exv4w9



 






Exhibit 4.9




WHITE MOUNTAIN TITANIUM CORPORATION




(the “Company” or “WMTC”)




STOCK OPTION PLAN




1. PURPOSE OF THE PLAN




     The Company hereby establishes a stock option plan for directors, officers and Service
Providers (as defined below) of the Company and its subsidiaries, to be known as the “White
Mountain Stock Option Plan” (the “Plan”). The purpose of the Plan is to give to directors,
officers and Service Providers, as additional compensation, the opportunity to participate in the
profitability of the Company by granting to such individuals options, exercisable over periods of
up to five years as determined by the board of directors of the Company, to buy shares of the
Company at a price equal to the Market Price prevailing on the date the option is granted less
applicable discount, if any, permitted by the policies of the Exchanges and approved by the Board.




	2.	 	DEFINITIONS
	 
	 	 	In this Plan, the following terms shall have the following meanings:
	 
	2.1	 	“Associate” means an associate as defined in the Securities Act.
	 
	2.2	 	“Board” means the Board of Directors of the Company.
	 
	2.3	 	“Change of Control” means the acquisition by any person or by any person and a Joint Actor,
whether directly or indirectly, of voting securities (as defined in the Securities Act) of the
Company, which, when added to all other voting securities of the Company at the time held by
such person or by such person and a Joint Actor, totals for the first time not less than fifty
percent (50%) of the outstanding voting securities of the Company or the votes attached to
those securities are sufficient, if exercised, to elect a majority of the Board of Directors
of the Company.
	 
	2.4	 	“Company” means White Mountain Titanium Corporation and its successors.
	 
	2.5	 	“Disability” means any disability with respect to an Optionee which the Board, in its sole
and unfettered discretion, considers likely to prevent permanently the Optionee from:






	 	(a)	 	being employed or engaged by the Company, its subsidiaries or another employer,
in a position the same as or similar to that in which he was last employed or engaged
by the Company or its subsidiaries; or
	 
	 	(b)	 	acting as a director or officer of the Company or its subsidiaries.






	2.6	 	“Discounted Market Price” of Shares means, if the Shares are listed only on the TSX Venture
Exchange, the Market Price less the maximum discount permitted under the policy of the TSX
Venture Exchange applicable to Options;






	2.7	 	“Exchanges” means the TSX Venture Exchange and, if applicable, the Toronto Stock Exchange and
any other stock exchange on which the Shares are listed.














 












	2.8	 	“Expiry Date” means the date set by the Board under section 3.1 of the Plan, as the last date
on which an Option may be exercised.






	2.9	 	“Grant Date” means the date specified in an Option Agreement as the date on which an Option
is granted.






	2.10	 	“Insider” means:






	 	(a)	 	an insider as defined in the Securities Act, other than a person who is an
insider solely by virtue of being a director or senior officer of a subsidiary of the
Company; and
	 
	 	(b)	 	an Associate of any person who is an insider under subsection (a).






	2.11	 	“Investor Relations Activities” means investor relations activities as defined in the rules
and policies of the TSX Venture Exchange.






	2.12	 	“Joint Actor” means a person acting “jointly or in concert with” another person as that
phrase is interpreted in section 96 of the Securities Act.






	2.13	 	“Market Price” of Shares at any Grant Date means, if the Shares are listed on the Toronto
Stock Exchange, the closing price per Share on the Toronto Stock Exchange or, for the last day
Shares were traded prior to the Grant Date or, if the Shares are only listed on the TSX
Venture Exchange, “Market Price” of Shares means the last closing price per Share on the
trading day immediately preceding the day on which the TSX Venture Exchange received notice
that the directors granted the Option (in accordance with the policies of the TSX Venture
Exchange as may exist from time to time) or if the Shares are not listed on any stock
exchange, “Market Price” of Shares means the price per Share on the over-the-counter market
determined by dividing the aggregate sale price of the Shares sold by the total number of such
Shares so sold on the applicable market for the last day prior to the Grant Date.
	 
	2.14	 	“Option” means an option to purchase Shares granted pursuant to this Plan.
	 
	2.15	 	“Option Agreement” means an agreement, in the form attached hereto as Schedule “A”, whereby
the Company grants to an Optionee an Option.
	 
	2.16	 	“Optionee” means each of the directors, officers and Service Providers granted an Option
pursuant to this Plan and their heirs, executors and administrators and, subject to the
policies of the Exchange, an Optionee may also be a corporation wholly-owned by an individual
eligible for an Option grant pursuant to this Plan.
	 
	2.17	 	“Option Price” means the price per Share specified in an Option Agreement, adjusted from time
to time in accordance with the provisions of section 5.
	 
	2.18	 	“Option Shares” means the aggregate number of Shares which an Optionee may purchase under an
Option.
	 
	2.19	 	“Plan” means this White Mountain Titanium Corporation Stock Option Plan.
	 
	2.20	 	“Shares” means the common shares in the capital of the Company as constituted on the Grant
Date provided that, in the event of any adjustment pursuant to section 5, “Shares” shall
thereafter mean the shares or other property resulting from the events giving rise to the
adjustment.




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	2.21	 	“Securities Act” means the Securities Act, R.S.B.C. 1996, c.418, as amended, as at the date
hereof.
	 
	2.22	 	“Service Provider” means:






	 	(a)	 	an employee or Insider of the Company or any of its subsidiaries;
	 
	 	(b)	 	any other person or company engaged to provide ongoing management or consulting
services or Investor Relations Activities for the Company or for any entity controlled
by the Company; and
	 
	 	(c)	 	any person who is providing ongoing management or consulting services or
Investor Relations Activities to the Company or to any entity controlled by the Company
indirectly through a company that is a Service Provider under subsection 2. 21(b).






	2.23	 	“Unissued Option Shares” means the number of Shares, at a particular time, which have been
allotted for issuance upon the exercise of an Option but which have not been issued, as
adjusted from time to time in accordance with the provisions of section 5, such adjustments to
be cumulative.
	 
	2.24	 	“Vested” means that an Option has become exercisable in respect of a number of Option Shares
by the Optionee pursuant to the terms of the Option Agreement.





3.
GRANT OF OPTIONS


3.1 Option
Terms


     The Board may from time to time authorize the issue of Options to directors, officers and
Service Providers of the Company and its subsidiaries. The Option Price under each Option shall be
not less than the Discounted Market Price on the Grant Date. The Expiry Date for each Option shall
be set by the Board at the time of issue of the Option and shall not be more than five years after
the Grant Date. Options shall not be assignable (or transferable) by the Optionee.



3.2 Limits on Shares Issuable on Exercise of Options




     The maximum number of Shares which may be issuable pursuant to options granted under the Plan
shall be 3,140,000 Shares or such additional amount as may be approved from time to time by the
shareholders of the Company. The number of Shares issuable to any one Optionee under the Plan,
together with all of the Company’s other previously established or proposed share compensation
arrangements, shall not exceed 5% of the total number of issued and outstanding shares on a
non-diluted basis. The number of Shares which may be reserved for issue pursuant to options
granted to Insiders under the Plan, together with all of the Company’s other previously established
or proposed share compensation arrangements, in aggregate, shall not exceed 20% of the total number
of issued and outstanding Shares on a non-diluted basis. The number of Shares which may be
issuable under the Plan, together with all of the Company’s other previously established or
proposed share compensation arrangements, within a one-year period:




	 	(a)	 	in aggregate shall not exceed 20% of the outstanding issue;




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	 	(b)	 	to any one Optionee, shall not exceed 5% in the aggregate of the outstanding
issue over a twelve month period; and
	 
	 	(c)	 	if granted to consultants shall not exceed 2% at the time of the grant.





     For the purposes of subsections (a) and (b) above, “outstanding issue” is determined on the basis
of the number of Shares that are outstanding immediately prior to the Share issuance in question,
excluding Shares issued pursuant to Share compensation arrangements over the preceding one-year
period.



3.3 Option Agreements




     Each Option shall be confirmed by the execution of an Option Agreement. Each Optionee shall
have the option to purchase from the Company the Option Shares at the time and in the manner set
out in the Plan and in the Option Agreement applicable to that Optionee. For stock options to
Employees, Consultants or Management Company Employees, the Company is representing herein and in
the applicable Stock Option Agreement that the Optionee is a bona fide Employee, Consultant or
Management Company Employee (as defined in the applicable policies of the Exchanges), as the case
may be, of the Company or its subsidiary. The execution of an Option Agreement shall constitute
conclusive evidence that it has been completed in compliance with this Plan.



4. EXERCISE OF OPTION




4.1 When Options May be Exercised




     Subject to sections 4.3 and 4.4, an Option may be exercised to purchase any number of Shares
up to the number of Vested Unissued Option Shares at any time after the Grant Date up to 5:00 p.m.
local time on the Expiry Date and shall not be exercisable thereafter.



4.2 Manner of Exercise




     The Option shall be exercisable by delivering to the Company a notice specifying the number of
Shares in respect of which the Option is exercised together with payment in full of the Option
Price for each such Share. Upon notice and payment there will be a binding contract for the issue
of the Shares in respect of which the Option is exercised, upon and subject to the provisions of
the Plan. Delivery of the Optionee’s cheque payable to the Company in the amount of the Option
Price shall constitute payment of the Option Price unless the cheque is not honoured upon
presentation in which case the Option shall not have been validly exercised.



4.3 Vesting of Option Shares




     The Directors, subject to the policies of the TSX Venture Exchange, may determine and impose
terms upon which each Option shall become Vested in respect of Option Shares. Current policies of
the TSX Venture Exchange provide that minimum vesting requirements shall be 25% of the Option upon
TSX Venture Exchange approval and 12 1/2% every quarter thereafter which is the vesting period
hereby adopted by the directors of the Company.



4.4 Termination of Employment




     If an Optionee ceases to be a director, officer or Service Provider of the Company or one of
the Company’s subsidiaries, his or her Option shall be exercisable as follows:



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	 	(a)	 	Death or Disability
	 
	 	 	 	If the Optionee ceases to be a director, officer or Service Provider of the Company
or a subsidiary of the Company, due to his or her death or Disability or, in the
case of an Optionee that is a company, the death or Disability of the person who
provides management or consulting services to the Company or to any entity
controlled by the Company, the Option then held by the Optionee shall be exercisable
to acquire Vested Unissued Option Shares at any time up to but not after the earlier
of:






	 	(i)	 	365 days after the date of death or Disability; and
	 
	 	(ii)	 	the Expiry Date;






	 	(b)	 	Termination For Cause
	 
	 	 	 	If the Optionee, or in the case of an Option granted to an Optionee who falls under
the definition of Service Provider set out in subsection 2.21(c), the Optionee’s
employer, ceases to be a director, officer or Service Provider of the Company or a
subsidiary of the Company as a result of termination for cause, as that term is
interpreted by the courts of the jurisdiction in which the Optionee, or, in the case
of the Optionee who satisfies the definition of Service Provider set out in
subparagraph 2.20(c), of the Optionee’s employer, is employed or engaged; any
outstanding Option held by such Optionee on the date of such termination, whether in
respect of Option Shares that are Vested or not, shall be cancelled as of that date.
	 
	 	(c)	 	Early Retirement, Voluntary Resignation or Termination Other than For Cause
	 
	 	 	 	If the Optionee or, in the case of an Option granted to an Optionee who falls under
the definition of Service Provider set out in subparagraph 2.21(c), the Optionee’s
employer, ceases to be a director, officer or Service Provider of the Company or a
subsidiary of the Company due to his or her retirement at the request of his or her
employer earlier than the normal retirement date under the Company’s retirement
policy then in force, or due to his or her termination by the Company other than for
cause, or due to his or her voluntary resignation, the Option then held by the
Optionee shall be exercisable to acquire Vested Unissued Option Shares at any time
up to but not after the earlier of the Expiry Date and the date which is 90 days (30
days if the Optionee was engaged in Investor Relations Activities) after the
Optionee or, in the case of an Option granted to an Optionee who falls under the
definition of Service Provider set out in subparagraph 2.21(c), the Optionee’s
employer, ceases to be a director, officer or Service Provider of the Company or a
subsidiary of the Company.




For greater certainty, an Option that had not become Vested in respect of certain Unissued Option
Shares at the time that the relevant event referred to in this paragraph 4.4 occurred, shall not be
or become exercisable in respect of such Unissued Option Shares and shall be cancelled.




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4.5 Effect of a Take-Over Bid




     If a bona fide offer ( an “Offer”) for Shares is made to the Optionee or to shareholders of
the Company generally or to a class of shareholders which includes the Optionee, which Offer, if
accepted in whole or in part, would result in the offeror becoming a control person of the Company,
within the meaning of subsection 1(1) of the Securities Act, the Company shall, immediately upon
receipt of notice of the Offer, notify each Optionee of full particulars of the Offer, whereupon
all Option Shares subject to such Option will become Vested and the Option may be exercised in
whole or in part by the Optionee so as to permit the Optionee to tender the Option Shares received
upon such exercise, pursuant to the Offer. However, if:




	 	(a)	 	the Offer is not completed within the time specified therein; or
	 
	 	(b)	 	all of the Option Shares tendered by the Optionee pursuant to the Offer are not
taken up or paid for by the offeror in respect thereof,





then the Option Shares received upon such exercise, or in the case of clause (b) above, the Option
Shares that are not taken up and paid for, may be returned by the Optionee to the Company and
reinstated as authorized but unissued Shares and with respect to such returned Option Shares, the
Option shall be reinstated as if it had not been exercised and the terms upon which such Option
Shares were to become Vested pursuant to paragraph 4.3 shall be reinstated. If any Option Shares
are returned to the Company under this paragraph 4.5, the Company shall immediately refund the
exercise price to the Optionee for such Option Shares.



4.6 Acceleration of Expiry Date




     If at any time when an Option granted under the Plan remains unexercised with respect to any
Unissued Option Shares, an Offer is made by an offeror, the Directors may, upon notifying each
Optionee of full particulars of the Offer, declare all Option Shares issuable upon the exercise of
Options granted under the Plan, Vested, and declare that the Expiry Date for the exercise of all
unexercised Options granted under the Plan is accelerated so that all Options will either be
exercised or will expire prior to the date upon which Shares must be tendered pursuant to the
Offer.



4.7 Effect of a Change of Control




     If a Change of Control occurs, all Option Shares subject to each outstanding Option will
become Vested, whereupon such Option may be exercised in whole or in part by the Optionee.



4.8 Exclusion From Severance Allowance, Retirement Allowance or Termination Settlement




     If the Optionee, or, in the case of an Option granted to an Optionee who falls under the
definition of Service Provider set out in subsection 2.21(c), the Optionee’s employer, retires,
resigns or is terminated from employment or engagement with the Company or any subsidiary of the
Company, the loss or limitation, if any, pursuant to the Option Agreement with respect to the right
to purchase Option Shares which were not Vested at that time or which, if Vested, were cancelled,
shall not give rise to any right to damages and shall not be included in the calculation of nor
form any part of any severance allowance, retiring allowance or termination settlement of any kind
whatsoever in respect of such Optionee.



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4.9 Shares Not Acquired




     Any Unissued Option Shares not acquired by an Optionee under an Option which has expired may
be made the subject of a further Option pursuant to the provisions of the Plan.



5. ADJUSTMENT OF OPTION PRICE AND NUMBER OF OPTION SHARES




5.1 Share Reorganization




     Whenever the Company issues Shares to all or substantially all holders of Shares by way of a
stock dividend or other distribution, or subdivides all outstanding Shares into a greater number of
Shares, or combines or consolidates all outstanding Shares into a lesser number of Shares (each of
such events being herein called a “Share Reorganization”) then effective immediately after the
record date for such dividend or other distribution or the effective date of such subdivision,
combination or consolidation, for each Option:




	 	(a)	 	the Option Price will be adjusted to a price per Share which is the product of:






	 	(i)	 	the Option Price in effect immediately before that effective
date or record date; and
	 
	 	(ii)	 	a fraction, the numerator of which is the total number of
Shares outstanding on that effective date or record date before giving effect
to the Share Reorganization, and the denominator of which is the total number
of Shares that are or would be outstanding immediately after such effective
date or record date after giving effect to the Share Reorganization; and






	 	(b)	 	the number of Unissued Option Shares will be adjusted by multiplying (i) the
number of Unissued Option Shares immediately before such effective date or record date
by (ii) a fraction which is the reciprocal of the fraction described in subsection
(a)(ii).





5.2 Special Distribution




     Subject to the prior approval of the Exchanges, whenever the Company issues by way of a
dividend or otherwise distributes to all or substantially all holders of Shares;




	 	(a)	 	shares of the Company, other than the Shares;
	 
	 	(b)	 	evidences of indebtedness;
	 
	 	(c)	 	any cash or other assets, excluding cash dividends (other than cash dividends
which the Board of Directors of the Company has determined to be outside the normal
course); or
	 
	 	(d)	 	rights, options or warrants;




then to the extent that such dividend or distribution does not constitute a Share Reorganization
(any of such non-excluded events being herein called a “Special Distribution”), and effective
immediately after the record date at which holders of Shares are determined for purposes of the
Special Distribution, for each Option the Option Price will be reduced, and the number of Unissued
Option Shares will be correspondingly increased, by such amount, if any, as is determined by the
Board in its sole and




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unfettered discretion to be appropriate in order to properly reflect any diminution in value of the
Option Shares as a result of such Special Distribution.




5.3 Corporate Organization



      Whenever
there is:



	 	(a)	 	a reclassification of outstanding Shares, a change of Shares into other shares
or securities, or any other capital reorganization of the Company, other than as
described in sections 5.1 or 5.2;
	 
	 	(b)	 	a consolidation, merger or amalgamation of the Company with or into another
corporation resulting in a reclassification of outstanding Shares into other shares or
securities or a change of Shares into other shares or securities; or
	 
	 	(c)	 	a transaction whereby all or substantially all of the Company’s undertaking and
assets become the property of another corporation;




(any such event being herein called a “Corporate Reorganization”) the Optionee will have an option
to purchase (at the times, for the consideration, and subject to the terms and conditions set out
in the Plan) and will accept on the exercise of such option, in lieu of the Unissued Option Shares
which he would otherwise have been entitled to purchase, the kind and amount of shares or other
securities or property that he would have been entitled to receive as a result of the Corporate
Reorganization if, on the effective date thereof, he had been the holder of all Unissued Option
Shares or if appropriate, as otherwise determined by the Directors.




5.4 Determination of Option Price and Number of Unissued Option Shares




     If any questions arise at any time with respect to the Option Price or number of Unissued
Option Shares deliverable upon exercise of an Option following a Share Reorganization, Special
Distribution or Corporate Reorganization, such questions shall be conclusively determined by the
Company’s auditor, or, if they decline to so act, any other firm of Chartered Accountants in
Vancouver, British Columbia, that the Directors may designate and who will have access to all
appropriate records and such determination will be binding upon the Company and all Optionees.



5.5 Regulatory Approval




     Any adjustment to the Option Price or the number of Unissued Option Shares purchasable under
the Plan pursuant to the operation of any one of paragraphs 5.1, 5.2 or 5.3 is subject to the
approval of the Exchanges and any other governmental authority having jurisdiction.



6. MISCELLANEOUS




6.1 Right to Employment




     Neither this Plan nor any of the provisions hereof shall confer upon any Optionee any right
with respect to employment or continued employment with the Company or any subsidiary of the
Company or interfere in any way with the right of the Company or any subsidiary of the Company to
terminate such employment.



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6.2 Necessary Approvals




     The Plan shall be effective only upon the approval of the shareholders of the Company given by
way of an ordinary resolution. Any Options granted under this Plan prior to such approval shall
only be exercised upon the receipt of such approval. Disinterested shareholder approval (as
required by the Exchanges) will be obtained for any reduction in the exercise price of any Option
granted under this Plan if the Optionee is an Insider of the Company at the time of the proposed
amendment. The obligation of the Company to sell and deliver Shares in accordance with the Plan is
subject to the approval of the Exchanges and any governmental authority having jurisdiction. If
any Shares cannot be issued to any Optionee for any reason, including, without limitation, the
failure to obtain such approval, then the obligation of the Company to issue such Shares shall
terminate and any Option Price paid by an Optionee to the Company shall be immediately refunded to
the Optionee by the Company.



6.3 Administration of the Plan




     The Directors shall, without limitation, have full and final authority in their discretion,
but subject to the express provisions of the Plan, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan and to make all other determinations deemed
necessary or advisable in respect of the Plan. Except as set forth in section 5.4, the
interpretation and construction of any provision of the Plan by the Directors shall be final and
conclusive. Administration of the Plan shall be the responsibility of the appropriate officers of
the Company and all costs in respect thereof shall be paid by the Company.



6.4 Income Taxes




     As a condition of and prior to participation in the Plan any Optionee shall on request
authorize the Company in writing to withhold from any remuneration otherwise payable to him or her
any amounts required by any taxing authority to be withheld for taxes of any kind as a consequence
of his or her participation in the Plan.



6.5 Amendments to the Plan




     The Directors may from time to time, subject to applicable law and to the prior approval, if
required, of the Exchanges or any other regulatory body having authority over the Company or the
Plan, suspend, terminate or discontinue the Plan at any time, or amend or revise the terms of the
Plan or of any Option granted under the Plan and the Option Agreement relating thereto, provided
that no such amendment, revision, suspension, termination or discontinuance shall in any manner
adversely affect any Option previously granted to an Optionee under the Plan without the consent of
that Optionee. Any amendments to the Plan or options granted thereunder will be subject to the
approval of the shareholders.



6.6 Form of Notice




     A notice given to the Company shall be in writing, signed by the Optionee and delivered to the
head business office of the Company.



6.7 No representation or Warranty




     The Company makes no representation or warranty as to the future market value of any Shares
issued in accordance with the provisions of the Plan.



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6.8 Compliance with Applicable Law




     If any provision of the Plan or any Option Agreement contravenes any law or any order, policy,
by-law or regulation of any regulatory body or Exchange having authority over the Company or the
Plan, then such provision shall be deemed to be amended to the extent required to bring such
provision into compliance therewith.



6.9 No Assignment




     No Optionee may assign any of his or her rights under the Plan.



6.10 Rights of Optionees




     An Optionee shall have no rights whatsoever as a shareholder of the Company in respect of any
of the Unissued Option Shares (including, without limitation, voting rights or any right to receive
dividends, warrants or rights under any rights offering).



6.11 Conflict




     In the event of any conflict between the provisions of this Plan and an Option Agreement, the
provisions of this Plan shall govern.



6.12 Governing Law




     The Plan and each Option Agreement issued pursuant to the Plan shall be governed by the laws
of the province of British Columbia.



6.13 Time of Essence




     Time is of the essence of this Plan and of each Option Agreement. No extension of time will
be deemed to be or to operate as a waiver of the essentiality of time.



6.14 Entire Agreement




     This Plan and the Option Agreement sets out the entire agreement between the Company and the
Optionees relative to the subject matter hereof and supersedes all prior agreements, undertakings
and understandings, whether oral or written.



Approved by the Board of Directors on August 30, 2005




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