EXHIBIT 10.29
DIRECTOR'S/EMPLOYEE
INCENTIVE STOCK OPTION AGREEMENT
(PLAN)
THIS AGREEMENT is made as of the 26th day of March, 1996,
BETWEEN:
SUMMO MINERALS CORPORATION, a company duly incorporated under
the laws of the Province of British Columbia, having its
registered office at 000-000 Xxxx Xxxxxx, Xxxxxxxxx, X.X.,
X0X 0X0
(hereinafter called the "COMPANY")
OF THE FIRST PART
AND:
XXXXXXX X. XXXX, of Suite 1100, 0000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx, X.X.X. 00000
(hereinafter called the "OPTIONEE")
OF THE SECOND PART.
WHEREAS:
A. the Optionee is a director and employee of the Company and requires as
a condition of holding such position that the parties enter into this
Incentive Stock Option Agreement on the terms and conditions hereinafter set
forth;
B. this incentive stock option is granted by the Company in reliance on
the exemptions from registration and prospectus requirements contained in
Sections 31(2)(l0) and 55(2)(9) of the SECURITIES ACT (British Columbia) and
Sections 35(1)(19) and 72(1)(n) of the SECURITIES ACT (Ontario);
C. the Company has been classified as a "Resource" company by the
Vancouver Stock Exchange and as a "Non-Exempt" resource company by the
Toronto Stock Exchange;
D. the directors of the Company passed a resolution at their board
meeting held January 15, 1996 implementing an Incentive Stock Option Plan
(the "PLAN"), subject to shareholder ratification, a copy of which is
attached hereto as "Schedule "A";
E. the option herein granted is subject to the terms and conditions of
the Plan;
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NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and of the covenants and agreements herein contained the parties
hereto covenant and agree as follows:
1. From the date hereof, and for so long as the Optionee shall be an
employee of the Company, the Optionee shall have and be entitled to and the
Company hereby grants to the Optionee, on the terms and conditions
hereinafter set out, an option to purchase all or any portion of an aggregate
of ONE HUNDRED AND TWENTY THOUSAND (120,000) fully paid and non-assessable
common shares of the Company from the treasury on or before MARCH 25, 2001 at
the price of ONE DOLLAR AND TEN CENTS ($1.10) per share.
2. The right to exercise the option herein granted is based upon the
progress of permitting, financing and completion of construction of the
Company's principal mining property situated near Moab, Utah, and known as
the Lisbon Valley Project (the "PROJECT"), since the Optionee is part of
senior management of the Company and in such position is materially
responsible for bringing the Project into commercial production as a mine.
3. The Optionee shall have the right to purchase 30,000 shares of the
Company subject to this agreement (the "FIRST TRANCHE") only if, on or before
December 31, 1996, all material permits have been issued by the applicable
federal, state, county and other regulatory bodies to allow the commencement
of construction for the Project.
4. Whether or not the Optionee becomes entitled to purchase the First
Tranche, the Optionee shall have the right to purchase an additional 40,000
shares of the Company subject to this agreement (the "SECOND TRANCHE") only
if, on or before June 30, 1997, agreements have been entered into between the
Company and third parties which, on completion, will provide financing for
the completion of construction for the Project.
5. Whether or not the Optionee becomes entitled to purchase the First
Tranche and/or the Second Tranche, the Optionee shall have the right to
purchase an additional 50,000 shares of the Company subject to this agreement
(the "THIRD TRANCHE") only if, on or before the first anniversary of the
production of cathode copper at the Project, the Company has substantially
satisfied all of the conditions established for the commercial completion of
the Project by the senior lending institutions providing the financing.
6. The determination as to whether the conditions have been met for the
purchase by the Optionee of each of the First Tranche, the Second Tranche and
the Third Tranche shall be made by the directors of the Company, and prompt
notice of such determination shall be given to the Optionee.
7. Notwithstanding that none or only some of the conditions set out in
paragraphs 3, 4 and 5 hereof have been met, the Optionee shall become
immediately entitled to purchase any unexercised part of the 120,000 shares
subject to this agreement in the event that the Company undergoes a "Change
of Control" (as that term is hereinafter defined). For the purposes of this
Agreement, a "CHANGE OF CONTROL" shall be deemed to have occurred at any time
following the effective date of this agreement when:
(a) a person becomes a new control person (as that term is defined in
the SECURITIES ACT of British Columbia) of the Company; or
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(b) a majority of the directors elected at any annual or special
general meeting of shareholders of the Company are not individuals
nominated by the Company's then-incumbent board of directors.
8. The right to take up shares pursuant to the option herein granted is
exercisable by notice in writing to the Company accompanied by a certified
cheque in favour of the Company for the full amount of the purchase price of
the shares being then purchased. When such payment is received, the Company
covenants and agrees to issue and deliver to the Optionee share certificates
in the name of the Optionee for the number of shares so purchased.
9. This is an option agreement only and does not impose upon the Optionee
any obligation to take up and pay for any of the shares under option.
10. Subject to paragraph 11 hereof, the option herein granted shall cease
and become null and void following the tenth day after which the Optionee
ceases to act as a director of the Company.
11. The Optionee hereby acknowledges that in the event the Optionee is an
insider of the Company, the option herein granted may not be exercised in
full or in part until this agreement has been approved by the members at a
general meeting of the Company.
12. The Company hereby covenants that it will seek the approval of the
members to the incentive stock option herein granted, together with any
amendments thereto, at the next general meeting of the Company prior to
exercise thereof by the Optionee, in accordance with the requirements of The
Toronto Stock Exchange, and the Optionee warrants that he will not exercise
all or any portion of the subject option until such approval is obtained.
13. The Company hereby covenants and agrees to and with the Optionee that
it will reserve in its treasury sufficient shares to permit the issuance and
allotment of shares to the Optionee upon full exercise of the option herein
granted.
14 If at any time during the continuance of this agreement, the parties
hereto deem it necessary or expedient to make any alteration or addition to
this agreement, they may do so by means of a written agreement between them
which will be supplemental hereto and form part hereof and which may be
subject to the approval of the securities regulatory bodies having
jurisdiction.
15. This agreement may be executed in several parts in the same form and
such parts as so executed will together constitute one original agreement,
and such parts, if more than one, will be read together as if all the signing
parties hereto had executed one copy of this agreement.
16. This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, and
successors.
17. Wherever the plural or masculine are used throughout this agreement,
the same shall be construed as meaning singular or feminine or neuter or the
body politic where the context of the parties thereto require.
18. The Optionee hereby acknowledges and confirms that he has obtained
independent legal advice with respect to this agreement and understands and
is aware that the securities of the
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Company have not been registered under the Securities Act of 1933, as
amended. The Optionee covenants with and to the Company that he will exercise
the option herein granted, and dispose of the shares thereby acquired, only
in accordance with all applicable laws.
19. In this agreement, all references to money are references to Canadian
dollars.
IN WITNESS WHEREOF the parties have hereunto caused these presents to
be executed as of the day and year first above written.
The COMMON SEAL of )
SUMMO MINERALS CORPORATION )
in the presence of: )
/s/ [Illegible] )
------------------------ ) c/s,
Authorized signatory )
Corporate Sec'y
SIGNED, SEALED AND DELIVERED )
by XXXXXXX X. XXXX )
in the presence of: )
/s/ Xxxxxxxx Xxxxxx ) /s/ Xxxxxxx X. Xxxx
------------------------ ---------------------------------
Witness XXXXXXX X. XXXX
This is page 3 to that certain Incentive Stock Option Agreement between SUMMO
MINERALS CORPORATION and XXXXXXX X. XXXX dated as of the 26th day of March,
1996.
Schedule "A"
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SUMMO MINERALS CORPORATION
EMPLOYEE INCENTIVE STOCK OPTION PLAN
1. PURPOSE
The purpose of the Employee Incentive Stock Option Plan (the "Plan")
is to promote the profitability and growth of SUMMO MINERALS CORPORATION
("Summo") by facilitating the efforts of Summo and its subsidiaries to obtain
and retain key individuals. The Plan provides an incentive for and encourages
ownership of Summo's shares by its key individual so that they may increase
their stake in Summo and benefit from increases in the value of Summo's
shares.
2. ADMINISTRATION
The Plan will be administered by a committee (the "Committee") of
Summo's Board of Directors (the "Board"), which will consist of two or more
members. All members of the Committee shall be non-employee directors who a
"Disinterested Persons" with regard to Plan administration, within the
meaning of Rule 16b-3 as promulgated and amended from time to time by the
United States Securities and Exchange Commission.
The Committee will be authorized, subject to the provisions of the
Plan, to adopt such rules and regulations which it deems consistent with the
Plan's provisions and, in its sole discretion, to designate options
("Options") to purchase shares of Summo pursuant to the Plan. The Committee
may authorize one or more individuals of Summo to execute, deliver and
receive documents on behalf of the Committee.
3. ELIGIBILITY
All directors and officers and employees of Summo and its subsidiaries
will be eligible to receive Options. The term "subsidiaries" for the purpose
of the Plan will include Summo U.S.A. Corporation, which definition may be
varied by the Committee to conform with the changing interests of Summo.
Nothing in the Plan or in any option shall confer any right on any
individual to continue in the employ of or association with Summo or its
subsidiaries or will interfere in any way with the right of Summo or
subsidiaries to terminate at any time the employment of a person who is an
optionee ("Optionee") under an Option.
4. SHARES SUBJECT TO OPTION
The shares to be optioned under the Plan will be authorized but
unissued Common Shares without par value ("Shares") of Summo.
At no time will more than 2,000,000 Shares be under option either
pursuant to the Plan or pursuant to other incentive stock options issued by
Summo. The number of Shares under option at any specific time to any one
Optionee shall not exceed 5% of the issued and outstanding common share
capital of Summo, subject to adjustment under Section 12 below.
Shares subject to and not delivered under an Option which expires or
terminates shall again be available for option under the Plan. The maximum
number of Shares which may be issued pursuant to
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the Plan shall not however exceed 2,000,000 Shares.
5. GRANTING OF OPTIONS
The Committee may from time to time at its discretion, subject to the
provisions of the Plan, determine those eligible individuals to whom Options
will be granted, the number of Shares subject to such Options, the dates on
which such Options are to be granted and the expiration of such Options.
The Committee may, at its discretion, with respect to any Option,
impose additional terms and conditions which are more restrictive on the
optionee than those provided for in the Plan.
Each Option will be evidenced by a written agreement between, and
executed by, Summo and the individual containing such terms and conditions
established by the Committee with respect to such Option and will be
consistent with the provisions of the Plan.
Options shall be granted to directors only according to the following
formula:
(i) Each director who was a member of the Board of Directors prior to
January 1, 1996, shall upon adoption of this Plan be issued
Options for that number of Shares necessary to bring the aggregate
number of Shares underlying incentive options issued to such
director to 150,000 Shares. The exercise price of such Options
shall be determined as provided in Section 6 hereof.
(ii) Each director who becomes a member of the Board of Directors after
January 1, 1996, shall be granted Options for 50,000 Shares upon
his or her election or appointment to the Board. The exercise
price shall be determined as provided in Section 6 hereof.
(iii) Upon the expiration date of any Options issued to a director
(regardless of whether such Options were exercised on or prior to
the expiration date), such director shall be issued Options for an
additional 50,000 Shares. The exercise price shall be determined
as provided in Section 6 hereof. The provisions of this
paragraph (iii) shall also apply upon the expiration date of any
other incentive stock options issued to a director if at the time
of such expiration date, the director holds incentive options,
including Options, for fewer than an aggregate of 50,000 Shares
underlying such options, in which case the director shall be
issued that number of Options necessary to bring the aggregate
number of Shares underlying incentive options issued to such
director at such time to 50,000 Shares. The calculation of
incentive options held by any director shall not include any
warrants to purchase Summo shares held by a director provided
such warrants were issued by Summo in connection with securities
offered by Summo.
(iv) The foregoing formulas shall not be amended more than once every
six months other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or the
rules thereunder.
(v) Additional options may be granted to directors at the discretion
of the Committee,
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provided that no director may receive additional options while
serving on the Committee if the receipt of such options would
cause him to cease to be a Disinterested Person.
6. OPTION PRICE
The price per Share at which Shares may be purchased upon the exercise
of an Option (the "Option Price") will not be lower that the "market price"
of the Shares on The Toronto Stock Exchange (the "TSE") at the time of grant.
In the context of the Plan, "market price" means the closing price of Summo's
shares on the TSE at the close of trading which immediately preceded the time
that the option was granted. If the shares of Summo do not trade on such day,
the "market price" shall be the average of the bid and ask prices on the
previous trading day.
7. TERM OF OPTION
The maximum term of any Option will be 10 years.
The Option Price will be paid in full at the time of exercise of the
Option and no Shares will be delivered until full payment is made.
An Optionee will not be deemed the holder of the Shares subject to his
Option until the Shares are delivered to him.
8. TRANSFERABILITY OF OPTIONS
An Option may not be assigned. During the lifetime of an Optionee, the
Option may be exercised only by the Optionee.
9. TERMINATION OF EMPLOYMENT
Upon termination of employment for any reason except death or
retirement or failure of reelection as a director or failure to be
re-appointed an officer of Summo, an Optionee may, at any time within 30 days
after the date of termination but not later than the date of expiration of
the Option, exercise the Option to the extent the Optionee was entitled to do
so on the date of termination. Any option or portions of Options of
terminated individuals not so exercised will terminate and again be available
for future Options under the Plan. A change of employment will not be
considered a termination so long as the Optionee continues to be employed by
Summo or its subsidiaries.
10. DEATH
Notwithstanding any other provision of this Plan other than the
maximum of 10 years provided for in Section 7, if any Optionee shall die
holding an Option which has not been fully exercised, his personal
representative, heirs or legatees may, at any time within 60 days of grant of
probate of the will or letters of administration of the estate of the
decedent or within one year after the date of such death, whichever is the
lesser time, exercise the Option with respect to the unexercised balance of
the Shares subject to the Option.
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11. RETIREMENT
Notwithstanding any other provision of this Plan, if any Optionee
shall retire or terminate his employment with the consent of the Board under
circumstances equating retirement, while holding an Option which has not been
fully exercised, such Optionee may exercise the Option at any time during the
unexpired term of the Option.
12. CHANGE IN SHARES
In the event the authorized common share capital of Summo as
presently constituted is consolidated into a lesser number of Shares or
subdivided into a greater number of Shares, the number of Shares for which
Options are outstanding will be decreased or increased proportionately as the
case may be and the Option Price will be adjusted accordingly and the
Optionee will have the benefit of any stock dividend declared during the
period within which the said Optionee held his Option. Should Summo
amalgamate or merge with any other company or companies (the right to do so
being expressly reserved) whether by way of arrangement, sale of assets and
undertakings or otherwise, then and in each such case the number of shares of
the resulting corporation to which an Option relates will be determined as if
the Option has been fully exercised prior to the effective date of the
amalgamation or merger and the Option Price will be correspondingly increased
or decreased, as applicable.
13. CANCELLATION AND RE-GRANTING OF OPTIONS
The Committee may, with the consent of the Optionee, cancel any
existing Option, and re-grant the Option at an Option Price determined in the
same manner as provided in Section 6 hereof, subject to the prior approval of
the TSE.
14. AMENDMENT OR DISCONTINUANCE
The Board may alter, suspend or discontinue the Plan, but may not,
without the approval of the shareholders of Summo and the TSE, may any
alteration which would (a) increase the aggregate number of Shares subject to
Option under the Plan except as provided in Section 12 or (b) decrease the
Option Price except as provided in Section 12. Notwithstanding the foregoing,
the terms of an existing Option may not be altered, suspended or discontinued
without the consent in writing of the Optionee.
15. INTERPRETATION
The Plan will be construed according to the laws of the Province of
British Columbia.
16. LIABILITY
No member of the Committee or any director, officer or employee of
Summo will be personally liable for any act taken or omitted in good faith in
connection with the Plan.
