STOCK OPTION AGREEMENT
TOUCAN GOLD CORPORATION
A Nonqualified Stock Option (the "Option") for a total of 50,000 shares
(the "Shares") of common stock, par value $.01 per share (the "Common Stock"),
of Toucan Gold Corporation (the "Company"), is hereby granted to Xxxxxx X.
Xxxxxxxx (the "Optionee") pursuant to the terms of this Option Agreement (the
"Option Agreement").
Section 1. Exercise Price. The exercise price of the Option is $1.00 for
each Share.
Section 2. Exercise of the Option. This Option may be exercised at any time
after the Date of Grant, subject its expiration date and subject to the
provisions contained in Sections 3 and 4 below. This Option will expire by its
terms on December 31, 1999.
(a) Method of Exercise. Options shall be deemed properly exercised
when:
(i) the Company has received written notice of such exercise,
stating the number of Shares which are being purchased, delivered to
the Company and signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or
persons other than the Optionee, be accompanied by proof, satisfactory
to the Company, of the right of such person or persons to exercise the
Option;
(ii) full payment of the exercise price of the Shares as to which
the Option is exercised has been tendered to the Company; and
(iii) arrangements that are satisfactory to the Board of
Directors of the Company (the "Board") in its sole discretion have
been made for the Optionee's payment to the Company of the amount, if
any, that the Company determines to be necessary for the Company to
withhold in accordance with applicable federal or state income tax
withholding requirements.
(b) Payment. The exercise price of any Shares purchased shall be paid
in cash, by certified or cashier's check, by money order or by personal
check (if approved by the Board).
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(c) Restrictions on Exercise.
(i) This Option may not be exercised if the issuance of the
Shares upon such exercise would constitute a violation of any
applicable federal or state securities or other law or valid
regulation. As a condition to the exercise of this Option, the Company
may require the exercising person to make any agreements and
undertakings that may be required by any applicable law or regulation.
(ii) Shares issued upon the exercise of this Option without
registration of such Shares under the Securities Act of 1933, as
amended (the "Act"), shall be restricted securities subject to the
terms of Rule 144 under the Act. The certificates representing any
such Shares shall bear an appropriate legend restricting transfer and
the transfer agent of the Company shall be given stop transfer
instructions with respect to such Shares.
Section 3. Term of Option. This Option may not be exercised after April 1,
2002 and is subject to earlier termination as provided in Section 4. In
addition, this Option is subject to cancellation by the Company upon a
significant corporate event as provided in Section 4 below. This Option may be
exercised during such times only in accordance with the terms of this Option
Agreement.
Section 4. Termination of Option Period.
(a) The unexercised portion of this Option shall automatically and
without notice terminate and become null and void at the time of the
earliest to occur of the following:
(i) thirty (30) days after the date that the Optionee ceases to
be employed by the Company or a subsidiary of the Company or ceases to
be a director, consultant or advisor to the Company or a subsidiary of
the Company, as the case may be, regardless of the reason therefor
other than as a result of such termination by reason of (x) death, (y)
mental or physical disability of the Optionee as determined by a
medical doctor satisfactory to the Company or (z) termination of the
Optionee's employment, status as director, or consulting contract or
advisory services, as the case may be, with the Company or a
subsidiary for Cause;
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The term "Cause," for the purposes of this Agreement, shall mean any
one or more of the following:
(w) Optionee's failure to carry out lawful directives of the
Chief Executive Officer of the Company.
(x) Optionee's performance of any criminal acts; (excluding
traffic violations and other minor offenses);
(y) Optionee's theft or embezzlement of property, including
trade secrets, of the Company; or
(z) Optionee's negligence in the performance of his duties.
(ii) one (1) year after the date on which the Optionee suffers a
mental or physical disability as determined by a medical doctor
satisfactory to the Company;
(iii) either (y) one (1) year after the date that the Optionee
ceases to be a director, consultant to or ceases to be employed by, as
the case may be, the Company or a subsidiary of the Company, by reason
of death of the Optionee, or (z) six (6) months after the date on
which the Optionee shall die, if the Optionee's death shall occur
during the thirty (30) day period described in Section 4(a)(i) or the
one-year period described in Section 4(a)(ii);
(iv) the date that the Optionee ceases to be a director,
consultant to or ceases to be employed by, as the case may be, the
Company or a subsidiary as a result of a termination for Cause; and
(v) December 31, 1999.
(b) The Company in its sole discretion may, by giving written notice
(a "Cancellation Notice") cancel, effective upon the date of the
consummation of any of the transactions described in Section 2(d), all or
any portion of this Option that remains unexercised on such date. Such
Cancellation Notice shall be given a reasonable period of time (but not
less than 15 days) prior to the proposed date of such cancellation, and may
be given either before or after stockholder approval of such transaction.
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(i) Any transaction (which shall include a series of transactions
occurring within 60 days or occurring pursuant to a plan) that has the
result that stockholders of the Company immediately before such
transaction cease to own at least 51% of (x) the voting stock of the
Company or (y) any entity that results from the participation of the
Company in a reorganization, consolidtion, merger, liquidation or any
other form of corporate transaction.
(ii) A sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company to an
unaffiliated third party.
Section 5. Adjustment of Shares.
(a) If at any time while unexercised Options are outstanding
hereunder, there shall be any increase or decrease in the number of issued
and outstanding shares of Common Stock through the declaration of a stock
dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of shares, then and in such event appropriate
adjustment shall be made in the number of Shares and the exercise price per
Share thereof then subject to this Option, so that the same proportion of
the Company's issued and outstanding shares shall remain subject to
purchase at the same aggregate exercise price.
(b) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection
with direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to the number of or
exercise price of Shares then subject to this Option.
(c) Without limiting the generality of the foregoing, the existence of
this Option shall not affect in any manner the right or power of the
Company to make, authorize or consummate (i) any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business; (ii) any merger or consolidation of the
Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to this Option;
(iv) the dissolution or liquidation of the Company; (v) any sale, transfer
or assignment of all or any part of the assets or business of the Company;
or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
Section 6. Non-Assignability of Option. This Option may be transferred or
assigned by the Optionee only to family member, trusts for the benefit of the
Optionee or for the benefit of the Optionees family members, other entities for
the benefit of the Optionee, by will or by the laws of descent and distribution.
Other than these enumerated entities, the Option may not be transferred by the
Optionee.
Section 7. Issuance of Shares. No person shall be, or have any rights or
privileges of, a stockholder of the Company with respect to any of the Shares
subject to this Option unless and until certificates representing such Shares
have been issued and delivered to such person. As a condition of an issuance of
a stock certificate for Shares, the Company may obtain such agreements or
undertakings, if any, as it may deem necessary or advisable to assure compliance
with any provision of this Option Agreement or any law or regulation, including,
but not limited to, the following:
(a) The Optionee's representation and warranty to the Company, at the
time the Option is exercised, that the Shares to be issued are being
acquired for investment and not with a view to, or for sale in connection
with, the distribution of any such Shares; and
(b) the Optionee's representation, warranty or agreement to be bound
by any legends that are, in the opinion of the Company, necessary or
appropriate to comply with the provisions of any securities law deemed by
the Company to be applicable to the issuance of the Shares and to be
endorsed upon the certificates representing the Shares.
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Section 8. Administration of this Option.
(a) The determinations and the interpretation and construction of any
provision of this Option by the Company shall be final and conclusive.
(b) Subject to the express provisions of this Option, the Company
shall have the authority, in its sole and absolute discretion (i) to adopt,
amend, and rescind administrative and interpretive rules and regulations
relating to this Option; (ii) to construe the terms of this Option; (iii)
as provided in Section 5, upon certain events to make appropriate
adjustments to the exercise price and number of Shares subject to this
Option; and (iv) to make all other determinations and perform all other
acts necessary or advisable for administering this Option, including the
delegation of such ministerial acts and responsibilities as the Company
deems appropriate. The Company may correct any defect or supply any
omission or reconcile any inconsistency in this Option in the manner and to
the extent it shall deem expedient to carry it into effect, and it shall be
the sole and final judge of such expediency. The Company shall have full
discretion to make all determinations on the matters referred to in this
Section 8(b), and such determinations shall be final, binding and
conclusive.
Section 9. Government Regulations. The granting and exercise of this Option
and the obligation of the Company to sell and deliver Shares under this Option,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
Section 10. Law Governing. THIS OPTION IS INTENDED TO BE PERFORMED IN THE
STATE OF DELAWARE AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SUCH STATE EXCEPT TO THE EXTENT DELAWARE LAW IS
PREEMPTED BY FEDERAL LAW.
Section 11. Notices. Whenever any notice is required or permitted under
this Option Agreement, such notice must be in writing and personally delivered
or sent by mail or delivery by a nationally recognized courier service. Any
notice required or permitted to be delivered under this Option Agreement shall
be deemed to be delivered on the date on which it is personally delivered, or,
if mailed, whether actually received or not, on the third Business Day after it
is deposited in the United States mail, certified or registered, postage
prepaid, addressed to the person who is to receive it at the address that such
person has previously specified by written notice delivered in accordance with
this subsection. The Company or the Optionee may change, at any time and from
time to time, by written notice to the other, the address that was previously
specified for receiving notices. Until changed in accordance with this Option
Agreement, the Company and the Optionee shall specify as its or his address for
receiving notices the address set forth in this Option Agreement pertaining to
the Shares to which such notice relates.
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Section 12. Miscellaneous.
(a) This Option is granted to the Optionee in accordance with that
certain Employment Agreement, dated April 1, 1997 (except for the reduction
in the exercise price as approved by the Board on the Date of Grant),
describing such Option and is in addition to any other stock option plans
of the Company or other benefits with respect to the Optionee's position
with or relationship to the Company or its subsidiaries. This Option shall
not confer upon the Optionee the right to continue as an employee,
consultant or advisor, or interfere in any way with the rights of the
Company to terminate the Optionee's status as an employee, consultant or
advisor.
(b) The members of the Board shall not be liable for any act, omission
or determination taken or made in good faith with respect to this Option,
and members of the Board shall, in addition to all other rights of
indemnification and reimbursement, be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage,
liability or expense (including attorneys' fees, the costs of settling any
suit, provided such settlement is approved by independent legal counsel
selected by the Company, and amounts paid in satisfaction of a judgment,
except a judgment based on a finding of bad faith) arising from such claim,
loss, damage, liability or expense to the full extent permitted by law and
under any directors' and officers' liability or similar insurance coverage
that may from time to time be in effect.
(c) Any issuance or transfer of Shares to the Optionee, or to the
Optionee's legal representative, heir, legatee, or distributee, in
accordance with the provisions of this Option, shall, to the extent
thereof, be in full satisfaction of all claims of such persons under this
Option. The Company may require the Optionee, or any legal representative,
heir, legatee or distributee as a condition precedent to such payment or
issuance or transfer of Shares, to execute a release and receipt for such
payment or issuance or transfer of Shares in such form as it shall
determine.
(d) Neither the Board nor the Company guarantees Shares from loss or
depreciation.
(e) All expenses incident to the administration, termination, or
protection of this Option, including, but not limited to, legal and
accounting fees, shall be paid by the Company; provided, however, the
Company may recover any and all damages, fees, expenses and costs arising
out of any actions taken by the Company to enforce its rights under this
Option.
(f) Records of the Company shall be conclusive for all purposes under
this Option, unless determined by the Board to be incorrect.
(g) Any action required of the Company relating to this Option shall
be by resolution of the Board or by a person authorized to act by
resolution of the Board.
(h) If any provision of this Option is held to be illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
provisions of this Option, but such provision shall be fully severable,
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and this Option shall be construed and enforced as if the illegal or
invalid provision had never been included in this Option.
(i) Any person entitled to notice under this Option may waive such
notice.
(j) This Option shall be binding upon the Optionee, his legal
representatives, heirs, legatees and distributees upon the Company, its
successors, and assigns, and upon the Board and its successors.
(k) The titles and headings of Sections are included for convenience
of reference only and are not to be considered in construction of this
Option's provisions.
(l) Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Option dictates, the plural
shall be read as the singular and the singular as the plural.
DATE OF GRANT: TOUCAN GOLD CORPORATION
February 2, 1998
By: /s/ L. Xxxxx Xxxxxx
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L. Xxxxx Xxxxxx
Vice President - Exploration
ADDRESS:
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
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Optionee hereby accepts this Option subject to all the terms and provisions
of this Option Agreement.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Optionee
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(Social Security No.)
ADDRESS:
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