EXHIBIT 4.3
FORM OF APEX SILVER MINES LIMITED
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement"), effective as of the 10th day of April,
1997 (the "Grant Date"), between Apex Silver Mines Limited (the "Company") and
________ (the "Optionee").
WHEREAS, the Company has determined to grant an option to the Optionee in
consideration for services to be rendered by the Optionee to the Company;
The parties hereto agree as follows:
1. GRANT. Effective as of the Grant Date, the Company hereby grants to the
Optionee the right and option hereinafter described (the "Option") to purchase
all or any part of an aggregate of ____ whole shares ("Shares") of the share
capital, $.01 par value, of the Company and such other securities as may be
substituted for such share or such other securities pursuant to Section 8. This
Option will not qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. PURCHASE PRICE. The Optionee shall be entitled to purchase Shares upon
exercising the Option at a price (the "Exercise Price") equal to $8.00 per
Share.
3. DURATION. The Option shall be exercisable for ten (10) years from the
Grant Date (the "Exercise Term").
4. EXERCISABILITY. The Option may be exercised commencing immediately upon
its grant.
5. METHOD OF EXERCISE. The Optionee may exercise the Option, in whole or in
part, prior to its expiration, by giving written notice of exercise to the
Secretary of the Company, specifying the Option to be exercised and the number
of Shares to be purchased, and paying in full the Exercise Price in cash
(including by check) or by surrender of Shares already owned by the Participant
having a Fair Market Value (as defined below) at the time of exercise equal to
the Exercise Price, or by a combination of cash and Shares.
6. LIMITATIONS ON TRANSFERABILITY. The Option will not be transferable by
the Optionee except by will or the laws of descent and distribution or to a
Beneficiary in the event of the Optionee's death, and, shall be exercisable
during the lifetime of the Optionee only by the Optionee or his or her guardian
or legal representative; provided, however, that the Optionee may transfer the
Option to (i) his or her spouse, children or grandchildren ("Immediate Family
Members"), (ii) a trust or trusts for exclusive benefit of such Immediate Family
Members, or (iii) a partnership in which such Immediate Family Members are the
only partners, provided that (x) there may be no consideration for any such
transfer, and (y) subsequent transfers of transferred Options
shall be prohibited except those occurring by laws of descent and distribution.
Following any such transfer, the Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to such transfer,
provided that for purposes of the Agreement, the term Optionee shall be deemed
to refer to the transferee. Options may not be pledged, mortgaged, hypothecated
or otherwise encumbered, and shall not be subject to the claims of creditors.
7. NO RIGHT TO CONTINUE AS A DIRECTOR. Nothing contained in this Agreement
will confer upon the Optionee any right to continue to serve as a director or
advisory director of the Company.
8. ADJUSTMENTS. The number of Shares covered by the Option and the Exercise
Price per Share shall be proportionately adjusted for any increase or decrease
in the number of issued Shares resulting from a subdivision or consolidation of
Shares or other capital adjustment, or the payment of a Share dividend or other
increase or decrease in such Shares, effected without receipt of consideration
by the Company, or other change in corporate or capital structure; provided,
however, that any fractional shares resulting from any such adjustment shall be
eliminated. The Board of Directors (the "Board") of the Company may also make
the foregoing changes and any other changes, including changes in the classes of
securities available, to the extent it is deemed necessary or desirable to
preserve the intended benefits of the Agreement for the Company and the Optionee
in the event of any other reorganization, recapitalization, merger,
consolidation, spin-off, extraordinary dividend or other distribution or similar
transaction. Notwithstanding any other provision of the Agreement, the Board may
cause the Option granted hereunder to be canceled in consideration of a cash
payment or alternative award made to the Optionee equal in value to the Fair
Market Value of the canceled Option. Notwithstanding anything to the contrary in
this Section 8, no issuance of Shares effected pursuant to the terms of the
Buy-Sell Agreement dated as of August 6, 1996 by and among, inter alia, the
Company, Consolidated Commodities Ltd., Argentum LLC and Silver Holdings LDC or
certain entities affiliated therewith, that does not constitute a change in
control shall result in any adjustment to the number or value of any Shares to
be issued pursuant to this Option.
9. NO SHAREHOLDER RIGHTS CONFERRED. Nothing contained in the Agreement will
confer upon the Optionee any rights of a shareholder of the Company unless and
the Option granted hereunder is validly exercised in accordance with Section 5.
10. COMPLIANCE WITH LAWS AND OBLIGATIONS. The Company will not be obligated
to issue or deliver Shares in connection with this Option in a transaction
subject to the registration requirements of the Securities Act of 1933, as
amended, or any other U.S. federal or state securities law, any requirement
under any listing agreement between the Company and any stock exchange or
automated quotation system, or any other law, regulation, or contractual
obligation of the Company, until the Company is satisfied that such laws,
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regulations, and other obligations of the Company have been complied with in
full. Certificates representing Shares issued under the Option will be subject
to such stop-transfer orders and other restrictions as may be applicable under
such laws, regulations, and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.
11. TAX WITHHOLDING. The Company shall have the right to deduct from any
cash distributed to the Optionee hereunder the federal, state and local income
taxes and other amounts required by law to be withheld (the "Withholding Taxes")
therefrom. If the Optionee is entitled to receive Shares upon exercise of the
Option, the Optionee shall pay the appropriate Withholding Taxes to the Company
before such Shares are issued. In satisfaction of the Withholding Taxes, the
Optionee may make a written election (the "Tax Election"), which may be accepted
or rejected in the discretion of the Board, to have withheld a portion of the
Shares issuable to him or her upon exercise of the Option, having an aggregate
Fair Market Value, on the date preceding the date of such issuance, equal to the
Withholding Taxes.
12. DEFINITIONS. In addition to terms defined elsewhere in the Agreement,
for purposes of this Agreement:
(a) "Fair Market Value" of a Share on a given date means the last
sales price or, if last sales information is generally unavailable, the
average of the closing bid and asked prices per Share on such date (or, if
there was no trading or quotation in the stock on such date, on the next
preceding date on which there was trading or quotation) as reported in the
WALL STREET JOURNAL; PROVIDED, HOWEVER, that the "Fair Market Value" of a
Share subject to Options granted effective on the date on which the Company
commences an Initial Public Offering shall be the price of the shares so
issued and sold, as set forth in the first final prospectus used in such
Initial Public Offering.
(b) "Initial Public Offering" means an initial public offering of
Shares in a firm commitment underwriting register with the U.S. Securities
and Exchange Commission in compliance with the provisions of the U.S.
Securities Act of 1933, as amended.
13. MODIFICATION. This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only by a written
instrument executed by the parties hereto.
14. SEVERABILITY. If any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.
15. GOVERNING LAW. The validity, construction, and effect of the Agreement
and the Option issued hereunder will be determined in accordance with the laws
of the Cayman Islands.
16. SUCCESSORS IN INTEREST. This Agreement shall inure to the
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benefit of and be binding upon any successor to the Company. This Agreement
shall inure to the benefit of the Optionee's legal representatives. All
obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be final, binding and conclusive upon the Optionee's
successors and shall inure to their benefit.
17. RESOLUTION OF DISPUTES. Any dispute or disagreement which may arise
under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined in good faith
by the Board. Any determination made hereunder shall be final, binding and
conclusive on the Optionee and the Company for all purposes.
18. NO ASSIGNMENT. Except as otherwise provided herein, the rights of the
Optionee hereunder may not be assigned or otherwise transferred to any other
party.
19. LEGEND. The certificates representing the Shares to be issued pursuant
hereto shall bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECRITIES, THE SALE IS MADE IN ACCORDANCE
WITH RULE 144 UNDER THE ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH.
IN ADDITION, THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN TRANSFERS AND VOTING RESTRICTIONS PURSUANT TO A SHAREHOLDERS' AGREEMENT
AMONG THE COMPANY AND CERTAIN OF THE COMPANY'S MEMBERS. A COPY OF SUCH
SHAREHOLDERS' AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE
HOLDER HEREOF UPON WRITTEN REQUEST.
APEX SILVER MINES LIMITED
Attest: By:________________________
Chairman
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Secretary
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Optionee
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