THIS AGREEMENT is entered into as of
the _________ day of ____________, 2004 (the “Date of Grant”).
BETWEEN:
| |
LIBERTY
STAR GOLD CORP., a company incorporated pursuant to the laws of the State of
Nevada, of 0000 X. Xxxxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxx 00000 |
AND:
| |
______________
[name of employee or director], of _________________________ [address of
employee or director] |
WHEREAS:
A. The
Board of Directors of the Company (the “Board”) has approved and
adopted the 2004 Stock Option Plan (the “Plan”), a copy of which is
attached hereto as Exhibit B, pursuant to which the Board is authorized to
grant to employees and other selected persons stock options to purchase common
stock of the Company (the “Common Stock”);
B. The
Plan provides for the granting of stock options that either (i) are intended to
qualify as “Incentive Stock Options” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”), or
(ii) do not qualify under Section 422 of the Code (“Non-Qualified Stock
Options”); and
C. The
Board has authorized the grant to Optionee of options to purchase a total of
________ shares of Common Stock (the “Options”), which Options are
intended to be (select one):
| |
[ ]
Incentive Stock Options |
| |
[ ] Non-Qualified Stock Options; |
NOW THEREFORE, the Company agrees to
offer to the Optionee the option to purchase, upon the terms and conditions set forth
herein and in the Plan, up to an aggregate of ________ shares of Common Stock.
Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto
in the Plan.
1. Exercise
Price. The exercise price (the “Exercise Price”) of the Options
shall be $__________ per share of Common Stock.
2. Expiry
Date. The Options shall expire on ____________, 200_____.
3. Vesting
Schedule. The Options shall vest in accordance with the vesting provisions
contained in Section 5.1(e) of the Plan. Options which have vested are referred
to as “Vested Options”.
4. Options
not Transferable. The Options may not be transferred, assigned, pledged or
hypothecated in any manner (whether by operation of law or otherwise) except in
accordance with Section 5.1(k) of the Plan.
5. Investment
Intent. By accepting the Options, the Optionee represents and agrees that
none of the shares of Common Stock purchased upon exercise of the Options will
be distributed in violation of applicable federal, state and provincial laws
and regulations. In addition, the Company may require, as a condition of
exercising the Options, that the Optionee execute an undertaking, in such a
form as the Company shall reasonably specify, that the shares of Common Stock
are being purchased only for investment and without any then-present intention
to sell or distribute such shares of Common Stock.
6. Termination
of Employment and Options. The Options shall terminate in accordance with
Section 5.1(g) of the Plan.
7. Common
Stock. In the case of any stock split, stock dividend or like change in the
nature of shares of Common Stock covered by this Agreement, the number of
shares of Common Stock issueable upon exercise of the Options and the Exercise
Price shall be proportionately adjusted as set forth in Section 5.1(m) of the
Plan.
8. Exercise
of Option. The Options shall be exercisable, in full or in part, at any
time after vesting, until termination; provided however, that any
Optionee who is subject to the reporting and liability provisions of Section 16
of the Securities Exchange Act of 1934 with respect to the Common Stock
shall be precluded from selling or transferring any Common Stock or other
security underlying the Options during the six (6) months immediately following
the grant of the Options. If less than all of the shares of Common Stock
included in the vested portion of any Option are purchased, the remainder may
be purchased at any subsequent time prior to the expiration of the Option term.
No portion of any Option for less than fifty (50) shares (as adjusted pursuant
to Section 5.1(m) of the Plan) may be exercised; provided, that if the vested
portion of any Option is less than fifty (50) shares, it may be exercised with
respect to all shares for which it is vested. Only whole shares of Common Stock
may be issued pursuant to an Option, and to the extent that an Option covers
less than one (1) share, it is unexercisable.
Each exercise of the Options shall
be by means of delivery of a notice of election to exercise (which may be in the form
attached hereto as Exhibit A) to the President of the Company at its principal
executive office, specifying the number of shares of Common Stock to be purchased and
accompanied by payment in cash by certified check or cashier’s check in the amount
of the full exercise price for the Common Stock to be purchased. In addition to payment
in cash by certified check or cashier’s check, an Optionee or transferee of an
Option may pay for all or any portion of the aggregate exercise price by complying with
one or more of the alternatives specified in Section 5.1(i) of the Plan.
It is a condition precedent to the
issuance of shares of Common Stock upon exercise of the Options that the Optionee execute
and deliver to the Company an Investment Representation Letter, in a form acceptable to
the Company, to the extent required pursuant to the terms thereof.
9. Holding
period for Incentive Stock Options. In order to obtain the tax treatment
provided for Incentive Stock Options by Section 422 of the Code, the shares of
Common Stock received upon exercising any Incentive Stock Options received
pursuant to this Agreement must be sold, if at all, after a date which is the
later of two (2) years from the date this Agreement is entered into or one (1)
year from the date upon which the Options are exercised. The Optionee agrees to
report sales of shares of Common Stock prior to the above determined date to
the Company within one (1) business day after such sale is concluded. The
Optionee also agrees to pay to the Company, within five (5) business days after
such sale is concluded, the amount necessary for the Company to satisfy its
withholding requirement required by the Code in the manner specified in Section
5.1(l) of the Plan. Nothing in this Section 9 is intended as a
representation that Common Stock may be sold without registration under
provincial, state and federal securities laws or an exemption therefrom or that
such registration or exemption will be available at any specified time.
10. Subject
to 2004 Stock Option Plan. The terms of the Options are subject to the
provisions of the Plan, as the same may from time to time be amended, and any
inconsistencies between this Agreement and the Plan, as the same may be from
time to time amended, shall be governed by the provisions of the Plan, a copy
of which has been delivered to the Optionee, and which is available for
inspection at the principal offices of the Company.
11. Professional
Advice. The acceptance of the Options and the sale of shares of Common
Stock issued pursuant to the exercise of Options may have consequences under
federal, state and provincial tax and securities laws which may vary depending
upon the individual circumstances of the Optionee. Accordingly, the Optionee
acknowledges that he or she has been advised to consult his or her personal
legal and tax advisor in connection with this Agreement and his or her dealings
with respect to Options for the shares of Common Stock. Without limiting other
matters to be considered, the Optionee should consider whether upon the
exercise of Options, the Optionee will file an election with the Internal
Revenue Service pursuant to Section 83(b) of the Code.
12. No
Employment Relationship. Whether or not any Options are to be granted under
this Plan shall be exclusively within the discretion of the Plan Administrator,
and nothing contained in this Plan shall be construed as giving any person any
right to participate under this Plan. The grant of an Option shall in no way
constitute any form of agreement or understanding binding on the Company or any
Related Company, express or implied, that the Company or any Related Company
will employ or contract with an Optionee for any length of time, nor shall it
interfere in any way with the Company’s or, where applicable, a Related
Company’s right to terminate the Optionee’s employment at any time,
which right is hereby reserved.
13. Entire
Agreement. This Agreement is the only agreement between the Optionee and
the Company with respect to the Options, and this Agreement and the Plan
supersede all prior and contemporaneous oral and written statements and
representations and contain the entire agreement between the parties with
respect to the Options.
14. Notices.
Any notice required or permitted to be made or given hereunder shall be mailed
or delivered personally to the addresses set forth below, or as changed from
time to time by written notice to the other:
|
|
| The Company:
|
Liberty Star Gold Corp.
0000 X. Xxxxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxx 00000
|
|
Attention: President
|
With a copy to:
|
Xxxxx, Xxxxxx
Barristers and Solicitors
Suite 800 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX
Xxxxxx X0X 0X0
|
|
Attention: Xxxxxxx Xxxxxx
|
The Optionee:
|
______________________
|
15.
Counterparts. This Agreement may be executed in several counterparts,
each of which will be deemed to be an original and all of which will together
constitute one and the same instrument.
16.
Currency. Unless otherwise provided, all dollar amounts referred to in
this Agreement are in lawful money of the United States of America.
17.
Electronic Means. Delivery of an executed copy of this Agreement by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy will be deemed to be execution and delivery
of this Agreement as of the date first above written.
18.
Proper Law. This Agreement will be governed by and construed in accordance with
the law of British Columbia.
IN WITNESS WHEREOF the parties
have duly executed and delivered this Agreement as of the date first above written.
Per:
Authorized Signatory
SIGNED, SEALED and DELIVERED by _________________ )
[Name] in the presence of: )
)
)
Signature )
)
Print Name ) ____________________ [Name]
)
Address )
)
)
)
Occupation )
EXHIBIT A
Notice of Election to
Exercise
This
Notice of Election to Exercise shall constitute proper notice pursuant to Section 5.1(h)
of the Liberty Star Gold Corp. 2004 Stock Option Plan (the “Plan”) and Section 8
of that certain Stock Option Agreement (the “Agreement”) dated as of the _______
day of _____________, 2004, between Liberty Star Gold Corp. (the “Company”) and
the undersigned.
The
undersigned hereby elects to exercise Optionee’s option to purchase shares of the
common stock of the Company at a price of US$________ per share, for an aggregate
consideration of US$_____________, on the terms and conditions set forth in the Agreement
and the Plan. Such aggregate consideration, in the form specified in Section 8 of the
Agreement, accompanies this notice.
The
Optionee hereby directs the Company to issue, register and deliver the certificates
representing the shares as follows:
Registration Information: Delivery Instructions:
Name to appear on certificates Name
Address Address
Telephone Number
DATED at ____________________________________, the ________ day of __________________, _______.
____________________________________________
(Name of Optionee - Please type or print)
____________________________________________
(Signature and, if applicable, Office)
____________________________________________
(Address of Subscriber)
____________________________________________
(City, State, and Zip Code of Subscriber)
____________________________________________
(Fax Number)
EXHIBIT B
2004 STOCK OPTION PLAN
This
2004 Stock Option Plan (the “Plan”) provides for the grant of options to acquire
shares of common stock, no par value (the “Common Stock”), of Liberty Star Gold
Corp., a Nevada company (the “Company”). For the purposes of Eligible Employees
(as defined below) who are subject to tax in the United States, stock options granted
under this Plan that qualify under Section 422 of the United States Internal Revenue
Code of 1986, as amended (the “Code”), are referred to in this Plan as
“Incentive Stock Options”. Incentive Stock Options and stock options that do not
qualify under Section 422 of the Code (“Non-Qualified Stock Options”) and
stock options granted to non-United States residents under this Plan are referred to
collectively as “Options”.
1. PURPOSE
1.1 The purpose of this Plan is to
retain the services of valued key employees and consultants of the Company and such other
persons as the Plan Administrator shall select in accordance with Section 3 below, and to
encourage such persons to acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the shareholders of the
Company, and to serve as an aid and inducement in the hiring of new employees and to
provide an equity incentive to consultants and other persons selected by the Plan
Administrator.
1.2 This Plan shall at all times be
subject to all legal requirements relating to the administration of stock option plans, if
any, under applicable Canadian federal and provincial, and United States federal and state
securities laws, the Code, the rules of any applicable stock exchange or stock quotation
system, and the rules of any foreign jurisdiction applicable to Options granted to
residents therein (collectively, the “Applicable Laws”).
2. ADMINISTRATION
2.1 This Plan shall be administered
initially by the Board of Directors of the Company (the “Board”), except that
the Board may, in its discretion, establish a committee composed of two (2) or more
members of the Board to administer the Plan, which committee (the “Committee”)
may be an executive, compensation or other committee, including a separate committee
especially created for this purpose. The Board or, if applicable, the Committee is
referred to herein as the “Plan Administrator”.
2.2 If and so long as the Common
Stock is registered under Section 12(b) or 12(g) of the United States Securities
Exchange Act of 1934, as amended (the “Exchange Act”), the Board shall
consider in selecting the Plan Administrator and the membership of any Committee, with
respect to any persons subject or likely to become subject to Section 16 of the Exchange
Act, the provisions regarding (a) “outside directors” as contemplated by
Section 162(m) of the Code, and (b) “Non-Employee Directors” as
contemplated by Rule 16b-3 under the Exchange Act.
2.3 The Committee shall have the
powers and authority vested in the Board hereunder (including the power and authority to
interpret any provision of the Plan or of any Option). The members of any such Committee
shall serve at the pleasure of the Board. A majority of the members of the Committee shall
constitute a quorum, and all actions of the Committee shall be taken by a majority of the
members present. Any action may be taken by a written instrument signed by all of the
members of the Committee and any action so taken shall be fully effective as if it had
been taken at a meeting.
2
2.4 The Board may at any time amend,
suspend or terminate the Plan, subject to such shareholder approval as may be required by
Applicable Laws, including the rules of an applicable stock exchange or other national
market system, provided that:
| |
(a) |
no
Options may be granted during any suspension of the Plan or after termination
of the Plan; and |
| |
(b) |
any
amendment, suspension or termination of the Plan will not affect Options
already granted, and such Options will remain in full force and affect as
if the Plan had not been amended, suspended or terminated, unless mutually
agreed otherwise between the Optionee (as defined below) and the Plan
Administrator, which agreement will have to be in writing and signed by
the Optionee and the Company. |
2.5 Subject to the provisions of this
Plan, and with a view to effecting its purpose, the Plan Administrator shall have sole
authority, in its absolute discretion, to:
| |
(a) |
construe
and interpret this Plan; |
| |
(b) |
define
the terms used in the Plan; |
| |
(c) |
prescribe,
amend and rescind the rules and regulations relating to this Plan; |
| |
(d) |
correct
any defect, supply any omission or reconcile any inconsistency in this
Plan; |
| |
(e) |
grant
Options under this Plan; |
| |
(f) |
determine
the individuals to whom Options shall be granted under this Plan and
whether the Option is an Incentive Stock Option or a Non-Qualified Stock
Option, or otherwise; |
| |
(g) |
determine
the time or times at which Options shall be granted under this Plan; |
| |
(h) |
determine
the number of shares of Common Stock subject to each Option, the exercise
price of each Option, the duration of each Option and the times at which
each Option shall become exercisable; |
| |
(i) |
determine
all other terms and conditions of the Options; and |
| |
(j) |
make
all other determinations and interpretations necessary and advisable for
the administration of the Plan. |
2.6 All decisions, determinations and
interpretations made by the Plan Administrator shall be binding and conclusive on all
participants in the Plan and on their legal representatives, heirs and beneficiaries,
subject to any contrary determination by the Board.
3
3. ELIGIBILITY
3.1 Incentive Stock Options may be
granted to any individual who, at the time the Option is granted, is an employee of the
Company or any Related Company (as defined below) (“Eligible Employees”) subject
to tax in the United States.
3.2 Non-Qualified Stock Options may
be granted to Eligible Employees, Consultants, and to such other persons (other than
Directors subject to tax in the United States) who are not Eligible Employees as the Plan
Administrator shall select, subject to any Applicable Laws.
3.3 Options may be granted in
substitution for outstanding options of another company in connection with the merger,
consolidation, acquisition of property or stock or other reorganization between such other
company and the Company or any subsidiary of the Company. Options also may be granted in
exchange for outstanding Options.
3.4 No person shall be eligible to
receive in any fiscal year Options to purchase more than 5% of the outstanding shares of
Common Stock (subject to adjustment as set forth in Section 5.1(m) hereof). Any person to
whom an Option is granted under this Plan is referred to as an “Optionee”. Any
person who is the owner of an Option is referred to as a “Holder”.
3.5 As used in this Plan, the term
“Related Company” shall mean any company (other than the Company) that is a
“Parent Company” of the Company or “Subsidiary Company” of the
Company, as those terms are defined in Sections 424(e) and 424(f), respectively, of
the Code (or any successor provisions) and the regulations thereunder (as amended from
time to time).
4. STOCK
4.1 The Plan Administrator is
authorized to grant Options to acquire up to a total of 3,850,000 shares of the
Company’s authorized but unissued, or reacquired, Common Stock. The number of shares
with respect to which Options may be granted hereunder is subject to adjustment as set
forth in Section 5.1(m) hereof. In the event that any outstanding Option expires or is
terminated for any reason, the shares of Common Stock allocable to the unexercised portion
of such Option may again be subject to an Option granted to the same Optionee or to a
different person eligible under Section 3 of this Plan; provided however, that any
cancelled Options will be counted against the maximum number of shares with respect to
which Options may be granted to any particular person as set forth in Section 3 hereof.
5. TERMS AND CONDITIONS
OF OPTIONS
5.1 Each Option granted under this
Plan shall be evidenced by a written agreement approved by the Plan Administrator (the
“Agreement”). Agreements may contain such provisions, not inconsistent with this
Plan, as the Plan Administrator in its discretion may deem advisable. All Options also
shall comply with the following requirements:
| |
(a) |
Number
of Shares and Type of Option |
4
| |
Each
Agreement shall state the number of shares of Common Stock to which it pertains and, for
Optionees subject to tax in the United States, whether the Option is intended to be an
Incentive Stock Option or a Non-Qualified Stock Option, provided that: |
| |
(i) |
in
the absence of action to the contrary by the Plan Administrator in connection
with the grant of an Option, all Options shall be Non-Qualified Stock
Options; |
| |
(ii) |
the
aggregate fair market value (determined at the Date of Grant, as defined
below) of the stock with respect to which Incentive Stock Options are
exercisable for the first time by an Optionee subject to tax in the United
States during any calendar year (granted under this Plan and all other
Incentive Stock Option plans of the Company, a Related Company or a
predecessor company) shall not exceed U.S.$100,000, or such other limit as
may be prescribed by the Code as it may be amended from time to time (the
“Annual Limit”); and |
| |
(iii) |
any
portion of an Option which exceeds the Annual Limit shall not be void but
rather shall be a Non-Qualified Stock Option. |
| |
Each
Agreement shall state the date the Plan Administrator has deemed to be the effective date
of the Option for purposes of this Plan (the “Date of Grant”). |
| |
Each
Agreement shall state the price per share of Common Stock at which it is exercisable. The
Plan Administrator shall act in good faith to establish the exercise price in accordance
with Applicable Laws; provided that: |
| |
(i) |
the
per share exercise price for an Incentive Stock Option or any Option granted
to a “covered employee” as such term is defined for purposes of
Section 162(m) of the Code (“Covered Employee”) shall not
be less than the fair market value per share of the Common Stock at the
Date of Grant as determined by the Plan Administrator in good faith; |
| |
(ii) |
with
respect to Incentive Stock Options granted to greater-than-ten percent (>10%)
shareholders of the Company (as determined with reference to Section 424(d)
of the Code), the exercise price per share shall not be less than one
hundred ten percent (110%) of the fair market value per share of the
Common Stock at the Date of Grant as determined by the Plan Administrator
in good faith; |
| |
(iii) |
Options
granted in substitution for outstanding options of another company in
connection with the merger, consolidation, acquisition of property or
stock or other reorganization involving such other company and the Company
or any subsidiary of the Company may be granted with an exercise price
equal to the exercise price for the substituted option of the other
company, subject to any adjustment consistent with the terms of the
transaction pursuant to which the substitution is to occur; and |
5
| |
(iv) |
with
respect to Non-Qualified Stock Options, the exercise price per share shall
be determined by the Plan Administrator at the time the Option is granted,
but such price shall not be less than the closing trading price of the
Common Stock on the OTCBB on the last trading day preceding the date on
which the Option is granted (or if the Common Stock is not then listed and
posted for trading on the OTCBB, on such other stock exchange on which the
Common Shares are listed and posted for trading as may be selected by the
Board of Directors). In the event that the Common Stock is not listed and
posted for trading on any stock exchange or other quotation systems, the
exercise price shall be the fair market value of the Common Stock as
determined by the Plan Administrator. |
| |
At
the time of the grant of the Option, the Plan Administrator shall designate, subject to
paragraph 5.1(g) below, the expiration date of the Option, which date shall not be later
than ten (10) years from the Date of Grant; provided, that the expiration date of
any Incentive Stock Option granted to a greater-than-ten percent (>10%) shareholder of
the Company (as determined with reference to Section 424(d) of the Code) shall not
be later than five (5) years from the Date of Grant. In the absence of action to the
contrary by the Plan Administrator in connection with the grant of a particular Option,
and except in the case of Incentive Stock Options as described above, all Options granted
under this Plan shall expire five (5) years from the Date of Grant. |
| |
No
Option shall be exercisable until it has vested. The vesting schedule for each Option
shall be specified by the Plan Administrator at the time of grant of the Option prior to
the provision of services with respect to which such Option is granted; providedthat
if no vesting schedule is specified at the time of grant, the Option shall vest as
follows: |
| |
(i) |
on
the six month anniversary of the Date of Grant, the Option shall vest and
shall become exercisable with respect to 25% of the Common Stock to which
it pertains; |
| |
(ii) |
on
the twelve month anniversary of the Date of Grant, the Option shall vest and
shall become exercisable with respect to an additional 25% of the Common
Stock to which it pertains; |
| |
(iii) |
on
the eighteen month anniversary of the Date of Grant, the Option shall vest
and shall become exercisable with respect to an additional 25% of the
Common Stock to which it pertains; and |
| |
(iv) |
on
the twenty-four month anniversary of the Date of Grant, the Option shall vest
and shall become exercisable with respect to balance of the Common Stock
to which it pertains. |
6
| |
The
Plan Administrator may specify a vesting schedule for all or any portion of an Option
based on the achievement of performance objectives established in advance of the
commencement by the Optionee of services related to the achievement of the performance
objectives. Performance objectives shall be expressed in terms of one or more of the
following: return on equity, return on assets, share price, market share, sales, earnings
per share, costs, net earnings, net worth, inventories, cash and cash equivalents, gross
margin or the Company’s performance relative to its internal business plan, or such
other terms as determined and directed by the Board. Performance objectives may be in
respect of the performance of the Company as a whole (whether on a consolidated or
unconsolidated basis), a Related Company, or a subdivision, operating unit, product or
product line of either of the foregoing. Performance objectives may be absolute or
relative and may be expressed in terms of a progression or a range. An Option that is
exercisable (in full or in part) upon the achievement of one or more performance
objectives may be exercised only following written notice to the Optionee and the Company
by the Plan Administrator that the performance objective has been achieved. |
| |
(f) |
Acceleration
of Vesting |
| |
The
vesting of one or more outstanding Options may be accelerated by the Plan Administrator
at such times and in such amounts as it shall determine in its sole discretion. The
vesting of Options also shall be accelerated under the circumstances described in Section
5.1(m) below. |
| |
(i) |
Options
that have vested as specified by the Plan Administrator or in accordance
with this Plan, shall terminate, to the extent not previously exercised,
upon the occurrence of the first of the following events: |
| |
A. |
the expiration of the Option, as designated by the Plan Administrator in
accordance with Section 5.1(d) above; |
| |
B. |
the date of an Optionee’s termination of employment or contractual
relationship with the Company or any Related Company for cause (as determined in
the sole discretion of the Plan Administrator); |
| |
C. |
the expiration of three (3) months from the date of an Optionee’s
termination of employment or contractual relationship with the Company or any
Related Company for any reason whatsoever other than cause, death or Disability
(as defined below); or |
| |
D. |
the expiration of one year (1) from termination of an Optionee’s
employment or contractual relationship by reason of death or Disability (as
defined below). |
| |
(ii) |
Upon
the death of an Optionee, any vested Options held by the Optionee shall be
exercisable only by the person or persons to whom such Optionee’s
rights under such Option shall pass by the Optionee’s will or by the
laws of descent and distribution of the Optionee’s domicile at the
time of death and only until such Options terminate as provided above. |
7
| |
(iii) |
For
purposes of the Plan, unless otherwise defined in the Agreement, “Disability” shall
mean medically determinable physical or mental impairment which has lasted
or can be expected to last for a continuous period of not less than six
(6) months or that can be expected to result in death. The Plan
Administrator shall determine whether an Optionee has incurred a Disability
on the basis of medical evidence acceptable to the Plan Administrator.
Upon making a determination of Disability, the Plan Administrator shall,
for purposes of the Plan, determine the date of an Optionee’s
termination of employment or contractual relationship. |
| |
(iv) |
Unless
accelerated in accordance with Section 5.1(f) above, unvested Options
shall terminate immediately upon termination of employment of the Optionee
by the Company for any reason whatsoever, including death or Disability. |
| |
(v) |
For
purposes of this Plan, transfer of employment between or among the Company
and/or any Related Company shall not be deemed to constitute a termination
of employment with the Company or any Related Company. For purposes of
this subsection, employment shall be deemed to continue while the Optionee
is on military leave, sick leave or other bona fide leave of
absence (as determined by the Plan Administrator). The foregoing
notwithstanding, employment shall not be deemed to continue beyond the
first ninety (90) days of such leave, unless the Optionee’s
re-employment rights are guaranteed by statute or by contract. |
| |
(i) |
Options
shall be exercisable, in full or in part, at any time after vesting, until
termination. If less than all of the shares included in the vested portion
of any Option are purchased, the remainder may be purchased at any
subsequent time prior to the expiration of the Option term. No portion of
any Option for less than fifty (50) shares (as adjusted pursuant to
Section 5.1(m) below) may be exercised; provided, that if the
vested portion of any Option is less than fifty (50) shares, it may be
exercised with respect to all shares for which it is vested. Only whole
shares may be issued pursuant to an Option, and to the extent that an
Option covers less than one (1) share, it is unexercisable. |
| |
(ii) |
Options
or portions thereof may be exercised by giving written notice to the
Company, which notice shall specify the number of shares to be purchased,
and be accompanied by payment in the amount of the aggregate exercise
price for the Common Stock so purchased, which payment shall be in the
form specified in Section 5.1(i) below. The Company shall not be
obligated to issue, transfer or deliver a certificate of Common Stock to
the Holder of any Option, until provision has been made by the Holder, to
the satisfaction of the Company, for the payment of the aggregate exercise
price for all shares for which the Option shall have been exercised and
for satisfaction of any tax withholding obligations associated with such
exercise. |
8
| |
(iii) |
During
the lifetime of an Optionee, Options are exercisable only by the Optionee
or in the case of a Non-Qualified Stock Option, transferee who takes title
to such Option in the manner permitted by subsection 5.1(k) hereof. |
| |
(i) |
Payment
upon Exercise of Option |
| |
Upon
the exercise of any Option, the aggregate exercise price shall be paid to the Company in
cash or by certified or cashier’s check. In addition, if pre-approved in writing by
the Plan Administrator who may arbitrarily withhold consent, the Holder may pay for all
or any portion of the aggregate exercise price by complying with one or more of the
following alternatives: |
| |
(i) |
by delivering to the Company shares of Common Stock previously held by such
Holder, or by the Company withholding shares of Common Stock otherwise
deliverable pursuant to exercise of the Option, which shares of Common Stock
received or withheld shall have a fair market value at the date of exercise (as
determined by the Plan Administrator) equal to the aggregate exercise price to
be paid by the Optionee upon such exercise; or |
| |
(ii) |
by complying with any other payment mechanism approved by the Plan
Administrator at the time of exercise. |
| |
(j) |
No
Rights as a Shareholder |
| |
A
Holder shall have no rights as a shareholder with respect to any shares covered by an
Option until such Holder becomes a record holder of such shares, irrespective of whether
such Holder has given notice of exercise. Subject to the provisions of Section 5.1(m)
hereof, no rights shall accrue to a Holder and no adjustments shall be made on account of
dividends (ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights declared on, or created in, the Common Stock for which the
record date is prior to the date the Holder becomes a record holder of the shares of
Common Stock covered by the Option, irrespective of whether such Holder has given notice
of exercise. |
| |
(i) |
Options granted under this Plan and the rights and privileges conferred by this
Plan may not be transferred, assigned, pledged or hypothecated in any manner
(whether by operation of law or otherwise) other than by will or by applicable
laws of descent and distribution or pursuant to a qualified domestic relations
order, and shall not be subject to execution, attachment or similar process;
provided however that, subject to applicable laws: |
| |
A. |
for Incentive Stock Options, any Agreement may provide or be amended to provide
that a Non-Qualified Stock Option to which it relates is transferable without
payment of consideration to immediate family members of the Optionee or to
trusts or partnerships or limited liability companies established exclusively
for the benefit of the Optionee and the Optionee’s immediate family
members; |
9
| |
B. |
for Non-Qualified Stock Options, the Optionee’s heirs or administrators
may exercise any portion of the outstanding Options within one year of the
Optionee’s death. |
| |
(ii) |
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of any Option or of any right or privilege conferred by this Plan contrary to
the provisions hereof, or upon the sale, levy or any attachment or similar
process upon the rights and privileges conferred by this Plan, such Option shall
thereupon terminate and become null and void. |
| |
(l) |
Securities
Regulation and Tax Withholding |
| |
(i) |
Shares
shall not be issued with respect to an Option unless the exercise of such
Option and the issuance and delivery of such shares shall comply with all
Applicable Laws. The inability of the Company to obtain from any regulatory
body the authority deemed by the Company to be necessary for the lawful
issuance and sale of any Options or shares under this Plan, or the
unavailability of an exemption from registration for the issuance and sale of
any shares under this Plan, shall relieve the Company of any liability with
respect to the non-issuance or sale of such Options or shares. |
| |
(ii) |
As a condition to the exercise of an Option, the Plan Administrator may require
the Holder to represent and warrant in writing at the time of such exercise that
the shares are being purchased only for investment and without any then-present
intention to sell or distribute such shares. At the option of the Plan
Administrator, a stop-transfer order against such shares may be placed on the
stock books and records of the Company, and a legend indicating that the stock
may not be pledged, sold or otherwise transferred unless an opinion of counsel
is provided stating that such transfer is not in violation of any applicable law
or regulation, may be stamped on the certificates representing such shares in
order to assure an exemption from registration. The Plan Administrator also may
require such other documentation as may from time to time be necessary to comply
with federal, provincial or state securities laws. THE COMPANY HAS NO OBLIGATION
TO UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE
EXERCISE OF OPTIONS. |
| |
(iii) |
The Holder shall pay to the Company by certified or cashier’s check,
promptly upon exercise of an Option or, if later, the date that the amount of
such obligations becomes determinable, all applicable federal, state,
provincial, local and foreign withholding taxes that the Plan Administrator, in
its discretion, determines to result upon exercise of an Option or from a
transfer or other disposition of shares of Common Stock acquired upon exercise
of an Option or otherwise related to an Option or shares of Common Stock
acquired in connection with an Option. Upon approval of the Plan Administrator,
a Holder may satisfy such obligation by complying with one or more of the
following alternatives selected by the Plan Administrator: |
10
| |
A. |
by delivering to the Company shares of Common Stock previously held by such
Holder or by the Company withholding shares of Common Stock otherwise
deliverable pursuant to the exercise of the Option, which shares of Common Stock
received or withheld shall have a fair market value at the date of exercise (as
determined by the Plan Administrator) equal to any withholding tax obligations
arising as a result of such exercise, transfer or other disposition; or |
| |
B. |
by complying with any other payment mechanism approved by the Plan
Administrator from time to time. |
| |
(iv) |
The issuance, transfer or delivery of certificates of Common Stock pursuant to
the exercise of Options may be delayed, at the discretion of the Plan
Administrator, until the Plan Administrator is satisfied that the applicable
requirements of the federal, provincial and state securities laws and the
withholding provisions under Applicable Laws have been met and that the Holder
has paid or otherwise satisfied any withholding tax obligation as described in
paragraph 5.1(l)(iii) above. |
| |
(m) |
Stock
Dividend or Reorganization |
| |
(i) |
If (1) the Company shall at any time be involved in a transaction described in
Section 424(a) of the Code (or any successor provision) or any
“corporate transaction” described in the regulations thereunder;
(2) the Company shall declare a dividend payable in, or shall subdivide,
reclassify, reorganize, or combine, its Common Stock or (3) any other event with
substantially the same effect shall occur, the Plan Administrator shall, subject
to applicable law, with respect to each outstanding Option, proportionately
adjust the number of shares of Common Stock subject to such Option and/or the
exercise price per share so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to such event, and
to the extent that such action shall include an increase or decrease in the
number of shares of Common Stock subject to outstanding Options, the number of
shares available under Section 4 of this Plan and the exercise price for such
Options shall automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Plan Administrator,
the Company, the Company’s shareholders, or any Holder, so as to preserve
the proportional rights of the Holder. |
| |
(ii) |
In the event that the presently authorized capital stock of the Company is
changed into the same number of shares with a different par value, or without
par value, the stock resulting from any such change shall be deemed to be Common
Stock within the meaning of the Plan, and each Option shall apply to the same
number of shares of such new stock as it applied to old shares immediately prior
to such change. |
11
| |
(iii) |
If the Company shall at any time declare an extraordinary dividend with respect
to the Common Stock, whether payable in cash or other property, the Plan
Administrator may, subject to applicable law, in the exercise of its sole
discretion and with respect to each outstanding Option, proportionately adjust
the number of shares of Common Stock subject to such Option and/or adjust the
exercise price per share so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to such event, and
to the extent that such action shall include an increase or decrease in the
number of shares of Common Stock subject to outstanding Options, the number of
shares available under Section 4 of this Plan shall automatically be increased
or decreased, as the case may be, proportionately, without further action on the
part of the Plan Administrator, the Company, the Company’s shareholders, or
any Holder. |
| |
(iv) |
The foregoing adjustments in the shares subject to Options shall be made by the
Plan Administrator, or by any successor administrator of this Plan, or by the
applicable terms of any assumption or substitution document. |
| |
(v) |
The grant of an Option shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge, consolidate or dissolve, to
liquidate or to sell or transfer all or any part of its business or assets. |
6. EFFECTIVE DATE;
6.1 Incentive Stock Options may be
granted by the Plan Administrator from time to time on or after the date on which this
Plan is adopted (the “Effective Date”) through the day immediately preceding the
tenth anniversary of the Effective Date.
6.2 Stock Options may
be granted by the Plan Administrator on or after the Effective Date and until this Plan is
terminated by the Board in its sole discretion.
6.3 Termination of this Plan
shall not terminate any Option granted prior to such termination.
7. NO OBLIGATIONS TO
EXERCISE OPTION
7.1 The grant of an Option
shall impose no obligation upon the Optionee to exercise such Option.
8. NO RIGHT TO OPTIONS
OR TO EMPLOYMENT
8.1 Whether or not any Options are to
be granted under this Plan shall be exclusively within the discretion of the Plan
Administrator, and nothing contained in this Plan shall be construed as giving any person
any right to participate under this Plan.
8.2 The grant of an Option shall in
no way constitute any form of agreement or understanding binding on the Company or any
Related Company, express or implied, that the Company or any Related Company will employ
or contract with an Optionee for any length of time, nor shall it interfere in any way
with the Company’s or, where applicable, a Related Company’s right to terminate
Optionee’s employment at any time, which right is hereby reserved.
12
9. APPLICATION OF FUNDS
9.1 The proceeds received by the
Company from the sale of Common Stock issued upon the exercise of Options shall be used
for general corporate purposes, unless otherwise directed by the Board.
10. INDEMNIFICATION OF
PLAN ADMINISTRATOR
10.1 In addition to all other rights
of indemnification they may have as members of the Board, members of the Plan
Administrator shall be indemnified by the Company for all reasonable expenses and
liabilities of any type or nature, including attorneys’ fees, incurred in connection
with any action, suit or proceeding to which they or any of them are a party by reason of,
or in connection with, this Plan or any Option granted under this Plan, and against all
amounts paid by them in settlement thereof (provided that such settlement is approved by
independent legal counsel selected by the Company), except to the extent that such
expenses relate to matters for which it is adjudged that such Plan Administrator member is
liable for willful misconduct; provided, that within fifteen (15) days after the
institution of any such action, suit or proceeding, the Plan Administrator member involved
therein shall, in writing, notify the Company of such action, suit or proceeding, so that
the Company may have the opportunity to make appropriate arrangements to prosecute or
defend the same.
11. AMENDMENT OF PLAN
11.1 The Plan Administrator may,
subject to Applicable Laws, at any time, modify, amend or terminate this Plan or modify or
amend Options granted under this Plan, including, without limitation, such modifications
or amendments as are necessary to maintain compliance with applicable statutes, rules or
regulations; provided however that:
| |
(a) |
no
amendment with respect to an outstanding Option which has the effect of
reducing the benefits afforded to the Holder thereof shall be made over
the objection of such Holder; |
| |
(b) |
the
events triggering acceleration of vesting of outstanding Options may be
modified, expanded or eliminated without the consent of Holders; |
| |
(c) |
the
Plan Administrator may condition the effectiveness of any such amendment on
the receipt of shareholder approval at such time and in such manner as the
Plan Administrator may consider necessary for the Company to comply with
or to avail the Company and/or the Optionees of the benefits of any
securities, tax, market listing or other administrative or regulatory
requirement; and |
| |
(d) |
the
Plan Administrator may not increase the number of shares available for
issuance on the exercise of Incentive Stock Options without shareholder
approval. |
11.2 Without limiting the generality
of Section 11.1 hereof, the Plan Administrator may modify grants to persons who are
eligible to receive Options under this Plan who are foreign nationals or employed outside
Canada and the United States to recognize differences in local law, tax policy or custom.
Effective Date: November
1, 2004
