Exhibit 10.3
WESTERN COPPER HOLDINGS LIMITED
(the "Corporation")
1998 STOCK OPTION PLAN
1. Purpose of the Plan
The purpose of the plan is to provide certain directors, officers and key
employees of, and certain other persons who provide services to, the Corporation
or its Subsidiaries with an opportunity to purchase Common Shares and to benefit
from any appreciation in the value thereof. This will provide an increased
incentive for these individuals to contribute to the future success and
prosperity of the Corporation, thus enhancing the value of the Common Shares for
the benefit of all the shareholders and increasing the ability of the
Corporation and its Subsidiaries to attract and retain skilled and motivated
individuals in the service of the Corporation.
2. Defined Terms
Where used herein, the following terms shall have the following meanings,
respectively:
2.1 "Board" means the board of directors of the Corporation;
2.2 "Common Shares" means the common shares of the Corporation or, in the event
of an adjustment contemplated by Article 6 hereof, such other Common Shares
to which a Participant may be entitled upon the exercise of an Option as a
result of such adjustment;
2.3 "Corporation" means Western Copper Holdings Limited, and includes any
successor corporation thereof;
2.4 "Exchange" means The Toronto Stock Exchange or, if the Common Shares are
not then listed and posted for trading on The Toronto Stock Exchange, on
such stock exchange in Canada on which such shares are listed and posted
for trading as may be selected for such purpose by the Board;
2.5 "Market Price" per Common Share at any date shall be the closing price of
the Common Shares on the Exchange (or, if the Common Shares are not then
listed and posted for trading on the Exchange, on such stock exchange in
Canada on which such shares are listed and posted for trading as may be
selected for such purpose by the Board) on the trading day immediately
preceding the date on which the Option is granted. In the event that the
Common Shares are not listed and posted for trading on any stock exchange
in Canada, the Market Price shall be determined by the Board in its sole
discretion;
2.6 "Option" means an option to purchase Common Shares granted by the Board to
Participants, subject to the provisions contained herein;
2.7 "Option Price" means the price per share at which Common Shares may be
purchased under the Option, as the same may be adjusted in accordance with
Articles 4 and 6 hereof;
2.8 "Participants" means certain directors, officers and key employees of, and
certain other persons who provide services to, the Corporation to whom
Options are granted and which Options or a portion thereof remain
unexercised;
2.9 "Plan" means the 1998 Stock Option Plan of the Corporation, as the same may
be amended or varied from time to time; and
2.10 "Subsidiary" means any corporation which is controlled by the Corporation.
3. Administration of the Plan
3.1 The Plan shall be administered by the Board. The Corporation shall effect
the grant of Options under the Plan, in accordance with determinations made
by the Board, pursuant to the provisions of the Plan, as to those
individuals eligible to be Participants and the number of Common Shares
which shall be the subject of each Option, by the execution and delivery of
a stock option agreement in such form which is consistent with the
provisions of the Plan as may be approved by the Board.
3.2 The Board may, from time to time, adopt such rules and regulations for
administering the Plan as it may deem proper and in the best interest of
the Corporation and may, subject to the applicable law, delegate its powers
hereunder to administer the Plan to a committee of the Board.
4. Granting of Options
4.1 The Board from time to time may grant Options to certain individuals
eligible to be Participants. The grant of Options will be subject to the
conditions contained herein and may be subject to additional conditions
determined by the Board from time to time.
4.2 The aggregate number of Common Shares reserved for issuance under the Plan
must not exceed 1,000,000 Common Shares. The aggregate number of Common
Shares reserved for issuance to any one person under the Plan must not
exceed 5% of the outstanding Common Shares (on a non-diluted basis). The
Common Shares in respect of which Options are not exercised shall be
available for subsequent options. No fractional shares may be purchased or
issued hereunder.
4.3 The Option Price shall be calculated by the Board and shall be the greater
of: (i) the average of daily high and low board lot trading prices over the
5 trading day period immediately preceding and including the date of grant;
or (ii) the Market Price.
4.4 An Option must be exercised within a period of five years from the date of
the granting of the Option. The limitation period or periods within this
ten year period during which an Option or a portion thereof may be
exercised by a Participant shall be determined by the Board.
5. Exercise of Option
Subject to the provisions of the Plan and the terms of the granting of the
Option, an Option or a portion thereof may be exercised from time to time by
delivery to the Corporation at its head office of a notice in writing signed by
the Participant or the Participant's legal personal representative and addressed
to the Corporation. This notice shall state the intention of the Participant or
the Participant's legal personal representative to exercise the said Option or a
portion thereof, the number of Common Shares in respect of which the Option is
then being exercised, and must be accompanied by payment in full of the Option
Price for the Common Shares which are the subject of the exercise.
6. Adjustment in Shares
6.1 Appropriate adjustments in the number of Common Shares subject to the Plan
and, as regards Options granted or to be granted, in the number of Common
Shares optioned and in the Option Price, shall be made by the Board to give
effect to adjustments in the number of Common Shares resulting from
subdivisions, consolidations or reclassification of the Common Shares or
other relevant changes in the authorized or issued capital of the
Corporation.
6.2 Options granted to Participants hereunder are non-assignable and, except in
the case of the death of a Participant (which is provided for in Section
8), are exercisable only by the Participant to whom the Options have been
granted; provided that subject to the prior approval of the Board and the
Exchange an Option may be assigned to a corporation controlled by the
Participant and 100% beneficially owned by the Participant and his spouse
or children, which control and ownership shall continue for as long as any
part of the Option remains unexercised.
7. Decisions of the Board
All decisions and interpretations of the Board respecting the Plan or
Options granted thereunder shall be conclusive and binding on the Corporation
and the Participants and their respective legal personal representative and on
all directors, officers, employees and other persons eligible under the
provisions of the Plan to participate therein.
8. Termination
8.1 If a Participant ceases to be any of a director, officer, employee or
person providing services to the Corporation (other than death), he may
within 30 days following his ceasing to be a director, officer, employee or
person providing services to the Corporation the Participant may within 30
days of ceasing to be a director, officer, employee or person providing
services to the Corporation, exercise his Option to the extent that he was
entitled to exercise it at the date of such cessation.
8.2 In the event of the death of a Participant, the Option previously granted
to the Participant will be exercisable only within 12 months following the
death of the Participant and then only:
(a) by the person or persons to whom the Participant's rights under the
Option shall pass by the Participant's will or the laws of descent and
distribution; and
(b) if and to the extent that the Participant was entitled to exercise the
Option at the date of death of the Participant.
8.3 The Plan does not confer upon a Participant any right with respect to
continuation of employment by the Corporation or any Subsidiary, nor does
it interfere in any way with the right of the Participant or the
Corporation, a Subsidiary to terminate the Participant's employment at any
time.
8.4 Options shall not be affected by any change of employment of the
Participant where the Participant continues to be employed by the
Corporation or any of its Subsidiaries.
9. Effect of Takeover Bid
If a bona fide offer (the "Offer") for Common Shares is made to the
Participant or to shareholders generally or to a class of shareholders which
includes the Participant, which Offer, if accepted in whole or in part, would
result in the offeror exercising control over the Corporation within the meaning
of subsection 1(3) of the Securities Act (Ontario)(as amended from time to
time), then the Corporation shall, immediately upon receipt of notice of the
Offer, notify each Participant currently holding an Option of the Offer, with
full particulars thereof; whereupon, such Option may be exercised in whole or in
part by the Participant so as to permit the Participant to tender the Common
Shares received upon such exercise (the "Optioned Shares") pursuant to the
Offer. If:
(a) the Offer is not completed within the time specified therein; or
(b) the Participant does not tender the Optioned Shares pursuant to the
Offer; or
(c) all of the Optioned Shares tendered by the Participant pursuant to the
Offer are not taken up and paid for by the offeror in respect thereof;
then the Optioned Shares or, in the case of clause (c) above, the Optioned
Shares that are not taken up and paid for shall be returned by the Participant
to the Corporation and reinstated as authorized but unissued Common Shares and
the terms of the Option as set forth in the Plan shall again apply to the
Option. If any Optioned Shares are returned to the Corporation under this
Section, the Corporation shall refund the exercise price to the Participant for
such Optioned Shares. In no event shall the Participant be entitled to sell the
Optioned Shares otherwise than pursuant to the Offer.
10. Effect of Amalgamation, Consolidation or Merger
If the Corporation amalgamates, consolidates with or merges with or into
another corporation any Common Shares receivable on the exercise of an Option
shall be converted into the securities, property or cash which the Participant
would have received upon such amalgamation, consolidation or merger if the
Participant had exercised his Option immediately prior to the record date
applicable to such amalgamation, consolidation or merger, and the Option Price
shall be adjusted appropriately by the Board and such adjustment shall be
binding for all purposes of the Plan.
11. Amendment or Discontinuance of Plan
The Board may amend or discontinue the Plan at any time without the consent
of the Participants provided that such amendment shall not alter or impair any
Option previously granted under the Plan except as permitted by the provisions
of Article 6 hereof. Any amendment of the Plan will require the prior approval
of the Exchange and may require the approval of the Corporation's shareholders.
12. Government Regulation
The Corporation's obligation to issue and deliver Common Shares under any
Option is subject to:
(a) the satisfaction of all requirements under applicable securities laws
in respect thereof and obtaining all regulatory approvals as the
Corporation shall determine to be necessary or advisable in connection
with the authorization, issuance or sale thereof;
(b) the admission of Common Shares to listing on any stock exchange on
which such Common Shares may then be listed; and
(c) the receipt from the Participant of such representations, agreements
and undertakings as to future dealings in such Common Shares as the
Corporation determines to be necessary or advisable in order to
safeguard against the violation of the securities laws of any
jurisdiction.
In this connection, the Corporation shall take all reasonable steps to obtain
such approvals and registrations as may be necessary for the issuance of such
Common Shares in compliance with applicable securities laws and for the listing
of such Common Shares on any stock exchange on which such Common Shares are then
listed.
13. Participant's Rights
A Participant shall not have any rights as a shareholder of the Corporation
until the issuance of a certificate for Common Shares upon the exercise of an
Option or a portion thereof, and then only with respect to the Common Shares
represented by such certificate or certificates.
14. Approvals
14.1 The Plan shall be subject to acceptance by the Exchange and compliance with
all conditions imposed by the Exchange.
14.2 Any Options granted prior to such acceptance shall be conditional upon such
acceptance being given and conditions complied with and no such Options may
be exercised unless such acceptance is given and such conditions complied
with.
15. No Representation or Warranty
The Corporation makes no representation or warranty as to the future market
value of any Common Shares issued in accordance with the provisions of the Plan.
16. Effective Date
The Plan shall become effective upon being adopted by the Board.
17. Deleted
Plan approved by consent resolutions of the board of directors of the
Corporation dated as of February 12, 1998.
Plan approved by the shareholders of the Corporation at a meeting held on March
31, 1998.
"Lawrence Page"
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Secretary