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Exhibit 10.5
SCHEDULE
HEDMAN RESOURCES LIMITED
STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of this stock option plan (the "Plan") is to provide employees,
officers and directors of and "service providers" (such term has here and
hereinafter the meaning ascribed to it under The Alberta Stock Exchange
rules and regulations) to Headman Resources Limited (the "Company") with
the opportunity, through share options, to acquire a proprietary interest
in the Company.
2. SHARES SUBJECT TO THE PLAN
(a) Subject to subsection 2(b) and (c) below, options may be granted on
authorized but unissued common shares (the "Shares") of the Company.
Options may be granted at any time and from time to time under the
Plan on a maximum of 1,200,000 Shares. Shares in respect of which
options have been granted but which are not exercised prior to expiry
shall be available for subsequent option;
(b) The number of Shares reserved for issuance to any one insider, within
a one-year period, pursuant to options must not exceed 5% of the
outstanding issue; and
(c) The number of shares reserved for issuance to insiders, within a
one-year period, pursuant to options must not exceed 10% of the
outstanding issue.
3. ADMINISTRATION
The Plan shall be administered by the board of directors of the Company
(the "Board"). The acts of a majority at any meeting and acts approved by
instrument or instruments in writing signed by all of the members of the
Board shall be the acts of the Board. All questions of interpretation and
application of the Plan and of any options issued under it shall be
determined by the Board, which interpretations and applications shall be
conclusive. No member or former member of the Board shall be liable, in the
absence of bad faith or misconduct, for any act or omission with respect to
his or her service on the Board.
4. PARTICIPANTS
The Board shall determine and designate from time to time those employees,
officers and directors of the Company and those service providers
(collectively, hereinafter sometimes referred to as "participants") to whom
options to purchase Shares are to be granted and the number of Shares to be
optioned from time to time to any individual.
5. OPTION PRICE
The option price of Shares which are the subject of any option shall be
fixed by the Board but such price shall not be less than the maximum
discount permitted under the rules, regulations and policies of The Alberta
Stock Exchange.
6. OPTION PERIOD AND VESTING
The period for exercising an option shall not extend beyond a period of 5
years following the date of grant of the option. Within such limitation,
the period or periods within which an option or portion thereof may be
exercised by a participant shall be determined in each case by the Board.
Except as expressly determined by the Board, participants may take up and
pay for not more than one-twelfth (1/12) of the Shares covered by the
option in any calendar quarter
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commencing with the first quarter following the date of the grant, provided
however, that if the number of Shares taken up under an option in any
previous calender quarter since the date of grant of option was less than
one-twelfth (1/12) of the Shares purchaseable then such Shares may also be
purchased at any time and from time to time during the term of the option.
7. Exercise of Option
Subject to the provisions of the Plan, an option may be exercised from time
to time by delivery to the Company at its head office of a subscription in
writing signed by the participant or his or her legal personal
representative and addressed to the Company at its head office, stating the
intention of the participant or his or her legal personal representative to
exercise the said option and specifying the number of Shares in respect of
which the option is then being exercised, accompanied by payment in full
(by certified cheque or bank draft) of the option price of the Shares in
respect of which the said option is then being exercised. Such subscription
shall be substantially in the form annexed hereto as Exhibit "A". The
Company shall deliver certificates for such Shares as soon thereafter as
practicable.
8. Option Agreement
Options granted shall be evidenced by an agreement substantially in the
form annexed hereto as Exhibit "B" to be executed by the Company and the
participant.
9. Options Non-Assignable, Death of Participant
Subject to the terms of this section 9, options granted under the Plan may
not be assigned. Notwithstanding the foregoing, in the event of the death
of a participant on or prior to the date on which his or her option expires
and provided the participant was at the time of death still legally
entitled to exercise the option in accordance with the terms of the option
so granted, the option granted to such participant may be exercised, as to
such of the optioned shares in respect of which such option has not
previously been exercised, by the legal personal representative of such
participant at any time up to and including, but not after, 5:00 o'clock in
the afternoon (Toronto time) on the date which is six (6) months following
the date of death of the participant or up to 5:00 o'clock in the afternoon
(Toronto time) on the date on which the option granted to such participant
expires, whichever is the earlier.
10. Cessation of Employment
In the event of discharge for cause of the participant as an employee of
the Company prior to the date on which the option granted to such
participant expires, the option so granted shall, forthwith upon the
participant so ceasing to be an employee of the Company, cease and
terminate and be of no further force or effect whatsoever as to such of the
Shares in respect of which such option has not previously been exercised.
In the event of the retirement of a participant as an employee of the
Company at normal retirement date (being the time at which a participant
attains the age of 65 years or as otherwise defined by the Board from time
to time) or, with the consent of the Board, in the event of the early
retirement of a participant as an employee of the Company prior to the date
on which the option granted to such participant expires, or in the event of
the discharge of the participant without cause, resignation of the
participant or incapacity of the participant where in the opinion of the
Board he or she cannot fulfill his or her normal duties, the option granted
to such participant may be exercised, as to such of the optioned shares in
respect of which such option has not previously been exercised, by the
participant or his or her personal legal representative at any time up to
and including, but not after, 5:00 o'clock in the afternoon (Toronto time)
on a date three (3) months following the date on which the participant
ceased to be an employee of the Company or up to 5:00 o'clock in the
afternoon (Toronto time) on the date on which the option granted to such
participant expires, whichever is the earlier.
11. Rights to Dividends
The participant shall have no right whatsoever as a shareholder in respect
of any of the Shares subject to the option granted to him or her (including
any right to receive dividends or other distributions therefrom or thereon)
other than in respect of the Shares in respect of which the participant
shall have exercised his or her option to purchase and which the
participant shall have actually taken up and paid for.
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12. ADJUSTMENTS
If there is any change in the character or amount of the Shares as a result
of a recapitalization, merger, consolidation, stock dividend, split-up,
combination or exchange of shares of the Company, or otherwise, prior to
the exercise of an option previously granted, the option to the extent that
it has not been exercised shall entitle the holder to purchase that number
and kind of shares or securities, or both, which he or she would have been
entitled to receive had he or she actually owned the Shares subject to the
option at the time of such change. If any other event shall occur prior to
the exercise of an option previously granted and which the Board shall
determine equitably requires an adjustment to the number or kind of shares
which any holder of an option should be permitted to acquire, such
adjustment as the Board shall determine may be made. Similar adjustments
shall be made to the total number of Shares which may be optioned. In the
event that any person makes an offer to acquire all or substantially all
the issued and outstanding Shares, all outstanding and unexercised options
may be exercised forthwith.
13. NON-ASSIGNABILITY
Options granted to participants hereunder are not transferable nor
assignable and, except in accordance with the laws of devolution as
provided in paragraphs 7, 9 and 10 hereof, are exercisable only by the
participant.
14. DECISIONS OF THE BOARD
All decisions and interpretations of the Board respecting the Plan or
options granted thereunder shall be binding and conclusive on the Company
and on all holders of options granted thereunder and their respective legal
personal representatives and on all participants eligible under the
provisions of the Plan to participate therein.
15. DISCONTINUANCE OF OR AMENDMENT TO THE PLAN
The Board may, at its discretion, amend, modify or discontinue the Plan or
any option granted thereunder at any time without notice (except in the
case of an amendment to the Plan or to an existing option granted
thereunder in which case the prior written consent of the stock exchanges
upon which the Shares are then listed must be obtained) provided, however,
that no such amendment or modification may, without the consent of a
participant, impair his or her rights under the Plan with respect to any
Shares upon which he or she has been granted an option.
16. SHAREHOLDER APPROVAL
The Plan shall be presented to the Company's shareholders on July 17, 1997
for approval by such shareholders. Options may be granted prior to such
approval, but such options shall be contingent upon such approval being
obtained and may not be exercised prior to such approval.
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EXHIBIT "A"
HEDMAN RESOURCES LIMITED
STOCK OPTION PLAN SUBSCRIPTION AGREEMENT
To:
Date: , 19
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Re: HEDMAN RESOURCES LIMITED STOCK OPTION PLAN
I refer to the option granted to me on the day of , 19 , pursuant
to the Hedman Resources Limited Stock Option Plan wherein I was granted an
option to subscribe for and purchase fully paid and non-assessable common
shares without par value of the capital of Hedman Resources Limited (the
"Company").
In the exercise of my rights under the said option, I hereby subscribe for
fully paid and non-assessable common shares without par value in the
capital of the Company at $ per share in lawful money of Canada, payment
for which in the aggregate amount of $ accompanies this subscription.
Will you please cause such shares to be certified and registered as follows:
(Insert full name and address of purchaser including postal code)
and forward the relevant certificate or certificates to the registered holder
at the address shown above.
Yours very truly,
(Signature)
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(Name of Optionee - Please Print)
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(Capacity - complete only if other
than employee (i.e. personal legal
representative or trustee))
