URANERZ ENERGY CORPORATION
2005 NONQUALIFIED STOCK OPTION PLAN
ARTICLE I
Purpose of Plan
This 2005
NONQUALIFIED STOCK OPTION PLAN (the “Plan”) of URANERZ
ENERGY CORPORATION (the “Company”) for persons employed
or associated with the Company, including without limitation any
employee, director, general partner, officer, attorney, accountant,
consultant or advisor, is intended to advance the best interests of
the Company by providing additional incentive to those persons who
have a substantial responsibility for its management, affairs, and
growth by increasing their proprietary interest in the success of
the Company, thereby encouraging them to maintain their
relationships with the Company. Further, the availability and
offering of Stock Options under the Plan supports and increases the
Company’s ability to attract, engage and retain individuals
of exceptional talent upon whom, in large measure, the sustained
progress growth and profitability of the Company for the
shareholders depends.
For Plan purposes,
except where the context might clearly indicate otherwise, the
following terms shall have the meanings set forth below:
“Board”
shall mean the Board of Directors of the Company.
“Code”
shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
“Committee”
shall mean the Compensation Committee, or such other committee
appointed by the Board, which shall be designated by the Board to
administer the Plan. The Company shall be composed of two or more
persons as from time to time are appointed to serve by the Board
and may be members of the Board or the entire Board.
“Common
Shares” shall mean the Company’s Common Shares $0.00001
par value per share, or, in the event that the outstanding Common
Shares are hereafter changed into or exchanged for different shares
or securities of the Company, such other shares or
securities.
“Company”
shall mean URANERZ ENERGY CORPORATION, a Nevada corporation, and
any parent or subsidiary corporation of URANERZ ENERGY CORPORATION,
as such terms are defined in Section 425(e) and 425(f),
respectively of the Code.
“Market
Price” shall mean the volume weighted average trading price
of the Common Shares on the Toronto Stock Exchange
(“TSX”) or the American Stock Exchange
(“AMEX”), whichever exchange has the greater trading
volume, for the five trading days immediately preceding the date
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the grant.
However, (a) if the Common Shares are not listed on the TSX or
the AMEX, then the “Market Price” shall be calculated
by reference to the volume weighted average trading price of the
Common Shares for the five trading days immediately preceding the
date of the grant on any other stock exchange on which the Common
Shares are listed (if more than one, then using the exchange on
which a majority of Common Shares are traded); or (b) if the
Common Shares are suspended from trading or have not traded on the
TSX, AMEX or another stock exchange for an extended period of time,
the “Market Price” will be the fair market value of the
Common Shares as determined by the board of directors of the
Company using good faith discretion.
“Optionee”
shall mean any person employed or associated with the affairs of
the Company who has been granted one or more Stock Options under
the Plan.
“Stock
Option” or “NQSO” shall mean a stock option
granted pursuant to the terms of the Plan.
“Stock
Option Agreement” shall mean the agreement between the
Company and the Optionee under which the Optionee may purchase
Common Shares hereunder.
ARTICLE III
Administration of the Plan
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1.
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The
Committee shall administer the plan and accordingly, it shall have
full power to grant Stock Options, construe and interpret the Plan,
establish rules and regulations and perform all other acts,
including the delegation of administrative responsibilities, it
believes reasonable and proper.
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2.
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The
determination of those eligible to receive Stock Options, and the
amount, price, type and timing of each Stock Option and the terms
and conditions of the respective stock option agreements shall rest
in the sole discretion of the Committee, subject to the provisions
of the Plan.
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3.
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The
Committee may cancel any Stock Options awarded under the Plan if an
Optionee conducts himself in a manner which the Committee
determines to be inimical to the best interest of the Company and
its shareholders as set forth more fully in paragraph 8 of
Article X of the Plan.
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4.
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The
Board, or the Committee, may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any
granted Stock Option, in the manner and to the extent it shall deem
necessary to carry it into effect.
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5.
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Any
decision made, or action taken, by the Committee or the Board
arising out or in connection with the interpretation and
administration of the Plan shall be final and
conclusive.
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6.
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Meetings of the Committee shall be
held at such times and places as shall be determined by the
Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business, and the vote
of a majority of those members
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present at any meeting shall decide
any question brought before that meeting. In addition, the Company
may take any action otherwise proper under the Plan by the
affirmative vote, taken without a meeting, of a majority of its
members.
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7.
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No
member of the Committee shall be liable for any act or omission of
any other member of the Committee or for any act or omission on his
own part, including, but not limited to, the exercise of any power
or discretion given to him under the Plan except those resulting
form his own gross negligence or willful misconduct.
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8.
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The
Company, through its management, shall supply full and timely
information to the Committee on all matters relating to the
eligibility of Optionees, their duties and performance, and current
information on any Optionee’s death, retirement, disability
or other termination of association with the Company, and such
other pertinent information as the Committee may require. The
Company shall furnish the Committee with such clerical and other
assistance as is necessary in the performance of its duties
hereunder.
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ARTICLE IV
Shares Subject to the Plan
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1.
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The
total number of shares of the Company available for grants of Stock
Options under the Plan shall be 10,000,000 Common Shares, subject
to adjustment as herein provided, which shares may be either
authorized but unissued or reacquired Common Shares of the
Company.
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2.
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If
a Stock Option or portion thereof shall expire or terminate for any
reason without having been exercised in full, the unpurchased
shares covered by such NQSO shall be available for future grants of
Stock Options.
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ARTICLE V
Stock Option Terms and Conditions
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1.
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Consistent with the Plan’s
purpose, Stock Options may be granted to any person who is
performing or who has been engaged to perform services of special
importance to management in the operation, development and growth
of the Company.
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2.
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Determination of the option price
per share for any stock option issues hereunder shall rest in the
sole and unfettered discretion of the Committee. Notwithstanding
the foregoing, no option shall be issued with an option price per
share less than Market Price.
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3.
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All
Stock Options granted under the Plan shall be evidenced by
agreements which shall be subject to applicable provisions of the
Plan, and such other provisions as the Committee may adopt,
including the provisions set forth in paragraphs 2 through 11 of
this Article V.
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4.
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All
Stock Options granted hereunder must be granted within ten years
from the date this
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Plan is adopted.
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5.
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No
Stock Option granted hereunder shall be exercisable after the
expiration of ten years from the date such NQSO is granted. The
Committee, in its discretion, may provide that an option shall be
exercisable during such ten year period or during any lesser period
of time. The Committee may establish installment exercise terms for
a Stock Option such that the NQSO becomes fully exercisable in a
series of cumulating portions. If an Optionee shall not, in any
given installment period, purchase all the Common Shares which such
Optionee is entitled to purchase within such installment period,
such Optionee’s right to purchase any Common Shares not
purchased in such installment period shall continue until the
expiration or sooner termination of such NQSO. The Committee may
also accelerate the exercise of any NQSO.
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6.
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A
Stock Option, or portion thereof, shall be exercised by deliver of
(i) a written notice of exercise to the Company specifying the
number of Common Shares to be purchased, and (ii) payment of
the full price of such Common Shares, as fully set forth in
paragraph 7 of this Article V. No NQSO or installment thereof
shall be reusable except with respect to whole shares, and
fractional share interests shall be disregarded. Not less than 100
Common Shares may be purchased at one time unless the number
purchased is the total number at the time available for purchase
under the NQSO. Until the Common Shares represented by an exercised
NQSO are issued to an Optionee, he shall have none of the rights of
a shareholder.
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7.
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The
exercise price of a Stock Option, or portion thereof, may be
paid:
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A.
In United States dollars, in cash or by cashier’s check,
certified check, bank draft or money order, payable to the order of
the Company in an amount equal to the option price; or,
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B.
At the discretion of the Committee, through the delivery of fully
paid and nonassessable Common Shares, with an aggregate fair market
value (determined as the average of the highest and lowest reported
sales prices on the Common Shares as of the date of exercise of the
NQSO, as reported by such responsible reporting service as the
Committee may select, or if there were not transactions in the
Common Shares on such day, then the last preceding day on which
transactions took place), as of the date of the NQSO exercise equal
to the option price, provided such tendered shares, or any
derivative security resulting in the issuance of Common Shares,
have been owned by he Optionee for at least 30 days prior to
such exercise; or,
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C.
By a combination of both A and B above.
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8.
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The
Committee shall determine acceptable methods for tendering Common
Shares as payment upon exercise of a Stock Option and may impose
such limitations and prohibitions on the use of Common Shares to
exercise an NQSO as it deems appropriate.
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9.
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With the Optionee’s consent,
the Committee may cancel any Stock Option issued under
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this Plan and issue a new NQSO to
such Optionee.
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10.
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Except by will, the laws of descent
and distribution, or with the written consent of the Committee, no
right or interest in any Stock Option granted under the Plan shall
be assignable or transferable, and no right or interest of any
Optionee shall be liable for, or subject to, any lien, obligation
or liability of the Optionee. Upon petition to, and thereafter with
the written consent of the Committee, an Optionee may assign or
transfer all or a portion of the Optionee’s rights and
interest in any stock option granted hereunder. Stock Options shall
be exercisable during the Optionee’s lifetime only by the
Optionee or assignees, or the duly appointed legal representative
of an incompetent Optionee, including following an assignment
consented to by the Committee herein.
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11.
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If
the Committee determines that it is in the best interests of the
Company and its shareholders and consistent with the stated goals
and purposes of this Plan, the Committee (i) may at its sole
discretion act to extend the term of any outstanding NQSO or
conduct a re-pricing of any outstanding NQSO if such re-pricing
acts to the benefit of the holder of the outstanding NQSO, or
(ii) may with the consent of the holder of an NQSO, conduct a
re-pricing of any outstanding NQSO regardless of whether such
re-pricing acts to the benefit of the holder of the outstanding
NQSO. Notwithstanding the foregoing, no extension of the term of
any outstanding NQSO will act to extend the term for a period
longer than ten years from the date of the original is
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