LIBERTY STAR URANIUM & METALS
CORP.
2007 STOCK OPTION PLAN
This 2007 Stock Option Plan (the "Plan") provides
for the grant of options to acquire common shares (the "Common
Shares") in the capital of LIBERTY STAR URANIUM & METALS CORP.,
a corporation formed under the laws of the State of Nevada (the
"Company"). Stock options granted under this Plan that qualify
under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") are referred to in this Plan as "Incentive Stock
Options" and stock options that do not qualify under
Section 422 of the Code are referred to as "Non-Qualified
Stock Options". Incentive Stock Options and Non-Qualified Stock
Options granted under this Plan are collectively referred to as
"Options".
1.1
The purpose of this Plan is to retain the services
of valued key employees and consultants of the Company and such
other persons as the Plan Administrator shall select in accordance
with Section 2 below, and to encourage such persons to acquire a
greater proprietary interest in the Company, thereby strengthening
their incentive to achieve the objectives of the shareholders of
the Company, and to serve as an aid and inducement in the hiring of
new employees and to provide an equity incentive to consultants and
other persons selected by the Plan Administrator.
1.2
This Plan shall at all times be subject to all legal
requirements relating to the administration of stock option plans,
if any, under applicable corporate laws, applicable United States
federal and state securities laws, the Code, the rules of any
applicable stock exchange or stock quotation system, and the rules
of any foreign jurisdiction applicable to Options granted to
residents therein (collectively, the "Applicable Laws").
2.1
This Plan shall be administered initially by the
Board of Directors of the Company (the "Board"), except that
the Board may, in its discretion, establish a committee composed of
two (2) or more members of the Board or two (2) or more other
persons to administer the Plan, which committee (the "Committee")
may be an executive, compensation or other committee, including a
separate committee especially created for this purpose. The Board
or, if applicable, the Committee is referred to herein as the "Plan
Administrator".
2.2
If and so long as the Common Shares are registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the Company wishes to grant
Incentive Stock Options, then the Board shall consider in selecting
the Plan Administrator and the membership of any Committee, with
respect to any persons subject or likely to become subject to
Section 16 of the Exchange Act, the provisions regarding (a)
"outside directors" as contemplated by Section 162(m) of the
Code, and (b) "Non-Employee Directors" as contemplated by
Rule 16b-3 under the Exchange Act.
2.3
The Committee shall have the powers and authority
vested in the Board hereunder (including the power and authority to
interpret any provision of the Plan or of any Option). The members
of any such Committee shall serve at the pleasure of the Board. A
majority of the members of the Committee shall constitute a quorum,
and all actions of the Committee shall be taken by a majority of
the members present. Any action may be taken by a written
instrument signed by all of the members of the Committee and any
action so taken shall be fully effective as if it had been taken at
a meeting.
2.4
The Board may at any time amend, suspend or
terminate the Plan, subject to such shareholder approval as may be
required by Applicable Laws, including the rules of an applicable
stock exchange or other national market system, provided
that:
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(a)
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no Options may be granted during any suspension of
the Plan or after termination of the Plan; and
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(b)
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any amendment, suspension or termination of the Plan
will not affect Options already granted, and such Options will
remain in full force and affect as if the Plan had not been
amended, suspended or terminated, unless mutually agreed otherwise
between the Optionee (as defined below) and the Plan Administrator,
which agreement will have to be in writing and signed by the
Optionee and the Company.
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2.5
Subject to the provisions of this Plan and any
Applicable Laws, and with a view to effecting the purpose of the
Plan, the Plan Administrator shall have sole authority, in its
absolute discretion, to:
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(a)
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construe and interpret this Plan;
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(b)
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define the terms used in the Plan;
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(c)
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prescribe, amend and rescind the rules and
regulations relating to this Plan;
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(d)
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correct any defect, supply any omission or reconcile
any inconsistency in this Plan;
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(e)
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grant Options under this Plan;
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(f)
determine the individuals to whom Options shall be
granted under this Plan and whether the Option is granted as an
Incentive Stock Option or a Non-Qualified Stock Option;
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(g)
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determine the time or times at which Options shall
be granted under this Plan;
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(h)
determine the number of Common Shares subject to
each Option, the exercise price of each Option, the duration of
each Option and the times at which each Option shall become
exercisable;
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(i)
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determine all other terms and conditions of the
Options; and
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(j)
make all other determinations and interpretations
necessary and advisable for the administration of the
Plan.
2.6
All decisions, determinations and interpretations
made by the Plan Administrator shall be binding and conclusive on
all participants in the Plan and on their legal representatives,
heirs and beneficiaries.
3.1
Incentive Stock Options may be granted to any
individual who, at the time the Option is granted, is an employee
of the Company or any Related Company (as defined below)
("Employees").
3.2
Non-Qualified Stock Options may be granted to
Employees and to such other persons who are not Employees as the
Plan Administrator shall select, subject to any Applicable
Laws.
3.3
Options may be granted in substitution for
outstanding Options of another corporation in connection with the
merger, consolidation, acquisition of property or stock or other
reorganization between such other corporation and the Company or
any subsidiary of the Company. Options also may be granted in
exchange for outstanding Options.
3.4
Any person to whom an Option is granted under this
Plan is referred to as an "Optionee". Any person who is the owner
of an Option is referred to as a "Holder".
3.5
As used in this Plan, the term "Related Company"
shall mean any corporation (other than the Company) that is a
"Parent Company" of the Company or "Subsidiary Company" of the
Company, as those terms are defined in Sections 424(e) and
424(f), respectively, of the Code (or any successor provisions) and
the regulations thereunder (as amended from time to
time).
4.1
The Plan Administrator is authorized to grant
Options to acquire up to a total of 10,000,000 Common Shares. The
number of Common Shares with respect to which Options may be
granted hereunder is subject to adjustment as set forth in
Section 5.1(m) hereof. In the event that any outstanding
Option expires or is terminated for any reason, the Common Shares
allocable to the unexercised portion of such Option may again be
subject to an Option granted to the same Optionee or to a different
person eligible under Section 3 of this Plan; provided
however, that any cancelled Options will be counted against the
maximum number of shares with respect to which Options may be
granted to any particular person as set forth in Section 0
hereof.
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5.
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TERMS AND CONDITIONS OF OPTIONS
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5.1
Each Option granted under this Plan shall be
evidenced by a written agreement approved by the Plan Administrator
(each, an "Agreement"). Agreements may contain such provisions, not
inconsistent with this Plan or any Applicable Laws, as the Plan
Administrator in its discretion may deem advisable. All Options
also shall comply with the following requirements:
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(a)
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Number of Shares and Type of Option
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Each Agreement shall state the number of Common
Shares to which it pertains and whether the Option is intended to
be an Incentive Stock Option or a Non-Qualified Stock
Option; provided that
:
(i)
the number of Common Shares that may be reserved
pursuant to the exercise of Options granted to any person shall not
exceed 10% of the issued and outstanding Common Shares of the
Company;
(ii)
in the absence of action to the contrary by the Plan
Administrator in connection with the grant of an Option, all
Options shall be Non-Qualified Stock Options;
(iii)
the aggregate fair market value (determined at the
Date of Grant, as defined below) of the Common Shares with respect
to which Incentive Stock Options are exercisable for the first time
by the Optionee during any calendar year (granted under this Plan
and all other Incentive Stock Option plans of the Company, a
Related Company or a predecessor corporation) shall not exceed
U.S.$100,000, or such other limit as may be prescribed by the Code
as it may be amended from time to time (the "Annual Limit");
and
(iv)
any portion of an Option which exceeds the Annual
Limit shall not be void but rather shall be a Non-Qualified Stock
Option.
Each Agreement shall state the date the Plan
Administrator has deemed to be the effective date of the Option for
purposes of this Plan (the "Date of Grant").
Each Agreement shall state the price per Common
Share at which it is exercisable. The Plan Administrator shall act
in good faith to establish the exercise price in accordance with
Applicable Laws; provided
that:
(i)
the per share exercise price for an Incentive Stock
Option or any Option granted to a "covered employee" as such term
is defined for purposes of Section 162(m) of the Code shall
not be less than the fair market value per Common Share at the Date
of Grant as determined by the Plan Administrator in good
faith;
(ii)
with respect to Incentive Stock Options granted to
greater-than-ten percent (>10%) shareholders of the Company (as
determined with reference to Section 424(d) of the Code), the
exercise price per share shall not be less than one hundred ten
percent (110%) of the fair market value per Common Share at the
Date of Grant as determined by the Plan Administrator in good
faith; and
(iii)
Options granted in substitution for outstanding
options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other
reorganization involving such other corporation and the Company or
any subsidiary of the Company may be granted with an exercise price
equal to the exercise price for the
substituted option of the other corporation, subject
to any adjustment consistent with the terms of the transaction
pursuant to which the substitution is to occur, and provided that
for Incentive Stock Options:
A.
the excess of the aggregate fair market value of the
shares subject to the option immediately after the substitution
over the aggregate exercise price of such shares is not more than
the excess of the aggregate fair market value of all shares subject
to the option immediately before such substitution over the
aggregate exercise price of such shares, and
B.
the substituted option does not give the employee
additional benefits which he did not have under the previously held
Option; and
(iv)
with respect to Non-Qualified Stock Options, the
exercise price per share shall be the fair market value of the
Common Shares as determined by the Plan Administrator in good
faith.
At the time of the grant of the Option, the Plan
Administrator shall designate, subject to Section 5.1(g)
below, the expiration date of the Option (the “Expiration
Date”), which date shall not be later than ten (10) years
from the Date of Grant; provided , that the Expiration Date
of any Incentive Stock Option granted to a greater-than-ten percent
(>10%) shareholder of the Company (as determined with reference
to Section 424(d) of the Code) shall not be later than five
(5) years from the Date of Grant. In the absence of action to the
contrary by the Plan Administrator in connection with the grant of
a particular Option, and except in the case of Incentive Stock
Options as described above, all Options granted under this
Section 5 shall expire ten (10) years from the Date of
Grant.
No Option shall be exercisable until it has vested.
The vesting schedule for each Option shall be specified by the Plan
Administrator at the time of grant of the Option prior to the
provision of services with respect to which such Option is
granted; provided , that if no vesting schedule is specified at the time of
grant, the Option shall vest according to the following
schedule:
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Number of Years
Following Date of Grant
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Percentage of Total
Option Vested
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One
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25%
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Two
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50%
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Three
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75%
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Four
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100%
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The Plan Administrator may specify a vesting
schedule for all or any portion of an Option based on the
achievement of performance objectives established in advance of the
commencement by the Optionee of services related to the achievement
of the performance objectives. Performance objectives shall be
expressed in terms of objective criteria, including but not limited
to, one or more
of the following: return on equity, return on
assets, share price, market share, sales, earnings per share,
costs, net earnings, net worth, inventories, cash and cash
equivalents, gross margin or the Company's performance relative to
its internal business plan. Performance objectives may be in
respect of the performance of the Company as a whole (whether on a
consolidated or unconsolidated basis), a Related Company, or a
subdivision, operating unit, product or product line of either of
the foregoing. Performance objectives may be absolute or relative
and may be expressed in terms of a progression or
