
has good right and full power to lease and to convey the interests  described in
this Agreement;  and (e) the claims are free and clear of all liens,  claims and
encumbrances   created  by,  through  or  under  Owner.   Owner   disclaims  any
representation  or warranty  concerning the existence or proof of a discovery of
locatable minerals on or under the Property.

17. COVENANTS,  WARRANTIES AND  REPRESENTATIONS.  Each of the parties covenants,
warrants and represents for itself as follows:

     17.1  COMPLIANCE  WITH LAWS.  That it has complied with all applicable laws
and regulations of any governmental body, federal, state or local, regarding the
terms of and performance of its obligations under this Agreement.

     17.2 NO PENDING  PROCEEDINGS.  That there are no  lawsuits  or  proceedings
pending or  threatened  which  affect its  ability to perform  the terms of this
Agreement.

     17.3  COSTS.  That it shall pay all costs and  expenses  incurred  or to be
incurred by it in  negotiating  and preparing  this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.

                                       12
<PAGE>
17.4 BROKERS.  That it has had no dealings  with any agent,  broker or finder in
connection with this Agreement,  and shall indemnify,  defend and hold the other
party  harmless  from and against any claims that may be asserted  through  such
party that any agent's  broker's or finder's fee is due in connection  with this
Agreement.

18.  TERMINATION  BY OWNER.  Any failure by FAS to perform any of its covenants,
liabilities,  obligations or  responsibilities  under this Agreement  shall be a
default.  Owner may give FAS written notice of a default.  If the default is not
remedied  within  thirty  (30) days after  receipt of the notice,  provided  the
default can  reasonably  be cured  within that time,  or, if not, if FAS has not
within  that  time  commenced  action  to cure the same or does not  after  such
commencement diligently prosecute such action to completion, Owner may terminate
this  Agreement  by  delivering  notice to FAS of  Owner's  termination  of this
Agreement. In the case of FAS's failure to pay the Minimum Payments, Owner shall
be entitled to give FAS written  notice of the  default,  and if such default is
not  remedied  within  fifteen  (15) days after the receipt of the notice,  then
Owner may  terminate  this  Agreement  by  delivering  notice to FAS of  Owner's
termination of this  Agreement.  On termination of this Agreement based on FAS's
default, within ten (10) days after termination FAS shall execute and deliver to
Owner a  release  and  termination  of this  Agreement  in form  acceptable  for
recording.

19.  TERMINATION  BY FAS. FAS may at any time terminate this Agreement by giving
two  (2)  months  advance  written  notice  to  Owner.  If FAS  terminates  this
Agreement,  FAS shall perform all  obligations and pay all payments which accrue
or  become  due  before  the  termination  date.  On FAS's  termination  of this
Agreement,  within ten (10) days after termination FAS shall execute and deliver
to Owner a release and  termination  of this  Agreement in form  acceptable  for
recording.

20. SURRENDER OF PROPERTY.  On expiration or termination of this Agreement,  FAS
shall  surrender  the  Property  promptly  to Owner and at FAS's sole cost shall
remove from the Property all of FAS's buildings,  equipment and structures.  FAS
shall  reclaim  the  Property in  accordance  with all  applicable  Governmental
Regulations.  FAS shall  diligently  perform  reclamation and restoration of the
Property such that FAS's  reclamation and restoration  shall be completed before
expiration  of this  Agreement  and not later than the date  required  under any
Governmental Regulations.

21. DATA. Within thirty (30) days following  termination of this Agreement,  FAS
shall  deliver  to Owner  copies of all data  regarding  the  Property  in FAS's
possession at the time of  termination  which before  termination  have not been
furnished to Owner and, at Owner's request, FAS shall deliver to Owner all drill
core,  cuttings,  samples and sample splits taken from the  Property.  FAS shall
deliver the data in digital and hard copy form.  The digital  data shall be in a
format which is readable and useful using commercially  available software which
is customarily  used in the mineral  exploration  industry in the United States.
All digital and written data shall be in English.

22.  CONFIDENTIALITY.  The data and  information,  including  the  terms of this
Agreement, coming into a party's possession by virtue of this Agreement shall be
deemed  confidential  and shall not be disclosed to outside third parties except
as may be  required to publicly  record or protect  title to the  Property or to

                                       13
<PAGE>
publicly  announce and disclose  information under  Governmental  Regulations or
under the rules and  regulations of any stock exchange on which the stock of any
party, or the parent or affiliates of any party, is listed. Each party agrees to
inform the other  party of the  content of the  announcement  or  disclosure  in
sufficient  time to permit the other party to jointly or  simultaneously  make a
similar public announcement or disclosure.  If a party negotiates for a transfer
of all or any portion of its interest in the Property or under this Agreement or
negotiates to procure  financing or loans relating to the Property,  in order to
facilitate  any such  negotiations  such  party  shall have the right to furnish
information  to  third  parties,  provided  that  each  third  party to whom the
information is disclosed  agrees to maintain its  confidentiality  in the manner
provided in this Section.

23. ASSIGNMENT.

23.1 FAS'S ASSIGNMENT. Except as expressly provided in this Agreement, FAS shall
not assign,  convey,  encumber,  sublease,  grant any concession,  or license or
otherwise  transfer (each a "Transfer")  all or any part of its interest in this
Agreement or the Property, without, in each case, Owner's prior written consent,
which shall not be withheld  unreasonably.  Any Transfer of this Agreement which
is  prohibited  under this Section  shall be deemed void and shall  constitute a
material  default under the terms of this  Agreement.  In its  consideration  of
FAS's  request for  consent to a Transfer,  Owner may  consider  the  financial,
legal,  operating and regulatory  history and the market  capitalization  of the
proposed transferee.

23.2 OWNER'S  ASSIGNMENT.  Subject to FAS's rights under this  Agreement,  Owner
shall have the right to assign, convey, encumber, or sell all or any part of its
interest in this  Agreement or the  Property.  No change in ownership of Owner's
interest in the Property  shall affect FAS's  obligations  under this  Agreement
unless and until Owner delivers and FAS receives  copies of the documents  which
demonstrate  the change in  ownership  of Owner's  interest.  Until FAS receives
Owner's  notice and the documents  required to be delivered  under this Section,
FAS may continue to make all payments under this Agreement as if the transfer of
Owner's ownership interest had not occurred. No division of Owner's ownership as
to all or any part of the Property  shall enlarge FAS's  obligations or diminish
FAS's rights under this Agreement.

24. MEMORANDUM AGREEMENT.  The parties shall execute and deliver a memorandum of
this Agreement.  The execution of the memorandum shall not limit, increase or in
any manner affect any of the terms of this Agreement or any rights, interests or
obligations of the parties.

25.  NOTICES.  Any notices  required or authorized to be given by this Agreement
shall be in writing and shall be sent either by commercial  courier,  facsimile,
or by  certified  U.S.  mail,  postage  prepaid  and return  receipt  requested,
addressed to the proper party at the address stated below or such address as the
party  shall  have  designated  to the other  parties  in  accordance  with this
Section.  Such notice shall be effective on the date of receipt by the addressee
party,  except that any facsimiles  received after 5:00 p.m. of the  addressee's
local time shall be deemed delivered the next day.

                                       14
<PAGE>
          If to Owner:      Pyramid Lake LLC
                            PO Box 6945
                            Incline Village, Nevada 89450

                            Anthony A. Longo
                            1275 Lord Street
                            Washoe Valley, Nevada 89704

          If to FAS :       First American Silver Corp.
                            1135 Terminal Way
                            Reno, Nevada 88502

26. BINDING  EFFECT OF  OBLIGATIONS.  This  Agreement  shall be binding upon and
inure to the benefit of the respective parties and their successors or assigns.

27. ENTIRE  AGREEMENT.  The parties agree that the entire agreement between them
is written in this  Agreement  and in a  memorandum  of  agreement of even date.
There are no terms or  conditions,  express or  implied,  other  than  expressly
stated in this  Agreement.  This  Agreement may be amended or modified only by a
written  instrument  signed  by the  parties  with  the same  formality  as this
Agreement.

28.  GOVERNING LAW AND FORUM  SELECTION.  This Agreement  shall be construed and
enforced  in  accordance  with the laws of the State of  Nevada.  Any  action or
proceeding  concerning the construction,  or interpretation of the terms of this
Agreement or any claim or dispute  between the parties  shall be  commenced  and
heard in the Second Judicial  District Court of the State of Nevada,  in and for
the County of Washoe, Reno, Nevada.

29.  MULTIPLE  COUNTERPARTS.  This  Agreement  may be  executed in any number of
counterparts,  each of which shall be deemed to be an original, but all of which
shall constitute the same Agreement.

30. SEVERABILITY.  If any part, term or provision of this Agreement is held by a
court  of  competent  jurisdiction  to  be  illegal  or  in  conflict  with  any
Governmental  Regulations,  the validity of the remaining portions or provisions
shall not be affected,  and the rights and  obligations  of the parties shall be
construed and enforced as if the Agreement did not contain the particular  part,
term or provision held to be invalid.

31. TIME OF ESSENCE.  Time is of the essence in the  performance of the parties'
obligations under this Agreement.

                                       15
<PAGE>
     The parties have  executed  this  Agreement  effective as of the  Effective
Date.

Pyramid Lake LLC

By /s/ Henry H. Tonking
  -------------------------------------------
  Henry H. Tonking, Manager

/s/ Anthony A. Longo
  -------------------------------------------
Anthony A. Longo

First American Silver Corp.

By /s/ Thomas J. Menning
  -------------------------------------------
   Thomas J. Menning, Chief Executive Officer

                                       16
<PAGE>
STATE OF NEVADA,    )
                    ss.
COUNTY OF WASHOE.   )

     This Mining Lease and Option to Purchase  Agreement  Mount Jackson  Project
was acknowledged before me on April 15, 2011, by Henry H. Tonking as Manager of
Pyramid Lake LLC.

---------------------------------
Notary Public

STATE OF NEVADA,   )
                   ss.
COUNTY OF WASHOE.  )

     This Mining Lease and Option to Purchase  Agreement  Mount Jackson  Project
was acknowledged before me on April 15, 2011, by Anthony A. Longo.

---------------------------------
Notary Public

STATE OF NEVADA,   )
                   ss.
COUNTY OF WASHOE.  )

     This Mining Lease and Option to Purchase  Agreement  Mount Jackson  Project
was acknowledged  before me on April 15,  2011, by Thomas J. Menning as Chief
Executive Officer of First American Silver Corp.

---------------------------------
Notary Public

                                       17exhibit_4-20.htm

Exhibit 4.20

 

TOWER SEMICONDUCTOR LTD.

2009 CHAIRMAN SHARE INCENTIVE PLAN

 

A. NAME AND PURPOSE 

 

1.         Name: This plan, as amended from time to time, shall be known as the “2009 Chairman Share Incentive Plan” or the “Plan”.

 

2.         Purpose: The purpose and intent of the Plan is to provide incentives to the Chairman of the Board of Directors (the “Chairman”) of Tower Semiconductor Ltd. (“Tower”) by providing him or her with opportunities to purchase Shares, pursuant to a plan approved by Tower’s Board of Directors (the “Board”) and which is designed to enable the Company to issue equity related awards subject to approval of the shareholders for specific awards.

 

3.         Incentives under the Plan will only be issued to Grantees (as defined below) subject to the applicable law in their respective country of residence for tax or other purposes.

 

B. DEFINITIONS 

 

“Administrator” means (i) the Board, or (ii) Tower’s Compensation Committee (the “Committee”).

 

“Affiliate” means any company in which Tower holds, directly or indirectly, at least 10% of the issued share capital or voting power.

 

“Cause” means with respect to any Grantee, the meaning of such term as set forth in the service agreement between the Company (or any Affiliate) and the Grantee or, in the event there is no such service agreement (or if any such service agreement does not contain such a definition), such term shall mean (i) breach of the Grantee’s duty of loyalty towards the Company, (ii) breach of the Grantee’s duty of care towards the Company, (iii) the commission of any criminal offense by the Grantee, (iv) the commission of any act of fraud, embezzlement or dishonesty towards the Company by the Grantee, (v) any unauthorized use or disclosure by the Grantee of confidential information or trade secrets of the Company, (vi) involvement in a transaction in connection with the performance of duties to the Company which transaction is adverse to the interests of the Company and which is engaged in for personal profit, (vii) any other intentional misconduct by the Grantee (by act or omission) adversely affecting the business or affairs of the Company in a material manner, (viii), or material breach of any employment or service agreement with the Company.

 

 “Cessation of Service” means the cessation of engagement of the Grantee as a Chairman of the Board for any reason.

 

“Companies Law” means the Israeli Companies Law, 1999.

 

“Company” means Tower and/or any Affiliate thereof.

 

  

  

  

 

“Corporate Transaction” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: (i) a sale or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries; (ii) a sale or other disposition of at least eighty percent (80%) of the outstanding equity securities  of the Company; (iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or (iv) a merger, consolidation or reorganization following which the Company is the surviving corporation but the Shares of the Company outstanding immediately preceding the merger, consolidation or reorganization are converted or exchanged by virtue of the merger, consolidation or reorganization into other property, whether in the form of securities, cash or otherwise.  Whether a transaction is a “Corporate Transaction” as defined above, shall be finally and conclusively determined by the Administrator in its absolute discretion.

 

“Date of Grant” means the effective date of grant of an Option, as detailed in Section 6.1 below.

 

“Date of Cessation” means the effective date of a Cessation of Service.

 

“Exercise Price” means the purchase price per Share.

 

“Exercised Share” means a Share issued upon exercise of an Option.

 

“Grantee” means a Chairman of the Board to whom an Option shall be granted under the Plan.

 

“Notice of Exercise” means a written notice of exercise of an Option delivered by a Grantee to the Representative.

 

“Notice of Grant” means a written notice of the grant of an Option delivered by the Company to a Grantee relating to the terms of the grant.

 

“Option” means an option to purchase a Share or Shares.

 

“Representative” means any third party designated by the Company for the purpose of the exercise of Options, as provided in Section 9.2 below.

 

“Sale” means the sale of all or substantially all of the issued and outstanding share capital of the Company.

 

“Share” means an ordinary share, nominal value of NIS 1.00 each of the Company.

 

 “Successor Entity Option” means Options for which the underlying Shares are replaced by securities of any successor entity, as provided in Section 10.5 below.

 

“Tax” means any and all federal, provincial, state and local taxes of any applicable jurisdiction, and other governmental fees, charges, duties, impositions and liabilities of any kind whatsoever, including social security, national health insurance or similar compulsory payments, together with all interest, linkage for inflation, penalties and additions imposed with respect to such amounts.

 

“Vesting Period” means the period between the Date of Grant and the date on which (i) the Grantee may exercise the Option into Exercised Shares.

 

  

2

  

 

C. GENERAL TERMS AND CONDITIONS OF THE PLAN 

 

4.         Administration:

 

4.1         The Plan will be administered by the Administrator, subject to applicable law.

 

4.2         Subject to the general terms and conditions of the Plan and the terms approved by shareholders of the Company, the Administrator shall have the full authority in its discretion, from time to time and at any time to determine (i) the Grantees under the Plan, (ii) the number of Shares in each Option, the type of Option  and the Exercise Price per Share, (iii) the time or times at which the same shall be granted, (iv) the schedule and conditions, if applicable, on which Options may vest or be exercised , (v) the method of payment for Shares purchased pursuant to any Option, (vi) the method for satisfaction of any tax withholding obligation arising in connection with an Option, including by the withholding, delivery or sale of Shares, (vii) rules and provisions, as may be necessary or appropriate to permit eligible Grantees resident or employed in any specific jurisdiction to participate in the Plan and/or to receive preferential tax treatment in their country of residence, with respect to Options granted hereunder, and/or (viii) any other matter which is necessary or desirable for, or incidental to, the administration of the Plan.

 

4.3         The Company may retain the right in an Notice of Grant to cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in conflict with any agreement, non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any confidentiality obligation with respect to the Company or otherwise in competition with the Company, to the extent specified in such Notice of Grant applicable to the Grantee. Furthermore, the Company may annul an Option if the Grantee is terminated for Cause as defined in the applicable Notice of Grant or the Plan, as applicable.

 

4.4         Any provision of the Plan or any Notice of Grant notwithstanding, the Administrator may cause any Option granted hereunder to be amended, modified or cancelled in consideration of a cash payment, an alternative Option or both made to the holder of such cancelled Option equal to or greater than the Fair  Market Value of such cancelled Option and subject to the approval of Company’s shareholders, if required.

 

4.5         The Administrator may, from time to time, adopt such rules and regulations for carrying out the Plan, as it may deem necessary.

 

4.6         The interpretation and construction by the Administrator of any provision of the Plan or of any Option thereunder shall be final and conclusive and binding on all parties who have an interest in the Plan or any Option or Exercised Share, unless otherwise determined by the Administrator.

 

5.         Eligible Grantees:

 

5.1         The Administrator, at its discretion, may grant Options under this plan to a Grantee serving as Chairman of the Board.

 

5.2         The grant of an Option to a Grantee hereunder, shall neither entitle such Grantee to participate, nor disqualify him from participating, in any other grant of Options pursuant to the Plan or any other incentive plan of Tower.

 

  

3

  

 

6.         Date of Grant and Shareholder Rights:

 

6.1         Date of Grant. Subject to Sections 8.1 and 8.2 hereof, the Date of Grant shall be the date the the Company’s shareholders  approve the  grant of such Option, or any later date, if so specified in the shareholder approval relating to the grant of such Option.

 

6.2         Shareholder Rights. A Grantee holding an Option shall have no shareholder rights with respect to the Shares subject to such Option until such Grantee (i) shall have exercised such Option, (ii) shall have all restrictions applicable to any Shares issued to him removed, if applicable; (iii) has paid the applicable Exercise Price; and (iv) has become the record holder of the Exercised Shares.

 

7.         Reserved Shares:

 

The maximum number of Shares that may be subject to Options granted under the Plan shall be 11,500,000 Shares.

 

8.         Required Approvals; Notice of Grant; Vesting:

 

8.1         The implementation of the Plan and the granting of any Option under the Plan shall be subject to the Company’s procurement of all approvals and permits required by applicable laws or regulatory authorities having jurisdiction over the Plan, the Options granted under it, and the Shares issued pursuant to it.

 

8.2         The Notice of Grant shall state, inter alia, the number of Shares subject to each Option, the type of Option, the vesting schedule, the dates when the Option may be exercised and/or will vest (as applicable), any restrictions upon transfer or sale of Shares (if applicable), the Exercise Price, the tax treatment to which the Option is subject and such other terms and conditions as the Administrator at its discretion may prescribe, provided that they are consistent with the Plan.

 

8.3         Vesting of Options. Unless determined otherwise by the Administrator, Options shall vest over a one to four year period according to the applicable vesting schedule and subject to any performance conditions which may be included in the Option.

 

9.         Options:

 

9.1         Exercise Price. The Exercise Price of an Option shall be equal to the closing price of Tower’s Shares, as quoted on the NASDAQ market or the principal national securities exchange upon which Tower’s Shares are listed or traded for the last market trading day prior to the date the Administrator resolves to grant such Option, subject however to approval of the shareholders of Tower. Notwithstanding the above, the exercise price will not be lower than the nominal value of the Shares.

 

9.2         Exercise of Options. Options shall be exercisable pursuant to the terms under which they were awarded and subject to the terms and conditions of the Plan. The exercise of an Option shall be made by a written Notice of Exercise delivered by the Grantee to the Representative, in such form and method as may be determined by the Company, specifying the number of Shares to be purchased, at the Representative’s principal office, and containing such other terms and conditions as the Administrator shall prescribe from time to time.

 

  

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9.3         Term of Options. Without derogating from the provisions of Section 9.5 below, if any Option has not been exercised and the Shares subject thereto not paid for within seven (7) years after the Date of Grant (or any shorter period set forth in the Notice of Grant), such Option and the right to acquire such Shares shall terminate, all interests and rights of the Grantee in and to the same shall ipso facto expire.

 

9.4         The exercise of the Options shall be subject to applicable law, including when applicable, the limitations in connection with the use of non-public information.

 

9.5         Cessation of Service.

 

(a)        In the event of a Cessation of Service, all Options granted to such Grantee that are vested and exercisable on the Date of Cessation shall be exercisable for the duration of the period, subject to and in accordance with the provisions set forth in the Notice of Grant.  All Options that are not vested on the Date of Cessation shall expire immediately.

 

(b)        Notwithstanding the aforesaid, under no circumstances shall any Option be exercisable after the expiration of the term of such Option.

 

10.         Adjustments, Liquidation and Corporate Transaction:

 

10.1         Adjustments. Subject to any required action under any applicable law, the number and/or type of Shares subject to each outstanding Option, , as well as the Exercise Price, shall be proportionately adjusted, as the Administrator deems necessary or appropriate, for any increase or decrease in the number of issued Shares resulting from a share split, reverse share split, stock dividend, combination or reclassification of the Shares, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, in such manner as is appropriate in order to prevent dilution or enlargement of the rights of a Grantee under the Plan, and the number of Shares which have been authorized for issuance under the Plan shall likewise be proportionately adjusted; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Except as expressly provided in this Section 10, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Option.  Any such adjustment in outstanding Options shall not change the aggregate Exercise Price payable with respect to shares underlying the outstanding Options but shall include a corresponding proportionate adjustment in the Exercise Price per share.

 

Except as expressly provided in this Section 10, the grant of Options under the Plan shall in no way affect the right of the Company to distribute bonus shares, to offer rights to purchase its securities, or to distribute dividends.

 

10.2         Adjustments to Options’ Exercise Price due to Distribution of Dividends. If the Company distributes cash dividends on an extraordinary basis with respect to all Shares issued to its shareholders, and the record date for determining the right to receive such dividends (the “Determining Date”) is earlier than the Exercise Date of any Options granted hereunder, then the Exercise Price for each Option granted but not exercised prior to the Determining Date, shall be reduced by an amount equal to the gross amount of the dividend per Share distributed. If such distribution is in a currency different than the currency in which the Exercise Price is stated, said amount of reduction will be calculated in the same currency as the Exercise Price according to the representative rate of exchange as of the Determining Date, if applicable. Unless determined otherwise by the Administrator, the Exercise Price shall not be reduced to less than the nominal value of a Share.

 

  

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10.3         Liquidation. In the event of the proposed dissolution or liquidation of the Company, all outstanding Options will terminate immediately prior to the consummation of such proposed action. Notwithstanding the above, the Administrator may declare that any Option shall terminate as of a date fixed by the Administrator and give each Grantee the right to exercise his Option or have it vested, including Options that would not otherwise vest or be exercisable.

 

10.4         If the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities which does not constitute a Corporate Transaction, any Option theretofore granted pursuant to the Plan shall pertain to and apply to the securities to which a holder of the number of Shares subject to such Option would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the Exercise  Price per share so that the aggregate Exercise Price thereafter shall be the same as the aggregate Exercise Price of the shares remaining subject to the Option immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Notice of Grant evidencing an Option, any restrictions applicable to such Option shall apply as well to any replacement shares received by the Grantee as a result of the reorganization, merger or consolidation.

 

10.5         Corporate Transaction.

 

(a)         In the event of a Corporate Transaction, immediately prior to the effective date of such Corporate Transaction, each Option shall , should, among other things, at the sole and absolute discretion of the Administrator, either:

 

(i)         Be substituted for a Successor Entity Option such that the Grantee may exercise the Successor Entity Option or have it become vested, as the case may be, for such number and class of securities of the successor entity which would have been issuable to the Grantee in consummation of such Corporate Transaction, had the Option vested or been exercised (as applicable), immediately prior to the effective date of such Corporate Transaction, given the exchange ratio or consideration paid in the Corporate Transaction, the Vesting Period and Performance Conditions (if any) of the Options and such other terms and factors that the Administrator determines to be relevant for purposes of calculating the number of Successor Entity Options granted to each Grantee;

 

(ii)         Be assumed by any successor entity such that the Grantee may exercise the Option or have his/her Option vest (as applicable), for such number and class of securities of the successor entity which would have been issuable to the Grantee in consummation of such Corporate Transaction, had the Option vested or been exercised immediately prior to the effective date of such Corporate Transaction, given the exchange ratio or consideration paid in the Corporate Transaction, the Vesting Period and Performance Conditions (if any) of the Options and such other terms and factors that the Administrator determines to be relevant for this purpose; or

 

  

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(iii)         Determine that the Options shall be cashed out for a consideration equal to the difference between the price per share determined in the Corporate Transaction and the Exercise Price, purchase price, or nominal value, as the case may be, of such Option.

 

In the event of a clause (i) or clause (ii) action, appropriate adjustments shall be made to the Exercise Price per Share to reflect such action.

 

(b)         Immediately following the consummation of the Corporate Transaction, all outstanding Options (excluding Successor Entity Options) shall terminate and cease to be outstanding, except to the extent assumed by a successor entity.

 

(c)         Notwithstanding the foregoing, and without derogating from the power of the Administrator pursuant to the provisions of the Plan, the Administrator shall have full authority and sole discretion to determine that any of the provisions of Sections 10.5(a)(i) or 10.5(a)(ii) above shall apply in the event of a Corporate Transaction in which the consideration received by the shareholders of the Company is not solely comprised of securities of a successor entity, or in which such consideration is solely cash or assets other than securities of a successor entity. In addition, in the event that the Administrator determines in good faith that, in the context of a Corporate Transaction, certain Options have no monetary value and thus do not entitle the holders of such Options to any consideration under the terms of the Corporate Transaction, the Administrator may determine that such Options shall terminate effective as of the effective date of the Corporate Transaction. It is the intention that the Administrator’s authority to make determinations, adjustments and clarifications in connection with the treatment of Options shall be interpreted as widely as possible, to allow the Administrator maximal power and flexibility to interpret and implement the provisions of the Plan in the event of  Transaction, provided that the Administrator shall determine in good faith that a Grantee’s  rights are not thereby adversely affected without the Grantee’s express written consent.

 

10.6         Sale. Subject to any provision in the Articles of Association of the Company and to the Administrator’s sole and absolute discretion, in the event of a Sale, each Grantee shall be obligated to participate in the Sale and sell his or her Shares and/or Options in the Company, provided, however, that each such Share or Option shall be sold at a price equal to that of any other Share sold under the Sale (and, unless determined otherwise by the Administrator, less the applicable Exercise Price), while accounting for changes in such price due to the respective terms of any such Option, and subject to the absolute discretion of the Administrator.

 

For purposes of a Sale, whether “all or substantially all of the issued and outstanding share capital of the Company is to be sold”, shall be finally and conclusively determined by the Administrator in its absolute discretion.

 

10.7         The grant of Options under the Plan shall in no way affect the right of the Company 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.

 

11.         Limitations on Transfer.

 

11.1         Unless determined otherwise by the Administrator, no Option shall be assignable or transferable by the Grantee otherwise than by will or the laws of descent and distribution, and an Option shall vest or may be exercised (as applicable) only by such Grantee or his/her guardian or legal representative. The terms of such Option shall be binding upon the beneficiaries, executors, administrators, heirs and successors of such Grantee. Any Shares acquired upon exercise of Options shall be transferable only in accordance with applicable securities and other local laws, and may be subject to substantial statutory or regulatory restrictions on transfer, except to the extent exemptions (whether by registration or otherwise) are available.

 

  

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11.2         Underwriter’s Lock-up and Limitations on the Use of Nonpublic Information. The Grantee’s rights to sell Exercised Shares may be subject to certain limitations (including a lock-up period), as may be requested by the Company or its underwriters, from time to time, or upon a specific occurrence, and the Grantee unconditionally agrees and accepts any such limitations. Furthermore, the Grantee’s right to sell Exercised Shares is subject to applicable law, including in connection with limitations relating to the use of non-public information, Company-wide black out periods and so forth.

 

12.         Term and Amendment of the Plan:

 

12.1         The Plan shall continue until terminated by the Administrator. All Options outstanding at the time of termination, as aforementioned, shall continue to have full force and effect in accordance with the provisions of the Plan and the documents evidencing such Options.

 

12.2         Subject to applicable laws and regulations, the Administrator in its discretion may, at any time and from time to time, amend, alter, extend or terminate the Plan, as it deems advisable .  In addition, the Administrator may adopt, as part of the Plan and based on it, sub-plans, in order to comply with all relevant and applicable laws and regulations of the country of residence of any Grantees.

 

13.         Withholding and Tax Consequences:

 

13.1         All Tax consequences and obligations arising from the grant, vesting, or exercise of any Option (as applicable), or the subsequent disposition of, Shares subject thereto or from any other event or act (of the Company or of the Grantee) hereunder, shall be borne solely by the Grantee, and the Grantee shall indemnify the Company and hold it harmless against and from any and all liability for any such Tax, including without limitation, monetary liabilities relating to the necessity to withhold, or to have withheld, any such Tax payment from any payment made to the Grantee. The Company or any of its affiliates may make such provisions and take such steps as it may deem  necessary or appropriate for the withholding of all taxes required by law to be withheld with respect to Options granted under the Plan and the exercise or vesting thereof, including, but not limited, to (i) deducting the amount so required to be withheld from any other amount (or Shares issuable) then or thereafter  to be provided to the Grantee, including by deducting any such amount from a Grantee’s salary or other amounts payable to the Grantee, to the maximum extent permitted under law and/or (ii) requiring  the Grantee to pay to the Company or any of its affiliates the amount so required to be withheld as a condition of the issuance, delivery, distribution or release of any Shares and/or (iii) by causing the exercise and sale of any Options or Shares held by on behalf of the Grantee to cover such liability, up to the amount required to satisfy  minimum statutory withholding requirements. In addition, the Grantee will be required to pay any amount due in excess of the tax withheld and transferred to the tax authorities, pursuant to applicable tax laws, regulations and rules. Notwithstanding the above, the Company’s obligation to deliver Shares upon the exercise or vesting of any Options granted under the Plan shall be subject to the satisfaction of all applicable Tax withholding requirements and any other required payments as governed by applicable law or practice. The Company shall have the right, but not the obligation, to deduct from the Shares issuable to a Grantee upon the exercise or vesting of an Option, or to accept from the Grantee the tender of, a number of whole Shares having a fair market value, as determined by the Company, that will enable the Company to satisfy any Tax withholding obligations of the Company. The maximum number of Shares that may be withheld from any Option to satisfy any federal, state or local tax withholding requirements upon the exercise, vesting, lapse of restrictions applicable to such Option or payment of shares pursuant to such Option, as applicable, cannot exceed such number of shares having a fair market value equal to the minimum statutory amount required by the Company to be withheld and paid to any such federal, state or local taxing authority with respect to such exercise, vesting, lapse of restrictions or payment of shares.

 

  

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13.2         The Grantee shall, if requested at any time by the Company, provide to the Company within 10 calendar days of such request, any information regarding the transfer or other disposition of Shares reasonably required by the Company in order for the Company to comply with applicable local laws and regulations or to obtain any benefits thereunder.

 

14.         Miscellaneous:

 

14.1         No Employment. Neither the Plan nor the grant of an Option thereunder shall impose any obligation on the Company to continue the service of the Grantee. Nothing in the Plan or in any Option granted thereunder shall confer upon any Grantee any right to continue in the service of the Company for any period of specific duration, or interfere with or otherwise restrict in any way the right of the Company to terminate such service at any time, for any reason, with or without cause.

 

14.2         Governing Law. The Plan and all instruments issued thereunder or in connection therewith, shall be governed by, and interpreted in accordance with, the laws of the State of Israel, excluding the choice of law rules thereof.

 

14.3         Multiple Agreements. The terms of each Option may differ from other Options granted under the Plan at the same time, or at any other time. The Administrator may also grant more than one grant of Options to a Grantee during the term of the Plan, either in addition to, or in substitution for, one or more Options previously granted to that Grantee. The grant of multiple Options may be evidenced by a single Notice of Grant or multiple Notices of Grant, as determined by the Administrator.

 

14.4         Non-Exclusivity of the Plan. The adoption of the Plan by the Administrator shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Administrator to adopt such other incentive arrangements as it may deem desirable.

 

  

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TOWER SEMICONDUCTOR LTD.

 

ADDENDUM TO THE 2009 CHAIRMAN SHARE INCENTIVE PLAN

FOR ISRAELI GRANTEES

 

1.      General

 

1.1         This addendum (the “Addendum”) shall apply only to Grantees who are residents of the State of Israel or those who are deemed to be residents of the State of Israel for tax purposes (collectively, “Israeli Grantees”). The provisions specified hereunder shall form an integral part of the Tower Semiconductor Ltd. 2009 Chairman Share Incentive Plan (the “Plan”), which applies to the grant of Options.

 

1.2         This Addendum is to be read as a continuation of the Plan and only modifies the terms of Options granted to Israeli Grantees so that they comply with the requirements set by the Israeli law in general, and in particular with the provisions of the Israeli Tax Ordinance (as defined below), as may be amended or replaced from time to time.

 

1.3         The Plan and this Addendum are complimentary to each other and shall be deemed as one. In any case of contradiction with respect to Options granted to Israeli Grantees, whether explicit or implied, between the provisions of this Addendum and the Plan, the provisions set out in this Addendum shall prevail.

 

1.4         Any capitalized term not specifically defined in this Addendum shall be construed according to the definition or interpretation given to it in the Plan

 

2.      Definitions 

 

“102 Option” means a grant of an Option to an Israeli employee, director or other office holder of the Company, other than to a Controlling Shareholder, pursuant to the provisions of Section 102 of the Tax Ordinance, the 102 Rules, and any other regulations, rulings, procedures or clarifications promulgated thereunder, or under any other section of the Tax Ordinance that will be relevant for such issuance in the future.

 

“102(c) Option” means a 102 Option that will not be subject to a Taxation Route, as detailed in Section 102(c) of the Tax Ordinance.

 

 “Beneficial Grantee” means the Grantee for the benefit of whom the Trustee holds an Option in Trust.

 

“Capital Gains Route” means the capital gains tax route under Section 102(b)(2) of the Tax Ordinance.

 

“Controlling Shareholder” means a “controlling shareholder” of the Company, as such term is defined in Section 32(9)(a) of the Tax Ordinance.

 

“Minimum Trust Period” means the minimum period of time required under a Taxation Route for Options and/or Exercised Shares to be held in Trust in order for the Beneficial Grantee to enjoy to the fullest extent the tax benefits afforded under such Taxation Route, as prescribed at any time by Section 102 of the Tax Ordinance.

 

“Ordinary Income Route” means the ordinary income route under Section 102(b)(1) of the Tax Ordinance.

 

“Rights” means rights issued in respect of Exercised Shares, including bonus shares.

 

  

  

  

 

“102 Rules” means the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees), 2003.

 

“Taxation Route” means each of the Ordinary Income Route or the Capital Gains Route.

 

“Tax Ordinance” means the Israeli Income Tax Ordinance [New Version], 1961, as amended.

 

“Trust” means the holding of an Option or Exercised Share by the Trustee in Trust for the benefit of the Beneficial Grantee, pursuant to the instructions of a Taxation Route.

 

“Trustee” means a trustee designated by the Administrator in accordance with the provisions of Section 3 below and, with respect to 102 Options, approved by the Israeli Tax Authorities.

 

3.      Administration: 

 

3.1         The Administrator has elected the Capital Gains Route for grants of 102 Options pursuant to the provisions of Section 102 of the Ordinance and the applicable regulations.

 

3.2         Subject to the general terms and conditions of the Plan, the Tax Ordinance, and any other applicable laws and regulations, the Administrator shall have the full authority in its discretion, from time to time, to determine with respect to grants of 102 Options –the identity of the trustee who shall be granted such 102 Options in accordance with the provisions of the Plan and the then prevailing Taxation Route.

 

3.3         Notwithstanding the aforesaid, the Administrator may, from time to time, grant 102(c) Options.

 

4.     Grant of Options and Issuance of Shares: 

 

 Subject to the provisions of the Tax Ordinance and applicable law all grants of Options to Israeli employees, directors and office holders of the Company, other than to a Controlling Shareholder, shall be of 102 Options:

 

5.      Trust: 

 

5.1         General.

 

a.        In the event Options are deposited with a Trustee, the Trustee shall hold each such Option and any Exercised Shares in Trust for the benefit of the Beneficial Grantee.

 

b.        In accordance with Section 102, the tax benefits afforded to 102 Options (and any Exercised Shares) in accordance with the Ordinary Income Route or Capital Gains Route, as applicable, shall be contingent upon the Trustee holding such 102 Options for the applicable Minimum Trust Period.

 

c.        With respect to 102 Options granted to the Trustee, the following shall apply:

 

i)        A Grantee granted 102 Options shall not be entitled to sell the Exercised Shares or to transfer such Exercised Shares (or such 102 Options) from the Trust prior to the lapse of the Minimum Trust Period; and

 

ii)        Any and all Rights shall be issued to the Trustee and held thereby until the lapse of the Minimum Trust Period, and such Rights shall be subject to the Taxation Route which is applicable to such Exercised Shares.

 

d.        Notwithstanding the aforesaid, Exercised Shares or Rights may be sold or transferred, and the Trustee may release such Exercised Shares or Rights from Trust, prior to the lapse of the Minimum Trust Period, provided however, that tax is paid or withheld in accordance with Section 102 of the Tax Ordinance and Section 7 of the 102 Rules, and any other provision in any other section of the Tax Ordinance and any regulation, ruling, procedure and clarification promulgated thereunder, that will be relevant, from time to time.

 

  

  

  

 

e.        The Company shall register the Exercised Shares issued to the Trustee pursuant to the Plan, in the name of the Trustee for the benefit of the Israeli Grantees, in accordance with any applicable laws, rules and regulations, until such time that such Shares are released from the Trust as herein provided.

 

If the Company shall issue any certificates representing Exercised Shares deposited with the Trustee under the Plan, then such certificates shall be deposited with the Trustee, and shall be held by the Trustee until such time that such Exercised Shares are released from the Trust as herein provided.

 

f.         Subject to the terms hereof, at any time after the Options are exercised or vested, with respect to any Exercised Shares the following shall apply:

 

i)        Upon the written request of any Beneficial Grantee, the Trustee shall release from the Trust the Exercised Shares issued, on behalf of such Beneficial Grantee, by executing and delivering to the Company such instrument(s) as the Company may require, giving due notice of such release to such Beneficial Grantee, provided, however, that the Trustee shall not so release any such Exercised Shares to such Beneficial Grantee unless the latter, prior to, or concurrently with, such release, provides the Trustee with evidence, satisfactory in form and substance to the Trustee, that payment of all taxes, if any, required to be paid upon such release has been secured.

 

ii)        Alternatively, subject to the terms hereof, provided the Shares are listed on a stock market, upon the written instructions of the Beneficial Grantee to sell any Exercise Shares, the Company and/or the Trustee shall use their reasonable efforts to effect such sale and shall transfer such Shares to the purchaser thereof concurrently with the receipt of, or after having made suitable arrangements to secure, the payment of the proceeds of the purchase price in such transaction. The Company and/or the Trustee, as applicable, shall withhold from such proceeds any and all taxes required to be paid in respect of such sale, shall remit the amount so withheld to the appropriate tax authorities and shall pay the balance thereof directly to the Beneficial Grantee, reporting to such Beneficial Grantee the amount so withheld and paid to said tax authorities.

 

5.2         Voting Rights. Unless determined otherwise by the Administrator, as long as the Trustee holds the Exercised Shares, the voting rights at the Company’s general meeting attached to such Exercised Shares will remain with the Trustee. However, the Trustee shall not be obligated to exercise such voting rights at general meetings nor notify the Grantee of any Shares held in the Trust, of any meeting of the Company’s shareholders.

 

      Without derogating from the above, with respect to 102 Options, such shares shall be voted in accordance with the provisions of Section 102 and any rules, regulations or orders promulgated thereunder.

 

  

  

  

 

5.3         Dividends. Subject to any applicable law, tax ruling or guidelines of the Israeli Tax Authority, as applicable, for so long as Shares deposited with the Trustee on behalf of a Beneficial Grantee are held in Trust, the cash dividends paid or distributed with respect thereto shall be distributed directly to such Beneficial Grantee, subject further to any applicable taxation on distribution of dividends, and when applicable subject to the provisions of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated thereunder.

 

5.4         Notice of Exercise. With respect to a 102 Option held in the Trust, a copy of any Notice of Exercise shall be provided to the Trustee, in such form and method as may be determined by the Trustee in accordance with the requirements of Section 102 of the Tax Ordinance.

 

6.      Notice of grant: 

 

6.1         The Notice of Grant shall state, inter alia, whether the Options granted to Israeli Grantees are 102 Options (and in particular whether the 102 Options are granted under the Ordinary Income Route, the Capital Gains Route or as 102(c) Options). Each Notice of Grant evidencing a 102 Option shall be subject to the provisions of the Tax Ordinance applicable to such awards.

 

6.2         Furthermore, each Grantee of a 102 Option under a Taxation Route shall be required: (i) to execute a declaration stating that he or she is familiar with the provisions of Section 102 of the Tax Ordinance and the applicable Taxation Route; and (ii) to undertake not to sell or transfer the Options and/or the Exercised Shares prior to the lapse of the applicable Minimum Trust Period, unless he or she pays all taxes that may arise in connection with such sale and/or transfer.

 

7.     Sale: 

 

 In the event of a Sale described in Section 12.6 of the Plan, with respect to Shares held in Trust the following procedure will be applied: The Trustee will transfer the Shares held in Trust and sign any document in order to effectuate the transfer of Shares, including share transfer deeds, provided, however, that the Trustee receives a notice from the Administrator, specifying that: (i) all or substantially all of the issued outstanding share capital of the Company is to be sold, and therefore the Trustee is obligated to transfer the Shares held in Trust under the provisions of Section 11.5 of the Plan; and (ii) the Company is obligated to withhold at the source all taxes required to be paid upon release of the Shares from the Trust and to provide the Trustee with evidence, satisfactory to the Trustee, that such taxes indeed have been paid; and (iii) the Company is obligated to transfer the consideration for the Shares (less applicable tax and compulsory payments) directly to the Grantees.

 

8.     Limitations of Transfer: 

 

 In addition to the provisions of Section 11 of the Plan, as long as Options and/or Shares are held by the Trustee on behalf of the Grantee, all rights of the Grantee over the Shares are personal, cannot be transferred, assigned, pledged or mortgaged, other than by will or pursuant to the laws of descent and distribution.

 

  

  

  

 

9.     Taxation: 

 

9.1         Without derogating from the provisions of Section 13 of the Plan, the provisions of Section 13.1 of the Plan shall apply also to actions taken by the Trustee. Accordingly, without derogating from the provisions of Section 13.1 of the Plan, the Grantee shall indemnify the Trustee and hold it harmless against and from any and all liability for any such Tax, including without limitation, monetary liabilities relating to the necessity to withhold, or to have withheld, any such Tax from any payment made to the Grantee.

 

9.2         The Trustee shall not be required to release any Share (or Share certificate) to a Grantee until all required Tax payments have been fully made or secured.

 

9.3         With regards to 102 Options, any provision of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated thereunder, which is necessary in order to receive and/or to preserve any Tax treatment pursuant to Section 102 of the Tax Ordinance, which is not expressly specified in the Plan or in this Addendum, shall be considered binding upon the Company and the Israeli Grantee.

 

Guarantee. In the event a 102(c) Option is granted to a Grantee, and in the event of Cessation of Service, such Grantee shall provide the Company, to its full satisfaction, with a guarantee or collateral securing the future payment of all Taxes required to be paid upon the sale of the Exercised Shares received upon exercise of such 102(c) Option, all in accordance with the provisions of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated thereunder.

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