Filed by Automated Filing Services Inc. (604) 609-0244 - International Barrier Technology Inc. - Exhibit 10.3






Exhibit 10.3 

INTERNATIONAL BARRIER TECHNOLOGY INC. 

2004 STOCK OPTION PLAN 

1.              PURPOSE


This 2004 Stock Option Plan (the “Plan”) is intended to advance
the interests of the Company and its stockholders and subsidiaries by
attracting, retaining and motivating the performance of selected directors,
officers, employees or consultants of the Company of high caliber and potential
upon whose judgement, initiative and effort, the Company is largely dependent
for the successful conduct of its business, and to encourage and enable such
persons to acquire and retain a proprietary interest in the Company by ownership
of its stock. 

2.              DEFINITIONS

In this Plan, including the Schedules hereto, unless the
context otherwise requires, the following words and expressions shall have the
following meanings: 

“Exercise Notice” means an exercise notice in the form attached
as Schedule “B” hereto; 

“Option” means an option to purchase common shares
  of the Company granted pursuant to this Plan; 

“Option Certificate” means an option certificate in
  the form attached as Schedule “A” hereto; and

 “Optionee” means a person or entity to whom or which
  an Option is granted hereunder. 

Unless otherwise defined in this Plan, all capitalized words
shall have the meanings ascribed thereto in the policies of the TSX Venture
Exchange (the “Exchange”), as such policies are from time to time amended or
varied (the “Policies”). 

3.              ADMINISTRATION


3.1            Administration


The Plan shall be administered by the Board of Directors (the
“Board”). The Board may make, amend and repeal at any time and from time to time
such regulations as it may deem necessary or advisable for the proper
administration and operation of the Plan and such regulations shall form part of
the Plan. The Board may delegate to any Director, officer or Employee of the
Company (the “Administrator”) such administrative duties and powers as it may
see fit. 

3.2             INTERPRETATION


The interpretation by the Board of any of the provisions of the
Plan and any determination by it pursuant thereto shall be final and conclusive
and shall not be subject to any dispute by any Optionee. No member of the Board
or any person acting pursuant to authority delegated by the Board hereunder
shall be liable for any action or determination in connection with the Plan made
or taken in good faith and each member of the Board and each such person shall
be entitled to indemnification with respect to any such action or determination
in the manner provided for by the Company. 

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4.              
SHARES OF STOCK SUBJECT TO PLAN 

4.1             Number
of Shares.

Subject to adjustment pursuant to the provisions of Section 4.2
hereof, the number of shares which may be issued and sold hereunder shall be a
rolling maximum of 10% of the issued shares of the Company at the date of
granting the stock option. Options shall only be granted to bona fide Directors,
Employees, Consultants and Management Company Employees. Shares issued and sold
under the Plan may be either authorized but unissued shares or shares held in
the Company's treasury. Shares covered by an Option that shall have been
exercised shall not again be available for an Option grant. If an Option shall
terminate for any reason (including, without limitation, the cancellation of an
Option pursuant to section 6.2 hereof) or expire without being wholly exercised,
the number of shares to which such Option termination relates shall again be
available for grant hereunder. 

4.2             Adjustments


In the event (the occurrence of which is hereinafter referred
to as an "Event") that (i) there are any changes in the capital structure of the
Company through stock splits, consolidations, reclassifications, changes in or
elimination of par value shares, or (ii) any dividends or other distributions
are made to holders of shares, or (iii) any rights to purchase shares at prices
substantially below Market Value are granted to holders of shares of the
Company, or (iv) as a result of any other recapitalization, merger or
consolidation, the shares of the Company are converted into or exchangeable for
any other shares, then in any such case the Company may make such adjustments in
the right to purchase granted hereby as may be required to prevent substantial
dilution or enlargement of the rights granted to or available for the Optionee
hereunder. No fractional shares shall be issued upon the exercise of the Option
and accordingly, if as a result of the Event, an Optionee would become entitled
to a fractional share, such Optionee shall have the right to purchase only the
next lowest whole number of shares and no payment or other adjustment will be
made with respect to the fractional interest so disregarded. Additionally, no
lots of shares in an amount less than 500 shares shall be issued upon the
exercise of an Option unless such amount of shares represents the balance left
to be exercised under an Option. 

5.              
GRANT OF OPTIONS 

5.1             Options


The Board or Administrator shall, from time to time, in its
sole discretion, determine those Directors, Employees, Consultants, and
Management Company Employees if any, to whom Options are to be awarded. If the
Board elects to award an Option to a Director, the Board shall, in its sole
discretion, determine the number of shares to be acquired on the exercise of
such Option. If the Board elects to award an Option to an Employee, the number
of shares to be acquired on the exercise of such Option shall be determined by
the Board in its sole discretion, and in so doing the Board may take into
account the following criteria: 

	 	(a) 	
      the annual salary of the Employee as at the date the
      Option is awarded (the “Award Date”) in relation to the total annual
      salaries payable by the Company to all of its Employees as at the Award
      Date; 

	 	 	
       

	 	(b) 	
      the length of time that the Employee has been employed by
      the Company; and 

	 	 	
       

	 	(c) 	
      the quality and importance of the work performed by the
      Employee. 



If the Board elects to award an Option to a Consultant or
Management Company Employee, the Board shall determine the number of shares to
be acquired on the exercise of such Option based on such other considerations as
the Board in its sole discretion may determine with regard to Consultants or
Management Company Employees. 

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5.2            
Exercise Price. 

The exercise price of the shares covered by each option (the
“Exercise Price”) shall be determined by the Board. While the shares are listed
on the Exchange, the Exercise Price shall not be less than the Discounted Market
Price permitted by the Policies. 

If the shares are listed on an exchange other than the
Exchange, the minimum Exercise Price will be determined in accordance with the
policies of such other exchange, or in the absence thereof, will be determined
as the closing sales price of such shares (or the closing bid, if no sales were
reported) as quoted on such exchange for the market trading date immediately
prior to the time of determination less any discount permitted by such exchange.


If the shares are not listed on an exchange, the minimum
Exercise Price shall be determined in good faith by the Board. 

Disinterested Shareholder approval will be obtained for any
reduction in the Exercise Price if the Optionee is an Insider of the Company at
the time of the proposed amendment.

5.3             Exercise
of Option 

Any Option may be exercised only by the Optionee. An Optionee
may exercise an Option in whole or in part, subject to section 5.6 at any time
or from time to time during the Option Period up to 5:00 p.m. local time in
Vancouver, British Columbia on the Expiry Date by delivering to the Company the
applicable Option Certificate, the Exercise Notice, in substantially the forms
attached hereto as Schedule A and B respectively, and a certified cheque or bank
draft to be purchased pursuant to the exercise of the Option. 

5.4             Number
of Optioned Shares 

The Company shall not grant Options which, when calculated
together with outstanding options as at the Award Date: 

	 	(a) 	
      exceed 10% of the issued and outstanding shares of the
      Company at the Award Date including all stock options granted by the
      Company prior to the adoption of the Plan; 

	 	 	
       

	 	(b) 	
      for any one individual, at the Award Date, result in
      excess of 5% of the issued and outstanding shares of the Company being
      reserved for any such individual in any 12 month period, unless the
      Company is classified as a Tier 1 Issuer pursuant to the Policies, in
      which case reasonable grants of options will be permitted by the Exchange,
      provided that the Company has obtained the requisite disinterested
      shareholder approval as described in the Policies; 

	 	 	
       

	 	(c) 	
      grant in any 12 month period an aggregate of more than 2%
      of the issued and outstanding shares of the Company to an Employee
      conducting Investor Relations Activities; 

	 	 	
       

	 	(d) 	
      grant more than 2% of the issued and outstanding shares
      of the Company to any one Consultant in any 12 month period. Options
      issued to Consultants performing Investor Relations Activities must vest
      in stages over 12 months with no more than 1⁄4 of the options vesting in any
      three month period. 



5.5             Term


Subject to paragraph 6.2, the term (the “Option Period”) of any
Options granted under the Plan will be determined by the Board and may not
exceed five years from the date of grant, or ten (10) years if the Company is
classified by the Exchange as a Tier 1 Issuer. 

5.6            
Vesting 

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An option which is subject to vesting, shall vest and may be
exercised (in each case to the nearest full share) during the Option Period in
such manner as the Board may fix by resolution. Options which have vested may be
exercised in whole or in part at any time and from time to time during the
Option Period. 

5.7             Hold
Period 

In addition to any resale restrictions under Securities Laws,
where Options are granted by the Company at a time when it is classified by the
Exchange as a Tier 2 Issuer, or where the Exercise Price of the Option is based
on the Discounted Market Price, all Options and any shares issued on the
exercise of Options must be legended with a four month Exchange hold period
commencing on the date the Options were granted. 

6.              
OPTIONS 

6.1             Duration
of Option 

Each option and all rights thereunder shall be expressed to
expire on the date set out in the Option Certificate, and shall be subject to
earlier termination as provided in sections 6.2 and 7 (the “Expiry Date”). 

6.2             Termination
of Option 

An Optionee may exercise an Option in whole or in part at any
time or from time to time during the period in which a particular option may be
exercised. However, the Board may at any time fix a minimum or maximum number of
shares which an Optionee may exercise pursuant to his Option. Any Option or part
thereof not exercised within the Option Period shall terminate and become null,
void and of no further force and effect at 5:00 p.m. local time in Vancouver,
British Columbia, on the Expiry Date. Subject to any additional more limiting
terms as determined by the directors, the Expiry Date of an Option shall be the
earlier of the date so fixed by the Board at the time the Option is awarded and
the date established, if applicable, in paragraphs (a) to (c) below. 

	 	(a) 	Ceasing to Hold Office 
	 	 	
       
	
       

	 		
      If the Optionee holds his or her Option as Director of
      the Company and such Optionee ceases to be a Director of the Company,
      other than by reason of death, then the Expiry Date of the Option shall be
      90 days following the date the Optionee ceases to be a Director of the
      Company unless the Optionee ceases to be a Director of the Company as a
      result of: 

	 	 	
       
	
       

	 		
      (i) 
	
      ceasing to meet the qualifications set forth in s.138 of
      the Company Act R.S.B.C. 1979, c.59 (the "Act"); or 

	 	 	
       
	
       

	 		
      (ii) 
	
      a special resolution having been passed by the members of
      the Company pursuant to subsection 130(3) of the Act; or 

	 	 	
       
	
       

	 		
      (iii)
	
      an order of the British Columbia Securities Commission
      (the “Commission”), the Exchange, or any regulatory body having
      jurisdiction to so order; 

	 	 	
       
	
       

	 		
      in which case the Expiry Date shall be the date the
      Optionee ceases to be a Director of the Company. 

	 	 	
       
	
       

	 	(b) 	
      Ceasing to be Employed 

	 	 	
       
	
       

	 		
      If the Optionee holds his or her Option as an Employee,
      Consultant or Management Company 



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      Employee of the Company and such Optionee ceases to be an
      Employee, Consultant or Management Company Employee of the Company, other
      than by reason of death, then the Expiry Date of the Option shall be the
      90th day following the date the Optionee ceases to be an Employee,
      Consultant or Management Company Employee of the Company unless the
      Optionee ceases to be an Employee, Consultant or Management Company
      Employee of the Company as a result of: 

	 	 	
       
	
       

	 		
      (i) 
	
      termination for cause; or 

	 	 	
       
	
       

	 		
      (ii) 
	
      an order of the Commission, the Exchange, or any
      regulatory body having jurisdiction to so order; 

	 	 	
       
	
       

	 		
      in which case the Expiry Date shall be the date the
      Optionee ceases to be an Employee of the Company. 

	 	 	
       
	
       

	 	(c) 	
      Investor Relations Optionees Ceasing to be
      Employed 

	 	 	
       
	
       

	 		
      If an Optionee engaged in Investor Relations Activities
      ceases to be employed to perform Investor Relations Activities, other than
      by reason of death, then the Expiry date of the Option shall be the 30th
      day following the date the Optionee ceases to perform Investor Relations
      Activities for the Company unless the Optionee ceases to perform Investor
      Relations Activities, whether as an Employee or a Consultant, as a result
      of: 

	 	 	
       
	
       

	 		
      (i) 
	
      termination for cause; or 

	 	 	
       
	
       

	 		
      (ii) 
	
      an order of the Commission, the Exchange, or any
      regulatory body having jurisdiction to so order; 

	 	 	
       
	
       

	 		
      in which case the Expiry Date shall be the date the
      Optionee ceases to perform Investor Relations Activities for the Company.
      

	 	 	
       
	
       

	 	(d) 	
      Death 

	 	 	
       
	
       

	 		
      If the Optionee dies, then the Expiry Date shall be one
      year from the date of death of the Optionee. In the event of the death of
      an Optionee, the Optionee’s option shall be exercised only within one year
      next succeeding such death and then only: 

	 	 	
       
	
       

	 		
      (i) 
	
      by the person or persons to whom the Optionee’s rights
      under the option shall pass by the Optionee’s will or the laws of descent
      and distribution; and 

	 	 	
       
	
       

	 		
      (ii) 
	
      to the extent that the Optionee was entitled to exercise
      the option at the date of the Optionee’s death. 



7.               
CHANGE IN CONTROL 

In the event of a consolidation or merger in which the Company
is not the surviving company, or in the event the Company’s common shares are
converted into securities of another entity or exchanged for other
consideration, or in the event of an offer for fifty percent or more of shares
being made by a third party that constitutes a take-over bid as that term is
defined in the Securities Act (British Columbia) or would constitute a
take-over bid as that term is defined in the Securities Act (British
Columbia) but for the fact that the offeree is not in British Columbia, all
outstanding options will immediately vest, provided that if such transaction
does not close, all such options will be deemed not to have vested. 

8.               
ASSIGNMENT OF OPTIONS 

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All benefits, rights and options accruing to any Optionee in
accordance with the terms and conditions of the Plan shall not be transferable
or assignable unless specifically provided herein. During the lifetime of an
Optionee any benefits, rights and options may only be exercised by the Optionee.


9.               
AMENDMENT AND TERMINATION 

9.1              Prospective
Amendment 

The Board may from time to time amend the Plan and the terms
and conditions of any Option granted thereunder as follows: 

	 	(a) 	 The Exchange will permit a Company to amend
        the terms of a stock option agreement or plan to reduce the number of
        shares under option, increase the Exercise Price or cancel an option without
        the acceptance of the Exchange, provided the Company issued a news release
        outlining the terms of the amendment. 

	 	 	  
	  

	 	(b) 	 The Exchange will permit a Company to amend
        the Exercise Price downward provided disinterested shareholder approval
        is obtained at the time of the proposed amendment for any reduction in
        the exercise price if the Option ee is an Insider of the Company. 

	 	 	  
	  

	 	(c) 	 A Company can amend the other terms of a stock
        option agreement or plan only where Exchange acceptance is obtained and
        if the following requirements are satisfied: 

	 	 	  
	  

	 		 (i) 
	 if the Optionee is an Insider of the Company at the
        time of the amendment, the Company obtained disinterested shareholder
        approval; 

	 	 	  
	  

	 		 (ii) 
	 the Exercise Price can be amended only if a least six
        months have elapsed since the later of the date of commencement of the
        Option Period, the date the Company’s shares commenced trading, or
        the date the option Exercise Price was last amended; 

	 	 	  
	  

	 		 (iii) 
	 if the option price is amended to the Discounted Market
        Price, the Exchange hold period will apply from the date of the amendment.
        If the option price is amended to the Market Price, the Exchange hold
        period will not apply; 

	 	 	  
	  

	 		 (iv) 
	 any extension of the length of the Option Period is
        treated as a grant of a new option, which must comply with pricing and
        other requirements of the Exchange’s policy. The Option Period cannot
        be extended so that the effective term of the Option, exceeds 5 years
        for a Tier 2 Issuer or 10 years for a Tier 1 Issuer in total. An option
        must be outstanding for at least one year before the Company can extend
        its term; and 

	 	 	  
	  

	 		 (v) 
	 The Exchange must accept a proposed amendment before
        the amended option is exercised. 

	 	 	  
	  

	 		 If the Company cancels a stock option and
        within one year grants new options to the same individual, the new options
        will be subject to the requirements in sections (i) to (iv) above. 

	 	 	  
	  

	 	(d) 	 An amendment to the terms of a stock option
        may be considered to be a new grant under Securities Laws. Acceptance
        for filing by the Exchange does not provide assurance that the Company
        is complying with Securities Laws. 



9.3              Termination


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The Board may terminate the Plan at any time provided that such
termination shall not alter the terms or conditions of any Option or impair any
right of any Optionee pursuant to any Option awarded prior to the date of such
termination and notwithstanding such termination, such Options shall continue to
be governed by the provisions of the Plan, which shall survive the termination
for such purpose. 

9.4              Applicable
Laws or Regulations 

The Company’s obligation to sell and deliver shares under each
Option is subject to compliance with all laws, rules and regulations of Canada
and the United States of America and any Provinces and/or States thereof
applying to the authorization, issuance, listing or sale of securities and, if
the shares of the Company are listed on an Exchange, is also subject to the
Exchange accepting for listing the shares which may be issued in exercise
thereof. The Company may request that an Optionee demonstrate compliance with
securities laws outside of British Columbia, if applicable, to the exercise of
an Option.

10.              
APPROVALS REQUIRED FOR PLAN 

10.1            
Approvals Required for Plan 

The Plan must be approved by the Exchange and on a yearly basis
by the shareholders at the annual general meeting of the Company.

11.               
EFFECTIVE DATE OF PLAN 

The Plan has been adopted by the Board of the Company subject
to the approval of the Exchange. If so approved, the Plan shall become effective
upon such approval being obtained, subject to disinterested shareholder approval
being obtained in accordance with the Policies where applicable. 

12.               
INTERPRETATION 

This Plan is established under and the provisions of the Plan
shall be interpreted and construed in accordance with the laws of the Province
of British Columbia. 

IN WITNESS WHEREOF the Company has executed and
delivered this Stock Option Plan as of the 3rd day of November, 2004.


INTERNATIONAL BARRIER TECHNOLOGY INC. 


	Per:	 	 
	 	Authorized Signatory 	 


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SCHEDULE "A" 

INTERNATIONAL BARRIER TECHNOLOGY INC. 

STOCK OPTION CERTIFICATE 

PURSUANT TO THE 

2004 STOCK OPTION PLAN 

This Certificate is issued pursuant to the provisions of the
  Company’s 2004 Stock Option Plan and evidences that __________ is the holder
  of an Option to purchase up to ___________ shares in the capital stock of the
  Company at a purchase price of $___________ per Share. Subject to the provisions
  of the Plan: 

	 	(a) 	the Award Date of this Option is
      ________________________________; and 
	 	 	 
	 	(b) 	the Expiry Date of this Option is
      ________________________________. 


Other Restrictions: 

This Option may be exercised from the Award Date until 5:00
p.m. local time in Vancouver, British Columbia on the Expiry Date, by delivering
to the Administrator of the Plan an Exercise Notice, in the form provided in the
Plan, together with this Certificate and a certified cheque or bank draft
payable to INTERNATIONAL BARRIER TECHNOLOGY INC. or such other entity as
the Company may direct, in an amount equal to the aggregate Exercise Price of
the shares in respect of which this Option is being exercised; provided that the
Optionee must have satisfied the conditions precedent, if any, to the exercise
of the Option set out in the Plan. When due notice and payment are received, the
Company covenants and agrees to issue and deliver to the Optionee share
certificates in the name of the Optionee for the number of shares so purchased.


This Certificate and the Option evidenced hereby is not
assignable, transferable or negotiable. This Certificate is issued for
convenience only and in the case of any dispute with regard to any matter in
respect hereof, the provisions of the Plan and records of the Company shall
prevail. 

THE EXERCISE OF THIS OPTION IS SUBJECT TO THE TERMS AND
RESTRICTIONS SET OUT IN THE STOCK OPTION PLAN. TERMS HAVE THE MEANING AS SET OUT
IN THE STOCK OPTION PLAN. 

Dated this _____________________ day of _______________________,
  200__. 

INTERNATIONAL BARRIER TECHNOLOGY INC. 

  

	Per: 	 
	Authorized Signatory 	 


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SCHEDULE "B" 

INTERNATIONAL BARRIER TECHNOLOGY INC. 

EXERCISE NOTICE 

	To: 	The Board of Directors - Stock Option Plan
  
	  	INTERNATIONAL BARRIER TECHNOLOGY INC.
  


 

The undersigned hereby irrevocably gives notice, pursuant to
  Company’s 2004 Stock Option Plan, of the exercise of the Option to acquire
  and hereby subscribes for (cross out inapplicable item): 

	 	(a) 	all of the Shares; or 
	 	 	 
	 	(b) 	__________________________ of the Shares; 


which are the subject of the Option Certificate held by the
undersigned evidencing the undersigned's option to purchase said shares. 

Calculation of total Exercise Price: 

	 	(i) 	number of Shares to be acquired on exercise 	                                                             Shares
    
	 	 	 	 
	 	(ii) 	multiplied by the Exercise Price per Share: 	$                                                          
    
	 	 	 	 
	 	TOTAL EXERCISE PRICE, enclosed
      herewith: 	$                                                          
    


The undersigned tenders herewith a certified cheque or bank draft
  (circle one) in the amount of $_____________ payable to the Company in an amount
  equal to the total Exercise Price of the aforesaid shares, as calculated above,
  and directs the Company to issue the share certificate evidencing said shares
  in the name of the undersigned to be mailed to the undersigned at the following
  address: 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


Dated this _____________________ day of _______________________,
  ________. 

	 	 	 
	Signature of Witness 	 	Signature of Optionee 
	 	 	 
	 	 	 
	 	 	 
	Name of Witness (please print) 	 	Name of Optionee (please print) 


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