Filed by Automated Filing Services Inc. (604) 609-0244 - International Barrier Technology Inc. - Exhibit 10.4






Exhibit 10.4 

INTERNATIONAL BARRIER TECHNOLOGY INC. 

2005 STOCK OPTION PLAN 

1.               
 PURPOSE 

This 2005 Stock Option Plan (the “Plan”) is intended to advance
the interests of INTERNATIONAL BARRIER TECHNOLOGY INC. (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

Unless otherwise defined in this Plan, all capitalized words
will 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 Board of Directors (the “Board”) will administer the Plan
on the instructions of 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 will 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 will be final and conclusive and will 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 will 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 will be entitled to indemnification with respect to
any such action or determination in the manner provided for by the Company. 

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 maximum number of shares of common stock which may be issued and
sold hereunder will be a maximum of 10% of the issued shares of the Company at
the date of granting the stock option. Options will only be granted to bona fide
Directors, Employees, Consultants and Management Company Employees. Shares of
common stock issued and sold under the Plan may be either authorized but
unissued shares or shares held in the Company's treasury. Shares of common stock
covered by an option that will have been exercised will not 




again be available for an option grant. If an option will
terminate for any reason (including, without limitation, the cancellation of an
option pursuant to section 6.2 hereof) without being wholly exercised, the
number of shares to which such option termination relates will again be
available for grant hereunder. 

4.2               
Adjustments 

In the event (collectively the "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
will 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 will 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 a Board Lot will 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 will, from time to time, in its sole
discretion, determine those Directors, Employees, and Consultants, if any, to
whom options are to be awarded. If the Board elects to award an option to a
Director, the Board will, 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 will 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, the
Board will, subject to section 5.4 hereof, 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. 

5.3               
Exercise Price. 

The exercise price of the shares covered by each option will be
determined by the Board. The minimum exercise price must not be less than the
Discounted Market Price, which is the last closing price of the Listed Shares
before the date of the stock option grant (less the applicable discount). A
minimum exercise price cannot be established unless the options are allocated to
particular Persons. 




The minimum exercise price of any option granted within 90 days
of a Distribution by a Prospectus, will be the greater of the Discounted Market
Price and the per share price the public investors paid for Listed Shares
acquired under the Distribution. The 90 day period begins: 

	 	(a) 	
      on the date a final receipt is issued for the Prospectus;
      or 

	 	 	
       

	 	(b) 	
      in the case of a Prospectus that qualifies shares to be
      issued on the conversion of special warrants, on the closing date of the
      special warrant Private Placement. 



Disinterested Shareholder Approval will be required prior to
any reduction in the exercise price if the Optionee is an Insider of the Company
at the time of the proposed amendment. 

5.4               
Exercise of Option 

Any option may be exercised only by the Optionee, subject to
the acceptance by the Exchange. An Optionee may exercise an option in whole or
in part, subject to section 5.5 at any time or from time to time during the
Exercise Period up to 5:00 p.m. local time in Vancouver, British Columbia on the
expiry date set out in the Option Certificate, or as provided in sections 6.2
and 7 hereof (the “Expiry Date”), by delivering to the Company an Exercise
Notice, and the applicable Option Certificate, 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. 

5.5               
Number of Optioned Shares 

The Company will 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) 	
      will result in the number of options granted to Insiders
      within a 12 month period, exceeding 10% of the issued shares; 

	 	 	
       

	 	(c) 	
      for any one individual, 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, in which case reasonable grants of options will be
      permitted by the Exchange if the Company has obtained the requisite
      Disinterested Shareholder Approval; 

	 	 	
       

	 	(d) 	
      result in options representing more than an aggregate of
      2% of the issued shares of the Company being held by all Employees
      conducting Investor Relations Activities in any 12 month period;


	 	 	
       

	 	(e) 	
      result in options representing more than 2% of the issued
      shares of the Company being held by 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. 



If any option is cancelled, expires or otherwise terminates for
any reason without having been exercised in full, the number of shares which
would have been acquired on the exercise of such option will again be available
for the purposes of the Plan. 




5.6               
Term 

Subject to section 6.2 hereof, the term 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 10 years if the Company is classified by the Exchange
as a Tier 1 Issuer (the “Option Period”). 

5.7               
Vesting 

An option which is subject to vesting, will 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.

No option holder will have any of the rights of a shareholder
in respect to common shares under an option until such common shares will have
been paid for in full and issued by the Company. 

6.                 
OPTIONS 

6.1               
Duration of Option 

Each option and all rights thereunder will expire on 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 during 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 will 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 Board, the Expiry Date of an option will 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 (d) 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 will be
      90 days after 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 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
      will be 90 days after the date the Optionee ceases to be an Employee,
      Consultant or Management Company 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 will be 30 days
      after the date the Optionee ceases to perform Investor Relations
      Activities for the Company. 








	 	(d) 	
      Death 

	 	 	
       
	
       

	 		
      If the Optionee dies, then the Expiry Date will be one
      year from the date of death of the Optionee. In the event of the death of
      an Optionee, the Optionee’s option will 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 will 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. 



6.3               
Leave of Absence 

In the event an option holder will go on an approved leave of
absence, the Board may make such provision respecting continuance of the option
as they may deem equitable, except that in no event will any option be
exercisable after the date specified in it for expiration. In making such
equitable provisions for an option holder or leave of absence, the relationship
between such person and the Company will be treated as continuing for the
purposes of this Plan. 

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 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, the Board may make such
arrangements as the Board deems appropriate for the exercise of outstanding
options or continuance of outstanding options. 

8.                 
ASSIGNMENT OF OPTIONS 

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


9.                 
AMENDMENT AND TERMINATION 

9.1               
Prospective Amendment 

Subject to section 10.2 hereof, the Board may from time to time
amend the Plan and the terms and conditions of any option thereafter to be
awarded and, without limiting the generality of the foregoing, may make such
amendment for the purpose of meeting any changes in any relevant law, rule or
regulation applicable to the Plan, any option or the shares, or for any other
purpose which may be permitted by all relevant laws, rules and regulation,
provided always that any such amendment will not alter the terms or conditions
of any option or impair any right of any Optionee pursuant to any option awarded
prior to such amendment. 




9.2               
Retroactive Amendment 

Subject to section 10.2 hereof, the Board may from time to time
retroactively amend the plan and, with the consent of the affected Optionees,
retroactively amend the terms and conditions of any options which have been
theretofore awarded. 

9.3               
Termination 

The Board may terminate the Plan at any time provided that such
termination will 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, the Company, such options and
such Optionees will continue to be governed by the provisions of the Plan. 

9.4               
Agreement 

The Company and every person to whom an option is awarded
hereunder will be bound by and subject to the terms and conditions of the Plan.


10.               
APPROVALS REQUIRED FOR PLAN 

10.1              Approvals
Required for Plan 

The Plan must be approved by the Exchange and by the
shareholders at every annual general meeting of the Company.

10.2               Substantive
Amendments to Plan 

Shareholder approval will be sought in respect of any material
amendment to the Plan. 

Disinterested Shareholder Approval will be sought in respect of
any reduction in the exercise price, if the Optionee is an Insider of the
Company at the time of the proposed amendment.

11.                
EFFECTIVE DATE OF PLAN 

The Plan has been adopted by the Board of the Company subject
to the approval of the TSX Venture Exchange and, if so approved, the Plan will
become effective upon such approval being obtained, subject to Disinterested
Shareholder Approval being obtained in accordance with the Policies if
necessary. 

12.               INTERPRETATION


This Plan is established under and the provisions of the Plan
will 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 17th day of November,
2005. 

INTERNATIONAL BARRIER TECHNOLOGY INC. 

 

	Per:	 	 
	 	Authorized Signatory 	 






SCHEDULE "A" 

INTERNATIONAL BARRIER TECHNOLOGY INC. 

STOCK OPTION CERTIFICATE

PURSUANT TO THE

2005 STOCK OPTION PLAN 

This Certificate is issued pursuant to the provisions of the
  Company’s 2005 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 its solicitors in an
amount equal to the aggregate of the Exercise Price of the Shares in respect of
which this option is being exercised; provided that the Optionee will 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 will
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 	 





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 Stock Option Plan, of the exercise of the option to acquire
  and hereby subscribes for (cross out inapplicable item): 

The undersigned hereby irrevocably gives notice, pursuant to
  Company’s 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)