Document:

spartan_10k-ex1007.htm

 EXHIBIT 10.7

    

SPARTAN GOLD LTD.

 

2012 EQUITY INCENTIVE PLAN

1.   Purposes.

(a)   Eligible Stock Award Recipients.  The persons eligible to receive Stock Awards are the Employees, Directors and Consultants of the Company and its Affiliates.

 

(b)   Available Stock Awards.  The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards:  (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.

 

(c)   General Purpose.  The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

 

2.   Definitions.

 

(a)   “Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

 

(b)   “Board” means the Board of Directors of the Company.

 

(c)   “Code” means the Internal Revenue Code of 1986, as amended.

 

(d)   “Committee” means a committee of one or more members of the Board appointed by the Board in accordance with subsection 3(c).

 

(e)   “Common Stock” means the common stock of the Company.

 

(f)   “Company” means Spartan Gold Ltd., a Nevada corporation.

 

(g)   “Consultant” means any person, including an advisor, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate.  However, the term “Consultant” shall not include either Directors who are not compensated by the Company for their services as Directors or Directors who are merely paid a director’s fee by the Company for their services as Directors.

   

  

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(h)   “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated.  The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service.  For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not constitute an interruption of Continuous Service.  The Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.

 

(i)   “Covered Employee” means the chief executive officer and the four (4) other highest compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

 

(j)   “Director” means a member of the Board of Directors of the Company.

 

(k)   “Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

 

(l)   “Employee” means any person employed by the Company or an Affiliate.  Service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.

 

(m)   “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(n)   “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

 

(i)   If the Common Stock is listed on any established stock exchange, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.

 

(ii)   In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board.

 

(o)   “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

   

  

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(p)   “Non-Employee Director” means a Director who either (i) is not a current Employee or Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

 

(q)   “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

 

(r)   “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

(s)   “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.

 

(t)   “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an individual Option grant.  Each Option Agreement shall be subject to the terms and conditions of the Plan.

 

(u)   “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

 

(v)   “Outside Director” means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is not currently receiving direct or indirect remuneration from the Company or an “affiliated corporation” for services in any capacity other than as a Director or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

 

(w)   “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

 

(x)   “Plan” means this Spartan Gold Ltd. 2012 Equity Incentive Plan.

 

(y)   “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

 

(z)   “Securities Act” means the Securities Act of 1933, as amended.

 

(aa)   “Stock Award” means any right granted under the Plan, including an Option, a stock bonus and a right to acquire restricted stock.

   

  

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(bb)   “Stock Award Agreement” means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant.  Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.

 

3.   Administration.

 

(a)   Administration by Board.  The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in subsection 3(c).

 

(b)   Powers of Board.  The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(i)   To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person.

 

(ii)   To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration.  The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

 

(iii)   To amend the Plan or a Stock Award as provided in Section 12.

 

(iv)   Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan.

 

(c)   Delegation to Committee

 

(i)   General.  The Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated.  If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.

 

(ii)   Committee Composition when Common Stock is Publicly Traded.  At such time as the Common Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3.  Within the scope of such authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Stock Award or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code and/or) (2) delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act.

   

  

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(d)   Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.

 

4.   Shares Subject to the Plan.

 

(a)   Share Reserve.  Subject to the provisions of Section 11 relating to adjustments upon changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate 4,750,000 shares of Common Stock; plus an annual increase on the first day of each of the Company’s fiscal years beginning in fiscal 2013 equal to the lesser of (a) 10% of the shares of Common Stock outstanding on the last day of the immediately preceding fiscal year, (b) 10,000,000 shares of Common Stock, or (c) such lesser number of Shares as the Board shall determine; provided, however, in no event shall the maximum number of Shares that may be issued under this Plan pursuant to Stock Awards shall not exceed 15% of the aggregate Shares outstanding on the last day of the immediately preceding fiscal year.

 

(b)   Reversion of Shares to the Share Reserve.  If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan.

 

(c)   Source of Shares.  The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

 

5.   Eligibility.

 

(a)   Eligibility for Specific Stock Awards.  Incentive Stock Options may be granted only to Employees.  Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.

 

(b)   Section 162(m) Limitation. The Board, in its sole discretion, may require that one or more agreements contain provisions which provide that, in the event Section 162(m) of the Code, or any successor provision relating to excessive employee remuneration, would operate to disallow a deduction by the Company for all or part of any payment of an award under the Plan, a grantee’s receipt of the portion that would not be deductible by the Company shall be deferred to either the earliest date at which the Board reasonably anticipates that the grantee's remuneration either does not exceed the limit set forth in Section 162(m) of the Code or is not subject to Section 162(m) of Code, or the calendar year in which the grantee separates from service.  This Section 5(b) shall be applied and construed consistently with Section 409A of the Code and the regulations (and guidance) thereunder.

 

(c)   Consultants.

   

  

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(i)   A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to register either the offer or the sale of the Company’s securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require registration under the Securities Act in order to comply with the requirements of the Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all other relevant jurisdictions.

 

(ii)   Rule 701 and Form S-8 generally are available to consultants and advisors only if (i) they are natural persons; (ii) they provide bona fide services to the issuer, its parents, its majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s parent; and (iii) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the issuer’s securities.

 

6.   Option Provisions.

 

Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate.  All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option.  The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

 

(a)   Term.  No Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date it was granted.

 

(b)   Exercise Price of an Incentive Stock Option.  The exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

 

(c)   Exercise Price of a Nonstatutory Stock Option.  The exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

  

  

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(d)   Consideration.  The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock, (2) according to a deferred payment or other similar arrangement with the Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board.  Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).  At any time that the Company is incorporated in Nevada, payment of the Common Stock’s “par value,” as defined in the Nevada General Corporation Law, shall not be made by deferred payment.

 

In the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement.

 

(e)   Transferability of an Incentive Stock Option.  An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder.  Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.

 

(f)   Transferability of a Nonstatutory Stock Option.  A Nonstatutory Stock Option shall be transferable to the extent provided in the Option Agreement.  If the Nonstatutory Stock Option does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder.  Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.

 

(g)   Vesting Generally.  The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal.  The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate.  The vesting provisions of individual Options may vary.  The provisions of this subsection 6(g) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.

 

(h)   Termination of Continuous Service.  In the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder’s Continuous Service (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement.  If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate.

   

  

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(i)   Extension of Termination Date.  An Optionholder’s Option Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service (other than upon the Optionholder’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the expiration of a period of three (3) months after the termination of the Optionholder’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements.

 

(j)   Disability of Optionholder.  In the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement.  If, after termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate.

 

(k)   Death of Optionholder.  In the event (i) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder’s death pursuant to subsection 6(e) or 6(f), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement) or (2) the expiration of the term of such Option as set forth in the Option Agreement.  If, after death, the Option is not exercised within the time specified herein, the Option shall terminate.

 

(l)   Early Exercise.  The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option.  Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate.

   

  

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(m)   Right of Repurchase.   The Option may, but need not, include a provision whereby the Company may elect to repurchase all or any part of the vested shares of Common Stock acquired by the Optionholder pursuant to the exercise of the Option.

 

(n)   Right of First Refusal.  The Option may, but need not, include a provision whereby the Company may elect to exercise a right of first refusal following receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of Common Stock received upon the exercise of the Option.  Except as expressly provided in this subsection 6(n), such right of first refusal shall otherwise comply with any applicable provisions of the Bylaws of the Company.

 

7.   Provisions of Stock Awards other than Options.

 

(a)   Stock Bonus Awards.  Each stock bonus agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate.  The terms and conditions of stock bonus agreements may change from time to time, and the terms and conditions of separate stock bonus agreements need not be identical, but each stock bonus agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

 

(i)   Consideration.  A stock bonus may be awarded in consideration for past services actually rendered to the Company or an Affiliate for its benefit.

 

(ii)   Vesting.  Shares of Common Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board.

 

(iii)   Termination of Participant’s Continuous Service.  In the event a Participant’s Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination under the terms of the stock bonus agreement.

 

(iv)   Transferability.  Rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the stock bonus agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the stock bonus agreement remains subject to the terms of the stock bonus agreement.

 

(b)   Restricted Stock Awards.  Each restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate.  The terms and conditions of the restricted stock purchase agreements may change from time to time, and the terms and conditions of separate restricted stock purchase agreements need not be identical, but each restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

   

  

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(i)   Purchase Price.  The purchase price of restricted stock awards shall not be less than eighty-five percent (85%) of the Common Stock’s Fair Market Value on the date such award is made or at the time the purchase is consummated.

 

(ii)   Consideration.  The purchase price of Common Stock acquired pursuant to the restricted stock purchase agreement shall be paid either:  (i) in cash at the time of purchase; (ii) at the discretion of the Board, according to a deferred payment or other similar arrangement with the Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board in its discretion; provided, however, that at any time that the Company is incorporated in Nevada, then payment of the Common Stock’s “par value,” as defined in the Nevada General Corporation Law, shall not be made by deferred payment.

 

(iii)   Vesting.  Shares of Common Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board.

 

(iv)   Termination of Participant’s Continuous Service.  In the event a Participant’s Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination under the terms of the restricted stock purchase agreement.

 

(v)   Transferability.  Rights to acquire shares of Common Stock under the restricted stock purchase agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the restricted stock purchase agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains subject to the terms of the restricted stock purchase agreement.

 

8.   Covenants of the Company.

 

(a)   Availability of Shares.  During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

 

(b)   Securities Law Compliance.  The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award.  If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained.

 

9.   Use of Proceeds from Stock.

 

Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company.

   

  

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10.   Miscellaneous.

 

(a)   Acceleration of Exercisability and Vesting.  The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.

 

(b)   Stockholder Rights.  No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms.

 

(c)   No Employment or other Service Rights.  Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

 

(d)   Incentive Stock Option $100,000 Limitation.  To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.

 

(e)   Investment Assurances.  The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock.  The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws.  The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

   

  

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(f)   Withholding Obligations.  To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means:  (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company owned and unencumbered shares of Common Stock.

 

11.   Adjustments upon Changes in Stock.

 

(a)   Capitalization Adjustments.  If any change is made in the Common Stock subject to the Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Stock Awards.  The Board shall make such adjustments, and its determination shall be final, binding and conclusive.  (The conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.)

 

(b)   Dissolution or Liquidation.  In the event of a dissolution or liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to such event.

 

(c)   Asset Sale, Merger, Consolidation, or Series of Transactions.  In the event of (i) a sale, lease or other disposition of all or substantially all of the assets of the Company, (ii) a consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than 50% of the Company’s outstanding voting power of the surviving entity (or its parent) following the consolidation, merger or reorganization or (iii) any transaction (or series of related transactions involving a person or entity, or a group of affiliated persons or entities) in which in excess of fifty percent (50%) of the Company’s outstanding voting power is transferred (individually, a “Corporate Transaction”), then any surviving corporation or acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar stock awards (including an award to acquire the same consideration paid to the stockholders in the Corporate Transaction for those outstanding under the Plan.  In the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock awards for those outstanding under the Plan, then with respect to Stock Awards held by Participants whose Continuous Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated in full, and the Stock Awards shall terminate if not exercised (if applicable) at or prior to the Corporate Transaction.  With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to the Corporate Transaction.

    

  

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12.   Amendment of the Plan and Stock Awards.

 

(a)   Amendment of Plan.  The Board at any time, and from time to time, may amend the Plan.  However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements.

 

(b)   Stockholder Approval.  The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

 

(c)   Contemplated Amendments.  It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith.

 

(d)   No Impairment of Rights.  Rights under any Stock Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.

 

(e)   Amendment of Stock Awards.  The Board at any time, and from time to time, may amend the terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.

 

13.   Termination or Suspension of the Plan.

 

(a)   Plan Term.  The Board may suspend or terminate the Plan at any time.  Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.  No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

(b)   No Impairment of Rights.  Suspension or termination of the Plan shall not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the Participant.

   

  

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14.   Effective Date of Plan.

 

The Plan shall become effective as determined by the Board, but no Stock Award shall be exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.

 

15.   Choice of Law.

 

The law of the State of Nevada shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14spartan_10k-ex1008.htm

EXHIBIT 10.8

      

Spartan Gold Ltd.

EMPLOYMENT AGREEMENT

CHIEF EXECUTIVE OFFICER and DIRECTOR

Agreement made as of this 28th day of March, 2012, by and between Malcolm Stevens (“Executive”) and Spartan Gold Ltd. (“Spartan” or, the “Company”).

 

PREAMBLE

 

The Board of Directors of the Company recognizes Executive’s potential contribution to the growth and success of the Company and desires to assure the Company of Executive’s employment in an executive capacity as Chief Executive Officer and Director and to compensate him therefor.  Executive wants to be employed by the Company and to commit himself to serve the Company on the terms herein provided.

 

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties, the parties agree as follows:

 

1.    Definitions

“Benefits” shall mean all the fringe benefits approved by the Board from time to time and established by the Company for the benefit of executives generally and/or for key executives of the Company as a class, including, but not limited to, regular holidays, vacations, absences resulting from illness or accident, health insurance, disability and medical plans (including dental and prescription drug), group life insurance, and pension, profit-sharing and stock bonus plans or their equivalent.

 

“Board” shall mean the Board of Directors of the Company, together with an executive committee thereof (if any), as the same shall be constituted from time to time.

 

“Cause” shall mean (i) gross negligence in the performance of the material responsibilities of the Executive’s office or position, (ii) willful misconduct in performance and discharge of the Executive’s material duties or that is otherwise materially injurious to the Company’s business, (iii) conviction of or a plea of no contest to a felony or Executive’s incapacity due to alcoholism or substance abuse or (iv) a material and intentional breach by Executive of his principal obligations under this Agreement not remedied within fifteen (15) business days after receipt of written notice from the Company.

 

“Change of Control” shall mean the occurrence of one or more of the following four events:

     

	 	
(1)

	
Any Person becomes a beneficial owner (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) directly or indirectly of securities representing 51% or more of the total number of votes that may be cast for the election of directors of the Company;

     

  

1

  

      

	 	
(2)

	
Within eighteen months after a merger, consolidation, liquidation or sale of assets involving the Company, or a contested election of a Company director, or any combination of the foregoing, the individuals who were directors of the Company immediately prior thereto shall cease to constitute a majority of the Board;

   

	 	
(3)

	
Within eighteen months after a tender offer or exchange offer for voting securities of the Company, the individuals who were directors of the Company immediately prior thereto shall cease to constitute a majority of the Board; or

     

	 	
(4) 

	
A Reorganization.

   

	 	
(5) 

	
A sale of all or substantially all of the assets of the Company.

   

“Chief Executive Officer” shall mean the individual having responsibility to the Board for direction and management of the executive and administration of the Company and who reports and is accountable only to the Board.

 

“Company” shall mean Spartan Gold Ltd., a Nevada corporation.

 

“Competitive Business Activity” shall mean the exploration, development and sale of gold or other natural resources from the Company’s properties.

 

“Director” shall mean the individual elected by shareholders or designated by the Board from time to time as its Director.

 

“Disability” shall mean a written determination by an independent physician mutually agreeable to the Company and Executive (or, in the event of Executive’s total physical or mental disability, Executive’s legal representative) that Executive is physically or mentally unable to perform his duties of Chief Executive Officer and Director under this Agreement and that such disability can reasonably be expected to continue for a period of six (6) consecutive months or for shorter periods aggregating one hundred and eighty (180) days in any twelve-(12)-month period.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934.

 

“Executive” shall mean Malcolm Stevens and, if the context requires, his heirs, personal representatives, and permitted successors and assigns.

 

“Performance Year” shall mean each twelve-month period of employment under this Agreement commencing upon the date of this Agreement.

 

“Person” shall mean any natural person, incorporated entity, limited or general partnership, limited liability company, business trust, association, agency (governmental or private), division, political sovereign, or subdivision or instrumentality, including those groups identified as “persons” in §§ 13(d)(3) and 14(d)(2) of the Exchange Act.

    

  

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“Reorganization” shall mean any transaction, or any series of transactions consummated in a 12-month period, pursuant to which any Person acquires (by merger, acquisition, or otherwise) all or substantially all of the assets of the Company or the then outstanding equity securities of the Company and the Company is not the surviving entity, the Company being deemed surviving if and only if the majority of the Board of Directors of the ultimate parent of the surviving entity were directors of the Company prior to its organization.

 

“Territory” shall mean any state of the United States and any equivalent section or area of any country in which the Company has revenue-producing customers or activities.

 

2.    Position, Responsibilities, and Term of Employment.

2.01    Position.  Executive shall serve as Director, and Chief Executive Officer of the Company.  In this capacity Executive shall, subject to the bylaws of the Company, and to the direction of the Board, serve the Company by performing such duties and carrying out such responsibilities as are normally related to the position of Director and Chief Executive Officer in accordance with the standards of the industry in which the Company carries on its business.  The Board shall either vote, or recommend to the shareholders of the Company, as appropriate, that during the term of employment pursuant to this Agreement:  (i) Executive be nominated for election as a director at each meeting of shareholders held for the election of directors and be nominated for election as Director; (ii) Executive be elected to and continued in the office of Chief Executive Officer of the Company; (iii) Executive be elected to and continued on the Board of Directors of each wholly-owned subsidiary of the Company, (iv) if the Board or any of the Company’s wholly-owned subsidiaries’ Board of Directors shall appoint an executive committee (or similar committee authorized to exercise the general powers of the Board), Executive be elected to and continued on such committee; and (v) the Company shall not confer on any other officer authority, responsibility, powers or prerogatives superior or equal to the authority, responsibility, prerogatives and powers vested in Executive hereunder.

2.02    Reporting.  Executive, in his capacity as Chief Executive Officer of the Company, will report directly to the Board.

2.03    Time and Efforts Covenant.  Executive will, to the best of his ability, devote such time and efforts as are necessary to the performance of his duties for the Company and its wholly-owned subsidiaries.

2.04    Executive’s Commitment.  During Executive’s employment with the Company, Executive will not undertake or engage in any other employment, occupation or business enterprise inconsistent with his obligations under this Agreement except for Executive’s service in an executive or board position with organizations, and their respective subsidiaries and/or affiliates, and/or other companies Executive currently has ownership, management responsibilities and/or other relationships with, as approved and added to this document in Exhibit B.  Subject to the foregoing, Executive agrees not to acquire, assume, or participate in, directly or indirectly, any position, investment, or interest in the Territory adverse or antagonistic to the Company, its business or prospects, financial or otherwise, or take any action towards any of the foregoing. The provisions of this Section shall not prevent Executive from owning shares of any entity engaging in Competitive Business Activity, so long as such shares (i) do not constitute more than 5% of the outstanding equity of such competitor, and (ii) are regularly traded on a national securities exchange or quoted for trading by the NASDAQ Stock Market.

   

  

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2.05    Relocation.  Executive’s place of employment will not be located outside the Scottsdale, Arizona area.

2.06    Post-Employment Noncompetition and Nonsolicitation Covenant.  During the Employment Period and continuing until the six month termination anniversary thereof, Executive shall not, without the prior written authorization of the Board of Directors of the Company, (i) directly or indirectly render services of a business, professional or commercial nature (whether for compensation or otherwise) to any person or entity competitive or adverse to the Company's business welfare, (ii) engage in any activity, whether alone, as a partner, or as an officer, director, employee, consultant, independent contractor, or stockholder in any other corporation, person, or entity which is competitive with or adverse to the Company's business welfare, (iii) hire or solicit for hire any of the Company's employees, prospective employees or consultants (iv) solicit the business of any client of the Company, or any prospective client of the Company that had been serviced or solicited by the Company during the six (6) months preceding Executive's termination, or (v) enter into any agreements with any supplier of the Company regarding the sale or distribution of products of the supplier.

In the event that Executive's employment with the Company is terminated by Executive or the Company at any time, for any reason whatsoever, the Company shall have the right to inform any of Executive's future employers or prospective employers of the existence of this Section 2.06 of the Agreement. This Section 2.06 shall not, however, prevent Executive from investing in securities issued by any such competitive or adverse corporation provided the holdings thereof by Executive do not constitute more than five percent of any one class of such securities.

   

2.07    Confidential Information.  Executive shall not disclose or use, or authorize anyone else to disclose or use, at any time, during the Employment Period, any trade secrets or other confidential information of the Company of which Executive is or becomes informed or aware of prior to or during the Employment Period, except (i) as may be required for Executive to perform his duties and obligations under this Agreement, (ii) to the extent such information has been disclosed to Executive by a third party who is not affiliated with the Company or which otherwise becomes generally available to the public, (iii) information which must be disclosed as a result of a subpoena or other legal process, provided that the Company is given reasonable notice and an opportunity to obtain a protective order, or (iv) unless Executive shall first secure the Company's prior written authorization. This paragraph shall survive the termination of this Employment Period, whether by lapse of time or otherwise, and shall remain in effect and be enforceable against Executive for six months or if Company trade secrets or confidential information becomes public prior to the time limit. Executive shall execute additional agreements and confirmations of his obligations to the Company concerning such non-disclosure of Company trade secrets and other confidential information as the Company may require from time to time, provided that the execution of such additional agreements and confirmations are (i) reasonable and (ii) are required of all other senior executive employees of the Company under similar circumstances.

Executive shall use his best efforts to prevent the removal of any Confidential Information from the premises of the Company, except as required in his normal course of employment by the Company.  Executive shall use his best efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by him hereunder to observe the terms and conditions set forth herein as though each such person or entity was bound hereby.

    

  

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2.08    Records, Files.  All records, files, drawings, documents, equipment and the like relating to the business of the Company which are prepared or used by Executive during the term of his employment under this Agreement shall be and shall remain the sole property of the Company.

2.09    Equitable Relief.  Executive acknowledges that his services to the Company are of a unique character which gives them a special value to the Company.  Executive further recognizes that material and intentional violations by Executive of any one or more of the provisions of this Section 2 may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law and that such material and intentional violations may result in irreparable and continuing harm to the Company.  Executive agrees that, in addition to any other remedy which the Company may have at law and equity, including the right to withhold any payment of compensation under Section 3 of this Agreement, the Company shall be entitled to injunctive relief to restrain any material and intentional violation, actual or threatened, by Executive of the provisions of Section 2 of this Agreement.

2.10    (a)    Executive agrees promptly to disclose and deliver to the Company any and all, and hereby assigns, transfers, and sets over to the Company Executive’s entire and exclusive right, title, and interest, including rights in the nature of patent rights, trademark rights, copyrights, trade secrets, or design rights, in and to any and all, improvements, inventions, developments, discoveries, works of authorship, innovations, systems, techniques, ideas, processes, programs, listings, and other things that may be of assistance to the Company, whether patentable or unpatentable, relating to or arising out of any development, service, or product of, or pertaining in any manner to the business of, the Company whether conceived, developed, or learned by Executive, alone or with others, during or after normal business hours, while employed by the Company (collectively, “Work Products”).  The foregoing assignment includes, without limitation, all such rights in the United States of America and throughout the world, and in and to any letters patent, applications for letters patent, any division, reissue, extension, continuation, or continuation-in-part thereof, or any copyright or trademark registrations that may be granted and issued for such Work Products.  Executive hereby authorizes and requests the Commissioner of Patents and Trademarks or other appropriate government official to issue any such Letters Patent or registrations to the Company, its successors, and assigns.  It is expressly understood that Work Products does not include any and all, improvements, inventions, developments, discoveries, works of authorship, innovations, systems, techniques, ideas, processes, programs, listings, and other things developed for the benefit of Enterprises during normal business hours while Executive is employed by Enterprises.

   

  

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(b)    The parties intend that the Company have the sole and exclusive right, title, and interest in such Work Products and Prior Art. Executive acknowledges and agrees that all Work Products and Prior Art will be and remain the exclusive property of the Company and that Executive will, upon the request of the Company, and without further compensation, do all lawful things requested by the Company to ensure the Company’s ownership of the Work Products and Prior Art, including, without limitation, the execution of all documents requested by the Company to assign and transfer to the Company and its assigns all of Executive’s right, title, and interest in the Work Products and Prior Art, if any, and to enable the Company to file and obtain patents, copyrights, and other proprietary rights in the United States and foreign countries relating to the Work Products and Prior Art.  Executive hereby appoints the Company as Executive’s attorney-in-fact to execute all documents relating to such registrations, applications, and assignments.  The provisions of this Section 2.10 will survive the expiration or termination of this Agreement for any reason.

2.11    Term.  The Company shall employ Executive, and Executive shall be employed by the Company and shall provide services to the Company upon the terms and conditions hereinafter set forth. The initial term of Executive's employment with the Company shall continue, unless earlier terminated pursuant to Section 4 hereof, through December 31, 2012 (the "Employment Period"); provided, however, that after expiration of the initial term, the Employment Period shall automatically be renewed each January 1 for successive one-year terms unless the Company or Executive delivers written notice to the other party at least sixty (60) days preceding the expiration of the initial term or any one-year extension date of the intention not to extend the term of this Agreement.

3.    Compensation.

3.01    Annual Compensation.  The Company shall pay to Executive for the services to be rendered hereunder a base salary as shown on Exhibit A hereto (“Annual Compensation”).  There shall be an annual review for merit by the Board and an increase as deemed appropriate to reflect the value of services by Executive.  At no time during his employment with the Company shall Executive’s annual base salary fall below his Annual Compensation.  In addition, if the Board increases Executive’s Annual Compensation at any time during his employment with the Company, such increased Annual Compensation shall become a floor below which Executive’s compensation shall not fall at any future time during his employment with the Company and shall become his Annual Compensation.

Executive’s salary shall be payable in periodic installments in accordance with the Company’s usual practice for similarly situated executives of the Company.

3.02    Incentive Compensation.  In addition to his Annual Compensation, Executive shall be entitled to receive incentive compensation in such amounts as are determined by the Board from time to time (“Incentive Compensation”). Incentive Compensation is outlined in Exhibit A.  Any Incentive Compensation which is not deductible in the opinion of the Company’s counsel, under § 162(m) of the Internal Revenue Code of 1986 shall be deferred and paid, without interest, in the first year or years when and to the extent such payment may be deducted, Executive’s right to such payment being absolute so long as Executive remains employed by the Company, subject only to the provisions of Section 2.09.

   

  

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3.03    Participating in Benefits.  Executive shall be entitled to all Benefits for as long as such Benefits may remain in effect and/or any substitute or additional Benefits made available in the future to similarly situated Executives of the Company, subject to and on a basis consistent with the terms, conditions and overall administration of such Benefits adopted by the Company.  Benefits paid to Executive shall not be deemed to be in lieu of other compensation to Executive hereunder as described in this Section 3.

3.04    Specific Benefits.

During Executive’s employment with the Company:

(a)    Executive shall be entitled to four (4) weeks of paid vacation time per year, to be taken at times mutually acceptable to the Company and Executive.

(b)    The Company shall provide fully paid accident and health insurance for Executive and Executive’s spouse and children with limits and extent of coverage no less than that provided to other executives of the Company.

(c)    Executive shall be entitled to sick leave benefits during his employment in accordance with the customary policies of the Company for its executive officers, but in no event less than one (1) month per year.

(d)    In addition to the vacation provided pursuant to Section 3.04(a) hereof, Executive shall be entitled to not less than ten (10) paid holidays (other than weekends) per year, generally on such days on which the New York Stock Exchange is closed to trading.

(e)    Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him (in accordance with the policies and procedures established by the Board for the similarly situated executives of the Company) in performing services hereunder.

(f)    Executive shall be eligible to participate during his employment in Benefits not inconsistent or duplicative of those set forth in this Section 3.04 as the Company shall establish or maintain for its executives generally.

(g)    The Company shall have the option to maintain and be the owner and beneficiary of a term life insurance policy payable on Executive’s death with a minimum policy limit of one million dollars ($1,000,000) and Executive agrees to submit to any physical examination, and otherwise to cooperate in any other procedures required to obtain such policy.

(h)    The Company shall have the option to maintain and be the owner and beneficiary of a disability insurance policy payable on Executive’s disability with a minimum policy limit of one million dollars ($1,000,000) and Executive agrees to submit to any physical examination, and otherwise to cooperate in any other procedures required to obtain such policy.

   

  

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4.    Termination.

4.01    Termination by the Company for Reasons Other Than Cause.  If the Company terminates the employment of Executive and such termination is not for Cause (a “Termination by the Company for Reasons Other Than Cause”), then, the Company shall pay to Executive an amount equal to Executive’s Annual Compensation at the time of such termination plus (i) if the termination is during the first three years of this Agreement, the annual cash portion of the Incentive Compensation that was paid to him in the last Performance Year or (ii) if the termination is after the first three years of this Agreement, the average of the annual cash portion of the Incentive Compensation that was paid to him in the last three Performance Years.  Such amount shall be paid to Executive in no event later than sixty (60) days after the date of such termination.  To the extent that Executive is not fully vested in Benefits from any pension or any other retirement plan or program (whether tax qualified or not) maintained by the Company, the Company shall obtain and pay the premium upon an annuity policy to provide Executive with Benefits as though he had been fully vested on the date that his employment terminated.  See Exhibit A for full disclosure of the compensation.

4.02    Constructive Discharge.  If the Company (a) subjects Executive to a diminution in his title(s), responsibilities, or in his then current Annual Compensation, (b) fails to comply with the provisions of Section 3, (c) locates Executive’s place of employment outside the Scottsdale, Arizona area or (d) engages in any material and intentional breach of the Company’s principal obligations under this Agreement which is not remedied within fifteen (15) business days after receipt of written notice from the Executive (a “Constructive Discharge”), Executive may at his option terminate his employment and such termination shall be considered to be a Termination by the Company for Reasons Other Than Cause.

4.03    Termination by the Company for Cause.  The Company shall have the right to terminate the employment of Executive for Cause (a “Termination by the Company for Cause”).  Effective as of the date of Termination by the Company for Cause, this Agreement, except for Sections 2.06 through 2.10, shall terminate and no further payments of the Compensation described in Section 3 (except for such remaining payments of Annual Compensation under Section 3.01 relating to periods during which Executive was employed by the Company, Benefits which are required by applicable law to be continued, and reimbursement of expenses incurred prior to such termination under Section 3.04) shall be made.

4.04    Change of Control.  If at any time during Executive’s employment at the Company there is a Change of Control, Executive may at his option terminate his employment and such termination shall be considered to be a Termination by the Company for Reasons Other Than Cause.  If such Change of Control involves the sale of the Company for an amount in excess of $100 million dollars, Executive shall be entitled to receive a one-time bonus equal to two and a half percent (2.5%) of all amounts received by the Company or its shareholders in excess of $100 million dollars.

    

  

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4.05    Termination on Account of Executive’s Death.  In the event of Executive’s death during his employment at the Company, the Company shall pay to Executive’s beneficiary or beneficiaries (or to his estate if he fails to make such a designation) an amount equal to the remainder of his Annual Compensation for the year in which he died plus a prorated amount of any Incentive Compensation which would have been payable to Executive at the end of such year.

Executive may designate one or more beneficiaries for the purposes of this Section 4.05 by making a written designation and delivering such designation to an Executive or the Chief Financial Officer of the Company.  If Executive makes more than one such written designation, the designation last received before Executive’s death shall control.

4.06    Disability.  If Executive shall sustain a Disability, the Company shall continue to pay to Executive while such Disability continues the full amount of his then current Annual Compensation for the one-year period next succeeding the date upon which such Disability shall have been so certified as well as a prorated amount of any Incentive Compensation which would have been paid to Executive at the end of the year.  Thereafter, if Executive’s Disability shall continue, the employment of Executive under this Agreement shall terminate and all obligations of Executive shall cease and Executive shall be entitled to receive the Benefits, if any, as may be provided by any insurance to which he may have become entitled pursuant to Section 3.04 as well as the acceleration of the exercise date of any incentive stock options granted prior to Executive’s Disability.

5.    Stock Options.  Executive will participate in the Company’s Stock Option Plan, when adopted, and will be eligible to participate at the level of other similarly situated executives in any future stock incentive plans established by the Company.

6.    Indemnification.  The Company shall indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action arising from or out of Executive’s performance as an officer, director or employee of the Company or in any other capacity, including any fiduciary capacity, in which the Executive serves at the request of the Company to the maximum extent permitted by applicable law.  The Company shall advance to Executive the reasonable costs and expenses of investigating and/or defending any such claim, subject to receiving a written undertaking from Executive to repay any such amounts advanced to Executive in the event and to the extent of any subsequent determination by an agency of competent jurisdiction that Executive was not entitled to indemnification hereunder.  In the event that Executive is or becomes a party to any action or proceeding in respect of which indemnification may be sought hereunder, Executive shall promptly notify the Company thereof.  Following such notice, the Company shall be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof with counsel satisfactory to Executive in its reasonable judgment.  After notice from the Company to Executive of the Company's election to assume the defense of such Executive, the Company will not be liable to Executive hereunder for any legal or other expenses subsequently incurred by Executive in connection with the defense thereof other than reasonable costs of investigation.  Executive shall not settle any action or claim against Executive without the prior written consent of the Company except at such Executive's sole cost and expense.

   

  

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7.    Left blank intentionally.

8.    Miscellaneous.

8.01    Assignment.  This Agreement and the rights and obligations of the parties hereto shall bind and inure to the benefit of each of the parties hereto and shall also bind and inure to the benefit of any successor or successors of the Company in a Reorganization, merger or consolidation and any assignee of all or substantially all of the Company’s business and properties, but, except as to any such successor of the Company, neither this Agreement nor any rights or benefits hereunder may be assigned by the Company or Executive.

8.02    At Will Employee.  Executive is and will be at all times be an “at-will employee” and his employment may be terminated by him or by the Company upon sixty (60) days written notice at any time, for any reason or no reason, with or without cause, subject to the provisions of Section 4.

8.03    Governing Law.  This Agreement shall be construed in accordance with and governed for all purposes by the laws of the State of Nevada.

8.04    Interpretation.  In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

8.05    Notice.  Any notice herein required or permitted to be given shall be in writing and may be sent by hand delivery or registered or certified mail, return receipt requested, and shall be deemed to have been given: if by hand delivery, on the date of delivery or if mailed, on the date indicated as the date of delivery or, if refused, on the date of attempted delivery, on the return receipt. For purposes hereof, the addresses of the parties hereto (until notice of a change thereof is given as provided in this Section 7.05) shall be as follows:

    

	
To the Company:

	
To Executive:

	 	 
	
Spartan Gold Ltd.

13591 N. Scottsdale Rd.

Suite 233

Scottsdale, AZ 85254

	
Malcolm Stevens

Lagos De Sierra Blanca

173 Wagner Street

Block Carmen, Apt. 1(d)

Marbella, 29602, Spain

   

8.06    Amendment and Waiver.  This Agreement may not be amended, supplemented or waived except by a writing signed by the party against which such amendment or waiver is to be enforced.  The waiver by any party of a breach of any provision of this Agreement shall not operate to, or be construed as a waiver of, any other breach of that provision or as a waiver of any breach of another provision.

   

  

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8.07    Binding Effect.  Subject to the provisions of Section 4 hereof, this Agreement shall be binding on the successors and assigns of the parties hereto.

All obligations of Executive with respect to any shares covered by this Agreement shall, as the context requires, bind Executive’s spouse and the divorce or death of such spouse shall not vitiate the binding nature of such obligation.

8.08    Survival of Rights and Obligations.  All rights and obligations of Executive or the Company arising during the term of this Agreement shall continue to have full force and effect after the termination of this Agreement unless otherwise provided herein.

8.09    Section Headings.  The section headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

8.10    Entire Agreement.  This Agreement contains the entire understanding, and cancels and supersedes all prior agreements, including any agreement in principle or oral statement, letter of intent, statement of understanding or guidelines of the parties hereto with respect to the subject matter hereof.

In witness whereof, on the date first written above, the undersigned do hereby agree to the terms contained herein.

Spartan Gold Ltd.

By:__________________________

Name: William H. Whitmore, Jr.

Title: Director

__________________________

Name: Malcolm Stevens

    

  

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Exhibit A

Employment Agreement

Between Malcolm Stevens and Spartan Gold Ltd. 

Section 3.01   Compensation.

     

	 	
(A) 

	
$6,000 per month commencing January 1, 2012 and until the Company enters into its funded Phase 1 exploration activities with at least $2 million of funding.

 

	 	
(B) 

	
$150,000 per year commencing after the Company has begun its funded Phase 1 exploration activities with at least $2 million of funding and until the Company enters into its funded Phase 2 explorations and development activities with at least $5 million of funding;

 

	 	
(C) 

	
$200,000 per year commencing after the Company has begun its funded Phase 2 exploration and development activities with at least $5 million of funding;

 

	 	
(D) 

	
Incentive Compensation as follows:

 

	 	
a. 

	
Incentive compensation will be determined by the Board of Directors on a discretionary basis based on profitability and achievement of company performance goals.

 

	 	
(E) 

	
If a controlling interest in the Company is sold to a third party, the Executive shall get a bonus as outlined below:

 

	 	
a. 

	
If a Change of Control involves the sale of the Company for an amount in excess of $100 million dollars, Executive shall be entitled to receive a one-time bonus equal to two and a half percent (2.5%) of all amounts received by the Company or its shareholders in excess of $100 million dollars.

	 	
b. 

	
The Executive shall, at his option, have the opportunity to convert the cash payment associated with this bonus, into common stock of the Company at a conversion rate of the published market price per share as of the date of the Change of Control.

 

	 	
(F) 

	
Termination, based on Section 4 of this Agreement, shall be as follows:

 

	 	
a. 

	
If the Company has raised $1 million but less than $2 million, under any investment vehicle(s) during the Executive’s employment, then the following applies:

 

	 	
i. 

	
Termination payment as stated in Section 4.

 

	 	
b. 

	
If the Company has raised $2 million but less than $5 million, under any investment vehicle(s) during the Executive’s employment, then the following applies:

 

	 	
i. 

	
Termination payment at two times the rate stated in Section 4.

 

	 	
c. 

	
If the Company has raised $5 million or more, under any investment vehicle(s) during the Executive’s employment, then the following applies:

 

	 	
i. 

	
Termination payment at three times the rate stated in Section 4.

   

  

12

  

Exhibit B

Employment Agreement

Between Malcolm Stevens and Spartan Gold Ltd. 

   

Section 2.04   Executive’s Commitment.

The Executive is also involved in various roles for the following entities:

 

 

Sphere Resources, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

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