INFORMATION STATEMENT PURSUANT TO
SECTION 14(c) OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[X] Preliminary Information Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2)
[_] Definitive Information Statement
CAMDEN MINES LIMITED
-----------------------------
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[_] 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:________.
(2) Aggregate number of securities to which transaction applies:________.
(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):______
(4) Proposed maximum aggregate value of transaction:_____. (5) Total fee
paid:_____.
[_] 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: __________
-2-
CAMDEN MINES LIMITED
505 Burrard St., Suite 1880
Vancouver, British Columbia, Canada, V6E 3X2
INFORMATION STATEMENT
Dated
September 9, 2004
GENERAL
This Information Statement is being circulated to the shareholders of
Camden Mines Limited, a Nevada corporation (the "Company"), in connection with
the taking of corporate action without a meeting upon the written consent of the
holders of a majority of the outstanding shares of the Company's $0.00001 par
value common stock (the "Common Stock").
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
---------------------------------------------------------------------------
PROXY.
- ------
As more completely described below, the matters upon which action is
proposed to be taken are: (i) to approve an amendment to the Articles of
Incorporation to effectuate an increase in authorized shares of common stock of
the Company from 100,000,000 shares to 500,000,000 shares; (ii) to approve an
amendment to the Articles of Incorporation to effectuate a name change of the
Company to "Xinhua China Ltd."; (iii) to approve a stock option and incentive
plan for key personnel of the Company (the "Stock Option Plan"); (iv) to ratify
the appointment of Xianping Wang, Henry Jung, Reg Handford, Edward Wong and
Peter Shandro as directors and to serve as directors of the Company until the
next annual meeting of the Company's shareholders or until their successors have
been elected and qualified; and (v) to ratify the selection of auditors for the
fiscal year ending June 30, 2005.
The date, time and place at which action is to be taken by written consent
on the matters to be acted upon, and at which consents are to be submitted, is
October 12, 2004, at 10:00 a.m. (Pacific Time) at 505 Burrard St., Suite 1880,
Vancouver, British Columbia, Canada, V6E 3X2.
This information statement is being first sent or given to security holders
on approximately September 20, 2004.
VOTING SECURITIES AND VOTE REQUIRED
On September 4, 2004, the Board of Directors authorized and approved,
subject to shareholder approval, certain corporate actions, which the Board of
Directors deemed to be in the best interests of the Company and its
shareholders. The Board of Directors further authorized the preparation and
circulation of this information statement and a shareholders' consent to the
holders of a majority of the outstanding shares of the Company's Common Stock.
There are currently 61,056,375 shares of the Company's Common Stock
outstanding, and each share of Common Stock is entitled to one vote. The Written
Consent of Shareholders of ten (10) or less shareholders of the Company holding
-3-
at least 30,528,188 shares of the Common Stock issued and outstanding is
necessary to approve the matters being considered. Except for the Common Stock
there is no other class of voting securities outstanding at this date. The
record date for determining shareholders entitled to vote or give consent is
September 6, 2004 (the "Record Date").
The matters upon which action is proposed to be taken are: (i) the approval
of an amendment to the Articles of Incorporation to effectuate an increase in
authorized shares of common stock of the Company from 100,000,000 shares to
500,000,000; (ii) the approval of an amendment to the Articles of Incorporation
to effectuate a name change of the Company to "Xinhua China Ltd."; (iii) the
approval of the adoption of the Stock Option Plan for key personnel; (iv) the
ratification of the appointment of the following persons as directors and to
serve as directors of the Company until the next annual meeting of the Company's
shareholders or until their successors have been elected and qualified: Xianping
Wang, Henry Jung, Reg Handford, Edward Wong and Peter Shandro; and (v) the
ratification of the selection of Moore Stephens Ellis Foster Ltd. as the
Company's independent public accountants for the fiscal year ending June 30,
2005.
The cost of this Information Statement, consisting of printing, handling,
and mailing of the Information Statement and related material, and the actual
expense incurred by brokerage houses, custodians, nominees and fiduciaries in
forwarding the Information Statement to the beneficial owners of the shares of
Common Stock, will be paid by the Company.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
CURRENT OFFICERS AND DIRECTORS
As of the date of this Information Statement, the directors and executive
officers of the Company are as follows:
Name Age Position with the Company
- --------------- --- -----------------------------------
Xianping Wang 44 President, CEO and a Director
Henry Jung 53 CFO and a Director
Reg Handford 58 Secretary, Treasurer and a Director
Edward Wong 38 Director
Peter Shandro 60 Director
- ------------------------------
XIANPING WANG has been a Director of the Company since August 5, 2004 and
has been the President and CEO of the Company since September 4, 2004. In
addition, Mr. Wang is the President of Asia-Durable (Beijing) Investments Co.,
Ltd., which is a company that has successfully invested in construction and
development projects as well as biotechnology research. From 1997 to 2002, Mr.
Wang was the President of Beijing New Fortune Investment Co., Ltd., which is a
company that has invested in real estate and other profitable projects such as
-4-
Chongqing Wanli Storage Battery Co., Ltd. and Shenzhen Technology Co., Ltd. Mr.
Wang helped Chongqing Wanli Storage Battery Co., Ltd. and Shenzhen Technology
Co., Ltd. to become publicly listed companies on Chinese stock markets in
Shanghai and Shenzhen. Mr. Wang received an Engineering Bachelor Degree from
Navy Engineering Institute in 1978 and an Economics Master Degree from Tsinghua
University in 1990.
HENRY JUNG has been a Director of the Company since September 3, 2004 and
the Chief Financial Officer since September 4, 2004. Mr. Henry Jung is as a self
employed Chartered Accountant engaged by various public and private companies to
assist them in a controllership and financial advisory capacity. These services
include preparation of financial budgets and forecasts in addition to management
of operating budgets and overseeing project programs. Mr. Jung obtained a
Bachelor of Commerce Degree from the University of British Columbia in 1974. In
addition to being a Chartered Accountant, he has completed the Canadian
Institute of Chartered Accountants in Depth Tax Course in 1979 and continued his
studies with various professional development courses with the British Columbia
Institute of Chartered Accountants. Mr. Jung has not been a director of any
other reporting issuer.
REG HANDFORD has been a Director of the Company since September 3, 2004 and
the Secretary and Treasurer since September 4, 2004. Mr. Reg Handford has been a
self employed business consultant providing management, corporate relations and
compliance services to public and private companies since 2001. Mr. Handford is
currently the President of Ardent Mines Limited and Raglan Mines Limited, two
prospective mining exploration companies, neither of which are yet listed on a
stock exchange. From October 2001 through May 2003, Mr. Handford was the
President of Bright Star Ventures Ltd., a company with a platinum-group minerals
exploration target near Princeton, British Columbia. Bright Star Ventures Ltd.
is listed on the TSX Venture Exchange. From 1999 to 2001 Mr. Handford was an
editing and marketing person for ChinaWeb a subsidiary of Stock Exchange
Executive Council, a quasi-governmental organization that is charged with
disseminating news, information and quotes from China's stock markets both
domestically and internationally. From 1998 to 1999 Mr. Handford was a pro
trader at Levesque Securities Ltd. located in Vancouver, Canada. In addition,
Mr. Handford has 17 years experience as a stock broker in Vancouver, Canada, and
10 years of personal investing experience as well as management positions in
publicly traded companies, both in mining and in technology. Mr. Handford
obtained a Bachelors of Science Degree with a concentration in mathematics from
the University of British Columbia in 1968 and a Masters of Science Degree in
mathematical logic from Simon Fraser University in 1971. Furthermore, Mr.
Handford has completed the Canadian Securities Course in 1973, the Canadian
Options Course in 1981, the Vancouver Stock Exchange Pro Trader Course in 1998
and the Trader Training Course in 1998.
EDWARD WONG has been a Director of the Company since September 3, 2004. Mr.
Edward Wong is a self employed trial lawyer who appears at all levels of court
in the Province of British Columbia, Canada on civil litigation matters
including commercial, employment, trademark and family matters. Mr. Wong has
been called and admitted to The Law Society of Upper Canada (Ontario, Canada)
and The Law Society of British Columbia. Mr. Wong received a Bachelor of Laws
from the University of Western Ontario in 1989 and a Bachelor of Arts with
Distinction from Carleton University in 1986. From 1996 to 2003, Mr. Wong was a
director of Junior Achievement of British Columbia, including a term as
chairman. Mr. Wong is a past member of the executive committee of Junior
Achievement of Canada. Mr. Wong was not been a director of any other reporting
issuer.
-5-
PETER SHANDRO has been a Director of the Company since September 3, 2004.
Mr. Peter Shandro is a self employed business consultant. From 1999 to 2003 he
was the CEO of XML Global Technologies, Inc., a software development company
focused on data transformation and web-based transactional solutions. XML global
Technologies is listed on the Over-the-Counter Bulletin Board. Mr. Shandro has
business development, corporate finance, public offering and strategic planning
experience in manufacturing, distribution, retail, medical devices, software
development, transportation and oil and gas exploration, both as a principal and
consultant through Wes-Sport Holdings Ltd., a company he founded in 1981. Mr.
Shandro obtained a Bachelors of Science Degree with a concentration in Chemistry
from the University of Alberta in 1965.
For further information concerning the officers and directors, please see
"RATIFICATION OF FIVE (5) PERSONS TO SERVE AS DIRECTORS OF THE COMPANY -
Information Concerning Directors."
AUDIT COMMITTEE
As of the date of this Statement, our audit committee consisted of the
following directors:
Henry Jung
Peter Shandro
Edward Wong
Peter Shandro and Edward Wong are deemed independent members of the audit
committee. Henry Jung, a member on the current audit committee also holds the
position of CFO of the Company. Our audit committee is responsible for: (i)
selection and oversight of our independent accountant; (ii) establishing
procedures for the receipt, retention and treatment of complaints regarding
accounting, internal controls and auditing matters; (iii) establishing
procedures for the confidential, anonymous submission by our employees of
concerns regarding accounting and auditing matters; (iv) engaging outside
advisors; and (v) funding for the outside auditory and any outside advisors
engagement by the audit committee.
The Board of Directors considered whether the independent principal
accountant is independent, and concluded that the auditor for the previous
fiscal year ended June 30, 2004 was independent.
AUDIT FEES
The aggregate fees billed for each of the last two years for professional
services rendered by the principal accountant for the audit of the Company's
annual financial statements and review of financial statements included in the
Company's Form 10-QSB's, and services that are normally provided by the
accountant in connection with statutory and regulatory engagements for those
fiscal years was approximately $6,500.00
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During fiscal year ended June 30, 2004, the Company did not incur any fees
for professional services rendered by its principal independent accountant for
certain information technology services which may include, but is not limited
to, operating or supervising or managing the Company's information or local area
-6-
network or designing or implementing a hardware or software system that
aggregate source data underlying the financial statements.
ALL OTHER FEES
During fiscal year ended June 30, 2004, the Company did not incur any other
fees for professional services rendered by its principal independent accountant
for all other non-audit services which may include, but is not limited to,
tax-related services, actuarial services or valuation services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date
concerning: (i) each person who is known by the Company to own beneficially more
than 5% of the Company's outstanding Common Stock; (ii) each of the Company's
executive officers, directors and key employees; and (iii) all executive
officers and directors as a group. Common Stock not outstanding but deemed
beneficially owned by virtue of the right of an individual to acquire shares
within 60 days is treated as outstanding only when determining the amount and
percentage of Common Stock owned by such individual. Except as noted, each
person or entity has sole voting and sole investment power with respect to the
shares shown.
CLASS OF STOCK NAME AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNERSHIP OF OWNERSHIP
- ---------------------------------------------------------------------------------------------
(1)
Common Stock Xianping Wang 45,000,000 73.70%
B-26F Oriental Kenzo, No. 48
Dongzhimenwai, Dongcheng District
Beijing, China 100027
Common Stock Henry Jung Nil 0%
505 Burrard St., Suite 1880
Vancouver, B.C.
Canada, V7X 1M6
(1)
Common Stock Reg Handford 12,000 0.02%
505 Burrard St., Suite 1880
Vancouver, B.C.
Canada, V7X 1M6
(1)(2)
Common Stock Peter Shandro 20,000 0.03%
609 Granville St. Suite 880
P.O. Box 10321, Pacific Centre
Vancouver, B.C.
Canada, V7Y 1G5
-7-
(1)(3)
Common Stock Edward Wong 20,000 0.03%
1045 Howe St., Suite 400
Vancouver, B.C.
Canada, V6Z 2A9
(1)
Common Stock All officers and directors 45,052,000 73.78%
as a group (5 persons)
- ---------------------------------------------------------------------------------------------
<FN>
(1) These are restricted shares of common stock.
(2) These shares are owned directly by Mr. Peter Shandro's wife, and therefore,
indirectly by Mr. Shandro. Mr. Shandro has shared voting and investment control
over these shares.
(3) These shares are owned directly by Mr. Edward Wong's wife, and therefore,
indirectly by Mr. Wong. Mr. Wong has shared voting and investment control over
these shares.
</FN>
EXECUTIVE COMPENSATION
The following table sets forth in summary form all the compensation awarded to,
earned by, or paid to our Directors and Executive Officers during the fiscal
year ended June 30, 2004.
Other Re- Securities All
Name and Annual stricted Underlying Other
Principal Fiscal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation Awards SARs Payouts sation
- --------- ------ ------ ----- ------- -------- ---------- ------- -------
Hugh Grenfal(1) 2004 Nil $0.00 $0.00 None None None None
President, Treasurer
and Director
Sergei Stetsenko(2) 2004 Nil $0.00 $0.00 None None None None
Secretary and
Director
<FN>
(1) Mr. Hugh Grenfal was appointed the President, Treasurer and a director of
the Company on September 24, 1999. Mr. Grenfal has resigned as a director and
from all officer positions of the Company on September 3, 2004.
(2) Mr. Sergei Stetsenko was appointed the Secretary and a director of the
Company on September 24, 1999. Mr. Stetsenko has resigned as a director and
Secretary of the Company on September 3, 2004.
</FN>
Officers and directors of the Company are reimbursed for any out-of-pocket
expenses incurred by them on behalf of the Company. None of the Company's
directors or officers are currently a party to employment agreements with the
Company. The Company presently has no pension, health, annuity, insurance, or
profit sharing plans.
-8-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has not entered into any contractual arrangements with related
parties. There is not any currently proposed transaction, or series of the same
to which the Company is a party, in which the amount involved exceeds $60,000
and in which, to the knowledge of the Company, any director, executive officer,
nominee, five percent shareholder or any member of the immediate family of the
foregoing persons, have or will have a direct or indirect material interest.
The officers and directors of the Company are engaged in other businesses,
either individually or through partnerships and corporations in which they may
have an interest, hold an office or serve on the boards of directors. The
directors of the Company may have other business interests to which they may
devote a major or significant portion of their time. Certain conflicts of
interest, therefore, may arise between the Company and its directors. Such
conflicts are intended to be resolved through the exercise by the directors of
judgment consistent with their fiduciary duties to the Company. The officers and
directors of the Company intend to resolve such conflicts in the best interests
of the Company. The officers and directors will devote their time to the affairs
of the Company as necessary.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act, as amended, requires the Company's
executive officers, directors and persons who beneficially own more than 10% of
the Company's shares of common stock to file reports of their beneficial
ownership and changes in ownership (Forms 3, 4 and 5, and any amendment thereto)
with the SEC. Executive officers, directors, and greater-than-ten percent
holders are required to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon a review of the Forms 3, 4, and 5 furnished to the
Company for the fiscal year ended June 30, 2004, the Company has determined that
its directors, officers, and greater than 10% beneficial owners complied with
all applicable Section 16 filing requirements, except as described below.
Mr. Xianping Wang, failed to timely file his initial Form 3 relating to his
acquisition of 45,000,000 shares of common stock of the Company in aggregate
from Mr. Hugh Grenfal and Mr. Sergei Stetsenko on August 5, 2004, due to
problems with attempting to apply for and receive EDGAR codes. Mr. Wang filed
his Form 3 on August 12, 2004. In addition, Mr. Henry Jung failed to timely file
his initial Form 3 relating to his appointment as a Director of the Company on
September 3, 2004 due to an error in his EDGAR codes. Mr. Jung intends to file
his Form 3 in the very near future. Furthermore, Mr. Peter Shandro failed to
timely file his initial Form 3 relating to his appointment as a Director of the
Company on September 3, 2004 due to the unknown expiry of his EDGAR codes. Mr.
Shandro intends to file his Form 3 in the very near future.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO
MATTERS TO BE ACTED UPON
With the exception of the current directors of the Company, and as of the
date of this Information Statement, there are no persons identified by
-9-
management of the Company who have an interest in the matters to be acted upon
nor who are in opposition to the matters to be acted upon.
As of the date of this Information Statement, there are no persons who are
currently a director or officer of the Company, that oppose any action to be
taken by the Company.
APPROVAL OF A PROPOSED AMENDMENT TO THE
ARTICLES OF INCORPORATION TO EFFECTUATE AN INCREASE
IN THE AUTHORIZED SHARES OF COMMON STOCK FROM
100,000,000 SHARES TO 500,000,000 SHARES
The Board of Directors of the Company, at a special meeting held on
September 4, 2004, authorized and approved, subject to shareholder approval, an
increase in the authorized shares of Common Stock from 100,000,000 shares to
500,000,000 shares. By approving this proposal, the shareholders will authorize
the Board of Directors to amend the Company's Articles of Incorporation
accordingly, attached as Exhibit B. The amendment embodies Article Fourth
changing the text to:
"The amount of the total authorized capital stock of the corporation
is Five Thousand Dollars ($5,000.00) consisting of Five Hundred Million
(500,000,000) shares of common stock of the par value of $0.00001 each."
REASONS FOR THE INCREASE IN THE AUTHORIZED CAPITAL
The Company currently has authorized Common Stock of 100,000,000 shares. As
of September 6, 2004, there were a total of 61,056,375 shares of Common Stock
issued and outstanding. However, the Company intends to acquire a majority
ownership of an active business which may result in the issuance of a
considerable amount of shares. In addition, the Company intends to raise capital
through private placement offerings which may result in the issuance of a
considerable amount of shares. Furthermore, the Company wishes to reserve
20,000,000 shares of Common Stock in connection with the Company's Stock Option
Plan (See proposal #3 - approval of the Stock Option Plan for key personnel
below). Therefore, the Company anticipated that it will need to have an
authorized capital in excess of 100,000,000 shares of Common Stock in order to
be able to honor these various obligations.
In addition to the obligations and anticipation to issue Common Stock
described above, the Board of Directors believes it is in the best interests of
the Company and its shareholders for the Company to have a reasonable reserve of
authorized but unissued shares of common stock in order to allow for future
stock issuances.
The additional shares of Common Stock described above will enhance our
flexibility in connection with possible future actions, such as stock splits,
stock dividends, acquisitions of property and securities of other companies,
financings, and other corporate purposes.
The Board of Directors is not proposing the increase in the authorized
shares of Common Stock with the intention of using the shares for anti-takeover
purposes. It is possible, however, that the additional shares could be used in
the future to discourage an attempt to acquire or take control of the Company.
-10-
No shareholder of the Company has any preemptive right to acquire any of
the additional authorized shares, so the issuance of the additional authorized
shares may correspondingly dilute the percentage interests of current
shareholders.
BOARD RECOMMENDATION
The Board of Directors of the Company believes that it would be in the best
interests of the Company and its shareholders to increase the authorized shares
of Common Stock from 100,000,000 shares to 500,000,000 shares. The Board of
Directors recommends approval of the amendment to the Articles of Incorporation
of the Company to effectuate an increase in the authorized shares of Common
Stock from 100,000,000 shares to 500,000,000 shares and each of the resolutions
with respect thereto set forth in Exhibit A hereto.
APPROVAL OF A PROPOSED AMENDMENT TO THE
ARTICLES OF INCORPORATION TO EFFECTUATE A CHANGE
IN NAME OF THE COMPANY TO "XINHUA CHINA LTD."
NAME CHANGE
Due to the Company's recent change of control and majority ownership by Mr.
Xianping Wang, who is Chinese and resides in China, the Board of Directors has
determined that it will be in the best interests of the Company and its
shareholders to change the name of the Company from Camden Mines Limited to
Xinhua China Ltd. in order to provide the Company with stronger negotiating
ability in attempts to acquire a majority ownership of an active business in
China.
The Board of Directors approved a resolution to amend the Certificate of
Incorporation on September 4, 2004 to change the Company's name to Xinhua China
Ltd., subject to shareholder approval. By approving this proposal, the
shareholders will authorize the Board of Directors to amend the Company's
Articles of Incorporation accordingly, attached as Exhibit B. The amendment
embodies Article First changing the text to:
"The name of the corporation is Xinhua China Ltd."
After the name change, it is anticipated that the Company's trading symbol
for the Bulletin Board will be changed from CNMN.
Management expects formal implementation of the name change with the Nevada
Secretary of State to be completed as soon as practicable after the effective
date of the shareholder resolution.
APPROVAL OF THE STOCK OPTION PLAN FOR
KEY PERSONNEL OF THE COMPANY
On September 4, 2004, the Board of Directors of the Company unanimously
approved and adopted a stock option and incentive plan (the "Stock Option
Plan"), which is attached hereto as Exhibit C. The purpose of the Stock Option
Plan is to advance the interests of the Company and its shareholders by
affording key personnel of the Company an opportunity for investment in the
Company and the incentive advantages inherent in stock ownership in the Company.
Pursuant to the provisions of the Stock Option Plan, stock options, stock
-11-
awards, cash awards or other incentives (the "Stock Options and Incentives")
will be granted only to key personnel of the Company, generally defined as a
person designated by the Board of Directors upon whose judgment, initiative and
efforts the Company may rely including any director, officer, employee,
consultant or advisor of the Company.
The Stock Option Plan is to be administered by the Board of Directors of
the Company, which shall determine (i) the persons to be granted Stock Options
and Incentives; (ii) the Fair Market Value of the Company's shares; (iii) the
exercise price per share of options to be granted; (iv) the number of shares to
be represented by each option or incentive award; (v) the time or times at which
options and incentive awards shall be granted; (vi) the interpretation of the
Stock Option Plan; (vii) whether to prescribe, amend and rescind rules and
regulations relating to the Stock Option Plan; (viii) the term and provisions or
each option and incentive award granted (which need not be identical) and, with
the consent of the grantee thereof, modify or amend such option or incentive
award; (ix) whether to accelerate or defer (with the consent of the grantee) of
the exercise date of any option or incentive award; (x) the person to execute on
behalf of the Company any instrument required to effectuate the grant of an
option or incentive award previously granted by the Board; (xi) whether to
accept or reject the election made by a grantee pursuant to Section 7.5 of the
Stock Option Plan; and (xii) all other determinations deemed necessary or
advisable for the administration of the Stock Option Plan. The Stock Option Plan
provides authorization to the Board of Directors to grant Stock Options and
Incentives to a total number of shares of common stock of the Company, not to
exceed Twenty Million (20,000,000) shares of common stock of the Company as at
the date of adoption by the Board of Directors of the Stock Option Plan.
In the event an optionee who is a director, officer, employee (employee
also encompasses consultants and advisors where such is appropriate or where
such is intended by the Board or by a particular grant under the Stock Option
Plan) (each an "Employee") of the Company has his employment terminated by the
Company, except if such termination is voluntary or occurs due to retirement
with the consent of the Board or due to death or disability, then the option, to
the extent not exercised, shall terminate on the date on which the Employee's
employment by the Company is terminated. If an Employee's termination is
voluntary or occurs due to retirement with the consent of the Board, then the
Employee may after the date such Employee ceases to be an employee of the
Company, exercise his option at any time within three (3) months after the date
he ceases to be an Employee of the Company, but only to the extent that he was
entitled to exercise it on the date of such termination. To the extent that the
Employee was not entitled to exercise the Option at the date of such
termination, or if he does not exercise such option (which he was entitled to
exercise) within the time specified herein, the option shall terminate. In no
event may the period of exercise in the case of incentive options extend more
than three (3) months beyond termination of employment.
In the event an Employee is unable to continue his employment with the
Company as a result of his permanent and total disability (as defined in Section
22(e)(3) of the Internal Revenue Code), he may exercise his option at any time
within six (6) months from the date of termination, but only to the extent he
was entitled to exercise it at the date of such termination. To the extent that
he was not entitled to exercise the option at the date of termination, or if he
does not exercise such option (which he was entitled to exercise) within the
time specified herein, the option shall terminate. In no event may the period of
exercise in the case of an incentive option extend more than six (6) months
-12-
beyond the date the Employee is unable to continue employment due to such
disability.
In the event an optionee dies during the term of the option and is at the
time of his death an Employee who shall have been in continuous status as an
Employee since the date of grant of the option, the option may be exercised at
any time within six (6) months following the date of death by the optionee's
estate or by a person who acquired the right to exercise the option by bequest
or inheritance, but only to the extent that an optionee was entitled to exercise
the option on the date of death, or if the optionee's estate, or person who
acquired the right to exercise the option by bequest or inheritance, does not
exercise such option (which he was entitled to exercise) within the time
specified herein, the option shall terminate. In no event may the period of
exercise in the case of an incentive option extend more than six (6) months
beyond the date of the Employee's death.
Except to the extent otherwise expressly provided in an award, the right to
acquire shares or other assets under the Stock Option Plan may not be assigned,
encumbered or otherwise transferred by an optionee and any attempt by an
optionee to do so will be null and void. However Stock Options and Incentives
granted under this Stock Option Plan may be transferred by an optionee by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code or Title I of the
Employee Retirement Income Security Act, as amended, or the rules thereunder.
Unless assigned in accordance with the terms of an award, options and other
awards granted under this Stock Option Plan may not be exercised during an
optionee's lifetime except by the optionee or, in the event of the optionee's
legal incapacity, by his guardian or legal representative acting in a fiduciary
capacity on behalf of the optionee under state law and court supervision.
As of the date of this Information Statement, no Stock Options and/or
Incentives have been granted. Upon approval by the shareholders of the Stock
Option Plan, the Board of Directors will be authorized, without further
shareholder approval, to grant such Stock Options and Incentives from time to
time to acquire up to an aggregate of 20,000,000 shares of the Company's
restricted common stock.
BOARD APPROVAL
Based upon review of a wide variety of factors considered in connection
with its evaluation of the provisions and terms of the Stock Option Plan, the
Board of Directors of the Company believes that it would be in the best
interests of the Company and its shareholders to adopt the Stock Option Plan.
The Board of Directors recommends approval of the Stock Option Plan and approval
of each of the resolutions with respect thereto set forth in Exhibit A hereto.
RATIFICATION OF THE APPOINTMENT OF FIVE (5)
PERSONS TO SERVE AS DIRECTORS OF THE COMPANY
The Company's directors are elected annually to serve until the next annual
meeting of shareholders or until their successors shall have been elected and
qualified. The Company's bylaws provide that the number of directors of the
Company shall be no less than one (1) nor more than thirteen (13). The number of
directors presently authorized by resolution of the Board of Directors shall be
five (5).
-13-
INFORMATION CONCERNING DIRECTORS
XIANPING WANG has been a Director of the Company since August 5, 2004 and
has been the President and CEO of the Company since September 4, 2004. In
addition, Mr. Wang is the President of Asia-Durable (Beijing) Investments Co.,
Ltd., which is a company that has successfully invested in construction and
development projects as well as biotechnology research. From 1997 to 2002, Mr.
Wang was the President of Beijing New Fortune Investment Co., Ltd., which is a
company that has invested in real estate and other profitable projects such as
Chongqing Wanli Storage Battery Co., Ltd. and Shenzhen Technology Co., Ltd. Mr.
Wang helped Chongqing Wanli Storage Battery Co., Ltd. and Shenzhen Technology
Co., Ltd. to become publicly listed companies on Chinese stock markets in
Shanghai and Shenzhen. Mr. Wang received an Engineering Bachelor Degree from
Navy Engineering Institute in 1978 and an Economics Master Degree from Tsinghua
University in 1990.
HENRY JUNG has been a Director of the Company since September 3, 2004 and
the Chief Financial Officer since September 4, 2004. Mr. Henry Jung is as a self
employed Chartered Accountant engaged by various public and private companies to
assist them in a controllership and financial advisory capacity. These services
include preparation of financial budgets and forecasts in addition to management
of operating budgets and overseeing project programs. Mr. Jung obtained a
Bachelor of Commerce Degree from the University of British Columbia in 1974. In
addition to being a Chartered Accountant, he has completed the Canadian
Institute of Chartered Accountants in Depth Tax Course in 1979 and continued his
studies with various professional development courses with the British Columbia
Institute of Chartered Accountants. Mr. Jung has not been a director of any
other reporting issuer.
REG HANDFORD has been a Director of the Company since September 3, 2004 and
the Secretary and Treasurer since September 4, 2004. Mr. Reg Handford has been a
self employed business consultant providing management, corporate relations and
compliance services to public and private companies since 2001. Mr. Handford is
currently the President of Ardent Mines Limited and Raglan Mines Limited, two
prospective mining exploration companies, neither of which are yet listed on a
stock exchange. From October 2001 through May 2003, Mr. Handford was the
President of Bright Star Ventures Ltd., a company with a platinum-group minerals
exploration target near Princeton, British Columbia. Bright Star Ventures Ltd.
is listed on the TSX Venture Exchange. From 1999 to 2001 Mr. Handford was an
editing and marketing person for ChinaWeb a subsidiary of Stock Exchange
Executive Council, a quasi-governmental organization that is charged with
disseminating news, information and quotes from China's stock markets both
domestically and internationally. From 1998 to 1999 Mr. Handford was a pro
trader at Levesque Securities Ltd. located in Vancouver, Canada. In addition,
Mr. Handford has 17 years experience as a stock broker in Vancouver, Canada, and
10 years of personal investing experience as well as management positions in
publicly traded companies, both in mining and in technology. Mr. Handford
obtained a Bachelors of Science Degree with a concentration in mathematics from
the University of British Columbia in 1968 and a Masters of Science Degree in
mathematical logic from Simon Fraser University in 1971. Furthermore, Mr.
Handford has completed the Canadian Securities Course in 1973, the Canadian
Options Course in 1981, the Vancouver Stock Exchange Pro Trader Course in 1998
and the Trader Training Course in 1998.
EDWARD WONG has been a Director of the Company since September 3, 2004. Mr.
Edward Wong is a self employed trial lawyer who appears at all levels of court
-14-
in the Province of British Columbia, Canada on civil litigation matters
including commercial, employment, trademark and family matters. Mr. Wong has
been called and admitted to The Law Society of Upper Canada (Ontario, Canada)
and The Law Society of British Columbia. Mr. Wong received a Bachelor of Laws
from the University of Western Ontario in 1989 and a Bachelor of Arts with
Distinction from Carleton University in 1986. From 1996 to 2003, Mr. Wong was a
director of Junior Achievement of British Columbia, including a term as
chairman. Mr. Wong is a past member of the executive committee of Junior
Achievement of Canada. Mr. Wong was not been a director of any other reporting
issuer.
PETER SHANDRO has been a Director of the Company since September 3, 2004.
Mr. Peter Shandro is a self employed business consultant. From 1999 to 2003 he
was the CEO of XML Global Technologies, Inc., a software development company
focused on data transformation and web-based transactional solutions. XML global
Technologies is listed on the Over-the-Counter Bulletin Board. Mr. Shandro has
business development, corporate finance, public offering and strategic planning
experience in manufacturing, distribution, retail, medical devices, software
development, transportation and oil and gas exploration, both as a principal and
consultant through Wes-Sport Holdings Ltd., a company he founded in 1981. Mr.
Shandro obtained a Bachelors of Science Degree with a concentration in Chemistry
from the University of Alberta in 1965.
As of the date of this Information Statement, no director or executive
officer of the Company is or has been involved in any legal proceeding
concerning (i) any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (ii) any conviction in a
criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses) within the past five years; (iii)
being subject to any order, judgment or decree permanently or temporarily
enjoining, barring, suspending or otherwise limiting involvement in any type of
business, securities or banking activity; or (iv) being found by a court, the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law (and the
judgment has not been reversed, suspended or vacated).
BOARD APPROVAL
Based upon evaluation of the current directors, the Board of Directors of
the Company believes that it would be in the best interests of the Company and
its shareholders to ratify the appointment of the current directors of the
Company. The Board of Directors recommends the ratification of the appointment
of Xianping Wang, Henry Jung, Reg Handford, Edward Wong and Peter Shandro, as
directors of the Company and approval of each of the resolutions with respect
thereto set forth in Exhibit A.
RATIFICATION OF SELECTION OF
MOORE STEPHENS ELLIS FOSTER LTD.
AS INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY
As of September 4, 2004, Manning Elliot, Chartered Accoutants ("ME"), were
the principal independent accountants of the Company. The Company has decided
that it would be in the best interests of the Company to have ME remain as the
principal independent accountants for the Company for the fiscal year ended June
-15-
30, 2004, and to then engage the services of an independent accountant, which
has a current relationship with new management. Therefore, on September 4, 2004,
the board of directors of the Company authorized and approved the engagement of
Moore Stephens Ellis Foster Ltd. ("MSEF"), Chartered Accountants, 1650 West 1st
Avenue, Vancouver, British Columbia, Canada, V6J 1G1 as the principal
independent accountant for the Company for the fiscal year ending June 30, 2005.
During the Company's two most recent fiscal years and any subsequent
interim period preceding the dismissal of ME, there were no disagreements with
ME which were not resolved on any matter concerning accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of ME, would have caused ME
to make reference to the subject matter of the disagreements in connection with
its respective reports. ME, as the Company's principal independent accountant,
has not provided an adverse opinion or disclaimer of opinion to the Company's
financial statements, nor has ME modified its respective opinion as to
uncertainty, audit scope or accounting principles. The financial statements for
fiscal year ended June 30, 2002 and 2003 did contain the principal independent
accountant's modification of its opinion due to going concern uncertainties.
The Company's principal independent accountant from October 1, 2004 onward
will be Moore Stephens Ellis Foster Ltd., 1650 West 1st Avenue, Vancouver,
British Columbia, Canada, V6J 1G1.
BOARD APPROVAL
The Board of Directors of the Company believes that it would be in the best
interests of the Company and its shareholders to ratify the selection of Moore
Stephens Ellis Foster Ltd. as independent public accountants of the Company. The
Board of Directors recommends ratification of Moore Stephens Ellis Foster Ltd.
as independent public accountants of the Company for fiscal year ending June 30,
2005 and approval of each of the resolutions with respect thereto set forth in
Exhibit A.
PROPOSALS BY SECURITY HOLDERS
The Board of Directors does not know of any matters that are to be
presented to the shareholders for their approval and consent pursuant to the
Written Consent of Shareholders other than those referred to in this Information
Statement. If any shareholder of the Company entitled to vote by written
authorization or consent has submitted to the Company a reasonable time before
the Information Statement is to be transmitted to shareholders a proposal, other
than elections to offices, such proposal must be received at the Company's
offices, 505 Burrard St., Suite 1880, Vancouver, British Columbia, Canada, V7X
1M6, Attention: Secretary, not later than September 6, 2004.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS
SHARING AN ADDRESS
One Information Statement will be delivered to multiple shareholders
sharing an address unless the Company receives contrary instructions from one or
-16-
more of the shareholders. Upon receipt of such notice, the Company will
undertake to deliver promptly a separate copy of the Information Statement to
the shareholder at a shared address to which a single copy of the documents was
delivered and provide instructions as to how the shareholder can notify the
Company that the shareholder wishes to receive a separate copy of an annual
report of Information Statement. In the event a shareholder desires to provide
such notice to the Company, such notice may be given verbally by telephoning the
Company's offices at (604 681 3864) or by mail to 505 Burrard St., Suite 1880,
Vancouver, British Columbia, Canada, V7X 1M6.
By Order of the Board of Directors
By: /s/ Xianping Wang
---------------------------------
Xianping Wang, President
-17-
EXHIBIT A TO INFORMATION STATEMENT
WRITTEN CONSENT OF SHAREHOLDERS
Pursuant to Section 78.320 of the Nevada Revised Statutes, as amended,
which provides that any action required to be taken at a meeting of the
shareholders of a corporation may be taken without a meeting if, before or after
the action, a written consent setting forth the action so taken shall be signed
by the shareholders holding at least a majority of the voting power. The
undersigned, being ten (10) or less of the shareholders holding at least a
majority of the voting power of Xinhua China Ltd., a Nevada corporation (the
"Company"), do hereby take, consent, affirm and approve the following actions.
WHEREAS the board of directors of the Company at a special meeting held on
September 4, 2004 (the "Special Meeting") authorized and approved, subject to
shareholder approval, certain corporate actions, which the board of directors
deemed to be in the best interests of the Company; and its shareholders;
WHEREAS the board of directors of the Company at the Special Meeting
further authorized and directed the submission to a limited number of
shareholders of the Company holding at least a majority of the voting power the
certain corporate actions to be approved and authorized by such shareholders of
the Company;
WHEREAS Section 78.320 of the Nevada Revised Statutes, as amended, provides
that any action required to be taken at a meeting of the shareholders of a
corporation may be taken without a meeting if, before or after the action, a
written consent setting forth the action so taken shall be signed by the
shareholders holding at least a majority of the voting power;
WHEREAS the shareholders who have signed this Written Consent of
Shareholders dated to be effective as of October 5, 2004 are shareholders of
record as of September 6, 2004 and hold shares in excess of a majority of the
Company's issued and outstanding shares of Common Stock.
WHEREAS such shareholders have been fully apprised and informed of the
nature of the certain corporate actions and have concluded that approval and
authorization of such corporate actions would be beneficial to the Company and
in the best interests of its shareholders; therefore, be it
I
Approval of an Amendment to the Articles of
Incorporation of the Company to Effectuate a Increase
In the Authorized Shares of Common Stock from
100,000,000 shares to 500,000,000 shares
Resolved that, subject to regulatory approval and in compliance with the
policies of the applicable stock exchange, the filing and form of which is at
the sole and absolute discretion of the Board of Directors of the Company, the
shareholders of the Company who have signed this Written Consent of Shareholders
approve the filing of an amendment to the Articles of Incorporation of the
Company to effectuate an increase in the authorized shares of Common Stock of
the Company from 100,000,000 shares to 500,000,000 shares, and furthermore, that
the Board of Directors of the Company is authorized, in its sole and absolute
-18-
discretion, to abandon or alter any portion of the proposed increase in the
authorized shares of Common Stock of the Company at any time without the further
approval of the shareholders of the Company; and
FURTHER RESOLVED that, an amendment to the Articles of Incorporation of the
Company to effectuate an increase in the authorized shares of Common Stock of
the Company from 100,000,000 shares to 500,000,000 shares be and hereby is
approved, and that such amendment to the Articles of Incorporation be filed with
the Nevada Secretary of State at the sole and absolute discretion of the Board
of Directors of the Company.
II
Approval of an Amendment to the Articles of
Incorporation of the Company to Effectuate a Change
in Name of the Company to "Xinhua China Ltd."
RESOLVED that, subject to regulatory approval and in compliance with the
policies of the applicable stock exchange, the filing and form of which is at
the sole and absolute discretion of the Board of Directors of the Company, the
shareholders of the Company who have signed this Written Consent of Shareholders
approve the filing of an amendment to the Articles of Incorporation of the
Company to effectuate a change in the name of the Company from Camden Mines
Limited to "Xinhua China Ltd." or to such other name as may be approved by the
Board of Directors of the Company, in its sole and absolute discretion, and as
is acceptable with the appropriate regulatory authorities (the "Name Change");
and, furthermore, that the Board of Directors of the Company is authorized, in
its sole and absolute discretion, to abandon or alter any portion of the
proposed Name Change at any time without the further approval of the
shareholders of the Company; and
FURTHER RESOLVED that an amendment to the Articles of Incorporation of the
Company to effectuate a change in name of the Company to "Xinhua China Ltd." be
and hereby is approved, and that such amendment to the Articles of Incorporation
be filed with the Nevada Secretary of State at the sole and absolute discretion
of the Board of Directors of the Company.
III
Approval of the Stock Option Plan for
Key Personnel of the Company
RESOLVED that, subject to regulatory approval and in compliance with the
policies of the applicable stock exchange, the filing and form of which is at
the sole and absolute discretion of the Board of Directors of the Company, the
shareholders of the Company who have signed this Written Consent of Shareholders
do hereby approve and ratify the adoption of a stock option and incentive plan
(the "Stock Option Plan") for the Company (a) to fix the maximum number of
common shares for which options and incentive awards may be granted under the
Stock Option Plan not to exceed Twenty Million (20,000,000) shares of common
stock of the Company as at the date of adoption by the Board of Directors of the
Stock Option Plan, (b) to specify that the exercise price for any incentive
option granted under the Stock Option Plan may not be less than the fair market
-19-
value of the applicable common shares on the date of grant, and (c) to specify
that the options issued pursuant to the Stock Option Plan are non-transferable,
except in accordance with the Stock Option Plan; all on the basis as set forth
in the Stock Option Plan, a copy of which is attached to this Information
Statement and is available for inspection by the shareholders of the Company;
and furthermore, that the Board of Directors of the Company is authorized, in
its sole and absolute discretion, to abandon or alter any portion of the
proposed Stock Option Plan at any time without the further approval of the
shareholders of the Company;
FURTHER RESOLVED that, subject to regulatory approval and in compliance
with the policies of the applicable stock exchange, the filing and form of which
is at the sole and absolute discretion of the Board of Directors of the Company,
the shareholders of the Company who have signed this Written Consent of
Shareholders do hereby approve the Company's grant of stock options and/or
incentive awards (which may have special rights attached to them) to such key
personnel of the Company during the ensuing year and at such prices and in such
amounts as may be determined by the Board of Directors of the Company, in its
sole and absolute discretion, and as are acceptable with the appropriate
regulatory authorities and, in addition, approve the exercise of any such or
outstanding stock options and/or incentive awards by such key personnel of the
Company together with any amendment or amendments to any such stock option
and/or incentive award agreements at such prices and in such amounts as may be
determined by the Board of Directors of the Company, in its sole and absolute
discretion, and as are acceptable with the appropriate regulatory authorities
(collectively, the "Stock Option Approvals"); and, furthermore, that the Board
of Directors of the Company is authorized, in its sole and absolute discretion,
to abandon or alter any portion of the proposed Stock Option Approvals at any
time without the further approval of the shareholders of the Company; and
FURTHER RESOLVED that, subject to regulatory approval and in compliance
with the policies of the applicable stock exchange, the filing and form of which
is at the sole and absolute discretion of the Board of Directors of the Company,
the shareholders of the Company who have signed this Written Consent of
Shareholders, do hereby approve the preparation of and filing with the
Securities and Exchange Commission a "Form S-8 - For Registration Under the
Securities Act of 1933, as amended, of Securities to Be Offered to Employees
Pursuant to Employee Benefit Plans".
IV
Ratification of the Appointment of Five (5)
Persons to Serve as Directors of the Company
RESOLVED that, subject to regulatory approval and in compliance with the
policies of the applicable stock exchange, the filing and form of which is at
the sole and absolute discretion of the Board of Directors of the Company, the
shareholders of the Company who have signed this Written Consent of
Shareholders, do hereby ratify and approve the appointment of the following
individuals to serve as directors of the Company until the next annual meeting
of shareholders or until his respective successor shall have been duly elected
and qualified:
-20-
Xianping Wang,
Henry Jung,
Reg Handford,
Edward Wong, and
Peter Shandro
V
Moore Stephens Ellis Foster Ltd. as Independent
Public Accountants of the Company
RESOLVED that, subject to regulatory approval and in compliance with the
policies of the applicable stock exchange, the filing and form of which is at
the sole and absolute discretion of the Board of Directors of the Company, the
shareholders of the Company who have signed this Written Consent of
Shareholders, do hereby approve and ratify the selection of Moore Stephens Ellis
Foster Ltd. as the independent public accountants for the Company for fiscal
year ending June 30, 2005.
EXECUTED to be effective as of the 5th day of October, 2004.
SHAREHOLDERS:
Date: September 6, 2004 Xianping Wang
-----------------------------------
Print Name
/s/ Xianping Wang
-----------------------------------
Signature (Title if Appropriate)
B-26 Oriental Kenzo, No. 48
Dongzhimenwai, Dongcheng District
Beijing, China 100027
-----------------------------------
Address
45,000,000 (1)
Number of Shares Held of Record
-21-
Date: September 6, 2004 Reg Handford
-----------------------------------
Print Name
/s/ Reg Handford
-----------------------------------
Signature (Title if Appropriate)
505 Burrard St., Suite 1880
Vancouver, B.C.
Canada, V7X 1M6
-----------------------------------
Address
12,000 (1)
-----------------------------------
Number of Shares Held of Record
-22-
Date: September 6, 2004 Edward Wong
-----------------------------------
Print Name
/s/ Edward Wong
-----------------------------------
Signature (Title if Appropriate)
1045 Howe St., Suite 400
Vancouver, B.C.
Canada, V6Z 2A9
-----------------------------------
Address
20,000 (1) (2)
-----------------------------------
Number of Shares Held of Record
-23-
Date: September 6, 2004 Peter Shandro
-----------------------------------
Print Name
/s/ Peter Shandro
-----------------------------------
Signature (Title if Appropriate)
609 Granville St., Suite 880
P.O. Box 10321, Pacific
Centre Vancouver, B.C.
Canada, V7Y 1G2
-----------------------------------
Address
20,000 (1) (3)
-----------------------------------
Number of Shares Held of Record
- --------------------------------------------------------------------------------
(1) These are restricted shares of common stock.
(2) These shares are owned directly by Mr. Edward Wong's wife, and therefore,
indirectly by Mr. Wong. Mr. Wong has shared voting and investment control over
these shares.
(3) These shares are owned directly by Mr. Peter Shandro's wife, and therefore,
indirectly by Mr. Shandro. Mr. Shandro has shared voting and investment control
over these shares.
-24-
EXHIBIT B
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
CAMDEN MINES LIMITED
"I, the undersigned Henry Jung, Chief Financial Officer of Camden Mines
Limited (the "Company"), do hereby certify that the Board of Directors of said
Company at a meeting duly convened and held on the 4th day of September, 2004,
adopted a resolution to amend the original articles as follows:
A. ARTICLE FIRST
The name of the corporation is Camden Mines Limited
Article FIRST is hereby amended to read as follows:
The name of the corporation is Xinhua China Ltd.
B. Article FOURTH
The amount of the total authorized capital stock of the corporation is
One Thousand Dollars ($1,000.00) consisting of One Hundred Million
(100,000,000) shares of common stock of the par value of $0.00001 each.
Article FOURTH is hereby amended to read as follows:
The amount of the total authorized capital stock of the corporation is
Five Thousand Dollars ($5,000.00) consisting of Five Hundred Million
(500,000,000) shares of common stock of the par value of $0.00001 each.
IN WITNESS WHEREOF, Camden Mines Limited has caused these presents to be
signed in its name and on its behalf by Henry Jung, its Chief Financial Officer
on this 6th day of September, 2004, and its Chief Financial Officer acknowledges
that this Certificate of Amendment is the act and deed of Camden Mines Limited,
and, under the penalties of perjury, that the matters and facts set forth herein
with respect to authorization and approval are true in all material respects to
the best of his knowledge, information and belief.
CAMDEN MINES LIMITED.
By: /s/ Henry Jung
---------------------------
Henry Jung, Chief Financial
Officer"
-25-
EXHIBIT C
CAMDEN MINES LIMITED
--------------------
2004 STOCK OPTION AND INCENTIVE PLAN
------------------------------------
1. Purposes of the Plan.
- --------------------------
The purposes of this Plan are to (i) attract and retain the best available
personnel for positions of responsibility within Camden Mines Limited (the
"Company"), (ii) provide additional incentives to Employees of the Company,
(iii) provide Directors, Consultants and Advisors of the Company with an
opportunity to acquire a proprietary interest in the Company to encourage their
continued provision of services to the Company and to provide such persons with
incentives and rewards for superior performance more directly linked to the
profitability of the Company's business and increases in shareholder value, and
(iv) generally to promote the success of the Company's business and the
interests of the Company and all of its stockholders, through the grant of
options to purchase shares of the Company's Common Stock and other incentives.
Incentive benefits granted hereunder may be either Incentive Stock Options,
Non-qualified Stock Options, stock awards, Restricted Shares, cash awards or
other incentives determined by the board, as such terms are hereinafter defined.
The types of options or other incentives granted shall be reflected in the terms
of written agreements.
2. Definitions.
- -----------------
As used herein, the following definitions shall apply:
2.1 "Board" shall mean the Board of Directors of Camden Mines Limited.
-----
2.2 "Change of Control" means a change in ownership or control of the
-------------------
Company effected through any of the following transactions:
(a) the direct or indirect acquisition by any person or related group
of persons (other than by the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer made
directly to the Company's shareholders, or other transaction, in each case which
the Board does not recommend such shareholders to accept; or
(b) a change in the composition of the Board over a period of 12
consecutive months or less such that a majority of the Board members (rounded up
to the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (i) who were still in
-26-
office at the time such election or nomination was approved by the Board; or
(c) a Corporate Transaction as defined below.
2.3 "Code" shall mean the US Internal Revenue Code or analogous
----
legislation, as amended from time to time, and the rules and regulations
promulgated thereunder.
2.4 "Committee" shall mean the Committee constituting the Board in
---------
accordance with Section 4.1 of the Plan, if one is appointed.
2.5 "Common Stock" or "Common Shares" shall mean (i) shares of the common
------------ --------------
stock, no par value, of the Company described in the Company's Articles of
Incorporation, as amended, and (ii) any security into which Common Shares may be
converted by reason of any transaction or event of the type referred to in
Section 12 of this Plan.
2.6 "Company" shall mean Camden Mines Limited, a Nevada corporation, and
-------
shall include any parent or subsidiary corporation of the Company.
2.7 "Consultants" and "Advisors" shall include any third party retained or
----------- --------
engaged by the Company to provide service to the Company, including any employee
of such third party providing such services.
2.8 "Corporate Transaction" means any of the following
-------------------------
shareholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated;
(b) the sale, transfer or other disposition of all or substantially
all of the assets of the Company in complete liquidation or dissolution of the
Company; or
(c) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than 50% of the total combined voting
power of the Company's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately prior to
such merger.
2.9 "Date of Grant" means the date specified by the Board or the Committee
-------------
on which a grant of Options, Stock Appreciation Rights, Performance Shares of
Performance Units or a grant or sale of Restricted Shares or Deferred Shares
shall become effective.
2.10 "Deferral Period" means the period of time during which Deferred
----------------
Shares are subject to deferral limitations under Section 9.3 of this Plan.
2.11 "Deferred Shares" means an award pursuant to Section 9 of this Plan of
---------------
the right to receive Common Shares at the end of a specified Deferral Period.
-27-
2.12 "Director" shall mean a member of the Board.
--------
2.13 "Effective Date" shall have the meaning ascribed thereto in Section 6.
--------------
2.14 "Employee" shall mean any person, including officers and directors,
--------
employed by the Company. The payment of a director's fee by the Company shall
not be sufficient to constitute "employment" by the Company. For inclusiveness
purposes, but not having legal effect as to obligations and liabilities,
Employee in this Agreement may also encompass Consultants and Advisors where
such is appropriate or where such is intended by the Board or by a particular
grant hereunder.
2.15 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
-------------
amended, and all pertinent rules and regulations.
2.16 "Fair Market Value" shall mean, with respect to the date a given
-------------------
Option or other incentive is granted or exercised, the value of the Common Stock
determined by the Board in such manner as it may deem equitable for Plan
purposes but, in the case of an Incentive Stock Option, no less than is required
by applicable laws or regulations; provided, however, that where there is a
public market for the Common Stock, the Fair Market Value per share shall be not
less than the closing price for the Common Stock on the last trading day
preceding the Date of Grant, as reported by the National Association of
Securities Dealers Automated Quotation System - Small Cap or National Markets or
the National Association of Security Dealers Over the Counter Bulletin Board or
other exchange on which the Company is listed and as determined by the Board;
provided, further, that if the Common Stock is not listed on any exchange, the
Fair Market Value per share shall not be less than the average of the means
between the bid and asked prices quoted on each such date by any two independent
persons or entities making a market for the Common Stock, such persons or
entities to be selected by the Board.
2.17 "Incentive Agreement" shall mean the written agreement between the
--------------------
Company and the Participant relating to Incentive Stock Options, Non-qualified
Stock Options, stock awards, Restricted Shares and cash awards granted under the
Plan, and shall include an Incentive Stock Option Agreement, Non-qualified Stock
Option Agreement or other form of Agreement which may be approved by the Board.
2.18 "Incentive Award" shall mean the award of one or more Incentives.
---------------
2.19 "Incentive Stock Option" shall mean an Option which is intended to
------------------------
qualify as an incentive stock option within the meaning of Section 422 of the
Code, or any successor provision thereto.
2.20 "Incentives" shall mean those incentive benefits which may be granted
----------
from time to time under the terms of the Plan which include Incentive Stock
Options, Non-qualified Stock Options, stock awards, Restricted Shares and cash
awards.
2.21 "Management Objectives" means the achievement of performance
-----------------------
-28-
objectives established pursuant to this Plan for Participants who have received
grants of Performance Shares or Performance Units or, when so determined by the
Board or the Committee, Restricted Shares.
2.22 "Non-qualified Stock Option" means an Option that is not intended to
----------------------------
qualify as a Tax-Qualified Option.
2.23 "Option Price" means the purchase price payable upon the exercise of
-------------
an Option.
2.24 "Option" means the right to purchase Common Shares from the Company
------
upon the exercise of a Non-qualified Stock Option or a Tax-Qualified Option
granted pursuant to Section 7 of this Plan.
2.25 "Optioned Stock" shall mean the Common Stock subject to an Option.
--------------
2.26 "Option Term" shall have the meaning ascribed to it in Section 7.3.
-----------
2.27 "Optionee" shall mean an Employee, Director, Consultant or Advisor of
--------
the Company who has been granted one or more Options.
2.28 "Parent" shall mean a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
2.29 "Participant" means a person who is selected by the Board or a
-----------
Committee to receive benefits under this Plan and (i) is at that time an
officer, including without limitation an officer who may also be a member of the
Board, director, or other employee of, or a Consultant or Advisor, to the
Company, or (ii) has agreed to commence serving in any such capacity.
2.30 "Performance Period" means, in respect of a Performance Share or
-------------------
Performance Unit, a period of time established pursuant to Section 10 of this
Plan within which the Management objectives relating thereto are to be achieved.
2.31 "Performance Share" means a bookkeeping entry that records the
------------------
equivalent of one Common Share awarded pursuant to Section 10 of this Plan.
2.32 "Performance Unit" means a bookkeeping entry that records a unit
-----------------
equivalent to the Board selected monetary unit awarded pursuant to Section 10 of
this Plan.
2.33 "Plan" shall mean this Stock Option and Incentive Plan, as amended
----
from time to time in accordance with the terms hereof.
2.34 "Restricted Shares" means Common Shares granted or sold pursuant to
------------------
section 8 of this Plan as to which neither the substantial risk of forfeiture
nor the restrictions on transfer referred to in Section 8.9 hereof has expired.
2.35 "Rule 16b-3" means Rule 16b-3, as promulgated and amended from time to
----------
-29-
time by the Securities and Exchange Commission under the Exchange Act, or any
successor rule to the same effect.
2.36 "Share" shall mean a share of the Common Stock, as adjusted in
-----
accordance with Section 11 of the Plan.
2.37 "Subsidiary" shall mean a "subsidiary corporation," whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
2.38 "Tax Date" shall mean the date an Optionee is required to pay the
--------
Company an amount with respect to tax withholding obligations in connection with
the exercise of an option.
2.39 "Tax-Qualified Option" means an Option that is intended to qualify
---------------------
under particular provisions of the Code, including without limitation an
Incentive Stock Option.
2.40 "Termination Date" shall have the meaning ascribed thereto in Section
-----------------
6.
3. Common Stock Subject to the Plan.
- --------------------------------------
3.1 Subject to the provisions of Section 11 of the Plan, the maximum
aggregate number of shares which may be optioned and sold or otherwise awarded
under the Plan is Twenty Million (20,000,000) Common Shares. Any Common Shares
available for grants and awards at the end of any calendar year shall be carried
over and shall be available for grants and awards in the subsequent calendar
year. For the purposes of this Section 3:
(a) Upon payment of cash in lieu of exercise provided by any award
granted under this Plan, or upon expiration or cancellation of any award granted
under this Plan, any Common Shares that were covered by such award and not
issued shall again be available for issuance hereunder.
(b) Common Shares covered by any award granted under this Plan shall
be deemed to have been issued or transferred, and shall cease to be available
for future issuance or transfer in respect of any other award granted hereunder,
at the earlier of the time when they are actually issued or transferred or the
time when dividends or dividend equivalents are paid thereon; provided, however,
that Restricted Shares shall be deemed to have been issued or transferred at the
earlier of the time when they cease to be subject to a substantial risk of
forfeiture or the time when dividends are paid thereon.
(c) Performance Units that are granted under this Plan and are paid
in Common Shares but are not earned by the Participant at the end of the
Performance Period shall be available for future grants of incentives hereunder.
-30-
4. Administration of the Plan.
- --------------------------------
4.1 Procedure.
----------
(a) The Board shall administer the Plan and is the body responsible
for the Plan; provided, however, that the Board may appoint a Committee
consisting solely of two (2) or more "Non-Employee Directors" to conduct
day-to-day administration of the Plan on behalf of the Board, in accordance with
Rule 16b-3 and subject to the authority of the Board.
(b) Once appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause), appoint new members in substitution therefor, and fill
vacancies however caused; provided, however, that at no time may any person
serve on the Committee if that person's membership would cause the committee not
to satisfy the requirements of Rule 16b-3.
(c) A majority of the Committee shall constitute a quorum, and the
acts of the members of the Committee who are present at any meeting thereof at
which a quorum is present, or acts unanimously approved by the members of the
Committee in writing, shall be the acts of the Committee.
(d) Any reference herein to the Board shall, where appropriate,
encompass a Committee appointed to administer the Plan in accordance with this
Section 4.
4.2 Power of the Board or the Committee
-----------------------------------
(a) Subject to the provisions of the Plan, the Board shall have the
authority, in its discretion: (i) to grant Options or Incentive Awards to
Participants; (ii) to determine, upon review of relevant information and in
accordance with Section 2.16 of the Plan, the Fair Market Value of the Common
stock; (iii) to determine the exercise price per share of Options to be granted,
which exercise price shall be determined in accordance with Section 7.14 of the
Plan; (iv) to determine the number of Common Shares to be represented by each
Option or Incentive Award; (v) to determine the Participants to whom, and the
time or times at which, Options and Incentive Awards shall be granted; (vi) to
interpret the Plan; (vii) to prescribe, amend and rescind rules and regulations
relating to the Plan; (viii) to determine the terms and provisions of each
Option and Incentive Award granted (which need not be identical) and, with the
consent of the grantee thereof, modify or amend such Option or Incentive Award;
(ix) to accelerate or defer (with the consent of the grantee) the exercise date
of any Option or Incentive Award; (x) to authorize any person to execute on
behalf of the Company any instrument required to effectuate the grant of an
Option or Incentive Award previously granted by the Board; (xi) to accept or
reject the election made by a grantee pursuant to Section 7.5 of the Plan; and
(xii) to make all other determinations deemed necessary or advisable for the
administration of the Plan.
(b) The Board or a Committee may delegate to an officer of the
Company the authority to make decisions pursuant to this Plan, provided that no
-31-
such delegation may be made that would cause any award or other transaction
under the Plan to cease to be exempt from Section 16(b) of the Exchange Act. A
Committee may authorize any one or more of its members or any officer of the
Company to execute and deliver documents on behalf of the Committee.
4.3 Effect of Board or Committee Decisions. All decisions and
----------------------------------------------
determinations and the interpretation and construction by the Board or a
Committee of any provision of this Plan or any agreement, notification or
document evidencing the grant of Options, Restricted Shares, Deferred Shares,
Performance Shares or Performance Units, and any determination by the Board or a
Committee pursuant to any provision of this plan or any such agreement,
notification or document, shall be final, binding and conclusive with respect to
all grantees and any other holders of any Option or Incentive Award granted
under the Plan. No member of the Board or a Committee shall be liable for any
such action taken or determination made in good faith.
5. Eligibility.
- -----------------
Consistent with the Plan's purposes, Options and Incentive Awards may be
granted only to such Directors, Officers, Employees, Consultants and Advisors of
the Company as determined by the Board. Subject to the terms of the Plan, an
Employee, Officer, Director, Consultant or Advisor who has been granted an
Option or Incentive Award may, if he is otherwise eligible, be granted an
additional Option or Incentive Award.
6. Board Approval; Effective Date; Termination Date.
- ------------------------------------------------------
The Plan shall take effect on September 3, 2004 (the "Effective Date"). The
Plan shall terminate on September 3, 2014 (the "Termination Date"); accordingly,
no Incentive Award or Option under this Plan may be granted after the
Termination Date but the term of an award may extend beyond the Plan Termination
Date.
7. Stock Options.
- -------------------
The Board or the Committee may from time to time authorize grants to
Participants of Options to purchase Common Shares upon such terms and conditions
as the Board or the Committee may determine in accordance with the following
provisions:
7.1 Options to be Granted; Terms.
-----------------------------
(a) Options granted pursuant to this Section 7 may be Non-qualified
Stock Options or Tax-Qualified Options or combinations thereof. The Board or the
Committee shall determine the specific terms of Options.
(b) Each grant shall specify the period or periods of continuous
employment, or continuous engagement of the consulting or advisory services, of
the Optionee by the Company or any Subsidiary that are necessary before the
Options or installments thereof shall become exercisable.
(c) Any grant of a Non-qualified Stock Option may provide for the
-32-
payment to the Optionee of dividend equivalent thereon in cash or Common Shares
on a current, deferred or contingent basis, or the Board or the Committee may
provide that any dividend equivalents shall be credited against the Option
Price.
7.2 Number of Shares Subject to Options. Each grant shall specify the
--------------------------------------
number of Common Shares to which it pertains. Successive grants may be made to
the same Optionee regardless of whether any Options previously granted to the
Optionee remain unexercised.
7.3 Term of Option; Earlier Termination. Subject to the further provisions
------------------------------------
of this Section 7, unless otherwise provided in the Option Agreement, the term
(the "Option Term") of each Option shall be five (5) years from the Date of
Grant.
7.4 Exercise Price.
---------------
(a) Each grant shall specify an Option Price per Common Share for the
Common Share to be issued pursuant to exercise of an Option, which shall be
determined by the Board or the Committee. Unless otherwise determined by the
Board an Incentive Stock Option shall be no less than one hundred percent (100%)
of the Fair Market Value per share on the Date of Grant, and in the case of a
Non-qualified Stock Option shall be no less than seventy-five percent (75%) of
the Fair Market Value per share on the Date of Grant.
(b) With respect to Incentive Stock Options, the aggregate Fair
Market Value (determined as of the respective Date or Dates of Grant) of the
Common Shares for which one or more options granted to any Optionee under this
Plan may for the first time become exercisable as Incentive Stock Options under
the federal tax laws during any one calendar year (under all employee benefit
plans of the Company) shall not exceed $100,000. To the extent that the Optionee
holds two or more such options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the exercisability of such
options as Incentive Stock Options under the deferral tax laws shall be applied
on the basis of the order in which such options are granted. Should the number
of Common Shares for which any Incentive Stock Option first becomes exercisable
in any calendar year exceed the applicable $100,000 limitation, then that Option
may nevertheless be exercised in such calendar year for the excess number of
Shares as a Non-qualified Stock Option under the federal tax laws.
7.5 Payment for Shares. The price of an exercised Option and any taxes
--------------------
attributable to the delivery of Common Stock under the Plan, or portion thereof,
shall be paid as follows:
(a) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of United States currency
or check or other cash equivalent acceptable to the Company, (ii)
nonforfeitable, unrestricted or restricted Common Shares, which are already
owned by the Optionee and have a market referenced value at the time of exercise
that is equal to the Option Price, (iii) any other legal consideration that the
Board or the Committee may deem appropriate, including without limitation any
form of consideration authorized pursuant to this Section 7 on such basis as the
Board or the Committee may determine in accordance with this Plan, and (iv) any
-33-
combination of the foregoing. The Board (or Committee) in its sole discretion
may permit a so-called "cashless exercise" (net exercise) of the Options.
In the event of a cashless exercise of the Option the Company shall issue
the Option holder the number of Shares determined as follows:
X = Y (A-B)/A
where:
X = the number of Shares to be issued to the Optionholder.
Y = the number of Shares with respect to which the Option is being
exercised.
A = the average of the closing sale prices of the Common Stock for the
five (5) Trading Days immediately prior to (but not including) the
Date of Exercise.
B = the Exercise Price.
(b) Any grant of a Non-qualified Stock Option may provide that
payment of the Option Price may also be made in whole or in part in the form of
Restricted Shares or other Common Shares that are not subject to risk of
forfeiture or restrictions on transfer in the manner determined by the Board.
Unless otherwise determined by the Board or the Committee on or after the Date
of Grant, whenever any Option Price is paid in whole or in part by means of any
of the forms of consideration specified in this Section 7.5(b), the Common
Shares received by the Optionee upon the exercise of the Non-qualified Stock
Option shall be subject to the same risks of forfeiture as those that applied to
the consideration surrendered by the Optionee; provided, however, that such
risks of forfeiture shall apply only to the same number of Common Shares
received by the Optionee as applied to the forfeitable Common Shares surrendered
by the Optionee.
(c) Any grant may allow for deferred payment of the Option Price
through a sale and remittance procedure by which a Participant shall provide
concurrent irrevocable written instructions to (i) a Company-designated
brokerage firm to effect the immediate sale of the purchased Common Shares and
remit to the company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Option Price payable for the purchased
Common Share, and (ii) the Company to deliver the certificates for the purchased
Common Shares directly to such brokerage firm to complete the sale transaction.
(d) The Board or Committee shall determine acceptable methods for
tendering Common Stock as payment upon exercise of an Option and may impose such
limitations and prohibitions on the use of Common Stock to exercise an Option as
it deems appropriate.
7.6 Rights as a Stockholder. Until the issuance (as evidenced by the
-------------------------
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Common Shares, no
right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
-34-
Option. No adjustment will be made for a dividend or the right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan.
7.7 Loans or Installment Payments; Bonuses.
---------------------------------------
(a) The Board or the Committee may, in its discretion, assist any
Participant in the exercise of one or more awards under the plan, including the
satisfaction of any federal, state, local and foreign income and employment tax
obligations arising therefrom, by (i) authorizing the extension of a loan from
the Company to such Participant; or (ii) permitting the participant to pay the
exercise price or purchase price for the purchased shares in installments; or
(iii) a guaranty by the Company of a loan obtained by the Optionee from a third
party; or (iv) granting a cash bonus to the Participant to enable the
Participant to pay federal, state, local and foreign income and employment tax
obligations arising from an award.
(b) Any loan or installment method of payment (including the interest
rate and terms of repayment) shall be upon such terms as the Board or the
Committee specifies in the applicable Incentive Agreement or otherwise deems
appropriate under the circumstances. Loans or installment payments may be
authorized with or without security or collateral. However, the maximum credit
available to the Participant may not exceed the exercise or purchase price of
the acquired shares (less the par value of such shares) plus any federal, state
and local income and employment tax liability incurred by the Participant in
connection with the acquisition of such shares. The amount of any bonus shall be
determined by the Board or the Committee in its sole discretion under the
circumstances.
(c) The Board or the Committee may, in its absolute discretion,
determine that one or more loans extended under this financial assistance
program may be subject to forgiveness by the Company in whole or in part upon
such terms and conditions as the Board or the Committee may deem appropriate;
provided, however, that the Board or the Committee shall not forgive that
portion of any loan owed to cover the par value of the Common Shares.
7.8 Exercise of Option.
-------------------
(a) Procedure for Exercise.
-----------------------
(i) Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Board, including
performance criteria with respect to the Company and/or the Optionee, and as
shall be permissible under the terms of the Plan. Unless otherwise determined by
the Board at the time of grant, an Option may be exercised in whole or in part.
An Option may not be exercised for a fraction of a share.
(ii) An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Common Shares with respect to which the Option is exercised has
been received by the Company. Full payment may, as authorized by the Board,
consist of any consideration and method of payment allowable under Section 7.5
of the Plan.
-35-
(iii) Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Common
Shares as to which the Option is exercised.
(b) Termination of Status as an Employee. Unless otherwise provided
-------------------------------------
in an Incentive Agreement, if an Employee's employment by the Company is
terminated, except if such termination is voluntary or occurs due to retirement
with the consent of the Board or due to death or disability, then the Option, to
the extent not exercised, shall terminate on the date on which the Employee's
employment by the Company is terminated. If an Employee's termination is
voluntary or occurs due to retirement with the consent of the Board, then the
Employee may after the date such Employee ceases to be an employee of the
Company, exercise his Option at any time within three (3) months after the date
he ceases to be an Employee of the Company, but only to the extent that he was
entitled to exercise it on the date of such termination. To the extent that he
was not entitled to exercise the Option at the date of such termination, or if
he does not exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate. In no event may the period of
exercise in the case of Incentive Stock Options extend more than three (3)
months beyond termination of employment.
(c) Disability. Unless otherwise provided in the Incentive Agreement,
-----------
notwithstanding the provisions of Section 7.8(b) above, in the event an Employee
is unable to continue his employment with the Company as a result of his
permanent and total disability (as defined in Section 22(e)(3) of the Code), he
may exercise his Option at any time within six (6) months from the date of
termination, but only to the extent he was entitled to exercise it at the date
of such termination. To the extent that he was not entitled to exercise the
Option at the date of termination, or if he does not exercise such Option (which
he was entitled to exercise) within the time specified herein, the Option shall
terminate. In no event may the period of exercise in the case of an Incentive
Stock Option extend more than six (6) months beyond the date the Employee is
unable to continue employment due to such disability.
(d) Death. Unless otherwise provided in the Incentive Agreement, if
------
an Optionee dies during the term of the Option and is at the time of his death
an Employee who shall have been in continuous status as an Employee since the
date of Grant of the Option, the Option may be exercised at any time within six
(6) months following the date of death by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that an Optionee was entitled to exercise the Option on the
date of death, or if the Optionee's estate, or person who acquired the right to
exercise the Option by bequest or inheritance, does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate. In no event may the period of exercise in the case of an
Incentive Stock Option extend more than six (6) months beyond the date of the
Employee's death.
7.9 Option Reissuance. The Board or the Committee shall have the authority
------------------
to effect, at any time and from time to time, with the consent of the affected
Participant, the cancellation of any or all outstanding Options under this
Section 7 and grant in substitution new Options under the Plan covering the same
or a different number of Common Shares but with an exercise price not less than
(i) 75% of the Fair Market Value per share on the new Date of Grant or (ii) 100%
of the Fair Market Value per share in the case of Incentive Stock Options.
-36-
7.10 Incentive Stock Options - Disposition of Shares. In the case of an
---------------------------------------------------
Incentive Stock Option, a Participant who disposes of Common Shares acquired
upon exercise of such Incentive Stock Option by sale or exchange (i) within two
(2) years after the Date of Grant of the Option, or (ii) within one (1) year
after the exercise of the Option, shall notify the Company of such disposition
and the amount realized upon such disposition.
7.11 Incentive Agreement. Each grant shall be evidenced by an agreement,
---------------------
which shall be executed on behalf of the Company by any officer thereof and
delivered to and accepted by the Optionee and shall contain such terms and
provisions as the Board or the Committee may determine consistent with this
Plan.
8. Restricted Shares.
- -----------------------
Restricted Shares are shares of Common Stock which are sold or transferred
by the Company to a Participant at a price which may be below their Fair Market
Value, or for no payment, but subject to restrictions on their sale or other
transfer by the Participant. The transfer of Restricted Shares and the transfer
and sale of Restricted Shares shall be subject to the following terms and
conditions:
8.1 Number of Shares. The number of Restricted Shares to be transferred or
-----------------
sold by the Company to a Participant shall be determined by the Board or
Committee, if any.
8.2 Sale Price. The Board shall determine the prices, if any, at which
-----------
Restricted Shares shall be sold to Participant, which may vary from time to time
and among Participants, and which may be below the Fair Market Value of such
shares of Common Stock on the date of sale.
8.3 Restrictions. All Restricted Shares transferred or sold hereunder
-------------
shall be subject to such restrictions as the Board may determine, including,
without limitation, any or all of the following:
(a) a prohibition against the sale, transfer, pledge or other
encumbrance of the Restricted Shares, such prohibition to lapse at such time or
times as the Board or the Committee shall determine (whether in annual or more
frequent installments, at the time of the death, disability or retirement of the
holder of such Restricted Shares, or otherwise);
(b) a requirement that the holder of Restricted Shares forfeit or
resell back to the Company, at his cost, all or a part of such Restricted Shares
in the event of termination of his employment during any period in which such
Restricted Shares are subject to restrictions; and
(c) a prohibition against employment of the holder of such Restricted
Shares by any competitor of the Company or a subsidiary of the Company, or
against such holder's dissemination of any secret or confidential information
belonging to the Company or a subsidiary of the Company.
8.4 Escrow. In order to enforce the restrictions imposed by the Board
-------
pursuant to Section 8.3 above, the Participant receiving Restricted Shares shall
enter into an agreement with the Company setting forth the conditions of the
grant. Restricted Shares shall be registered in the name of the Participant and
deposited, together with a stock power endorsed in blank, with the Company.
-37-
8.5 End of Restrictions. Subject to Section 8.3, at the end of any time
---------------------
period during which the Restricted Shares are subject to forfeiture and
restrictions on transfer, such Restricted Shares will be delivered, free of all
restrictions, to the Participant or to the Participant's legal representative,
beneficiary or heir.
8.6 Stockholder. Subject to the terms and conditions of the Plan, each
------------
Participant receiving Restricted Shares shall have all the rights of a
stockholder with respect to such shares of stock during any period which such
shares are subject to forfeiture and restrictions on transfer, including,
without limitation, the right to vote such shares. Dividends paid in cash or
property other than Common Stock with respect to the Restricted Shares shall be
paid to the Participant currently.
8.7 Ownership of Restricted Shares. Each grant or sale shall constitute an
-------------------------------
immediate transfer of the ownership of the Restricted Shares to the Participant
in consideration of the performance of services, entitling such Participant to
dividend, voting and other ownership rights, subject to the "substantial risk of
forfeiture" and restrictions on transfer referred to hereinafter.
8.8 Additional Consideration. Each grant or sale may be made without
--------------------------
additional consideration from the Participant or in consideration of a payment
by the Participant that is less than the Fair Market Value per share on the Date
of Grant.
8.9 Substantial Risk of Forfeiture.
-------------------------------
(a) Each grant or sale shall provide that the Restricted Shares
covered thereby shall be subject to a "substantial risk of forfeiture" within
the meaning of Section 83 of the Code for a period to be determined by the Board
or the Committee on the Date of Grant.
(b) Each grant or sale shall provide that, during the period for
which substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Board or the Committee on the Date or Grant. Such
restrictions may include without limitation rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any transferee.
8.10 Dividends. Any grant or sale may require that any or all dividends or
----------
other distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered and reinvested on an immediate or
deferred basis in additional Common Shares, which may be subject to the same
restrictions as the underlying award or such other restrictions as the Board of
the Committee may determine.
8.11 Additional Grants. Successive grants or sales may be made to the same
------------------
Participant regardless of whether any Restricted Shares previously granted or
sold to a Participant remain restricted.
-38-
9. Deferred Shares.
- ---------------------
The Board or the Committee may authorize grants or sales of Deferred Shares
to Participants upon such terms and conditions as the Board or the Committee may
determine in accordance with the following provisions:
9.1 Performance Conditions. Each grant or sale shall constitute the
------------------------
agreement by the Company to issue or transfer Common Shares to the Participant
in the future in consideration of the performance of services, subject to the
fulfillment during the Deferral Period of such conditions as the Board or the
Committee may specify.
9.2 Additional Consideration. Each grant or sale may be made without
--------------------------
additional consideration from the Participant or in consideration of a payment
by the participant that is less than the Fair Market Value per shares on the
Date of Grant.
9.3 Deferral Period. Each grant or sale shall provide that the Deferred
-----------------
Shares covered thereby shall be subject to a Deferral Period, which shall be
fixed by the Board or the Committee on the Date of Grant.
9.4 Ownership of Shares. During the Deferral Period, the Participant shall
--------------------
not have any right to transfer any rights under the subject award, shall not
have any rights of ownership in the Deferred Shares and shall not have any right
to vote the Deferred Shares, but the Board or the Committee may on or after the
Date of Grant authorize the payment of dividend equivalents on the Deferred
Shares in cash or additional Common Shares on a current, deferred or contingent
basis.
9.5 Additional Grants. Successive grants or sales may be made to the same
------------------
Participant regardless of whether any Deferred Shares previously granted or sold
to a Participant have vested.
9.6 Agreement. Each grant or sale shall be evidenced by an agreement,
----------
which shall be executed on behalf of the Company by any officer thereof and
delivered to and accepted by the Participant and shall contain such terms and
provisions as the Board or the Committee may determine consistent with this
Plan.
10. Performance Shares and Performance Units.
- ----------------------------------------------
The Board or the Committee may authorize grants of Performance Shares and
Performance Units, which shall become payable to the Participant upon the
achievement of specified Management Objectives, upon such terms and conditions
as the Board or the Committee may determine in accordance with the following
provisions:
10.1 Number. Each grant shall specify the number of Performance Shares or
-------
Performance Units to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors.
-39-
10.2 Performance Period. The Performance Period with respect to each
--------------------
Performance Share or Performance Unit shall be determined by the Board or the
Committee on the Date of Grant.
10.3 Management Objectives.
----------------------
(a) Each grant shall specify the Management Objectives that are to be
achieved by the Participant, which may be described in terms of Company-wide
objectives or objectives that are related to the performance of the individual
Participant or the Subsidiary, division, department or function within the
Company or Subsidiary in which the Participant is employed or with respect to
which the participant provides consulting services.
(b) Each grant shall specify in respect of the specified Management
Objectives a minimum acceptable level of achievement below which no payment will
be made and shall set forth a formula for determining the amount of any payment
to be made if performance is at or above the minimum acceptable level but falls
short of full achievement of the specified Management Objectives.
(c) The Board or the Committee may adjust Management Objectives and
the related minimum acceptable level of achievement if, in the sole judgment of
the Board or the Committee, events or transactions have occurred after the Date
of Grant that are unrelated to the performance of the Participant and result in
distortion of the Management Objectives or the related minimum acceptable level
of achievement.
10.4 Payment.
--------
(a) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been earned, and any
grant may specify that any such amount may be paid by the Company in cash,
Common Shares or any combination thereof and may either grant to the Participant
or reserve to the Board or the Committee the right to elect among those
alternatives.
(b) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified by the Board or
the Committee on the Date of Grant. Any grant of Performance Units may specify
that the amount payable, on the number of Common Shares issued, with respect
thereto may not exceed maximums specified by the Board or the Committee Shares
on the Date of Grant.
10.5 Dividends. On or after the Date of Grant of Performance Shares, the
----------
Board or the Committee may provide for the payment to the Participant of
dividend equivalents thereon in cash or additional Common Shares on a current,
deferred or contingent basis.
10.6 Additional Grants. Successive grants may be made to the same
-------------------
Participant regardless of whether any Performance Shares or Performance Units
granted to any Participant have vested.
10.7 Agreement. Each grant shall be evidenced by an agreement, which shall
----------
be executed on behalf of the Company by any officer thereof and delivered to and
-40-
accepted by the Participant and shall contain such terms and provisions as the
Board or the Committee may determine consistent with this Plan.
11. Adjustments Upon Changes in Capitalization or Merger.
- ----------------------------------------------------------
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each outstanding Option or Incentive
Award, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options nor Incentive Awards have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Incentive Award, as well as the price per share of
Common Stock covered by each such outstanding Option or Incentive Award, shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof, shall be made
with respect to the number or price of shares of Common Stock subject to an
Option or Incentive Award.
In the event of the proposed dissolution or liquidation of the Company, all
Options and Incentive Awards will terminate immediately prior to the
consummation of such proposed action unless otherwise provided by the Board. The
Board may, in the exercise of its sole discretion in such instances, declare
that any Option or Incentive Award shall terminate as of a date fixed by the
Board and give each holder the right to exercise of its sole discretion in such
instances, declare that any Option or Incentive Award shall terminate as of a
date fixed by the Board and give each holder the right to exercise his Option or
Incentive Award as to all or any part thereof, including Shares as to which the
Option or Incentive Award would not otherwise be exercisable. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the Option or Incentive
Award shall be assumed or an equivalent Option or Incentive Award shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the holder shall
have the right to exercise the Option or Incentive Award as to all of the
Shares, including Shares as to which the Option or Incentive Award would not
otherwise be exercisable. If the Board makes an Option or Incentive Award
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the holder that the Option or Incentive
Award shall be fully exercisable for a period of sixty (60) days from the date
of such notice (but not later than the expiration of the term of the Option or
Incentive Award), and the Option or Incentive Award will terminate upon the
expiration of such period.
12. Transferability.
- ---------------------
Except to the extent otherwise expressly provided in an award, the right to
-41-
acquire Common Shares or other assets under the Plan may not be assigned,
encumbered or otherwise transferred by a Participant and any attempt by a
Participant to do so will be null and void. However Option or Incentive Awards
granted under this Plan may be transferred by a Participant by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security
Act, as amended, or the rules thereunder. Unless assigned in accordance with the
terms of an award, options and other awards granted under this Plan may not be
exercised during a Participant's lifetime except by the Participant or, in the
event of the Participant's legal incapacity, by his guardian or legal
representative acting in a fiduciary capacity on behalf of the Participant under
state law and court supervision.
13. Time of Granting Incentives.
- ---------------------------------
The Date of Grant of an Option or Incentive Award shall, for all purposes,
be the date on which the Board or Committee makes the determination granting
such Option or Incentive Award. Notice of the determination shall be given to
each Participant to whom an Option or Incentive Award is so granted within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
- -------------------------------------------
14.1 The Board may amend or terminate the Plan from time to time in such
respects as the Board may deem advisable; provided, however, that the following
revisions or amendments shall require approval of the holders of a majority of
the outstanding Shares of the Company entitled to vote thereon, to the extent
required by law, rule or regulation:
(a) Any increase in the number of Shares subject to the Plan, other
than in connection with an adjustment under Section 11 of the Plan;
(b) Any change in the designation of the persons eligible (or any
change in the class of Employees eligible, in the case of Incentive Stock
Options) to be granted Options or Incentive Awards involving Shares; or
(c) If the Company has a class of equity security registered under
Section 12 of the Exchange Act at the time of such revision or amendment, any
material increase in the benefits accruing to participants under the Plan.
14.2 Notwithstanding the foregoing, stockholder approval under this Section
14 shall only be required at such time as (A) any rules of the National
Association of Securities Dealers' Automated Quotation System-National Market
System shall require stockholder approval of a plan or arrangement pursuant to
which Common Stock may be acquired by officers or directors of the Company,
and/or (B) any rule or regulation promulgated by the Securities and Exchange
Commission, or (C) if Section 422 of the Code shall require shareholder approval
of an amendment to the Plan.
14.3 Any such amendment or termination of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing and
signed by the Optionee and the Company.
-42-
14.4 Notwithstanding the foregoing, this Plan shall terminate upon the
earlier of (i) the Termination Date or such earlier date as the Board shall
determine, or (ii) the date on which all awards available for issuance in the
last year of the Plan shall have been issued or canceled. Upon termination of
the Plan, no further awards may be granted, but all grants outstanding on such
date shall thereafter continue to have force and effect in accordance with the
provisions of the agreements evidencing such grants.
15. Withholding Taxes.
- -----------------------
The Company is authorized to withhold income taxes as required under
applicable laws or regulations. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for the withholding are insufficient, it
shall be a condition to the receipt of any such payment or the realization of
any such benefit that the Participant or such other person make arrangements
satisfactory to the Company for payment of the balance of any taxes required to
be withheld. At the discretion of the Board or the Committee, any such
arrangements may without limitation include relinquishment of a portion of any
such payment or benefit or the surrender of outstanding Common Shares. The
Company and any Participant or such other person may also make similar
arrangements with respect to the payment of any taxes with respect to which
withholding is not required.
16. Corporate Transaction or Change of Control.
- ------------------------------------------------
The Board or the Committee shall have the right in its sole discretion to
include with respect to any award granted to a Participant hereunder provisions
accelerating the benefits of the award in the event of a Corporate Transaction
or Change of Control, which acceleration rights may be granted in connection
with an award pursuant to the agreement evidencing the same or at any time after
an award has been granted to a Participant.
17. Miscellaneous Provisions.
- ------------------------------
17.1 Plan Expense. Any expenses of administering this Plan shall be borne
-------------
by the Company.
17.2 Construction of Plan. The place of administration of the Plan shall be
---------------------
in the State of Nevada, and the validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined in accordance with the laws of
the State of Nevada without regard to conflict of law principles and, where
applicable, in accordance with the Code.
17.3 Other Compensation. The Board or the Committee may condition the grant
-------------------
of any award or combination of awards authorized under this Plan on the
surrender or deferral by the Participant of his or her right to receive a cash
bonus or other compensation otherwise payable by the Company or a Subsidiary to
the Participant.
-43-
17.4 Continuation of Employment or Services. This Plan shall not confer
------------------------------------------
upon any Participant any right with respect to continuance of employment or
other service with the Company or any Subsidiary and shall not interfere in any
way with any right that the Company or any Subsidiary would otherwise have to
terminate any Participant's employment or other service at any time. Nothing
contained in the Plan shall prevent the Company or any Subsidiary from adopting
other or additional compensation arrangements for its employees.
17.5 Tax-Qualified Options. To the extent that any provision of this Plan
-----------------------
would prevent any Option that was intended to qualify as a Tax-Qualified Option
from so qualifying, any such provision shall be null and void with respect to
any such Option; provided, however, that any such provision shall remain in
effect with respect to other Options, and there shall be no further effect on
any provision of this Plan.
17.6 Certain Terminations of Employment or Consulting Services, Hardship
----------------------------------------------------------------------
and Approved Leaves of Absence. Notwithstanding any other provision of this Plan
- -------------------------------
to the contrary, in the event of termination of employment or consulting
services by reason of death, disability, normal retirement, early retirement
with the consent of the Company, termination of employment or consulting
services to enter public or military service with the consent of the Company or
leave of absence approved by the Company, or in the event of hardship or other
special circumstances, of a Participant who holds an Option that is not
immediately and fully exercisable, any Restricted Shares as to which the
substantial risk of forfeiture or the prohibition or restriction on transfer has
not lapsed, any Performance Shares or Performance Units that have not been fully
earned, or any Common Shares that are subject to any transfer restriction
pursuant to Section 8 of this Plan, the Board or the Committee may take any
action that it deems to be equitable under the circumstances or in the best
interest of the Company, including without limitation waiving or modifying any
limitation or requirement with respect to any award under this Plan.
17.7 Binding Effect. The provisions of the Plan shall inure to the benefit
---------------
of, and be binding upon, the Company and its successors or assigns, and the
Participants, their legal representatives, their heirs or legacees and their
permitted assignees.
17.8 Exchange Act Compliance. With respect to persons subject to Section 16
------------------------
of the Exchange Act, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the Exchange
Act. To the extent any provisions of the Plan or action by the Board or the
Committee fails to so comply, they shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board or the Committee.
17.9 Conditions upon Issuance of Shares.
-----------------------------------
(a) Shares shall not be issued pursuant to the exercise of an Option
or Incentive Award unless the exercise of such Option or Incentive Award and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
-44-
(b) As a condition to the exercise of an Option or Incentive Award,
the Company may require the person exercising such Option or Incentive Award to
represent and warrant at the time of any such exercise that the Shares are being
purchased or otherwise acquired only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company such a representation is required by any of the aforementioned
relevant provisions of law.
(c) Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Share hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
17.10 Fractional Shares. The Company shall not be required to issue any
------------------
fractional Common Shares pursuant to this Plan. The Board or the Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
17.11 Reservation of Shares. The Company will at all times reserve and
------------------------
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
17.12 Indemnification. In addition to such other rights of indemnification
----------------
as they may have as members of the Board, the members of the Board and of the
Committee shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or proceeding to
which they or any of them may be party by reason of any action taken or failure
to act under or in connection with the Plan or any Option or Incentive Award,
and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith; provided that
upon the institution of any such action, suit or proceeding a Board member or
Committee member shall, in writing, give the Company notice thereof and an
opportunity, at its own expense, to handle and defend the same before such Board
member or Committee member undertakes to handle and defend it on his own behalf.
17.13 Gender. For purposes of this Plan, words used in the masculine
-------
gender shall include the feminine and neuter, and the singular shall include the
plural and vice versa, as appropriate.
17.14 Use of Proceeds. Any cash proceeds received by the Company from the
----------------
sale of Common Shares under the Plan shall be used for general corporate
purposes.
17.15 Regulatory Approvals.
---------------------
(a) The implementation of the Plan, the granting of any awards under
the Plan and the issuance of any Common Shares shall be subject to the Company's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the awards granted under it and the Common
Shares issued pursuant to it.
(b) No Common Shares or other assets shall be issued or delivered
-45-
under this Plan unless and until there shall have been compliance with all
applicable requirements of federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the Common
Shares issuable under the Plan, and all applicable listing requirements of any
securities exchange on which the Common Shares are then listed for trading.
17.16 Other Tax Matters. Reference herein to the Code and any described
------------------
tax consequences related to the Plan or the granting or exercise of an award
hereunder pertain only to those persons (including the Company) subject to the
tax laws of the United States of America or any state or territory thereof and
include all amendments to the Code enacted hereafter.