Exhibit 4.2
METALLICA RESOURCES
INC.
STOCK OPTION PLAN
AMENDED AND RESTATED AS OF MAY 23,
2006
1.
PURPOSE
The purpose of this stock option
plan (the "Plan") is to authorize the grant to service providers
for Metallica Resources Inc. (the "Corporation") of options to
purchase common shares ("shares") of the Corporation's capital and
thus benefit the Corporation by enabling it to attract, retain and
motivate service providers by providing them with the opportunity,
through share options, to acquire an increased proprietary interest
in the Corporation.
2.
ADMINISTRATION
The Plan shall be administered by a
committee established for such purpose by the board of directors of
the Corporation (the "Committee"), or in the event the board of
directors does not establish the Committee, by the board of
directors of the Corporation. Subject to approval of the
granting of options by the Committee or the board of directors, as
applicable, the Corporation shall grant options under the
Plan.
3.
SHARES SUBJECT
TO PLAN
Subject to adjustment under the
provisions of paragraph 12 hereof, the aggregate number of shares
of the Corporation which may be issued and sold under the Plan
after April 19, 2006 shall not exceed 7,500,000 shares. The
total number of shares which may be reserved for issuance to any
one individual under the Plan, together with all other outstanding
stock options granted to such individual shall not exceed 5% of the
outstanding issue. The Corporation shall not, upon the
exercise of any option, be required to issue or deliver any shares
prior to (a) the admission of such shares to listing on any stock
exchange on which the Corporation's shares may then be listed, and
(b) the completion of such registration or other qualification of
such shares under any law, rules or regulation as the Corporation
shall determine to be necessary or advisable. If any shares
cannot be issued to any optionee for whatever reason, the
obligation of the Corporation to issue such shares shall terminate
and any option exercise price paid to the Corporation shall be
returned to the optionee.
4.
ELIGIBILITY
Options shall be granted only to
service providers for the Corporation, or to personal holding
companies controlled by a service provider, or to a registered
retirement savings plan established by a service provider.
The term "service providers for the Corporation" means (a)
any employee or insider of the Corporation or any of its
subsidiaries, and (b) any other person or company engaged to
provide ongoing management or consulting services for the
Corporation or any entity controlled by the Corporation. The
terms "insider", "controlled" and "subsidiary" shall have the
meanings ascribed thereto in the Securities Act (Ontario) from time
to time. Subject to the foregoing, the Committee or the board
of directors, as applicable, shall have full and final authority to
determine the persons who are to be granted options under the Plan
and the number of shares subject to each option.
5.
PRICE
The purchase price (the "Price") for
the shares of the Corporation under each option shall be determined
by the Committee or the board of directors on the basis of the
market price at the time of granting of each option, where "market
price" shall mean the prior trading day closing price of the shares
of the Corporation on any stock exchange on which the shares are
listed or any other market on which the shares are quoted, and
where there is no such closing price, "market price" shall mean the
average of the most recent bid and ask of the shares of the
Corporation on any stock exchange or market on which the shares are
listed or quoted. In no event shall the Price be less than
the market price on The Toronto Stock Exchange, if the shares of
the Corporation are then listed on such exchange.
6.
PERIOD OF
OPTION AND RIGHTS TO EXERCISE
Subject to the provisions of this
paragraph 6 and paragraphs 7, 8 and 9 below, options will be
exercisable in whole or in part, and from time to time, during the
currency thereof. Options shall not be granted for a term
exceeding ten years. The shares to be purchased upon each
exercise of an option (the "optioned shares") shall be paid for in
full at the time of such exercise. Except as provided in
paragraphs 8 and 9 below, no option which is held by a service
provider may be exercised unless the optionee is then a service
provider for the Corporation.
7.
VESTING
RESTRICTIONS
Options may, at the discretion of
the Committee or the board of directors, as applicable, provide
that the number of shares which may be acquired pursuant to the
option shall not exceed a specified number or percentage each year
during the term of the option (a "Vesting Restriction").
Provided, however, that notwithstanding any Vesting
Restriction specified in respect of any particular option, options
shall become fully vested, and each optionee shall be
enti
