EXHIBIT 99.2
STOCK OPTION AGREEMENT
THIS AGREEMENT made as of the ___ day of ______, _______ BETWEEN:
PRUDENTIAL STEEL LTD., a corporation incorporated under the laws of the
Province of Alberta and having its head office at the City of Calgary,
in the Province of Alberta (hereinafter called the "Corporation")
OF THE FIRST PART
-and-
_________________, of the City of Calgary, in the Province of Alberta
(hereinafter called the "Optionee")
OF THE SECOND PART.
WHEREAS the Corporation has established a Stock Option Plan, as amended
and restated, providing for the grant to individual employees and members of the
board of directors of the Corporation of options to purchase common shares of
the Corporation upon and subject to the terms and conditions set out in such
Plan; and
WHEREAS, the directors of the Corporation have authorized the grant to
the Optionee of the option specified in and upon the terms and conditions
contained in this Agreement.
WITNESSETH AS FOLLOWS:
Grant of Option
1. The Corporation hereby agrees to issue and sell to the Optionee, at the
option of the Optionee, at a price of $_______ of lawful money of Canada per
share, during the periods and upon and subject to the terms and conditions
hereinafter set out, _______ common shares of the Corporation.
Exercise of Option
2. Subject to paragraphs 3 and 4, the Option shall be exercisable by the
Optionee on each of first, second and third anniversaries of the date of this
Agreement as to ____________ of the number of common shares optioned pursuant to
paragraph 1, or any lesser number of common shares then covered hereby, by
written notice given to the Corporation specifying the number of common shares
in respect of which the Option is being so exercised at such time, accompanied
by a certified cheque (payable at par in Calgary, Alberta) in payment for such
common shares at the price per share specified in paragraph 1, whereupon the
purchase pursuant to the Option of the common shares so specified shall be
deemed for all purposes to have been completed and the Option exercised to such
extent.
3. Notwithstanding paragraph 2:
(a) in the event that the Optionee dies either during employment or
after retirement, or that a notice is delivered to the Optionee
pursuant to paragraph 8, the Optionee or the Optionee's legal
personal representatives shall be entitled, from and after the
date of such death or the date of such delivery (as the case may
be) until the expiry of the Option pursuant to paragraph 6, to
exercise the Option with respect to all of the common shares
optioned pursuant to paragraph 1;
(b) in the event that the Optionee retires prior to the third
anniversary of this Agreement, the Optionee shall be entitled to
exercise the Option at the times set out in paragraph 2, until
the expiry of the Option pursuant to paragraph 6; and
(c) in the event that the employment of the Optionee terminates for
any reason other than death or retirement, the Optionee shall be
entitled to exercise the Option during the 90-day period
specified in paragraph 6, only with respect to that number of
common shares in respect of which he was entitled to exercise the
Option on the effective date of such termination.
4. Notwithstanding any other provision of this agreement, the Option may not be
exercised during the period (i) commencing with the announcement of an offeror's
intention to make a formal bid, which is a takeover bid for the Corporation and
(ii) ending on the expiry of such takeover bid, unless the directors issue a
directors' circular which recommends acceptance of the takeover bid.
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5. The Option is non-assignable, and shall be exercisable only by the Optionee
or the legal personal representative or representatives of the Optionee.
6. The term of the Option shall expire on:
(a) the tenth anniversary of the date of this Agreement;]
(b) the expiry of 270 days following the death of the Optionee
(regardless of whether the Optionee died during employment or
after retirement);
(c) the period specified in a notice given pursuant to paragraph 8
hereof;
(d) the third anniversary of the date of retirement of the Optionee;
and
(e) 90 days following the termination of employment of the Optionee;
whichever shall first occur.
Corporate Reorganizations
7. If at any time after:
(a) a reconstruction, reorganization or recapitalization of the
Corporation, or its consolidation, amalgamation or merger into or
with another corporation, or the sale of all or substantially all
of the assets of the Corporation; or
(b) a consolidation, subdivision, reclassification or other change of
or affecting the common shares, or the issue of further shares as
a stock dividend;
the directors of the Corporation shall determine that, in order to preserve as
nearly as may be possible the original scope and intent of this Agreement, the
Option should thereafter cover a different class and/or number of shares and/or
should be exercisable at a different option price per share, the Corporation
shall give notice to the Optionee designating such new class, number and/or
price, whereupon this Agreement shall, without further act or formality, be
thereby amended accordingly; and any notice so given by the Corporation pursuant
to a determination so made by its directors shall be final and binding for all
purposes of this Agreement.
8. Wherever the Corporation shall propose to take any of the steps referred to
in subparagraph (a) of paragraph 7 hereof, the Corporation shall have the right
to give written notice to the Optionee or the legal personal representative or
representatives of the Optionee, as the case may be, specifying a period (not
shorter than 30 days following the delivery of such notice) at the expiry of
which the Option shall terminate, whereupon the Option shall terminate
accordingly at the expiry of such period.
Definitions
9. In this Agreement:
"Act" means the Securities Act (Alberta) and the regulations thereto,
as the same may be amended or reenacted from time to time;
"common shares" means the common shares of the capital stock of the
Corporation as constituted as the date hereof;
"employment" means full-time employment with the Corporation;
"formal bid" has the meaning ascribed in the Act;
"Option" means the agreement of the Corporation to issue and sell
common shares pursuant to paragraph 1 hereof at the option of the Optionee;
"retirement" means the retirement from employment of the Optionee in
accordance with the policies and plans of the Corporation then in effect; and
"takeover bid" has the meaning ascribed in the Act, and includes a
takeover bid which is defined in the Act as an exempt takeover bid.
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Notices
10. Any notice to be given pursuant to the provisions hereof shall be deemed to
have been validly given if reduced to writing and either mailed by prepaid
ordinary post or delivered to the party to whom the same is to be given at the
following applicable address:
The Corporation Corporate Secretary
Prudential Steel Ltd.
1800 Sun Life Plaza
140 - 4 Avenue SW
Calgary, AB T2P 3N3
The Optionee or the
legal representative or
representatives of the
Optionee
or at such other address as the party to whom the same is to be given shall have
theretofore designated by notice given in the manner specified in this
paragraph; and any such notice shall be deemed to have been given on the day of
delivery thereof or on the day following the day of mailing thereof in Canada,
as the case may be.
Applicable Law
11. This Agreement and the provisions hereof shall be governed by and construed
according to the laws of the Province of Alberta.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date as of which this Agreement is stated to have been made on the first
page, which is hereby expressed to be the date of execution and delivery hereof.
PRUDENTIAL STEEL LTD.
By:
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