<PAGE> 1
SCHEDULE 14(c) INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934, as Amended
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only [as permitted by Rule
14c-5(d)(2)]
[X] Definitive Information Statement
- -----------------------------------------------------------------------------
CONSIL CORP.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box): N/A
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14c-5(g).
[ ] Fee Computed on Table Below Per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of Each Class of Securities to Which Transaction Applies:
COMMON STOCK
(2) Aggregate Number of Securities to Which Transaction Applies:
N/A
(3) Per Unit Price or Other Underlying Value of Transaction Computed Pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
N/A
(4) Proposed Maximum Aggregate Value of Transaction:
N/A
(5) Total Fee Paid:
N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule, or Registration Statement No:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CONSIL CORP.
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 17, 1997
TO THE SHAREHOLDERS OF CONSIL CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of ConSil Corp.,
will be held on Monday, March 17,1997, at the offices of Ladner Downs, 1200
Waterfront Centre, 200 Burrard Street, Vancouver, British Columbia, Canada, for
the following purposes:
1. To elect five (5) members to the Board of Directors to serve for one-
year terms or until their respective successors are elected and
qualified.
2. To approve the Resolution of the Board of Directors to amend paragraph
two of Article V of the Restated Articles of Incorporation to increase
the number of issued and outstanding shares of the Company's Common
Stock from 20,000,000 shares, $.10 par value, to 100,000,000 shares, no
par value.
3. To approve the Resolutions to ratify, approve and confirm the adoption
by the Board of Directors of the Company's Stock Option Plan and
Incentive Stock Option Plan.
4. To approve the Resolution of the Board of Directors to grant stock
options to Officers and Directors of the Company.
5. To approve the Resolution authorizing the Board of Directors to grant
stock options during the ensuing year pursuant to the rules and
policies of the Vancouver Stock Exchange and the Company's Stock Option
Plan and Incentive Stock Option Plan.
6. To consider and vote upon the selection of Coopers & Lybrand as the
Company's independent auditors for 1997.
7. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on Wednesday, January 29,
1997, as the record date for the determination of the Shareholders entitled to
notice of, and to vote at, the Annual Meeting and any adjournment or
adjournments thereof. The stock transfer books of the Corporation will not be
closed.
Hecla Mining Company is the record and beneficial owner of 7,418,300 shares
(approximately 78.45%) of the outstanding Common Stock of ConSil Corp. It is
Hecla's intention to vote all of its shares in favor of each matter to be
considered by the Shareholders thereby assuring approval.
By order of the Board of Directors,
NATHANIEL K. ADAMS, Secretary
February 11, 1997
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
<PAGE> 3
IMPORTANT
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
-------------------------------------------
CONSIL CORP.
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
--------------------------------
INFORMATION STATEMENT
Relating to the Annual Meeting of Shareholders
to be held on March 17, 1997
----------------------------
INTRODUCTION
This Information Statement is being furnished in connection with matters to be
considered and voted upon at the Annual Meeting of Shareholders of ConSil Corp.
(the "Company") to be held at 2:00 p.m., on Monday, March 17, 1997, in the Main
Board Room of Ladner Downs, 1200 Waterfront Centre, 200 Burrard Street,
Vancouver, British Columbia, Canada, any and all adjournments thereof with
respect to the matters referred to in the accompanying notice. This Information
Statement is first being mailed to Shareholders on or about February 11, 1997.
Hecla Mining Company is the record and beneficial owner of 7,418,300 shares
(approximately 78.45%) of the outstanding Common Stock of ConSil Corp. It is
Hecla's intention to vote all of its shares in favor of each matter to be
considered by the Shareholders thereby assuring approval. Although approval of
each matter to be considered by the Shareholders is assured, the Company is
required by Idaho corporate law to submit each of the matters to be considered
to the vote of all Shareholders. There are no dissenter's rights applicable
with respect to any matter to be considered by the Shareholders.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
-------------------------------------------
PURPOSES OF THE ANNUAL MEETING
ELECTION OF DIRECTORS
At the Annual Meeting, Shareholders will be asked to consider and to take action
on the election of five (5) members to the Board of Directors to serve for one-
year terms or until their respective successors are elected and qualified (See
"Election of Directors").
February 10, 1997
<PAGE> 4
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
At the Annual Meeting, Shareholders will be asked to ratify, approve and confirm
the following Resolution of the Board of Directors of the Company, unanimously
adopted at the Annual Meeting of the Board of Directors held January 13, 1997,
to authorize the Company to amend paragraph two of Article V of the Restated
Articles of Incorporation.
RESOLVED: That paragraph two of Article V of the Company's Restated
Articles of Incorporation shall be amended to read as follows:
ARTICLE V.
Shares
The total number of shares of Common Stock that the corporation will
have authority to issue is One Hundred Million (100,000,000), no par
value. All of the Common Stock authorized herein shall have equal
voting rights and powers without restrictions in preference.
APPROVAL OF STOCK OPTION AND INCENTIVE STOCK OPTION PLANS
At the Annual Meeting, Shareholders will be asked to approve the following
resolutions ratifying, approving, and confirming the Board of Directors'
adoption of the Company's Stock Option Plan and Incentive Stock Option Plan
effective January 13, 1997.
RESOLVED: That the Stock Option Plan adopted by the Company's Board of
Directors effective on January 13, 1997, be and hereby is ratified,
approved and confirmed.
IT IS FURTHER RESOLVED: That the Incentive Stock Option Plan adopted
by the Company's Board of Directors effective January 13, 1997, be and
hereby is ratified, approved and confirmed.
GRANT OF STOCK OPTIONS
At the Annual Meeting, Shareholders will be asked to approve the following
resolutions ratifying, approving, and confirming the previous grant and ensuing
grants by the Company of stock options to "insiders" of the Company, as defined
under the Securities Act (British Columbia), in accordance with the policies of
the Vancouver Stock Exchange as set forth below.
RESOLVED: Stock options granted by the Board of Directors of the
Company in the following amounts to the following individuals, who are
insiders of the Company as defined by the Securities Act (British
Columbia), be and the same are hereby ratified, approved, and
confirmed, subject to regulatory approval in accordance with the
requirements of the Vancouver Stock Exchange:
No. of Shares Exercise Price Expiration
Name of Optionee Under Option Per Share (U.S.$) Date
--------------------- ------------ ----------------- -----------
Incentive Stock Options:
Ralph Noyes 175,000 $0.87 January 13, 2002
Cheryl Maher 100,000 0.87 January 13, 2002
Michael White 60,000 0.87 January 13, 2002
Stock Options:
R. Stuart Angus 60,000 0.87 January 13, 2002
William Weymark 60,000 0.87 January 13, 2002
Charles Asher 60,000 0.87 January 13, 2002
IT IS FURTHER RESOLVED: That the Board of Directors of the Company be
and are hereby authorized during the ensuing year to grant stock options,
pursuant to the rules and policies of the Vancouver Stock Exchange and the
Company's Stock Option Plan and Incentive Stock Option Plan, to
individuals who are insiders of the Company as defined by the Securities
Act (British Columbia) and to make amendments to
<PAGE> 5
existing stock options as may be permitted under the rules and policies of
the Vancouver Stock Exchange and that any one director or officer is
hereby authorized to do all acts and things, to deliver all documents and
instruments, to give all notices and to deliver and file with regulatory
authorities or otherwise or distribute all documents which may be
necessary or desirable to give effect to or carry out the foregoing
resolution.
Shareholder approval of the grant of incentive stock options to insiders is
required prior to such options being exercised pursuant to the rules and
policies of the Vancouver Stock Exchange. No one director or employee may
be granted options that make available a number of shares exceeding five
percent (5%) of the issued share capital of the Company. The option exercise
price cannot be less than the average closing price of the Company's shares for
the ten trading days immediately preceding the day on which the Company grants
the option to the director or employee. The Company is then required to
immediately issue a news release disclosing the grant; and within thirty (30)
days thereafter, file the necessary documentation with the Vancouver Stock
Exchange.
SELECTION OF INDEPENDENT AUDITORS
At the Annual Meeting, Shareholders will be asked to consider and vote upon the
selection of Coopers & Lybrand as the Company's independent auditors for 1997
(See "Approval of Auditors").
VOTING AT ANNUAL MEETING
1. RECORD DATE. The Board of Directors of the Company has fixed the close of
business on January 29, 1997, as the record date for the purpose of
determining Shareholders of the Company entitled to notice of and to vote
at the Annual Meeting. At the close of business on that date, the Company
had 9,455,689 issued and outstanding shares of Common Stock (see "Recent
Market Prices"). A majority of such shares will constitute a quorum for
the transaction of business at the Annual Meeting.
2. VOTING POWER. Shareholders of the Common Stock of the Company are
entitled to one vote for each share held.
3. CUMULATIVE VOTING RIGHTS. In the election of directors, all voting is
non-cumulative. Accordingly, the holders of more than fifty percent (50%)
of the shares will be able to elect all the directors and the minority
shareholders will not be able to elect a representative of the Board of
Directors.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following information a is provided with respect to each director and
executive officer of the Company. There are no audit, compensation, or other
committees of the Company's Board of Directors. Directors received no
remuneration for their services rendered or meetings attended during the year
ended December 31, 1996.
Year First Term as
Elected As Director
Name Age A Director Expires In Position
- -------- ----- ---------- ---------- ---------
Ralph R. Noyes 49 1991 1997 President, Chairman
of the Board, and
Director
Gerald G. Carlson 50 1995 1997 President and Director
Michael B. White 46 1989 1997 Vice President and
Director
Cheryl Maher 46 ----- ----- Vice President-Finance
and Controller
Nathaniel K. Adams 34 ----- ----- Secretary
Charles F. Asher 75 1992 1997 Director
Robert Stuart Angus 47 1995 1997 Director
William J. Weymark 44 1995 1997 Director
<PAGE> 6
RALPH R. NOYES has been Chairman of the Company since 1995 and President of the
Company since December 1, 1996, following Mr. Carlson's resignation. Mr. Noyes
previously served as President of the Company from 1991 to 1994. He was Vice
President of Metal Mining and Exploration for Hecla Mining Company from 1988 to
1995.
GERALD G. CARLSON served as President and Director of the Company from 1995
until his resignation from both positions which became effective November 30,
1996.
MICHAEL B. WHITE has been Vice President of the Company since 1992 and Secretary
of the Company since 1982. Mr. White is Vice President-General Counsel and
Secretary of Hecla Mining Company.
CHERYL MAHER was appointed Vice President of Finance and Controller of the
Company on January 1, 1997. Ms. Maher, a certified public accountant, has
practiced public accounting since 1993. Prior to that, she was employed as the
Financial Operations Specialist for Hecla Mining Company.
NATHANIEL K. ADAMS has served as the Secretary of the Company since 1995. Mr.
Adams is an attorney for Hecla Mining Company and has served as Hecla's
Assistant Secretary since 1992.
CHARLES F. ASHER is President of Plainview Mining Company. He has served as a
director of Merger Miners Corporation and Verna Mae Mining since 1987.
ROBERT STUART ANGUS is an attorney and partner in the Canadian law firm of
Stikeman Elliott, in Vancouver, British Columbia. He serves on the board of
several public Canadian mineral resource companies.
WILLIAM J. WEYMARK, B.SC., P.ENG. has been President of Vancouver Wharves since
December 1996. Prior to that he was Vice President of Operations of Vancouver
Wharves from 1991 through 1996. He serves on the board of several public
Canadian resource companies.
REMUNERATION AND OTHER COMPENSATION OF MANAGEMENT
The following table sets forth information regarding the aggregate compensation
for the fiscal years ended December 31, 1995, and 1996, paid or accrued for the
Chief Executive Officer of the Company and the Chairman of the Company. The
Company had no other paid executive officers nor other employees prior to July
1995. The Board of Directors did not designate a compensation committee to set
the compensation of the president. The salaries were set by the Board of
Directors of the Company based on its familiarity with what constitutes
competitive wages for the president of companies engaged in the mineral
exploration industry. The Company has no retirement plan.
SUMMARY COMPENSATION TABLE(1)
Long-term
Annual Compensation(2)Compensation Awards
Name Position Year Salary Bonus(3) Options(4)
- ------- ---------- ---- ------ ------- ---------
Ralph R. Noyes Chairman 1995 $ -0- -0- 200,000
Chairman/President 1996 $35,000 -0- 200,000
Gerald G. Carlson President(5) 1995 $36,000 -0- 200,000
President 1996 $66,000 -0- -0-
(1) Information for deleted columns is not required because no such
compensation is paid by the Company for any such deleted column.
(2) The annual compensation set forth in the table is based upon: (1) the
salary actually paid to Mr. Carlson for the period from July 1, 1995,
through December 31, 1995, and for the fiscal year ended December 31,
1996; and (2) the salary actually paid to Mr. Noyes for the period from
January 1, 1996 through July 1996. In addition, Mr. Noyes accrued (but
has not been paid) consulting fees of $5,000 per month for the period from
August 1, 1996, through December 31, 1996.
(3) No bonuses were paid and the Company has no plan for paying bonuses.
<PAGE> 7
(4) All stock options to acquire common stock, $.10 par value, of the Company
referred to in the table above were granted pursuant to two Stock Option
Agreements dated as of November 14, 1995, between the parties named above
and Hecla Mining Company (Hecla). At December 1, 1995, upon Mr. Carlson's
resignation, his options were terminated.
(5) Mr. Carlson commenced employment as President of the Company in July 1995.
Effective November 30, 1996, Mr. Carlson resigned his position as
president and as a director of the Company, and Mr. Noyes was appointed
President by the Board of Directors effective December 1, 1996.
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------
% of Total Potential Realizable
Options Value At Assumed Annual
Granted to Exercise or Rate of Stock Price for
Options Employees in Base Price: Expiration Option Term(2)
Name Granted(1) Fiscal Year $/Share Date 5% 10%
- ------ --------- ----------- ------------ -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ralph R. Noyes:
1995 200,000 50% $0.10 11/14/97 $227,000 $251,000
1996 -0- 0% $0.00 -0- -0- -0-
Gerald G. Carlson
1995 200,000 50% $0.10 11/14/97 $227,000 $251,000
1996 -0- 0% $0.00 -0- -0- -0-
</TABLE>
(1) All stock options to acquire Common Stock referred to in the table above
were granted pursuant to two Stock Option Agreements dated as of November
14, 1995, between the parties named above and Hecla, and such options
entitled the holder thereof to acquire Common Stock owned by Hecla. The
terms of both Stock Option Agreements are substantially identical. Each
of the Stock Option Agreements provides that upon and only upon the
occurrence of certain conditions precedent each of the named parties has
the right to be granted up to an aggregate of 300,000 additional stock
options at an exercise price of $.50 per share and an additional 300,000
stock options at an exercise price of $1.00 per share.
(2) The Potential Realizable Value shown in the table represents the maximum
gain if held for the full two-year term at each of the assumed annual
appreciation rates. Gains, if any, are dependant upon the actual
appreciation rates. Gains, if any, are dependant upon the actual
performance of the Common Stock and the timing of any sale of the stock.
AGGREGATED OPTION EXERCISES AND YEAR END OPTION VALUES
The following table shows information concerning the exercise of stock options
during fiscal years 1995 and 1996, by each of the named executive officers and
the fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Shares Acquired Value Unexercised Options In-the-Money Options
Name on Exercise (#) Realized ($) at FY-End (#) at FY-End(1)
- -------------- ---------------- ------------ ------------------- ---------------------
<S> <C> <C> <C> <C>
Ralph R. Noyes
1995 -0- -0- 200,000 $154,000
1996 -0- -0- -0- $154,000
Gerald G. Carlson
1995 -0- -0- 200,000 $154,000
1996(2) -0- -0- -0- -0-
</TABLE>
(1) The Common Stock is traded in the over-the-counter market and quotations
are published on the National Association of Securities Dealers Automated
Quotation (NASDAQ) Bulletin Board and in the National Quotation Bureau
"pink sheets." The figures presented assume that the Common Stock could
be sold in one transaction
<PAGE> 8
without any discount to the market price as of December 29, 1995, and
December 31, 1996. However, because the Common Stock trades only
intermittently and at extremely low volumes, the likelihood of a seller
liquidation of the volume of stock indicated in the table above at market
price as of the respective dates is very speculative.
(2) Mr. Carlson's options were canceled effective November 30, 1996, upon his
resignation as President and Director of the Company.
OTHER TRANSACTIONS WITH MANAGEMENT
Hecla Mining Company receives a fee for general and administrative expenses
provided to the Company. During the years ended December 31, 1996 and 1995,
Hecla Mining Company received $64,713, and $88,172, respectively. At December
31, 1996, the Company was indebted to Hecla Mining Company and one of its
subsidiary in the amount of approximately $816,900. The indebtedness was to
fund the Company's acquisition and exploration programs in Mexico and for
general corporate activities.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
CONSIL CORP., STANDARD & POOR'S 500, AND PEER GROUP(1)
The following table illustrates the yearly changes in the cumulative total
shareholder return on the Company's common stock compared with the cumulative
total return on the Standard & Poor's 500 stock index and a custom peer group
for the five years ended December 31, 1996.
Date ConSil S&P 500 Peer Group
- ------ ------- -------- -----------
December 1991 $100.00 $100.00 $100.00
December 1992 110.67 107.61 89.17
December 1993 188.00 118.41 54.41
December 1994 166.67 120.01 29.38
December 1995 273.33 164.95 20.77
December 1996 200.00 202.73 14.15
The custom peer group was selected on the basis of market capitalization as of
December 31, 1996. The custom peer group is comprised of:
American Claims Evaluation M G Products Inc.
Arista Investment Corporation Moore Handley Inc.
Bio Reference Labs Paris Corporation
Comtech Telecommunication Pollution Resh & Cntl/California
Electro Catheter Corporation Puroflow Inc.
Electrocon International Inc. Santa Fe Gaming Corporation
Family Steak Houses of Florida Spire Corporation
Grandetel Technologies Inc. Teletek Inc.
Healthy Planet Products Inc. Tenera Inc.
Jim Hjelms Private Coll Ltd. Waters Instrument Inc.
Lakeland Industries Inc. Westmoreland Coal Company
Luxtec Corporation
These companies were selected from all publicly traded companies on the basis of
their market capitalization value ranging from -3 to +3 percent of ConSil
Corp.'s market capitalization and having five years of stock price history.
(1) Assumes that dividends are reinvested regularly; market returns are
ajdusted for spin-offs for both the Company and any peer group companies;
the returns of each issuer in the peer group are weighted quarterly for
stock
<PAGE> 9
market capitalization; and if any member of the peer group is a foreign
issuer and not traded on a U.S. exchange, the market value is converted to
U.S. dollars. However, returns only reflect the performance of the stock and
not gains or losses due to currency fluctuations.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of December 31, 1996, the outstanding Common
Stock of the Company beneficially owned by each of the Officers and Directors of
the Company, all Officers and Directors as a group, and each person known by the
Company to own more than five percent (5%) of the Company's Common Stock.
Common Stock Percent
Shareholder Owned Outstanding
- ----------- -------------------- -----------
Hecla Mining Company . . . . . . . . . . . . . . . . . 7,418,300 78.45%
Ralph R. Noyes . . . . . . . . . . . . . . . . . . . . . . 5,000 less than 1%
Michael B. White . . . . . . . . . . . . . . . . . . . . . 1,000 less than 1%
All Officers and Directors as a Group (six individuals) 7,424,300 78.52%
The Company does not know of any other person or entity who held more than five
percent (5%) of the Company's outstanding Common Stock as of December 31, 1996,
or as of the date of the preparation of this Information Statement.
RECENT MARKET PRICES
The Common Stock of the Company is traded on the over-the-counter market and
quotations are published on the National Association of Securities Dealers
Automated Quotation (NASDAQ) Bulletin Board and in the National Quotation Bureau
"pink sheets" under the symbol CSLV. There has not been an established trading
market for the Common Stock and the below-described quotations, when available,
do not constitute a reliable indication of the price that a holder of the Common
Stock could expect to receive upon sale of any particular quantity thereof. The
Company also trades on the Vancouver Stock Exchange under the symbol CS .
The following table sets forth the high and low bid and ask prices of the
Company's Common Stock as provided by the National Quotation Bureau for the
quarterly periods indicated. The prices reported by the National Quotation
Bureau represent prices between dealers, do not include retail markups,
markdowns, or commissions and do not necessarily represent actual transactions.
Bid
Asked
----------------- -----------------
1996 High Low High Low
January 2-March 29 $1.125 $ .875 $1.3125 $1.125
April 1-June 28 $1.000 $ .875 $1.25 $1.125
July 1-September 30 $ .9375 $ .50 $1.25 $ .875
October 1-December 31 $ .75 $ .50 $1.125 $ .8125
1995
January 3-March 31 $ .50 $ .25 $1.00 $ .625
April 3-June 30 $ .75 $ .55 $ .85 $ .65
July 3-September 29 $1.1875 $ .5625 $1.375 $ .6875
October 2-December 29 $1.1875 $ .875 $1.3125 $1.125
<PAGE> 10
1994
January 3-March 31 $ .50 $ .25 $1.00 $ .75
April 4-June 30 $ .50 $ .25 $1.00 $ .875
July 1-September 30 $ .50 $ .25 $1.00 $ .8125
October 3-December 30 $ .50 $ .25 $1.00 $ .8125
The number of holders of record of the Company's common stock as of December 31,
1996, was approximately 3,600.
MATTERS TO BE CONSIDERED AND VOTED UPON
AT THE ANNUAL MEETING OF SHAREHOLDERS
ELECTION OF DIRECTORS
At the meeting, five (5) Directors are to be elected who shall hold office until
the next Annual Meeting of Shareholders and until their respective successors
shall have been elected and qualified. The nominees for Directors, together
with certain information with respect to them, are as follows:
Year First Common Shares Owned
Became Beneficially, Directly or
Name Age A Director Indirectly, as of 12/31/96
- -------- ---- ---------- --------------------------
Ralph R. Noyes 49 1991 5,000
Michael B. White 46 1989 1,000
Robert Stuart Angus 47 1995 None
William J. Weymark 43 1995 None
Charles F. Asher 74 1992 None
RALPH R. NOYES has been President of the Company since 1991 and Vice President
of Metal Mining with Hecla Mining Company since 1988.
MICHAEL B. WHITE has been Vice President of the Company since 1992 and served as
Secretary of the Company from 1982 to 1996. Mr. White is Vice President-General
Counsel and Secretary of Hecla Mining Company.
ROBERT STUART ANGUS is an attorney and partner in the Canadian law firm of
Stikeman Elliott, in Vancouver, British Columbia. He serves on the board of
several Canadian public mineral resource companies.
WILLIAM J. WEYMARK, B.SC., P.ENG. has been President of Vancouver Wharves since
December 1996. Prior to that he was Vice President of Operations of Vancouver
Wharves from 1991 through 1996. He serves on the board of several Canadian
public resource companies.
CHARLES F. ASHER is President of Plainview Mining Company. He has served as a
director of Merger Miners Corporation and Verna Mae Mining since 1987.
AMEND ARTICLE V OF RESTATED ARTICLES OF INCORPORATION
At the Annual Meeting, Shareholders will be asked to ratify, approve and confirm
the following Resolution of the Board of Directors of the Company, unanimously
adopted at the Annual Meeting of the Board of Directors held January 13, 1997,
to authorize the Company to amend paragraph two of Article V of the Restated
Articles of Incorporation.
RESOLVED: That paragraph two of Article V of the Company's Restated
Articles of Incorporation shall be amended to read as follows:
<PAGE> 11
ARTICLE V.
Shares
The total number of shares of Common Stock that the corporation will
have authority to issue is One Hundred Million (100,000,000), no par
value. All of the Common Stock authorized herein shall have equal
voting rights and powers without restrictions in preference.
DISCUSSION
The Company is currently authorized to issue Twenty Million (20,000,000) shares
of its Common Stock, par value $.10 per share, of which 9,455,689 shares were
issued and outstanding and held of record by approximately 3,600 Shareholders as
of December 31, 1996, and 515,000 shares are reserved for issuance upon the
exercise of outstanding options.
The Board of Directors has determined that it would be advisable and in the best
interest of the Company to increase the number of authorized shares of Common
Stock from 20,000,000 to 100,000,000 shares in order to provide the Company with
an adequate supply of authorized but unissued shares of Common Stock for general
corporate needs, including obtaining additional financing, possible stock
dividends, employee incentive and benefit plans or consummation of acquisitions
at times when the Board, in its discretion, deems it advantageous to do so. At
present, the Company is negotiating for the financing required for a previously
announced transaction involving the sale of $6 million to $15 million of the
Company's Common Stock.
Accordingly, on January 13, 1997, the Company's Board of Directors approved an
amendment to the Company's Restated Articles of Incorporation which would
authorize an increase in the Company's capital stock from 20,000,000 to
100,000,000 shares. If the amendment is approved by the Shareholders, the
Restated Articles of Incorporation will be amended to reflect the increase.
All shares of Common Stock are equal with respect to voting, liquidation,
dividend and other rights. Owners of shares of Common Stock are entitled to one
vote for each share they own at any Shareholders' meeting. Holders of shares of
Common Stock are entitled to receive such dividends as may be declared by the
Board of Directors out of funds legally available therefor, and upon liquidation
are entitled to participate pro rata in a distribution of assets available for
such a distribution to Shareholders. There are no conversion, preemptive, or
other subscription rights or privileges with respect to any shares. Although
the Board of Directors would authorize the issuance of additional shares of
Common Stock based on its judgment as to the best interests of the Company and
its Shareholders, the issuance of authorized shares of Common Stock could have
the effect of diluting the voting power and book value per share of the
outstanding Common Stock.
Authorized shares of Common Stock in excess of those shares outstanding
(including, if authorized, the additional Common Stock provided for in the
Proposal) will remain available for general corporate purposes, may be privately
placed and could be used to make a change in control of the Company more
difficult. Under certain circumstances, the Board of Directors could create
impediments to, or frustrate, persons seeking to effect a takeover or transfer
in control of the Company by causing such shares to be issued to a holder or
holders who might side with the Board of Directors in opposing a takeover bid
that the Board of Directors determines is not in the best interests of the
Company and its Shareholders, but in which unaffiliated shareholders may wish to
participate. In this connection, the Board of Directors could issue authorized
shares of Common Stock to a holder or holders which, when voted together with
the shares held by members of the Board of Directors, executive officers. and
affiliates, could prevent the majority shareholder vote required by the
Company's Restated Articles of Incorporation to effect certain matters.
Furthermore, the existence of such shares might have the effect of discouraging
any attempt by a person, through the acquisition of a substantial number of
shares of Common Stock, to acquire control of the Company, since the issuance of
such shares should dilute the Company's book value per share and the Common
Stock ownership of such person. One of the effects of the Proposal, if
approved, might be to make a tender offer more difficult to accomplish. This
may be beneficial to Management in a hostile tender offer, thus having an
adverse impact on shareholders who may want to participate in such tender offer.
<PAGE> 12
The additional authorized shares of Common Stock resulting from the Proposal
would, when issued, have the same rights as the issued and outstanding shares of
Common Stock. Shareholders of the Company do not have preemptive rights nor
will they as a result of the Proposal.
If the Proposal is approved, the additional, authorized Common Stock, as well as
the currently authorized but unissued Common Stock, would be available for
issuance in the future for such corporate purposes as the Board of Directors
deems advisable from time to time without the delay and expense incident to
obtaining Shareholder approval, unless such action is required by applicable law
or by the rules of the National Association of Securities Dealers, Inc., or of
any stock exchange upon which the Company's shares may then be listed. It
should be noted that subject to the limitations discussed above, all of the
types of Board action with respect to the issuance of additional shares of
Common Stock that are described in the preceding paragraphs can currently be
taken and that the power of the Board of Directors to take such actions would
not be enhanced by the Proposal, although the Proposal would increase the number
of shares of Common Stock that are available for the taking of such action.
While the Board of Directors is seeking this authority from the Shareholders, at
this time, other than as stated herein, it has no present agreement, commitment,
plan or intent to issue any of the additional shares provided for in the
Proposal. If, however, the need arises in the future to issue additional
shares, there may not be sufficient time to call a Shareholders' meeting to
approve the increase in authorized Common Stock.
The Board of Directors recommends a vote for the amendment of Article V of the
Restated Articles of Incorporation.
APPROVAL OF STOCK OPTION AND INCENTIVE STOCK OPTION PLANS
At the Annual Meeting, Shareholders will be asked to approve the following
resolutions ratifying, approving, and confirming the Board of Directors'
adoption of the Company's Stock Option Plan and Incentive Stock Option Plan
effective January 13, 1997.
RESOLVED: That the Stock Option Plan adopted by the Company's Board
of Directors effective on January 13, 1997, be and hereby is
ratified, approved and confirmed.
IT IS FURTHER RESOLVED: That the Incentive Stock Option Plan
adopted by the Company's Board of Directors effective January 13,
1997, be and hereby is ratified, approved and confirmed.
DISCUSSION
The adoption of the Stock Option Plan and the Incentive Stock Option Plan is
intended to give the Company greater ability to attract, retain, and motivate
its officers, key employees, and directors; and is intended to provide the
Company with the ability to provide incentives more directly linked to the
success of the Company's business and increases in Shareholder value.
The Stock Option Plan and Incentive Stock Option Plan are identical as to
eligibility except the Incentive Stock Option Plan is intended only for
employees and the Stock Option Plan is intended to cover officers, directors,
and employees (including non-employee directors). Consultants are not eligible
to receive Options under the eligibility provisions of either plan. The
Incentive Stock Option Plan is structured as a qualified plan under the Internal
Revenue Code, and the Stock Option Plan is not a qualified plan. Both plans are
administered under the auspices of the Board of Directors. It is intended, that
to the extent possible, the exercise of Stock Options will be exempt from the
operation of Section 16(b) of the Securities Exchange Act of 1934, as amended.
Options are exercisable for a maximum of five (5) years. Transferability is
prohibited except for limited circumstances regarding the demise of an Optionee.
<PAGE> 13
The maximum number of shares available for issue upon the exercise of all stock
option plans adopted by the Company shall not exceed ten percent (10%) of the
issued and outstanding shares, and the aggregate number of shares issuable upon
exercise of the options to any one person shall not exceed five percent (5%) of
the issued and outstanding shares.
The option price for the Incentive Stock Options may be no less than the fair
market value on the date of grant of the Option, except that the exercise price
for any ten percent (10%) shareholder must be 110% of the fair market value on
the date of grant. The Option price for the Stock Option Plan is the lowest
allowable price under applicable law.
Copies of the Stock Option Plan and Incentive Stock Option Plan are attached
hereto as Exhibits A and B, respectively, and incorporated herein by this
reference.
GRANT OF STOCK OPTIONS
At the Annual Meeting, Shareholders will be asked to approve the following
resolutions ratifying, approving, and confirming the previous grant and ensuing
grants by the Company of stock options to "insiders" of the Company, as defined
under the Securities Act (British Columbia), in accordance with the policies of
the Vancouver Stock Exchange.
RESOLVED: Stock options granted pursuant to the Company's Stock
Option Plan and Incentive Stock Option Plan by the Board of
Directors of the Company in the following amounts to the following
individuals, who are insiders of the Company as defined by the
Securities Act (British Columbia), be and the same are hereby
ratified, approved, and confirmed, subject to regulatory approval in
accordance with the requirements of the Vancouver Stock Exchange:
No. of Shares Exercise Price Expiration
Name of Optionee Under Option Per Share (U.S.$) Date
---------------- ------------ ----------------- ------------
Incentive Stock Option Plan:
Ralph Noyes 175,000 $0.87 January 13, 2002
Cheryl Maher 100,000 0.87 January 13, 2002
Michael White 60,000 0.87 January 13, 2002
Stock Option Plan:
R. Stuart Angus 60,000 0.87 January 13, 2002
William Weymark 60,000 0.87 January 13, 2002
Charles Asher 60,000 0.87 January 13, 2002
IT IS FURTHER RESOLVED: That the Board of Directors of the Company be and
hereby are authorized during the ensuing year to grant stock options,
pursuant to the rules and policies of the Vancouver Stock Exchange and the
Company's Stock Option Plan and Incentive Stock Option Plan, to
individuals who are insiders of the Company as defined by the Securities
Act (British Columbia) and to make amendments to existing stock options as
may be permitted under the rules and policies of the Vancouver Stock
Exchange and that any one directors or officer is hereby authorized to do
all acts and things, to deliver all documents and instruments, to give all
notices and to deliver and file with regulatory authorities or otherwise
or distribute all documents which may be necessary or desirable to give
effect to or carry out the foregoing resolution.
During the past year, incentive stock options as set forth above were granted by
the Company and remain outstanding.
DISCUSSION
Shareholder approval of the grant of incentive stock options to insiders is
required prior to such options being exercised pursuant to the rules and
policies of the Vancouver Stock Exchange. No one director or employee may be
granted options that make available a number of shares exceeding five percent
(5%) of the issued share capital of the Company. The option exercise price
cannot be
<PAGE> 14
less than the average closing price of the Company's shares for the ten trading
days immediately preceding the day on which the Company grants the option to the
director or employee. The Company is then required to immediately issue a news
release disclosing the grant; and within thirty (30) days thereafter, file the
necessary documentation with the Vancouver Stock Exchange.
SELECTION OF AUDITORS
From the Company's inception through the year ended December 31, 1996, the
Company has retained Coopers & Lybrand as its independent auditors. It shall be
the Company's practice to refer to the Shareholders the selection of the firm to
audit its annual financial statements.
The Board of Directors recommends a vote for the appointment of Coopers &
Lybrand as the independent auditors for the Company for the year 1997. It is
expected that a representative of Coopers & Lybrand will be present at the
Annual Meeting, will have an opportunity to make a statement, and there will be
an opportunity to ask questions of the representative.
OTHER MATTERS
Management does not know of any other matters which are likely to be brought
before the 1997 Annual Meeting of Shareholders. However, in the event any other
matters properly come before the 1997 Annual Meeting of Shareholders, such
matters will be acted upon accordingly.
SHAREHOLDER PROPOSALS
Proposals by Shareholders intended to be presented at the next Annual Meeting of
Shareholders to be held in 1998, must be received by the Secretary of the
Company on or before October 1997, in order to be included in the Information
Statement for such meeting. Proposals should be directed to Mr. Michael B.
White, Secretary.
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
The Company's Annual Report to the Securities and Exchange Commission (Form 10-
K) is available to Shareholders on the record date free of charge for the
Company's most recent fiscal year. Requests should be addressed to:
Michael B. White
ConSil Corp.
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
RALPH NOYES, Chairman of the Board
<PAGE> 15
EXHIBIT A
STOCK OPTION PLAN
OF
CONSIL CORP.
I.
PURPOSE OF PLAN
The ConSil Corp. Stock Option Plan (the "Plan") is intended to advance the
interests of ConSil Corp. (the "Company"), its shareholders, and its
subsidiaries by encouraging and enabling selected officers, directors, and other
key employees upon whose judgment, initiative and effort the Company is largely
dependent for the successful conduct of its business, to acquire and retain a
proprietary interest in the Company by ownership of its stock. Options granted
under the Plan are intended to be options which do not meet the requirements of
Section 422 of the Internal Revenue Code of 1986 (the "Code").
II.
DEFINITIONS
2.1 "Administrative Committee" means the Board of Directors or a committee
appointed by the Board of Directors, pursuant to Article III below,
administering the Plan.
2.2 "Affiliate" means a "parent corporation" of the Company, as described in
Section 424(e) of the Code, or a "subsidiary corporation" of the Company,
as described in Section 424(f) of the Code.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Code" means the Internal Revenue Code of 1986.
2.5 "Common Stock" means the Company's no par value Common Stock.
2.6 "Company" means ConSil Corp.
2.7 "Date of Grant" means the date on which an Option is granted under the
Plan.
2.8 "Disinterested Person" has the meaning defined in Article 3.1(c) of this
Plan.
2.9 "Option" means an option granted under the Plan.
2.10 "Optionee" means a person to whom an Option, which has not expired, has
been granted under the Plan.
2.11 "Plan" means this Stock Option Plan.
2.12 "Qualified Successor" means a person or persons entitled under Optionee's
will or applicable laws of descent and distribution to receive Incentive
Stock Options held by Optionee at the time of Optionee's death.
<PAGE> 16
2.13 "Reorganization" and "Reorganization Agreement" have the meanings defined
in Article VII of this Plan.
2.13 "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations of the Company as defined in Section 424 of the Code.
2.14 "Successor" means the legal representative of the estate of a deceased
Optionee or the person or persons who acquire the right to exercise an
Option by bequest or inheritance or by reason of the death of any
Optionee.
III.
ADMINISTRATION OF PLAN
3.1 This Plan shall be administered by the Board of Directors of the Company
(the "Board") unless a committee of the Board is appointed in accordance
with Article 3.2 or 3.4(b) below. The Board, or such committee if
appointed, will be referred to in this Plan as the "Administrative
Committee."
3.2 The Board may at any time appoint a committee, consisting of not less than
two of its members, to administer this Plan on behalf of the Board in
accordance with such terms and conditions not inconsistent with this Plan
as the Board may prescribe. After it is appointed, the committee shall
continue to serve until otherwise directed by the Board. The Board may
appoint additional members to the committee; remove members (with or
without cause); fill vacancies however caused; and/or remove all members
of the committee and thereafter directly administer this Plan.
3.3 A majority of the members of the Administrative Committee shall constitute
a quorum; and subject to the limitations of this Article III, all actions
of the Administrative Committee shall require the affirmative vote of
members who constitute a majority of a quorum. Members of the
Administrative Committee who are not Disinterested Persons (as defined in
Article 3.4(c)) may vote on any matters affecting the administration or
the grant of Stock Options under the Plan; provided, however, that no
member shall vote on the granting of a Stock Option to himself or herself
(but a member may be counted in determining the existence of a quorum at a
meeting of the Administrative Committee during which action is taken with
respect to the granting of such Stock Option).
3.4 Notwithstanding the foregoing provisions of this Article III, to the
extent necessary to be exempt from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), this
Plan shall from the effective date of registration until six months after
the termination thereof, be administered as follows:
a. The Board shall administer the Plan directly (regardless of whether
a committee of the Board has been appointed under Article 3.2) as
long as each member of the Board is a Disinterested Person, and all
actions of the Board as the Administrative Committee shall require
the affirmative vote of directors who constitute a majority of a
quorum.
<PAGE> 17
b. If at any time a member of the Board is not a Disinterested Person,
the Board shall appoint a committee consisting of two or more of its
members, each of whom is a Disinterested Person, to administer this
Plan on behalf of the Board. Such committee shall act in accordance
with terms and conditions prescribed by the Board to the extent such
terms and conditions are not inconsistent with this Plan. Once
appointed, the committee shall continue to serve until otherwise
directed by the Board. From time to time, the Board may appoint
additional members to the committee; remove members (with or without
cause); fill vacancies however caused; and/or at any time when all
members of the Board are Disinterested Persons, remove all members
of the committee and thereafter directly administer this Plan. At
no time shall a person who is not a Disinterested Person serve on
the committee appointed under this Article 3.4(b), nor shall such
committee at any time have fewer than two members.
c. The term "Disinterested Person" shall mean a director who, during
the one year prior to service as a member of the Administrative
Committee or during such service, is not granted or awarded equity
securities pursuant to this Plan or any other plan of the Company or
any of its Affiliates (as defined in Article 2.2) other than grants
or awards that pursuant to Rule 166-3(c)(2)(i) under the Exchange
Act will not cause the director to cease to be a "Disinterested
Person," as defined in such rule.
3.5 The following provisions shall apply to the Administrative Committee:
a. The Administrative Committee shall have the authority to (i)
administer this Plan in accordance with its express terms; (ii)
determine all questions arising in connection with the
administration, interpretation, and application of this Plan,
including all questions relating to the value of the Common Stock;
(iii) correct any defect, supply any information and reconcile any
inconsistency in such manner and to such extent as shall be deemed
necessary or advisable to carry out the purpose of this Plan; (iv)
prescribe, amend, and rescind rules and regulations relating to the
administration of this Plan; (v) determine the duration and purposes
of leaves of absence which my be granted to participants without
constituting a termination of employment for purposes of this Plan;
and (vi) make all other determinations necessary or advisable for
administration of this Plan.
b. The authority of the Administrative Committee to administer the Plan
shall be exercised consistently with the intent that (i) the Stock
Options issued under this Plan qualify under Section 422 of the Code
(including any amendments thereof or successor provision similar
thereto); and (ii) the Plan be administered in a manner that
satisfies the conditions of Rule 16b-3(c)(2)(i) under the Exchange
Act (including any amendments thereof and any successor provision
similar thereto) so that the grant of Stock Options under this Plan,
and all other actions taken with respect to the Plan, to the options
granted thereunder and to the Common Stock acquired upon exercise of
Stock Options, shall to the extent possible be exempt from the
operation of Section 16(b) of the Exchange Act.
<PAGE> 18
c. All determinations made by the Administrative Committee in good
faith on matters referred to in this Article 3.5 shall be final,
conclusive, and binding upon all persons. The Administrative
Committee shall have all powers necessary or appropriate to
accomplish its duties under this Plan.
ARTICLE IV.
COMMON STOCK SUBJECT TO OPTIONS
The aggregate number of shares of the Company's Common Stock which may be issued
upon the exercise of Options granted under this Plan and any other stock option
plan adopted by the Company shall not exceed ten percent (10%) of the then
currently issued and outstanding shares of the Company's Common Stock, subject
to adjustment under the provisions of Article VII. The aggregate number of
shares of the Company's Common Stock which may be issued to any one person shall
not exceed five percent (5%) of the then currently issued and outstanding shares
of the Company's Common Stock. The shares of Common Stock to be issued upon the
exercise of Options may be authorized but unissued shares, shares issued and
reacquired by the Company or shares bought on the market for the purposes of the
Plan. In the event any Option shall, for any reason, terminate or expire or be
surrendered without having been exercised in full, the shares subject to such
Option but not purchased thereunder shall again be available for Options to be
granted under the Plan.
ARTICLE V.
PARTICIPANTS
Options may be granted under the Plan to any person who is or who agrees to
become an officer, director, or employee (including officers and employees who
are also directors) of the Company or any of its subsidiaries.
ARTICLE VI.
TERMS AND CONDITIONS OF OPTIONS
Any Option granted under the Plan shall be evidenced by an agreement executed by
the Company and the applicable officer or employee and shall contain such terms
and be in such form as the Administrative Committee may from time to time
approve, subject to the following limitations and conditions:
6.1 OPTION PRICE. The Option price per share with respect to each Option may
be the lowest price allowable under applicable laws and regulations.
6.2 PERIOD OF OPTION. The expiration date of each Option shall be fixed by
the Administrative Committee; but notwithstanding any provision of the
Plan to the contrary, such expiration date shall not be more than five (5)
years from the Date of Grant.
6.3 VESTING OF SHAREHOLDER RIGHTS. Neither an Optionee nor his successor
shall have any of the rights of a shareholder of the Company until the
Option has been exercised and the certificates evidencing the shares
purchased are properly delivered to such Optionee or his successor.
<PAGE> 19
6.4 EXERCISE OF OPTION. Each Option shall be exercisable from time to time
over a period commencing on the Date of Grant and ending upon the
expiration or termination of the Option; provided, however, the
Administrative Committee may by the provisions of any Option agreement
limit the number of shares purchasable thereunder in any period or periods
of time during which the Option is exercisable. An Option shall not be
exercisable in whole or in part prior to the date of shareholder approval
of the Plan.
6.5 NON-TRANSFERABILITY OF OPTION. No Option shall be transferable or
assignable by an Optionee, otherwise than by will or the laws of descent
and distribution and each Option shall be exercisable, during the
Optionee's lifetime, only by him. No Option shall be pledged or
hypothecated in any way and no Option shall be subject to execution,
attachment, or similar process except with the express consent of the
Administrative Committee.
6.6 TERMINATION OF EMPLOYMENT. Upon termination of an Optionee's employment
with the Company or with any of its subsidiaries, his Option privileges
shall be limited to the shares which were immediately purchasable by him
at the date of such termination and such Option privileges shall expire
unless exercised by him within 30 days after the date of such termination.
In the event of termination of an Optionee's employment "for cause," his
Option privileges shall immediately terminate. The granting of an Option
to an eligible person does not alter in any way the Company's or the
relevant subsidiary's existing rights to terminate such person's
employment at any time for any reason or for no reason, nor does it confer
upon such person any rights or privileges except as specifically provided
for in the Plan.
6.7 DEATH OF OPTIONEE. If an Optionee dies while a member of the Board or in
the employ of the Company or any subsidiary, the Option privileges of the
estate shall be limited to the shares which were immediately purchasable
by the Optionee at the date of death and such Option privileges shall
expire unless exercised by the Optionee's successor within one year after
the date of death.
ARTICLE VII.
ADJUSTMENTS
7.1 In the event that the outstanding shares of Common Stock of the Company
are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or
of another corporation, by reason of a recapitalization, reclassification,
stock split-up, combination of shares, or dividend or other distribution
payable in capital stock, appropriate adjustment shall be made by the
Administrative Committee in the number and kind of shares for the purchase
of which Options may be granted under the Plan. In addition, the
Administrative Committee shall make appropriate adjustment in the number
and kind of shares as to which outstanding Options, or portions thereof
then unexercised, shall be exercisable, to the end that the proportionate
interest of the holder of the Option shall, to the extend practicable, be
maintained as before the occurrence of such event. Such adjustment in
outstanding Options shall be made without change in the total price
applicable to the unexercised portion of the Option but with a
corresponding adjustment in the Option price per share.
<PAGE> 20
7.2 In the event of the dissolution or liquidation of the Company, any Option
granted under the Plan shall terminate as of a date to be fixed by the
Administrative Committee, provided that not less than 30 days written
notice of the date so fixed shall be given to each Optionee and each such
Optionee shall have the right during such period to exercise his Option as
to all or any part of the shares covered thereby including shares as to
which such Option would not otherwise be exercisable by reason of an
insufficient lapse of time.
7.3 In the event of a Reorganization (as hereinafter defined) in which the
Company is not the surviving or acquiring company, or in which the Company
is or becomes a wholly-owned subsidiary of another company after the
effective date of the Reorganization, then
a. If there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement does
not specifically provide for the change, conversion, or exchange of
the shares under outstanding and unexercised stock Options for
securities of another corporation, then the Administrative Committee
shall take such action, and the Options shall terminate, as provided
in Article 7.2; or
b. If there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or
exchange of the shares under outstanding and unexercised stock
Options for securities of another corporation, then the
Administrative Committee shall adjust the shares under such
outstanding and unexercised stock Options (and shall adjust the
shares remaining under the Plan which are then available to the
Optionee under the Plan, if the Reorganization Agreement makes
specific provision therefor) in a manner not inconsistent with the
provisions of the Reorganization Agreement for the adjustment,
change, conversion, or exchange of such stock and such Options.
The term "Reorganization" as used in this Article VII shall mean any
statutory merger; statutory consolidation; sale of all or substantially
all of the assets of the Company; or pursuant to an agreement with the
Company, the sale of securities of the Company pursuant to which the
Company is or becomes a wholly-owned subsidiary of another company after
the effective date of the Reorganization.
7.4 Adjustments and determinations under this Article VII shall be made by the
Administrative Committee, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final,
binding, and conclusive.
ARTICLE VIII.
RESTRICTIONS ON ISSUING SHARES
The exercise of each Option shall be subject to the condition that if at any
time the Company shall determine in its discretion that the satisfaction of
withholding tax or other withholding liabilities, or that the listing,
registration, or qualification of any shares otherwise deliverable upon such
exercise upon any securities exchange or under any state or federal law, or that
the consent or approval of any regulatory body, is necessary or desirable as a
condition of,
<PAGE> 21
or in connection with, such exercise or the delivery or purchase of shares
pursuant thereto, then in any such event, such exercise shall not be effective
unless such withholding, listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company.
ARTICLE IX.
USE OF PROCEEDS
The proceeds received by the Company from the sale of Common Stock pursuant to
the exercise of Options granted under the Plan shall be added to the Company's
general funds and used for general corporate purposes.
ARTICLE X.
AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN
The Board may at any time suspend or terminate the Plan or may amend it from
time to time in such respects as the Board may deem advisable in order that the
Options granted thereunder may conform to any changes in the law or in any other
respect which the Board may deem to be in the best interest of the Company;
provided, however, that without approval by the shareholders of the Company
representing a majority of the voting power, no such amendment shall (i) except
as specified in Article VII, increase the maximum number of shares for which
Options may be granted under the Plan; (ii) change the provisions of Article
6.01 relating to the establishment of the Option price; (iii) change the
provisions of Article 6.2 relating to the expiration date of each Option; or
(iv) change the provisions of the second sentence of this Article X relating to
the term of this Plan. Unless the Plan shall theretofore have been terminated
by the Board or as provided in Article XI, the Plan shall terminate ten years
after the effective date of the Plan. No Option may be granted during any
suspension or after the termination of the Plan. Except as provided in Article
XI, no amendment, suspension, or termination of the Plan shall, without an
Optionee's consent, alter or impair any of the rights or obligations under any
Option theretofore granted to such Optionee under the Plan.
ARTICLE XI
OPTION AGREEMENT AND LEGEND REQUIREMENT
Each Stock Option granted hereunder shall be evidenced by a written agreement
executed by the Company and the Optionee. Such agreement shall contain the terms
of the Stock Option specified by Article VI, together with other terms,
conditions, and provisions that the Administrative Committee deems advisable and
that are not inconsistent with the terms and conditions of this Plan. Such
agreement shall also provide that, by accepting a Stock Option granted under
this Plan, the Optionee, for himself or herself, for his or her Qualified
Successor, and for his or her heirs, successors and assigns:
(i) Recognizes, agrees and acknowledges that no registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), or
under any state securities laws, will have been filed as to either
the Stock Option or any shares of Common Stock that may be acquired
upon exercise of such Stock Option;
<PAGE> 22
(ii) Warrants and represents that the Stock Option and any shares of
Common Stock of the Company acquired upon exercise of the Stock
Option will be acquired and held by the Optionee for the Optionee's
own account, for investment purposes only, and not with a view
towards the distribution or public offering thereof nor with any
present intention of reselling or distributing the same at any
particular future time;
(iii) Acknowledges and consents to the appearance of a printed legend on
the back of each stock certificate representing shares of Common
Stock issued upon exercise of the Stock Option, which legend shall
read as follows:
NOTICE: RESTRICTION ON TRANSFER
The securities represented hereby have not been registered
under the Securities Act of 1933 or any state securities laws,
and may not be offered, sold, transferred, encumbered or
otherwise disposed of except upon satisfaction of certain
conditions set forth in the ConSil Corporation Stock Option
Plan. Information concerning these restrictions may be
obtained from the corporation or its legal counsel. Any offer
or disposition of these securities without satisfaction of
such conditions will be wrongful and will not entitle the
transferee to register ownership of the securities with the
corporation. These securities may also be subject to
repurchase by the corporation upon certain terms and
conditions set forth in said documents.
(iv) Agrees not to sell, transfer or otherwise dispose of any shares of
Common Stock that may be acquired upon exercise of the Stock Option
unless (i) there is an effective registration statement under the
1933 Act covering the proposed disposition and compliance with
governing state securities laws, (ii) the Optionee delivers to the
Company, at the Optionee's expense, a "no-action" letter or similar
interpretative opinion, satisfactory in form and substance to the
Company, from the staff of each appropriate securities agency, to
the effect that such shares may be disposed of by the Optionee in
the manner proposed, or (iii) the Optionee delivers to the Company,
at the Optionee's expense, a legal opinion, satisfactory in form and
substance to the Company, of legal counsel designated by the
Optionee and satisfactory to the Company, to the effect that the
proposed disposition is exempt from registration under the 1933 Act
and governing state securities laws; and
(v) Agrees to indemnify the Company and hold it harmless from and
against any loss, claim or liability, including attorney's fees or
other legal expenses incurred in the defense thereof, incurred by
the Company as a result of any breach by the Optionee of, or any
inaccuracy in, any representation, warranty, covenant or other
provision contained in such agreement.
If a registration statement under the 1933 Act is hereafter filed with respect
to Stock Options granted or to be granted hereunder and the shares of Common
Stock that may be acquired upon exercise of such Stock Options, then, following
the effectiveness of such registration statement, the provisions in agreements
representing Stock Options
<PAGE> 23
that would otherwise be required by this Article XI may, in the discretion of
the Administrative Committee, be modified or eliminated.
ARTICLE XII.
EFFECTIVE DATE OF PLAN AND SHAREHOLDER APPROVAL
The effective date of the Plan is January 13, 1997, the date of its approval by
the Board; provided, however, if the Plan is not approved by the shareholders of
the Company representing a majority of the voting power at the next
shareholders' meeting or if the Plan is not approved by such shareholders before
January 12, 1998, the Plan shall terminate and any Options granted thereunder
shall be void and have no force or effect.
This Plan is adopted this 13th day of January, 1997.
CONSIL CORP.
BY: BY:
-------------------------------- --------------------------------
Ralph Noyes, President Nathaniel K. Adams, Secretary
<PAGE> 24
EXHIBIT B
INCENTIVE STOCK OPTION PLAN
OF
CONSIL CORPORATION
ARTICLE I. Purpose of Plan
ARTICLE II. Definitions
ARTICLE III. Administration of the Plan
ARTICLE IV. Eligibility
ARTICLE V. Shares Available for Incentive Stock Options
ARTICLE VI. Option Terms
ARTICLE VII. Limitation on Exercise of Options
ARTICLE VIII. Exercise of Option
ARTICLE IX. Transferability of Options
ARTICLE X. Termination of Options
ARTICLE XI. Adjustments to Options
ARTICLE XII. Termination and Amendment
ARTICLE XIII. Option Agreement and Legend Requirement
ARTICLE XIV. Miscellaneous Provisions
ARTICLE XV. Effective Date of Plan
ConSil Corporation, an Idaho corporation (the "Company"), hereby establishes and
sets forth the terms of the ConSil Corporation INCENTIVE STOCK OPTION PLAN (the
"Plan"), dated January 13, 1997.
ARTICLE I
Purpose of Plan
The purpose of this Plan is to provide participating employees an incentive to
exert their best efforts on behalf of the Company. The Plan seeks to accomplish
this purpose by giving such employees an opportunity to gain a proprietary
interest in the Company in the form of stock options. Holders of the options
are allowed to acquire stock of the Company on favorable terms. An option
granted hereunder shall be referred to herein as an "Incentive Stock Option,"
and all such options are intended to constitute an "incentive stock option"' as
such term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code").
ARTICLE II
Definitions
2.1 "Administrative Committee" means the Board of Directors or a committee
appointed by the Board of Directors, pursuant to Article III below,
administering the Plan.
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2.2 "Affiliate" means a "parent corporation" of the Company, as described in
Section 424(e) of the Code, or a "subsidiary corporation" of the Company,
as described in Section 424(f) of the Code.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Code" means the Internal Revenue Code of 1986.
2.5 "Common Stock" means the Company's no par value Common Stock.
2.6 "Company" means ConSil Corp.
2.7 "Date of Grant" means the date on which an Incentive Stock Option is
granted under the Plan.
2.8 "Disinterested Person" has the meaning defined in Article 3.4(c) of this
Plan.
2.9 "Incentive Stock Option" means an option granted under the Plan.
2.10 "Optionee" means a person to whom an Incentive Stock Option, which has not
expired, has been granted under the Plan.
2.11 "Plan" means this Incentive Stock Option Plan.
2.12 "Qualified Successor" shall have the meaning as defined in Article 9.2 of
this Plan.
2.13 "Reorganization" and "Reorganization Agreement" have the meanings defined
in Article XI of this Plan.
2.14 "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations of the Company as defined in Section 424 of the Code.
2.15 "Successor" means the legal representative of the estate of a deceased
Optionee or the person or persons who acquire the right to exercise an
Incentive Stock Option by bequest or inheritance or by reason of the death
of any Optionee.
2.16 "Terminating Event" shall have the meaning as defined in Article 11.2 of
this Incentive Stock Option Plan.
ARTICLE III
Administration of the Plan
3.1 This Plan shall be administered by the Board of Directors of the Company
(the "Board") unless a committee of the Board is appointed in accordance
with Article 3.2 or 3.4(b)
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below. The Board, or such committee if appointed, will be referred to in
this Plan as the "Administrative Committee."
3.2 The Board may at any time appoint a committee, consisting of not less than
two of its members, to administer this Plan on behalf of the Board in
accordance with such terms and conditions not inconsistent with this Plan
as the Board may prescribe. After it is appointed, the committee shall
continue to serve until otherwise directed by the Board. The Board may
appoint additional members to the committee; remove members (with or
without cause); fill vacancies however caused; and/or remove all members
of the committee and thereafter directly administer this Plan.
3.3 A majority of the members of the Administrative Committee shall constitute
a quorum; and subject to the limitations of this Article III, all actions
of the Administrative Committee shall require the affirmative vote of
members who constitute a majority of a quorum. Members of the
Administrative Committee who are not Disinterested Persons (as defined in
Article 3.4(c)) may vote on any matters affecting the administration or
the grant of Incentive Stock Options under the Plan; provided, however,
that no member shall vote on the granting of an Incentive Stock Option to
himself or herself (but a member may be counted in determining the
existence of a quorum at a meeting of the Administrative Committee during
which action is taken with respect to the granting of such an Incentive
Stock Option).
3.4 Notwithstanding the foregoing provisions of this Article III, to the
extent necessary to be exempt from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), this
Plan shall from the effective date of registration until six months after
the termination thereof, be administered as follows:
a. The Board shall administer the Plan directly (regardless of
whether a committee of the Board has been appointed under Article
3.2) as long as each member of the Board is a Disinterested
Person, and all actions of the Board as the Administrative
Committee shall require the affirmative vote of directors who
constitute a majority of a quorum.
b. If at any time a member of the Board is not a Disinterested
Person, the Board shall appoint a committee consisting of two or
more of its members, each of whom is a Disinterested Person, to
administer this Plan on behalf of the Board. Such committee shall
act in accordance with terms and conditions prescribed by the
Board to the extent such terms and conditions are not inconsistent
with this Plan. Once appointed, the committee shall continue to
serve until otherwise directed by the Board. From time to time,
the Board may appoint additional members to the committee; remove
members (with or without cause); fill vacancies however caused;
and/or at any time when all members of the Board are Disinterested
Persons, remove all members of the committee and thereafter
directly administer this Plan. At no time shall a person who is
not a Disinterested Person serve on the committee appointed under
this Article 3.4(b), nor shall such committee at any time have
fewer than two members.
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c. The term "Disinterested Person" shall mean a director who, during
the one year prior to service as a member of the Administrative
Committee or during such service, is not granted or awarded equity
securities pursuant to this Plan or any other plan of the Company
or any of its Affiliates (as defined in Article 2.2) other than
grants or awards that pursuant to Rule 166-3(c)(2)(i) under the
Exchange Act will not cause the director to cease to be a
"Disinterested Person," as defined in such rule.
3.5 The following provisions shall apply to the Administrative Committee:
a. The Administrative Committee shall have the authority to (i)
administer this Plan in accordance with its express terms; (ii)
determine all questions arising in connection with the
administration, interpretation, and application of this Plan,
including all questions relating to the value of the Common Stock;
(iii) correct any defect, supply any information and reconcile any
inconsistency in such manner and to such extent as shall be deemed
necessary or advisable to carry out the purpose of this Plan; (iv)
prescribe, amend, and rescind rules and regulations relating to
the administration of this Plan; (v) determine the duration and
purposes of leaves of absence which my be granted to participants
without constituting a termination of employment for purposes of
this Plan; and (vi) make all other determinations necessary or
advisable for administration of this Plan.
b. The authority of the Administrative Committee to administer the
Plan shall be exercised consistently with the intent that (i) the
Incentive Stock Options issued under this Plan qualify under
Section 422 of the Code (including any amendments thereof or
successor provision similar thereto); and (ii) the Plan be
administered in a manner that satisfies the conditions of Rule
16b-3(c)(2)(i) under the Exchange Act (including any amendments
thereof and any successor provision similar thereto) so that the
grant of Incentive Stock Options under this Plan, and all other
actions taken with respect to the Plan, to the options granted
thereunder and to the Common Stock acquired upon exercise of
Incentive Stock Options, shall to the extent possible be exempt
from the operation of Section 16(b) of the Exchange Act.
c. All determinations made by the Administrative Committee in good
faith on matters referred to in this Article 3.5 shall be final,
conclusive, and binding upon all persons. The Administrative
Committee shall have all powers necessary or appropriate to
accomplish its duties under this Plan.
ARTICLE IV
Eligibility
4.1 An officer, director or other individual shall be eligible to participate
in this Plan provided that such individual (i) is in the employ of the
Company or its Affiliate, (ii) is determined by the Administrative
Committee to be a key employee of the Company or its Affiliate,
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and (iii) is selected by the Administrative Committee to receive one or
more Incentive Stock Options under this Plan. Each key employee so
selected by the Administrative Committee shall hereinafter be referred to
as an "Optionee."
4.2 As used in this Plan, an "Affiliate" of a corporation shall mean a "parent
corporation" of such corporation, as described in Section 424(e) of the
Code, or to a "subsidiary corporation" of such corporation, as described
in Section 424(f) of the Code.
4.3 No Incentive Stock Option shall be granted hereunder to a key employee who
is not a resident of the State of Idaho, unless the Administrative
Committee shall have determined, based on the advice of counsel, that the
grant of such Incentive Stock Option (and the exercise thereof by the
Optionee) will not violate the securities laws of the state where the
Optionee resides.
ARTICLE V
Shares Available for Incentive Stock Options
The aggregate number of shares of the Company's Common Stock which may be issued
upon the exercise of Incentive Stock Options granted under this Plan and any
other stock option plan adopted by the Company shall not exceed ten percent
(10%) of the then issued and outstanding shares of the Company's Common Stock,
subject to adjustment under the provisions of Article XI. The aggregate number
of shares of the Company's Common Stock which may be issued to any one person
shall not exceed five percent (5%) of the then issued and outstanding shares of
the Company's Common Stock. The shares of Common Stock to be issued upon the
exercise of Incentive Stock Options may be authorized but unissued shares,
shares issued and reacquired by the Company or shares bought on the market for
the purposes of the Plan. In the event any Incentive Stock Option shall, for
any reason, terminate or expire or be surrendered without having been exercised
in full, the shares subject to such Incentive Stock Option but not purchased
thereunder shall again be available for Incentive Stock Options to be granted
under the Plan.
ARTICLE VI
Option Terms
6.1 With respect to each Incentive Stock Option granted to an Optionee
selected by the Administrative Committee in accordance with Article III,
the Administrative Committee shall specify the following terms of the
Incentive Stock Option:
a. The number of shares of Common Stock subject to the Incentive
Stock Option.
b. The date on which the grant of the Incentive Stock Option shall be
effective (the "Date of Grant").
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c. The period of time during which the Incentive Stock Option shall
be exercisable, which shall in no event be more than five (5)
years from the Date of Grant of the Incentive Stock Option.
d. The price or prices at which the Incentive Stock Option shall be
exercisable by the Optionee (the "Option Price"); provided,
however, that the Option Price shall in no event be less than the
fair market value, on the Date of Grant, of the shares of Common
Stock subject thereto; and provided further, that, if such
Incentive Stock Option is granted to an Optionee who on the Date
of Grant owns, either directly or indirectly within the meaning of
Section 424(d) of the Code, more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company
or an Affiliate of the Company, then the Option Price shall be at
least one hundred ten percent (110%) of the fair market value, on
the Date of Grant, of the Common Stock subject thereto.
e. Any vesting schedule pursuant to which the right of the Optionee
to exercise the Incentive Stock Option shall be contingent upon
the passage of a specified period of time following its Date of
Grant, it being intended that the Administrative Committee shall
have complete discretion with respect to the terms of the vesting
schedule, including, without limitation, discretion (i) to allow
full and immediate vesting upon grant of the Incentive Stock
Option, (ii) to permit partial vesting in stated percentage
amounts based on the length of the holding period of the Incentive
Stock Option, or (iii) to permit full vesting after a stated
holding period has passed. No rights to exercise the Incentive
Stock Option shall vest after the termination of an Optionee's
employment with the Company, unless further vesting is expressly
allowed in the written agreement evidencing the Incentive Stock
Option.
f. Whether shares of Common Stock acquired upon exercise of the
Incentive Stock Option will be subject to repurchase in accordance
with Article XII.
g. Such other terms and conditions as the Administrative Committee
deems advisable and as are consistent with the terms and
conditions of this Plan, including, without limitation, any
repurchase provisions different from those set forth in Article
XII.
6.2 Notwithstanding any provision of this Article VI to the contrary, no
Incentive Stock Option shall be granted hereunder after the date
immediately preceding the tenth (10th) anniversary of the date this Plan
is adopted by the Board. Except as expressly provided herein, nothing
contained in this Plan shall require that the terms and conditions of
Incentive Stock Options granted hereunder be uniform.
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ARTICLE VII
Limitation on Exercise of Options
The aggregate fair market value of the Common Stock with respect to which,
during any calendar year, one or more Incentive Stock Options under this Plan
(and/or one or more options under any other plan maintained by the Company or
any of its Affiliates for the granting of options intended to qualify under
Section 422 of the Code) are exercisable for the first time by an Optionee shall
not exceed $100,000 (said value to be determined as of the respective Dates of
Grant of such options).
ARTICLE VIII
Exercise of Option
Subject to Article VII and any terms of an Incentive Stock Option specified
pursuant to Article VI, an Optionee (or the Qualified Successor, as defined in
Articles 9.2 and 9.3) may exercise an Incentive Stock Option, or any part
thereof (unless partial exercise is specifically prohibited by the terms of the
Incentive Stock Option), by giving written notice thereof to the Company at its
principal place of business. Such notice shall include a written representation
that the shares to be acquired will be acquired and held for investment and not
for resale or distribution and be accompanied by any documents required by
Article VII above. Such notice shall be accompanied by full payment of the
Option Price for the shares of Common Stock for which exercise is made. Payment
shall be in lawful money of the United States and shall be made in cash or by
certified or cashier's check; provided, however, that in the discretion of the
Administrative Committee, payment may be made, in whole or in part, in shares of
Common Stock or in any other form approved by the Administrative Committee.
Following the exercise of an Incentive Stock Option, the Administrative
Committee shall cause the information statement required by Section 6039 of the
Code to be furnished to the Optionee within the time and in the manner
prescribed by law.
ARTICLE IX
Transferability of Options
9.1 Except as provided in Articles 9.2, 9.3 and 9.4 below, no Incentive Stock
Option shall be transferable or exercisable by any person other than the
Optionee to whom such Incentive Stock Option was originally granted.
9.2 In the event of the demise of an Optionee while in the employ of the
Company, any Incentive Stock Options held by the Optionee shall pass to
the person or persons entitled thereto under the will of the Optionee or
applicable laws of descent and distribution (such person or persons are
sometimes herein referred to collectively as the "Qualified Successor" of
the Optionee). Any right under an Incentive Stock Option which the
Optionee could have exercised immediately prior to the date of his or her
demise shall, subject to Article X below, be exercisable by the Qualified
Successor for a period of one (1) year following such demise.
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9.3 In the event of an Optionee's demise, after the termination of Optionee's
employment on account of a Disability (as defined in Article 11.2 below)
but prior to the expiration of the one (1) year period specified in
Article 11.2, any right under an Incentive Stock Option which the Optionee
could have exercised immediately prior to the date of his or her demise
shall, subject to Article X, pass to and be exercisable by the Qualified
Successor of the Optionee until the expiration of such period of one (1)
year following the date of Optionee's termination.
9.4 In the event of the demise of an Optionee, after the termination of
Optionee's employment for any reason other than Disability, but prior to
the expiration of the three (3) month period specified in Article 11.3,
any right under any Incentive Stock Option which the Optionee could have
exercised immediately prior to the date of his or her demise shall,
subject to Article X, pass to and be exercisable by the Qualified
Successor of the Optionee until the expiration of the three (3) months
period following the date of Optionee's employment termination.
9.5 In the event two or more persons constitute the Qualified Successor of an
Optionee, all rights of such Qualified Successor shall be exercisable, if
at all, by the unanimous agreement of such persons.
ARTICLE X
Termination of Options
To the extent not earlier exercised, an Incentive Stock Option shall terminate
at the earliest of the following dates:
a. The date specified in such Incentive Stock Option, which date
shall not be extended for any reason;
b. One (1) year following the date of termination of the Optionee's
employment with the Company on account of (a) the Optionee's
demise, or (b) the Optionee's disability, as defined in Section
22(e)(3) of the Code (herein referred to as "Disability");
c. Three (3) months following the date of termination of the
Optionee's employment with the Company for any reason other than
the Optionee's demise or Disability;
d. The date of any sale, transfer or hypothecation, or any attempted
sale, transfer or hypothecation, of the Incentive Stock Option, by
the Optionee or his or her Qualified Successor;
e. The date a voluntary or involuntary petition is filed under the
bankruptcy laws of the United States, or under the insolvency laws
of any state, for the estate of the Optionee or his or her
Qualified Successor; and
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f. The date specified in Article 11.2 for such termination in the
event of a Terminating Event.
ARTICLE XI
Adjustments to Options
11.1 In the event that the outstanding shares of Common Stock of the Company
are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or
of another corporation, by reason of a recapitalization, reclassification,
stock split-up, combination of shares, or dividend or other distribution
payable in capital stock, appropriate adjustment shall be made by the
Administrative Committee in the number and kind of shares for the purchase
of which Incentive Stock Options may be granted under the Plan. In
addition, the Administrative Committee shall make appropriate adjustment
in the number and kind of shares as to which outstanding Incentive Stock
Options, or portions thereof then unexercised, shall be exercisable, to
the end that the proportionate interest of the holder of the Incentive
Stock Option shall, to the extend practicable, be maintained as before the
occurrence of such event. Such adjustment in outstanding Incentive Stock
Options shall be made without change in the total price applicable to the
unexercised portion of the Incentive Stock Option but with a corresponding
adjustment in the Incentive Stock Option price per share.
11.2 In the event of the dissolution or liquidation of the Company, any
Incentive Stock Option granted under the Plan shall terminate as of a date
to be fixed by the Administrative Committee, provided that not less than
30 days written notice of the date so fixed shall be given to each
Optionee and each such Optionee shall have the right during such period to
exercise his Incentive Stock Option as to all or any part of the shares
covered thereby including shares as to which such Incentive Stock Option
would not otherwise be exercisable by reason of an insufficient lapse of
time.
11.3 In the event of a Reorganization (as hereinafter defined) in which the
Company is not the surviving or acquiring company, or in which the Company
is or becomes a wholly-owned subsidiary of another company after the
effective date of the Reorganization, then
a. If there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement
does not specifically provide for the change, conversion, or
exchange of the shares under outstanding and unexercised incentive
stock options for securities of another corporation, then the
Administrative Committee shall take such action, and the Incentive
Stock Options shall terminate, as provided in Article 11.2; or
b. If there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion, or
exchange of the shares under outstanding and unexercised incentive
stock options for securities of another corporation, then the
Administrative Committee shall adjust the shares under
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such outstanding and unexercised incentive stock options (and
shall adjust the shares remaining under the Plan which are then
available to the Optionee under the Plan, if the Reorganization
Agreement makes specific provision therefor) in a manner not
inconsistent with the provisions of the Reorganization Agreement
for the adjustment, change, conversion, or exchange of such stock
and such Incentive Stock Options.
The term "Reorganization" as used in this Article XI shall mean any
statutory merger; statutory consolidation; sale of all or substantially
all of the assets of the Company; or pursuant to an agreement with the
Company, the sale of securities of the Company pursuant to which the
Company is or becomes a wholly-owned subsidiary of another company after
the effective date of the Reorganization.
11.4 Adjustments and determinations under this Article XI shall be made by the
Administrative Committee, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final,
binding, and conclusive.
ARTICLE XII
Termination and Amendment
12.1 Unless earlier terminated as provided below, this Plan shall terminate on,
and no Incentive Stock Option shall be granted under this Plan after, the
tenth (10th) anniversary of the date immediately preceding the date this
Plan is adopted by the Board. Such termination shall not affect the rights
of the Administrative Committee or the Company under the Plan (including,
but not limited to, rights under Article XI above) with respect to any
Incentive Stock Options theretofore granted or shares of Common Stock
issued upon exercise thereof.
12.2 The Board may at any time terminate, suspend or amend the terms of this
Plan; provided, however, that, except as provided in Article XI above, the
Board may not, without prior approval by holders of shares of Common Stock
constituting at least a majority of the shares of Common Stock represented
in person or by proxy at the meeting at which such approval is sought:
i. Change the aggregate number of shares of Common Stock reserved
for issuance upon exercise of Incentive Stock Options granted
under this Plan;
ii. Increase the period during which Incentive Stock Options may
be granted or exercised;
iii. Change the class of employees who are eligible to receive
Incentive Stock Options under this Plan; or
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iv. Make any change to the terms of this Plan which would cause
the Incentive Stock Options granted hereunder to lose their
qualification as incentive stock options under Section 422 of
the Code.
12.3 Notwithstanding the above, the Administrative Committee may, subject to
the terms and conditions of this Plan, grant additional Incentive Stock
Options to an Optionee (if such Optionee is otherwise eligible) or, with
the consent of the Optionee, grant a new Incentive Stock Option in lieu of
an outstanding Incentive Stock Option, for a number of shares, at an
Option Price and for a term which is greater or less than that of the
earlier Incentive Stock Option.
12.4 No Incentive Stock Option may be granted during any suspension, or after
termination, of this Plan. Amendment, suspension or termination of this
Plan shall not, without the consent of the Optionee, alter or impair any
rights or obligations with respect to any Incentive Stock Option
theretofore granted or shares of Common Stock acquired upon exercise
thereof.
ARTICLE XIII
Option Agreement and Legend Requirement
Each Incentive Stock Option granted hereunder shall be evidenced by a written
agreement executed by the Company and the Optionee. Such agreement shall contain
the terms of the Incentive Stock Option specified by Article VI, together with
other terms, conditions, and provisions that the Administrative Committee deems
advisable and that are not inconsistent with the terms and conditions of this
Plan. Such agreement shall also provide that, by accepting an Incentive Stock
Option granted under this Plan, the Optionee, for himself or herself, for his or
her Qualified Successor, and for his or her heirs, successors and assigns:
i. Recognizes, agrees and acknowledges that no registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), or
under any state securities laws, will have been filed as to either
the Incentive Stock Option or any shares of Common Stock that may
be acquired upon exercise of such Incentive Stock Option;
ii. Warrants and represents that the Incentive Stock Option and any
shares of Common Stock of the Company acquired upon exercise of
the Incentive Stock Option will be acquired and held by the
Optionee for the Optionee's own account, for investment purposes
only, and not with a view towards the distribution or public
offering thereof nor with any present intention of reselling or
distributing the same at any particular future time;
iii. Acknowledges and consents to the appearance of a printed legend on
the back of each stock certificate representing shares of Common
Stock issued upon exercise of the Incentive Stock Option, which
legend shall read as follows:
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NOTICE: RESTRICTION ON TRANSFER
The securities represented hereby have not been
registered under the Securities Act of 1933 or any state
securities laws, and may not be offered, sold,
transferred, encumbered or otherwise disposed of except
upon satisfaction of certain conditions set forth in the
ConSil Corporation Incentive Stock Option Plan.
Information concerning these restrictions may be obtained
from the corporation or its legal counsel. Any offer or
disposition of these securities without satisfaction of
such conditions will be wrongful and will not entitle the
transferee to register ownership of the securities with
the corporation. These securities may also be subject to
repurchase by the corporation upon certain terms and
conditions set forth in said documents.
iv. Agrees not to sell, transfer or otherwise dispose of any shares of
Common Stock that may be acquired upon exercise of the Incentive
Stock Option unless (i) there is an effective registration
statement under the 1933 Act covering the proposed disposition and
compliance with governing state securities laws, (ii) the Optionee
delivers to the Company, at the Optionee's expense, a "no-action"
letter or similar interpretative opinion, satisfactory in form and
substance to the Company, from the staff of each appropriate
securities agency, to the effect that such shares may be disposed
of by the Optionee in the manner proposed, or (iii) the Optionee
delivers to the Company, at the Optionee's expense, a legal
opinion, satisfactory in form and substance to the Company, of
legal counsel designated by the Optionee and satisfactory to the
Company, to the effect that the proposed disposition is exempt
from registration under the 1933 Act and governing state
securities laws; and
v. Agrees to indemnify the Company and hold it harmless from and
against any loss, claim or liability, including attorney's fees or
other legal expenses incurred in the defense thereof, incurred by
the Company as a result of any breach by the Optionee of, or any
inaccuracy in, any representation, warranty, covenant or other
provision contained in such agreement.
If a registration statement under the 1933 Act is hereafter filed with respect
to Incentive Stock Options granted or to be granted hereunder and the shares of
Common Stock that may be acquired upon exercise of such Incentive Stock Options,
then, following the effectiveness of such registration statement, the provisions
in agreements representing Incentive Stock Options that would otherwise be
required by this Article XIII may, in the discretion of the Administrative
Committee, be modified or eliminated.
<PAGE> 36
ARTICLE XIV
Miscellaneous Provisions
14.1 Nothing contained in this Plan shall obligate the Company to employ an
Optionee for any period, nor shall this Plan interfere in any way with the
right of the Company to reduce such Optionee's compensation.
14.2 The provisions of this Plan, each Incentive Stock Option issued to an
Optionee hereunder, and the agreement evidencing such Incentive Stock
Option under Article XIV above shall be binding upon the Optionee, and his
or her Qualified Successor, heirs, successors and assigns.
14.3 This Plan shall be construed, administered and enforced in accordance with
the laws of the United States, to the extent applicable hereto, as well as
the laws of the State of Idaho.
ARTICLE XV
Effective Date of Plan
This Plan shall be effective upon adoption of a resolution of the Board
approving it; and it shall be subject to approval, within twelve (12) months
before or after the date it is adopted by the Board, by holders of shares of
Common Stock constituting at least a majority of the shares of Common Stock
represented in person or by proxy at a meeting at which such approval is sought.
This Plan shall also be subject to any requirements imposed by the Director of
the Department of Finance pursuant to the Idaho Securities Act. If the
shareholder approval and notification requirements have not been satisfied on or
prior to January 12, 1998, this Plan and any Incentive Stock Options granted
hereunder prior to such date shall be void.
This Plan is adopted this 13th day of January, 1997.
CONSIL CORP.
By:
----------------------------------------------
Ralph Noyes, President
By:
----------------------------------------------
Nathaniel K. Adams, Secretary
