STOCK OPTION AND SUBSCRIPTION
AGREEMENT
THIS STOCK OPTION AND SUBSCRIPTION
AGREEMENT is entered into as of the ____ day of ________________,
200___ (the "Date of Grant").
BETWEEN:
TORRENT ENERGY
CORPORATION (the
"Company"), who has a business address at 600-666 Burrard Street,
Vancouver, BC, V6C 2X8
AND:
____________________________[
name of optionee ] , whose address is
_________________________________________[ address of
optionee ] (the "Optionee").
RECITALS
WHEREAS:
A. The
Board of Directors of the Company (the "Board") has approved and
adopted the 2005 Equity Incentive Plan (the "Plan"), pursuant to
which the Board is authorized to grant to employees and other
selected persons stock options to purchase common shares of the
Company (the "Common Stock"); and
B. The
Board has authorized the grant to the Optionee of options to
purchase a total of _______________ [number of shares ]
shares of Common Stock (the "Options").
NOW THEREFORE THIS AGREEMENT
WITNESSETH that in consideration of other good and valuable
consideration and the sum of One ($1.00) Dollar now paid by the
Optionee to the Company (the receipt and sufficiency whereof is
hereby acknowledged), it is hereby agreed by and between the
parties as follows:
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1.1
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In this Agreement, the following terms shall
have the following meanings:
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(a)
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" Exercise Payment " means the amount of
money equal to the Exercise Price multiplied by the number of
Optioned Shares specified in the Notice of Exercise;
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(b)
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" Exercise Price " means
$______;
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(c)
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" Expiry Date " means
________________;
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d)
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" Notice of Exercise " means a notice in
writing addressed to the Company at its address first recited (or
such other address of the Company as may from time to time be
notified to the Optionee in writing), substantially in the form
attached as Exhibit "A" hereto, which notice shall specify therein
the number of Optioned Shares in respect of which the Option is
being exercised;
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D/JCU/725157.1
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(e)
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" Option " means the irrevocable right
and option to purchase, from time to time, all, or any part of the
Optioned Shares granted to the Optionee by the Company pursuant to
Section 1.3 of this Agreement;
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(f)
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" Optioned Shares " means the common
shares of the Company, subject to the Option;
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(g)
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" Securities " means, collectively, the
Option and the Optioned Shares;
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(h)
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" Shareholders " means holders of record
of the Shares;
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(i)
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" Shares " means the common shares in the
capital stock of the Company; and
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(j)
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" Vested Options " means the Optioned
Shares that have vested in accordance with Section 1.4 of this
Agreement.
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1.2 Capitalized
terms not otherwise defined herein shall have the meanings ascribed
thereto in the Plan.
1.3 The
Company agrees to offer to the Optionee the option to purchase,
upon the terms and conditions set forth herein and in the Plan, the
Option to purchase a total of _____________[ number of
shares] (________) Optioned Shares at the Exercise
Price.
1.4 The
Options may be exercised after vesting and only in accordance with
the following schedule:
(a)
on the Date of Grant, the Option
shall vest with respect to one-fourth (25%) of the Common Stock to
which it pertains;
(b)
on _________________[ date that
is six months from Date of Grant] , the Option shall
vest with respect to one-fourth (25%) of the Common Stock to which
it pertains;
(c)
on _________________[ date that
is twelve months from Date of Grant] , the Option
shall vest with respect to one-fourth (25%) of the Common Stock to
which it pertains; and
(d)
on _________________[ date that
is eighteen months from Date of Grant] , the Option
shall vest with respect to one-fourth (25%) of the Common Stock to
which it pertains.
1.5 The
Option shall, at 5:00 p.m. (Vancouver time) on the Expiry Date,
forthwith expire and be of no further force or effect
whatsoever.
1.6 Vested
Options shall terminate, to the extent not previously exercised,
upon the occurrence of the first of the following
events:
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(a)
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Expiration. Five (5) years from the Date of
Grant.
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(b)
Termination for Cause.
The date of an Optionee's
termination of employment or contractual relationship with the
Company or any Related Corporation (as defined in the Plan) for
cause (as determined in the sole discretion of the Plan
Administrator, acting reasonably).
D/JCU/725157.1
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(c)
Termination Due to Death or
Disability. The
expiration of one (1) year from the date of the death of the
Optionee, or the expiration of one (1) year from termination of an
Optionee's employment or contractual relationship by reason of
Disability (as defined in Section 13.2 of the Plan).
(d)
Termination for other Reasons. Five
(5) days after the date of an Optionee's termination of employment
or contractual relationship with the Company or any Related
Corporation (as defined in the Plan) for any reason other than (b)
and (c) listed above.
Each unvested Option granted
pursuant hereto shall terminate immediately upon termination of the
Optionee's employment or contractual relationship with the Company
for any reason whatsoever, including Disability.
1.7 Subject
to compliance with any applicable securities laws, Options shall be
exercisable, in full or in part, at any time after vesting, until
termination; provided, however, that any Optionee who is
subject to the reporting and liability provisions of Section 16 of
the Securities Exchange Act of 1934 with respect to the
Common Stock shall be precluded from selling, transferring or
otherwise disposing of any Common Stock underlying an Option during
the six (6) months immediately following the grant of that Option.
If less than all of the shares included in the vested portion of
any Option are purchased, the remainder may be purchased at any
subsequent time prior to the Expiry Date. No portion of any Option
for less than fifty (50) shares may be exercised; provided, that if
the vested portion of any Option is less than fifty (50) shares, it
may be exercised with respect to all shares for which it is vested.
Only whole shares may be issued pursuant to an Option, and to the
extent that an Option covers less than one (1) share, it is
unexercisable.
Each exercise of the Option shall be
by means of delivery of a notice of election to exercise (which may
be in the form attached hereto as Exhibit A) to the
Secretary of the Company at its principal executive office,
specifying the number of shares of Common Stock to be purchased and
accompanied by payment in cash by certified check or cashier's
check in the amount of the full exercise price for the Common Stock
to be purchased. In addition to payment in cash by certified check
or cashier's check, an Optionee or transferee of an Option may pay
for all or any portion of the aggregate exercise price by complying
with one or more of the following alternatives:
(a)
by delivering a properly executed
exercise notice together with irrevocable instructions to a broker
promptly to sell or margin a sufficient portion of the Common Stock
and deliver directly to the Company the amount of sale or margin
loan proceeds to pay the exercise price; or
(b)
by complying with any other payment
mechanism approved by the Plan Administrator at the time of
exercise.
It is a condition precedent to the
issuance of shares of Common Stock that the Optionee execute and/or
deliver to the Company all documents and withholding taxes required
in accordance with Section 19 of the Plan.
1.8 Nothing
in this Agreement shall obligate the Optionee to purchase any
Optioned Shares except those Optioned Shares in respect of which
the Optionee shall have exercised his Option in the manner provided
in this Agreement.
D/JCU/725157.1
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1.9 The
terms of the Options are subject to the provisions of the Plan, as
the same may from time to time be amended, and any inconsistencies
between this Agreement and the Plan, as the same may be from time
to time amended, shall be governed by the provisions of the Plan, a
copy of which has been delivered to the Optionee, and which is
available for inspection at the principal offices of the
Company.
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2.
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Acknowledgements of the
Optionee
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2.1
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The Optionee acknowledges and agrees
that:
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(a)
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the Optionee has received and carefully read
this Agreement and the public information which has been filed with
th
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