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Exhibit 10.27    
  

ADDISON ENERGY INC.  

 FORM OF STOCK OPTION AGREEMENT  

 JUNE 30, 2002  

  
 

    TABLE OF CONTENTS    
  

	1.	Definitions	1
	

2.	

The Plan	

3
	

3.	

Purpose	

3
	

4.	

Administration	

3
	

5.	

Participation and Grant	

4
	

6.	

Value of the Corporation	

4
	

7.	

Tenn and Vesting	

6
	

8.	

Method of Exercise of Options	

8
	

9.	

Termination of Employment	

9
	

10.	

Death, Permanent Disability or Retirement of a Participant	

10
	

11.	

Adjustments	

10
	

12.	

Transferability	

10
	

13.	

Suspension, Termination or Amendment of Plan	

10
	

14.	

Gender	

10
	

15.	

Governing Law	

11
	

SCHEDULE A	

Form of Stock Option Grant Agreement
	

SCHEDULE B	

Form of Notice of Determined Value Per Option
	

SCHEDULE C	

Form of Exercise and Power of Attorney
	

SCHEDULE D	

Unanimous Shareholder Agreement

  

 
 

ADDISON ENERGY INC.
  
    STOCK OPTION AGREEMENT    
  

	1.
	Definitions

        In
this Plan: 

	(a)
	"affiliate" has the meaning ascribed thereto by the Securities Act (Alberta);

	(b)
	"Acquisition" means the acquisition of all of the common shares of the Corporation by EXCO Resources Canada Inc. on
April 26, 2001;

	(c)
	"Base Value Per Option" means One Thousand Thirty One Dollars and Sixty One Cents ($1031.61);

	(d)
	"Board" means the board of directors of the Corporation;

	(e)
	"Change of Control" shall have the meaning ascribed thereto in Section 7. d. below;

	(f)
	"Corporation" means Addison Energy Inc.;

	(g)
	"Corporation's Financial Statements" means the unaudited financial statements of the Corporation for a calendar year prepared in
accordance with GAAP;

	(h)
	"Deemed Deferred Tax Liability" means the amount by which the acquisition price of a company purchased by the Corporation was
discounted because of the low tax basis or pools of the acquired company;

	(i)
	"Determination Date" means December 31 of each Participating Year or, in the event of a Change of Control, the effective date of
such Change of Control;

	(j)
	"Determined Value" means the Value of the Corporation as at a Determination Date for which the Value of the Corporation has been
determined multiplied by a fraction, the numerator of which is either (i) with respect to a Determination Date occurring at December 31 of a Participating Year, the average trading price
of EXCO's shares in U.S. Dollars ("USD") for the first ten (10) trading days of the following calendar year; or (ii) with respect to a DeteImination Date resulting from a Change of
Control, the price at which EXCO's common stock was valued in such Change of Control; and the denominator of which is $18.25 USD.

	(k)
	"Determined Value Per Option" means, at a particular date, the amount determined by dividing the Determined Value applicable on such
date by 10,000;

	(l)
	"Engineering Report" means: (i) in connection with a December 31 Determination Date, a report prepared by EXCO's
independent oil and gas engineering firm evaluating the Proved Reserves of the Corporation in the manner set forth in Section 6; or (ii) in connection with a Determination Date caused by
a Change of Control, EXCO's internal engineering report evaluating the Proved Reserves of the Corporation in the manner set forth in Section 6;

	(m)
	"Equity Contributions" means all contributions, of capital, properties or other assets to the Corporation by EXCO;

	(n)
	"Evaluation Date" means, for each year, the date in such year on which the Board establishes the Determined Value as at
December 31 of the immediately preceding Participating Year;

	(o)
	"EXCO" means EXCO Resources, Inc., a corporation incorporated under the laws of the State of Texas; 

1

 

	(p)
	"Exercise Form" means a notice of exercise of Options in the form annexed hereto as Schedule C;

	(q)
	"Exercise Period" means, for each year, the 30-day period commencing on the day immediately following the Evaluation Date
for such year;

	(r)
	"GAAP" means generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants, or
any successor institute, applicable as at the date on which any calculation or determination is required to be made or financial statements prepared hereunder, and where the Canadian Institute of
Chartered Accountants includes a recommendation in its Handbook concerning the treatment of an accounting matter, such recommendation shall be regarded as the only generally accepted accounting
principle applicable to the circumstances it covers;

	(s)
	"NYMEX" means the New York Mercantile Exchange;

	(t)
	"Net Working Capital Deficiency" means the amount by which the Corporation's current liabilities on a Determination Date exceed the
Corporation's current assets on such date, in each case as indicated in the Corporation's Financial Statements for such year;

	(u)
	"Net Working Capital Surplus" means the amount by which the Corporation's current assets on a Determination Date exceed the
Corporation's current liabilities on such date, in each case as indicated in the Corporation's Financial Statements for such year;

	(v)
	"Notice Form" means a notification of the Determined Value Per Option in the form annexed hereto as
Schedule B;

	(w)
	"Option Price" is the Base Value Per Option (unless otherwise redetermined by the Board) multiplied by the number of shares exercised
by a Participant;

	(x)
	"Options" means the rights granted to the Participants to purchase shares in the Corporation in accordance with the terms of this Plan;

	(y)
	"Participants" means Craig Hruska, Steve Fagan, Dennis McIntyre, Robert Hemminger, Gregory Robb, Ron Jocsak, James Beninger, Jonathan
Kuhn, Terry Pidkowa, and Duane Masse;

	(z)
	"Participating Years" means the calendar years in the five-year period ending December 31, 2006, and  "Participating
Year" means any one of such calendar years;

	(aa)
	"Permanent Disability" of a Participant shall be deemed to have occurred when two medical doctors
dealing at arm's length with the Corporation, EXCO and all the Participants deliver to the Corporation certificates stating that the Participant is disabled and by reason thereof cannot reasonably be
expected to be able to continue performing for the Corporation for a period of at least 12 months the duties he performed before such disability;

	(bb)
	"Plan" means the stock option plan of the Corporation established hereby and  "Section" means a section of
the Plan;

	(cc)
	"Proved Developed Producing Reserves" or "PDP" means
those reserves expected to be recovered from currently producing zones under continuation of present operating methods;

	(dd)
	"Proved Non-Producing Reserves" or "PNP"
means those reserves expected to be recovered from zones that have been completed and tested but are not yet producing due to lack of market, minor completion problems that are expected to be
corrected, or reserves expected to be recovered from future stimulation treatments based upon analogy to nearby wells. Proved Non-Producing Reserves also include reserves currently behind
the pipe in existing wells that are considered proved by virtue of successful testing or production in offsetting wells; 

2

 

	(ee)
	"Proved Reserves" means the Proved Developed Producing Reserves, Proved Non-Producing
Reserves and Proved Undeveloped Reserves of the Corporation;

	(ff)
	"Proved Undeveloped Reserves" or "PUD" means those
reserves attributable to wells to be drilled at locations which can be considered proved by virtue of favourable structural position and which can be anticipated with a high degree of certainty;

	(gg)
	"Term" has the meaning ascribed thereto in Section 7;

	(hh)
	"Value of the Corporation" means the value of the Corporation for the purposes of the Plan as determined
in accordance with the provisions of Section 6; and

	(ii)
	"Value of the Corporation's Proved Reserves" means the value of the Corporation's Proved Reserves as
determined in accordance with the provisions of Section 6.B. hereof. 

	2.
	The Plan

        A
stock option plan of the Corporation is hereby established on the terms set forth herein pursuant to which Options shall be granted to the Participants. 

	3.
	Purpose

        The
purpose of the Plan is to encourage the interest and desire of the Participants to increase and enhance the profitable operation and continued growth and development of the
Corporation. 

	4.
	Administration
	(a)
	The
Plan shall be administered by the Board.

	(b)
	Subject
to the terms and conditions set forth herein, the Board shall have the sole authority and discretion to: 
	(i)
	construe
and interpret the Plan and all agreements entered into under the Plan,

	(ii)
	prescribe,
amend and rescind rules and regulations relating to the Plan and the exercise of Options granted under the Plan, and

	(iii)
	make
all other determinations necessary or advisable for the administration of the Plan. 

All
determinations and interpretations made by the Board shall be binding on the Corporation and the Participants and their respective heirs, administrators, successors, personal representatives and
beneficiaries. 

	(c)
	Notwithstanding
any other provision of the Plan, the Board shall have the right to delegate the administration and operation of the Plan, in whole or in part, to a committee of the
Board, and whenever used herein the term "Board" shall include any committee to which the board has, fully or partially, delegated the administration and operation of the Plan. 

	5.
	Participation and Grant

        The
Corporation shall grant to the Participant a total of 20 Options, upon the terms and conditions and subject to the limitations set forth in the Plan. Options granted under the Plan
shall be evidenced by an agreement signed on behalf of the Corporation by any authorized officer or director and by the Participant to whom Options are granted, which agreement shall be in the form
annexed hereto as Schedule A. 

	6.
	Value of the Corporation
	A.
	The
Value of the Corporation as of any Determination Date shall be equal to the remainder obtained by subtracting the items listed in b. below from the items listed in a. below.

	a.
	The
Value of the Corporation shall include the following:

	(i)
	the
Value of the Corporation's Proved Reserves, as determined in accordance with Section 6.B.; 

3

 

	(ii)
	the
Corporation's Net Working Capital Surplus, if any, as at such date;

	(iii)
	any
distributions of cash made by the Corporation to EXCO and its affiliates (other than subsidiaries of the Corporation) after June 30, 2002;
and

	(iv)
	the
total exercise price of all outstanding Options

	b.
	The
Value of the Corporation shall be reduced by the following:

	(i)
	the
Corporation's Net Working Capital Deficiency, if any, as at such date;

	(ii)
	all
Equity Contributions to the Corporation from and after April 26, 2001;

	(iii)
	all
debt payable by the Corporation to EXCO, banks and other third parties;

	(iv)
	the
sum of all Deemed Deferred Tax Liability incurred after June 30, 2002; and

	(v)
	an
estimate of the Corporation's cumulative share (from January 1, 2002 forward) of EXCO's annual corporate general and administrative expenses;
such estimate to be based upon the Value of the Corporation's Proved Reserves as determined by the formula described in paragraph 6.B. below and without regard to this subparagraph 6.A.b. (iv).
The following formula shall be used to obtain such estimate: 

.5%
of the first $200 million of the Value of the Corporation's Proved Reserves; plus 

.25%
of the next $200 million of the Value of the Corporation's Proved Reserves; plus 

.125%
of the Value of the Corporation's Proved Reserves over $400 million. 

	B.
	EXCO
shall obtain an Engineering Report which shall be used to establish the value of the Corporation's Proved Reserves at a Determination Date based on the following parameters: 
	(i)
	The
price forecast for oil and gas, which shall not include any pricing for oil and gas that is hedged, shall be based on NYMEX futures prices at the
close of business on the Determination Date for the three years subsequent to the effective date of the Engineering Report and on the then current price policy (base case) of EXCO's lead bank for all
subsequent periods. A basis differential future price between NYMEX and the AECO price for 3 years shall be used to adjust the price forecast for natural gas. The third year AECO/NYMEX basis
differential shall be held constant for subsequent periods after 3 years. The oil price forecast shall be adjusted for each of the Corporation's properties to account for the difference between
the actual price realized at the wellhead during the preceding twelve months and NYMEX pricing during the same period. The gas price forecast shall be adjusted for each of the Corporation's properties
to account for the difference between the actual price realized at the wellhead during the preceding twelve months and AECO pricing during the same period. Transportation, gathering, compression,
treating, processing and all other related costs (other than operating expenses as set out in the Engineering Report) shall be accounted for as adjustments in determining the value of the
Corporation's Proved Reserves. Assumptions used in the Engineering Report (other than those
relating to matters identified in this Section 6 that are to be derived from another source or applied in a different manner) shall be applied to the extent they are relevant.

	(ii)
	Natural
gas liquids pricing, which shall not include any pricing for liquids that are hedged, shall be based on a percentage of the adjusted oil price
for each of the Corporation's properties as determined by the respective realized pricing for each during the previous twelve months. Such percentage shall be held constant throughout the life of the
property. 

4

 

	(iii)
	Operating
expenses and capital costs shall be escalated based on the current policy (base case) of EXCO's lead bank.

	(iv)
	The
value of the Proved Reserves shall be determined as follows: 
	(A)
	Proved
Developed Producing Reserves: 100% of the present value of such reserves determined by applying a discount rate of 10%;

	(B)
	Proved
Non-Producing Reserves: 75% of the present value of such reserves determined by applying a discount rate of 15%;

	(C)
	Proved
Undeveloped Reserves: 50% of the present value of such reserves determined by applying a discount rate of 20%;

	(D)
	no
value shall be attributed to non-proved reserve categories; and

	(E)
	the
present value of all reserves shall be determined without regard to federal and provincial income taxes.

	(F)
	Except
as expressly provided in Paragraph 1.(k) above in connection with the calculation of Determined Value (which uses U. S. Dollars for part of such calculation), all
references to monetary sums and dollar amounts herein are to Canadian Dollars. 

	(vi)
	The
Corporation and EXCO shall ensure that the valuation methodology outlined herein, including the definitions, shall be consistently applied for the
purpose of providing an Engineering Report or evaluating the Corporation or any of its assets, irrespective of which engineering firm is selected to provide the Engineering Report or conduct the
evaluation or if EXCO performs such evaluation internally. 

	C.
	Notwithstanding
anything contained in the Plan to the contrary, in the event of a sale of the Corporation or all or substantially all of its assets independent of the sale of EXCO, the
Determined Value shall be the sale price of the Corporation. 

	7.
	Term and Vesting

        The
period during which Options may be exercised (the "Term") shall be as follows: 

	(a)
	Subject
to the other provisions set forth in this Section 7, each Option shall be exercisable for a period of five years from the date the Option is granted unless otherwise
specifically provided by the Board.

	(b)
	The
Term shall be automatically reduced in accordance with Sections 9 and 10 upon the occurrence of any of the events referred to therein.

	(c)
	The
number of Options vested for each Participant shall be as follows: 

	Vesting Date
	 	Portion of total number

of Options vested

(including Options

previously vested)
	 
	April 26, 2003	 	50	%
	

April 26, 2004	
 	

75	
%
	

April 26, 2005	
 	

100	
%

A
Participant shall not be entitled to exercise any vested Options prior to April 26, 2003. A Participant may exercise any vested Options beyond April 26, 2003, subject to the provisions
of this Section 7 and provided that the total number of Options exercised by a Participant shall not exceed the aggregate number of Options granted to such Participant. 

	(d)
	If
a Change of Control of the Corporation or of EXCO occurs prior to the fifth anniversary of the date of grant of any Options, all Options, regardless of the date of grant, shall
vest 

5

 

immediately
and the Participant shall be entitled to exercise at any time thereafter in whole or in part any Options previously granted to the Participant that had not been exercised prior to the
date on which the Change of Control occurred until the earlier of (i) the fifth anniversary of the date of grant of the Options, or (ii) the ninetieth day following the date on which the
Change of Control occurs. The Corporation shall ensure that Corporation's Financial Statements are completed as of the effective date of the Change of Control, or within a reasonable period thereafter
and that an Engineering Report is completed, having an effective date not more than 30 days prior to the date of such Change of Control. Unless determined pursuant to the terms of 6.C. above,
the Determined Value shall be based on the Value of the Corporation as calculated using such new Corporation's Financial Statements and Engineering Report. The amount so determined shall be the
Determined Value in respect of all Options exercised after the Change of Control occurs. 

For
the purpose of the Plan, a Change of Control of the Corporation or of EXCO shall be deemed to have occurred if and when: 

	(i)
	there
is any change in the holding, direct or indirect, of shares of the Corporation or of EXCO, as applicable, as a result of which a person, or a
group of persons, or persons acting jointly or in concert, or persons associated or affiliated with any such person or group within the meaning of the Securities
Act (Alberta), is or are in a position to exercise effective control of the Corporation or EXCO. For the purposes of the Plan, a person or group of persons holding shares
and/or other securities of a corporation in excess of the number that, directly or indirectly, would entitle the holders thereof to cast more than 50% of the votes attaching to all shares of such
corporation that may be cast to elect directors of such corporation shall be deemed to be in a position to exercise effective control of such corporation; or

	(ii)
	the
shareholders of the Corporation or of EXCO approve an amalgamation, consolidation, merger, arrangement or other combination (including a sale) of
the Corporation or EXCO with a corporation other than EXCO or the Corporation or an affiliate of EXCO or the Corporation as a result of which the shareholders of EXCO will own, directly or indirectly,
less than 50% of the shares of the combined entity; or

	(iii)
	the
shareholders of the Corporation or of EXCO approve the sale, transfer or lease of all or substantially all of the assets of the Corporation or of
EXCO to a corporation other than EXCO or the Corporation or an affiliate of EXCO or the Corporation. 

	8.
	Method of Exercise of Options
	(a)
	Except
as set forth in Sections 7, 9 and 10 or as otherwise determined by the Board, no Options may be exercised unless the holder of such Options is, at the time the Options are
exercised, an employee of the Corporation.

	(b)
	Any
Participant (or his legal personal representative) wishing to exercise Options shall deliver to the Corporation at its principal office: 
	(i)
	a
duly executed Exercise Form expressing the intention of such Participant (or his legal personal representative) to exercise some or all of his Options
and specifying the number of Options in respect of which the notice is given, accompanied by payment in full of the Option Price. Payment on exercise of an Option may be made by the Participant in
cash or certified cheque, or such other form of payment as may be permitted by the Board at any time prior to exercise of the Option; and

	(ii)
	in
the event that the Options are exercised in accordance with the Plan by a person other than the Participant, proof satisfactory to the Corporation
of the right of such person to exercise the Options. 

6

 

	(c)
	Except
in connection with a Change of Control of the Corporation, upon exercising the Options each Participant shall hold the shares issued pursuant to the Options for a period of six
(6) consecutive months. At the end of such period EXCO shall pay to each Participant so exercising the Determined Value Per Option for each Option so exercised. Each Participant shall return
for cancellation any shares of the Corporation for which he has received payment pursuant to this clause.

	(d)
	If,
in the event of a Change of Control of the Corporation, a Participant exercises such Participant's Options, EXCO shall pay to each Participant the Determined Value Per Option
exercised by such Participant, at the effective time of the Change of Control or as soon thereafter as is reasonably practicable, but in no event later than employees of EXCO are entitled to receive
payment for stock options they hold in EXCO.

	(e)
	Any
shares issued to a Participant pursuant to this Plan shall be subject to the shareholder agreement which is attached hereto as Schedule "D", reference to which is here made for
all purposes and the terms of which shall have the same effect as if included herein. 

	9.
	Termination of Employment

        If
a Participant's employment with the Corporation terminates for any reason other than death, Permanent Disability or retirement at normal retirement age, all Options held by such
Participant that have not vested prior to the date of such termination shall immediately and automatically become null and void and shall not be exercisable under any circumstances, and all vested
Options shall remain exercisable until 5:00 p.m. (Calgary time) on the earlier of the fifth anniversary of the date of grant of such Options and the ninetieth day following the date of such
termination, or such later date as may be determined by the Board. For the purposes of the Plan, if a notice of termination or notice of resignation is provided in connection with any such termination
of employment, the date of termination shall be the date on which notice of termination of employment is provided by the Corporation to the Participant or notice of resignation as an employee is
provided by the Participant to the Corporation, as the case may be. 

        If
the employment relationship between the Participant and the Corporation is terminated for any reason prior to the fifth anniversary of the date of grant of the Options, the
Participant's rights in respect of the Options shall be strictly limited to those expressly provided for in this Section 10, and the Participant shall have no claim or entitlement to any
unvested Options which would have vested during any notice period arising from the termination of the Participant's employment (whether at common law or pursuant to the terms of any statute or
agreement) but for the termination of the Participant's employment. The Participant shall also have no claim or entitlement to exercise any vested Options during any notice period arising from the
termination of the Participant's employment (whether at common law or pursuant to the terms of any statute or agreement) other than as expressly set out herein. 

        A
former employee whose employment with the Corporation was terminated and is eligible to exercise Options shall be entitled to exercise such Options and to receive from EXCO, at the
Participant's election, the Determined Value Per Option for: 

	(a)
	the
most recent prior Participating Year; or

	(b)
	the
Participating Year in which his employment was terminated. 

Such
election shall be made by the Participant by giving written notice thereof to EXCO on or before the 30th day after termination of employment. If such notice is not made by the timely giving of
such notice, the Determined Value Per Option for the most recent prior Participating Year shall be used. 

7

 

        A
former employee who resigns from the Corporation prior to normal retirement age shall be entitled to exercise Options vested upon the date of resignation and to receive from EXCO, at
the Corporation's election the Determined Value Per Option for: 

	(a)
	the
most recent prior Participating Year; or

	(b)
	the
Participating Year in which he resigned. 

Such
election shall be made by EXCO by giving written notice thereof to the Participant on or before the 30th day after resignation by the Participant. If such notice is not made by the timely giving
of such notice, the Determined Value Per Option for the most recent prior Participating Year shall be used. 

        Neither
the identification of any person as a Participant nor the granting of any Options to a Participant shall (i) confer upon such Participant any right to continue as an
employee of the Corporation, (ii) be construed as a guarantee that such Participant will continue as an employee of the Corporation, or (iii) nullify any right that such Participant or
the Corporation may have to terminate his position as an employee of the Corporation at any time. 

	10.
	Death, Permanent Disability or Retirement of a Participant

        In
the event of the death, Permanent Disability or retirement at normal retirement age of a Participant, any Options previously granted to such Participant that had not vested as at the
date of death, Permanent Disability or retirement shall immediately and automatically become null and void and shall not be exercisable under any circumstances, and any other Options that had vested
prior thereto shall be exercisable until the earlier of the fifth anniversary of the date of grant of such Options and the 180th day following the date of death, Permanent Disability or
retirement at normal retirement age of such Participant, and in the event of death or Permanent Disability the Options shall be exercisable by the person or persons to whom the Participant's rights
under the Options have passed under the Participant's will or applicable law. 

	11.
	Adjustments
	(a)
	The
Determined Value Per Option shall be increased or decreased proportionately in the event of a stock split, stock dividend, combination of shares, or subdivision or consolidation
of the common shares of the Corporation.

	(b)
	Adjustments
under this Section 11 shall be made by the Board, whose determination as to what adjustments shall be made, if any, and the extent thereof shall be final, binding
and conclusive. 

	12.
	Transferability

        All
Options and all benefits and rights accruing to any Participant in accordance with the terms and conditions of the Plan shall be non-transferable and
non-assignable unless specifically provided herein. Options may be exercised only by the Participant or, in the event of the death or Permanent Disability of a Participant, by the person
or persons to whom the Participant's rights under the Options have passed under the Participant's will or applicable law. 

	13.
	Suspension, Termination or Amendment of Plan

        The
Board may, at any time in its absolute and unfettered discretion, suspend or terminate the Plan without prior notice to, or the consent of, the Participants, provided that such
suspension or termination shall not affect any Options then outstanding. The Board may also at any time in its absolute and unfettered discretion amend or revise the terms of the Plan or any agreement
in respect of Options granted pursuant to the Plan, provided that no such amendment or revision shall in any manner adversely affect the rights of a Participant under any Options theretofore granted
without such Participant's consent. Participants shall be advised by the Corporation of any such amendments or revisions unless, in the opinion of the Board, they are immaterial or
non-substantive. 

8

 

	14.
	Gender

        Words
used in the Plan importing gender shall include all genders. 

	15.
	Governing Law

        The
Plan will be governed by and construed in accordance with the laws of the Province of Alberta. 

        Dated at Calgary, Alberta, as of the 30th day of June, 2002. 

	 	 	ADDISON ENERGY INC.
	

 	
 	

Per:	

 
	 	 	 	

	

 	
 	

Per:	

 
	 	 	 	

	ACKNOWLEDGED AND AGREED TO

effective the 30th day of June, 2002, by	 	 	 	 
	
EXCO RESOURCES, INC.	
 	

 	
 	

 
	

Per:	
 	

 	
 	

 
	
	 	 	 	 

9

 
 

SCHEDULE A    
  

 
 

ADDISON ENERGY INC.    
  

 
 

June 30, 2002    
  

TO:  JONATHAN KUHN

        We
are pleased to advise you that you have been granted 20 options ("Options") pursuant to the terms of the Stock Option Agreement dated June 30, 2002 (the "Plan"). Under the
Plan, you have been granted Options which, upon exercise, entitle you to purchase shares of common stock of Addison Energy Inc. in accordance with the terms of this letter and the Plan. 

        The
vesting periods and expiry dates for your Options are as follows: 

	Cumulative Number of Options
 
	 	Vesting Date
	 	Expiry Date

	10  (50% of total)	 	April 26, 2003	 	June 30, 2007
	15  (75% of total)	 	April 26, 2004	 	June 30, 2007
	20 (100% of total)	 	April 26, 2005	 	June 30, 2007

        Except
as set forth in this letter, your Options are governed by the terms and conditions of the Plan. 

        The
Base Value Per Option of Addison Energy Inc. for the purposes of the Plan at June 30, 2002, as determined in accordance with the terms of the Plan is $1,031.61. 

        The
granting of these Options and the specification of vesting and expiry dates does not constitute any offer of continued or guaranteed employment and your rights with respect to the
Options in the event of termination of your employment are as set out in the Plan. 

        We
wish to thank you for your valuable contribution to the Corporation both now and in the future. By granting Options to you we hope to allow you to share more directly in the future
growth and success of the Corporation, of which you are an integral part. By executing this letter you acknowledge and accept the granting of these Options in accordance with the terms and conditions
of the Plan and agree to be bound by the terms and conditions of the Plan. 

	 	 	Yours truly,
	

 	
 	
ADDISON ENERGY INC.
	

 	
 	

Per:	
 	

 
	 	 	 	 	 	

	

 	
 	
ACKNOWLEDGED AND AGREED TO by

EXCO RESOURCES, INC.
	

 	
 	

Per:	
 	

 
	 	 	 	 	 	

	

	
 	

	Witness	 	
JONATHAN KUHN

 
 

SCHEDULE B
  
    NOTICE OF DETERMINED VALUE PER OPTION    
  

        [Date]

TO: 

        The
Board of Directors of Addison Energy Inc. has determined the Determined Value Per Option of your Options for the year ended December 31,  [2002/2003/2004/2005] to be
$            per Option. You are under no obligation to exercise any of your Options. 

	 	 	Yours truly,
	

 	
 	
ADDISON ENERGY INC.
	

 	
 	

Per:	
 	

 
	 	 	 	 	 	

	

ACKNOWLEDGED AND AGREED TO

effective the    day of June 2002 by

 EXCO RESOURCES, INC.
	

Per:	

 	

 
	 	 	 	

 
 

SCHEDULE C
  
    EXERCISE FORM AND POWER OF ATTORNEY    
  

	TO:	 	ADDISON ENERGY INC.

ATTENTION: Corporate Secretary
	

AND TO:	
 	

EXCO RESOURCES. INC.

ATTENTION: Secretary

        The
undersigned (the "Participant") hereby irrevocably exercises            options to purchase common shares (the "Purchased Shares") of Addison Energy Inc. ("Addison")
pursuant to the stock option plan (the "Plan") of Addison established by the Stock Option Agreement between Addison and EXCO Resources, Inc. ("EXCO") dated June 30, 2002 (the
"Agreement"). 

        The
Participant acknowledges that the Participant and the Purchased Shares will be subject to and governed by (i) the Plan as specified in the Agreement, (ii) the Unanimous
Shareholder Agreement made as of June 30, 2002, among Addison, EXCO, the Participant, and the other holders of options granted under the Plan, and (iii) the Irrevocable Stock Power of
Attorney attached hereto, and the Participant hereby: 

	1.
	irrevocably
constitutes and appoints EXCO, its successors and assigns and any officer of EXCO, its successors and assigns, and each of them, and any other person designated by EXCO,
its successors and assigns in writing, as the true and lawful agent, attorney and attorney-in-fact and proxy of the undersigned with respect to the Purchased Shares, with full
power of substitution, in the name and on
behalf of the undersigned (such power of attorney being deemed to be an irrevocable power coupled with an interest):

	(a)
	to
register or record, transfer and enter any transfer of the Purchased Shares on the appropriate register of holders maintained by Addison; and

	(b)
	except
as otherwise may be agreed, to exercise any and all of the rights of the holder of the Purchased Shares including, without limitation, to (i) vote, execute and deliver
any and all instruments of proxy, authorizations or consents in respect of all or any of the Purchased Shares, (ii) revoke any such instrument, authorization or consent, (iii) designate
in any such instruments of proxy any person or persons as the proxy or the proxy nominee or nominees of the Participant in respect of such Purchased Shares for all purposes including, without
limitation, in connection with any meeting (whether annual, special or otherwise and any adjournments thereof) of holders of securities of Addison, and (iv) execute, endorse and negotiate, for
and in the name of and on behalf of the registered holder of Purchased Shares, any and all cheques or other instruments respecting any distribution payable to or to the order of such holder in respect
of such Purchased Shares; 

	2.
	agrees
not to vote any of the Purchased Shares at any meeting (whether annual, special or otherwise or any adjournment thereto) of holders of securities of Addison and, except as may
otherwise be agreed, not to exercise any or all of the other rights or privileges attached to the Purchased Shares, and agrees to execute and deliver to EXCO any and all instruments of proxy,
authorizations or consents in respect of the Purchased Shares and to designate in any such instruments of proxy the person or persons specified by EXCO as the proxy or proxy nominee or nominees of the
holder of the Purchased Shares in respect of the Purchased Shares and acknowledges that upon such appointment, all prior proxies given by the holder of such Purchased Shares with respect thereto shall
be revoked and no subsequent proxies may be given by such person with respect thereto;

	3.
	agrees
that if Addison should declare or pay any cash dividend, stock dividend or make any other distribution on or issue any rights with respect to any of the Purchased Shares which
is or are payable or distributable to the shareholders of record on a record date which is prior to the date of transfer into the name of EXCO or its nominees or transferees on the registers
maintained by 

Addison
of such Purchased Shares following the purchase thereof pursuant to the Plan, then the whole of any such dividend, distribution or right will be received and held by the Participant for the
account of EXCO and shall be promptly remitted and transferred by the Participant to EXCO, accompanied by appropriate documentation of transfer. Pending such remittance, EXCO will be entitled to all
rights and privileges as the owner of any such dividend, distribution or right, and may withhold the entire consideration payable by EXCO pursuant to the Plan or deduct from the consideration payable
by EXCO pursuant to the Plan the amount or value thereof, as determined by EXCO in its sole discretion; 

	4.
	covenants
to execute, upon request, any additional documents, transfers and other assurances as may be necessary or desirable to complete the sale, assignment and transfer of the
Purchased Shares to EXCO or its nominees or transferees;

	5.
	acknowledges
and agrees that all authority conferred or agreed to be conferred by the Participant herein may be exercised during any subsequent legal incapacity of the Participant and
shall survive the death or incapacity, bankruptcy or insolvency of the Participant and all obligations of the Participant herein shall be binding upon the heirs, personal representatives, successors
and assigns of the Participant. 

Dated
this                        day
of                        , 200    . 

	
 Witness	 	 	 	
 Signature of Participant

Name of Participant:

        The
name and address of the person in whose name the shares of Addison Energy Inc. are to be registered is as follows: 

	Name	 	 
	 	 	 	
 (please print full name)
	

Address:	
 	

 
	 	 	 	

	

Postal Code:	
 	

 
	 	 	 	

	

NOTE:	
 	

One completed copy of this Exercise Form and Power of Attorney is to be delivered to Addison Energy Inc. and one completed copy of this Exercise Form and Power of Attorney together with a signed and witnessed Irrevocable Stock Power of Attorney
in the form attached is to be delivered to EXCO Resources, Inc.

 
 

IRREVOCABLE STOCK POWER OF ATTORNEY    
  

        FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto ____________

____________________________, ______________________________________________________________

common shares of Addison Energy Inc. standing in the name of the undersigned on the books of the said corporation represented by Certificate No.    and hereby irrevocably constitutes
and appoints ______ ______________________ the true and lawful attorney of the undersigned to transfer the said shares on the books of the said corporation with full power of substitution in the
premises. 

	DATED:	 	 	 	 
	
	 	 	 	 
	

SIGNED, SEALED AND DELIVERED	
 	

)	
 	

 
	in the presence of	 	)	 	 
	 	 	)	 	 
	 	 	)	 	 
	
	 	)	 	

	Witness	 	)	 	Name:

 
 

Schedule "D"
  
  
  UNANIMOUS SHAREHOLDER AGREEMENT    
  

THIS AGREEMENT made as of the 30th day of June, 2002 

AMONG:

ADDISON ENERGY INC. a corporation incorporated under the laws of the Province of Alberta (the "Corporation") 

–and–

EXCO RESOURCES, INC. a corporation incorporated under the laws of the State of Texas ("EXCO") 

–and–

CRAIG HRUSKA, an individual resident in the Province of Alberta ("Hruska") 

–and– 

STEVE FAGAN, an individual resident in the Province of Alberta ("Fagan") 

–and–

DENNIS MCINTYRE, an individual resident in the Province of Alberta ("McIntyre") 

–and–

ROBERT HEMMINGER, an individual resident in the Province of Alberta ("Hemminger") 

–and–

GREGORY ROBB, an individual resident in the Province of Alberta ("Robb") 

–and– 

RON JOCSAK, an individual resident in the Province of Alberta ("Jocsak") 

–and–

JAMES BENINGER, an individual resident in the Province of Alberta ("BENINGER") 

–and–

DUANE MASSE, an individual resident in the Province of Alberta ("Masse") 

–and– 

TERRY PIDKOWA, an individual resident in the Province of Alberta ("Pidkowa") 

–and–

JONATHAN KUHN, an individual resident in the Province of Alberta ("Beninger") 

        WHEREAS EXCO is the registered and beneficial owner of all of the issued and outstanding shares of the Corporation; 

        AND WHEREAS the Corporation has established a stock option plan on the terms set forth in the Stock Option Agreement pursuant to which
Options will be granted to the Participants and Common Shares will be issued upon the exercise of Options; 

        AND WHEREAS it is the intention of the Shareholders to enter into an agreement to, among other things, restrict the transfer or other
assignment of shares of the Corporation to the circumstances specified in the Stock Option Agreement. 

        NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants of the parties and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto, the parties covenant and agree as follows: 

 
 

ARTICLE 1
  INTERPRETATION    
  

	1.1
	Definitions

In
this Agreement: 

	(a)
	"Agreement"
means this agreement, as amended from time to time;

	(b)
	"Common
Shares" means common shares in the capital of the Corporation;

	(c)
	"Option
Shares" means Common Shares issued upon the exercise of Options;

	(d)
	"Options"
means the right granted to the Participants to purchase shares in the Corporation in accordance with the terms of the Plan;

	(e)
	"Participants"
means Hruska, Fagan, McIntyre, Hemminger, Robb, Jocsak, Kuhn, Pidkowa, Beninger and Masse and any other individuals to whom Options are granted under the Plan;

	(f)
	"Plan"
means the stock option plan of the Corporation established pursuant to the Stock Option Agreement;

	(g)
	"Power
of Attorney and Proxy" means the power of attorney and proxy to be delivered by a Participant as a condition of exercise of any Options;

	(h)
	"Shareholders"
means EXCO, the Participants and any other persons who are or become the beneficial owners of Common Shares and each of their respective heirs, executors,
administrators, other legal representatives, successors and assigns;

	(i)
	"Stock
Option Agreement" means the agreement dated as of June 30, 2002, between the Corporation and EXCO. 

	1.2
	Except
as herein provided, this Agreement supersedes all former understandings and agreements relating to the disposition of shares of the Corporation and the other matters herein
provided and all such understandings are hereby declared to be of no further force or effect whatsoever.

	1.3
	The
parties agree that should there be, or at any time during which this Agreement is in force should there hereafter arise, any conflict between the provisions of this Agreement and
the by-laws of the Corporation, then any of the parties may at any time require the others to the extent they are able with him to cause the by-laws of the Corporation to be
amended to the extent necessary to remove or correct such conflict. 

 
 

ARTICLE 2
  CORPORATE AFFAIRS    
  

	2.1
	Each
of the Participants covenants and agrees that, to the extent the Participant is entitled to exercise voting rights in respect of any shares of the Corporation to which
Participant's Power of Attorney and Proxy does not apply, the Participant will exercise all voting rights attached to any such shares as directed by EXCO in relation to any corporate action proposed
in respect of the Corporation. 

 
 

ARTICLE 3
  RESTRICTION ON TRANSFER    
  

	3.1
	Each
of the Participants acknowledges and agrees that, unless otherwise agreed to by the Corporation and EXCO, the Participant's sole right to acquire Common Shares arises or will
arise 

upon
the exercise of Options granted to the Participant under the Plan, and that the Participant is not and will not be entitled to sell, transfer or otherwise dispose of any Common Shares other than
as provided in the Stock Option Agreement. Each Participant further acknowledges and agrees that, prior to becoming entitled to be registered as the owner of any Common Shares issuable upon the
exercise of Options, the Participant must deliver to the Corporation an executed stock transfer power of attorney in respect of such Common Shares and a Power of Attorney and Proxy in the form annexed
hereto as Schedule "A". Each of the Participants acknowledges that the delivery of these documents is a condition to the exercise of any Options and acknowledges that these documents are or will be
delivered for the purpose of enabling EXCO and the Corporation to ensure that no Common Shares owned by any of the Participants may be transferred other than as permitted by the Stock Option Agreement
or as otherwise agreed to in writing by EXCO, the Corporation and each of the other Participants. 

 
 

ARTICLE 4
  TRANSFER OF SHARES BY OPERATION OF LAW    
  

	4.1
	The
purported transfer at any time during the term of this Agreement of the whole or any portion of a Participant's Common Shares by operation of law (including death) or as a result
of the appointment of a trustee in bankruptcy or the purported transfer by way of involuntary transfer of shares, including, but not restricted to, a purported sale under any judgment or purported
acquisition of title by or transfer to any trustee, receiver or assignee for the benefit of creditors, shall be deemed to be a grant immediately prior to such event to EXCO of an option to purchase
such Common Shares for the amount and at the time specified in the Stock Option Agreement or as determined in accordance with the Stock Option Agreement. 

 
 

ARTICLE 5
  GENERAL PROVISIONS    
  

	5.1
	This
Agreement shall terminate at such time as shall be determined by EXCO after the Plan has expired and the Corporation has no shareholders other than EXCO and no other person has
any right to acquire any Common Shares of the Corporation.

	5.2
	This
Agreement may be altered or amended as to any of its provisions when any such changes are reduced to writing and signed by all parties hereto.

	5.3
	Each
of the parties hereto undertakes and agrees to execute and deliver such further and other documents and assurances as may be necessary to give full force and effect to all of the
terms and conditions of this Agreement, the Stock Option Agreement and the Plan.

	5.4
	This
Agreement shall enure to the benefit of and be binding upon each of the parties hereto and their respective heirs, executors, administrators, other personal representatives,
successors and assigns.

	5.5
	Wherever
the singular is used, it shall be deemed to extend to and include the plural, and where one gender is used, it shall include all genders, and when any party is referred to,
it shall extend to that party's heirs, executors, administrators, other personal representatives, successors and assigns.

	5.6
	Any
notice which one party may wish to give to another party may be given personally or by sending the same by prepaid registered mail in an envelope addressed as follows: 

In
the case of Hruska, Fagan, McIntyre, Hemminger, Robb, Jocsak, Kuhn, Pidkowa, Beninger and Masse: 

1100,
635 - 8th Avenue SW

Calgary, AB T2P 3M3 

In
the case of EXCO and the Corporation: 

6500
Greenville Avenue, Suite 600, LB17

Dallas, TX 75206 

and
any notice so sent shall be deemed to have been received on the fifth (5th) business day following that on which it is mailed. Any party may change its address for notice from
time to time by notice served as above set out. 

	5.7
	This
Agreement shall be interpreted in accordance with and be governed by the laws of the Province of Alberta.

	5.8
	The
headings in this Agreement are inserted for convenience only and do not form part of this Agreement or in any way limit or define the clauses to which they relate.

	5.9
	Each
of the Shareholders shall consider as confidential and use all best efforts to prevent the communication to others, both during the term of this Agreement and thereafter, all
information, other than that which is public, that shall have been acquired as a result of that Shareholder's relations with the Corporation.

	5.10
	This
Agreement shall become effective as of the date first above written.

	5.11
	A
Shareholder who no longer holds any Common Shares or Options and who has not breached any of the provisions of this Agreement, the Stock Option Agreement and the Plan shall be
deemed to be released from the provisions of this Agreement other than the provisions of clause 5.9.

	5.12
	Any
and all prior agreements, whether written or oral, respecting the ownership of shares or the conduct of the business and affairs of the Corporation, are terminated effective as
of the date first above written, and this Agreement together with the Stock Option Agreement and the documents delivered or to be delivered pursuant hereto and thereto constitutes the entire agreement
among the Shareholders respecting the ownership of shares and the conduct of the business and affairs of the Corporation.

	5.13
	Time
shall be of the essence in this Agreement.

	5.14
	If
any covenant, obligation or agreement contained in this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement or the application of such covenant, obligation or agreement to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be
affected thereby, and each covenant, obligation and agreement shall be separately valid and enforceable to the fullest extent permitted by law. 

        IN WITNESS WHEREOF we have hereunto set our hands and seals as of the day and year first above written. 

	ADDISON ENERGY INC.	 	EXCO RESOURCES, INC.
	

Per:	
 	

Per:
	
 Title:	 	
 Title:
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 CRAIG HRUSKA
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 STEVE FAGAN
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 DENNIS MCINTYRE
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 ROBERT HEMMINGER
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 GREGORY ROBB
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 RON JOCSAK
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 JONATHAN KUHN
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 TERRY PIDKOWA
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 JAMES BENINGER
	
SIGNED, SEALED AND DELIVERED

in the presence of:	
 	

 
	

 Witness	
 	

 DUANE MASSE

QuickLinks

Exhibit 10.27

TABLE OF CONTENTS

ADDISON ENERGY INC. STOCK OPTION AGREEMENT

SCHEDULE A

ADDISON ENERGY INC.

June 30, 2002

SCHEDULE B NOTICE OF DETERMINED VALUE PER OPTION

SCHEDULE C EXERCISE FORM AND POWER OF ATTORNEY

IRREVOCABLE STOCK POWER OF ATTORNEY

Schedule "D" UNANIMOUS SHAREHOLDER AGREEMENT

ARTICLE 1 INTERPRETATION

ARTICLE 2 CORPORATE AFFAIRS

ARTICLE 3 RESTRICTION ON TRANSFER

ARTICLE 4 TRANSFER OF SHARES BY OPERATION OF LAW

ARTICLE 5 GENERAL PROVISIONS<Page>

                                                                   EXHIBIT 10.11

                                   KEANE, INC.

                         UK EMPLOYEE STOCK PURCHASE PLAN

1.   PURPOSE.

     The Keane, Inc. UK Employee Stock Purchase Plan (the "Plan"), is intended
to provide eligible employees of Keane Ltd. ("Ltd."), a wholly owned subsidiary
of Keane, Inc. (the "Company") an opportunity to acquire a proprietary interest
in the Company through the purchase of shares of common stock of the Company,
Ten Cents ($0.10) par value (the "Common Stock" or "Stock"). The Company intends
that the Plan offer eligible employees of Ltd. rights to purchase Stock on
substantially the same terms and conditions as available to other employees of
the Company under the Keane, Inc. 1992 Employee Stock Purchase Plan.

2.   DEFINITIONS.

     For purposes hereof, in addition to those terms defined elsewhere herein,
the following terms shall have the meanings indicated unless the context or
applicable law shall otherwise require.

     (a)  "BENEFICIARY" means one or more individuals designated as such
pursuant to Section 13 hereof.

     (b)  "BOARD" means the Board of Directors of the Company.

     (c)  "COMPENSATION" means regular straight-time earnings, sales commissions
and recruiter bonuses all prior to deduction of taxes and other withholding
charges and employee contributions to employee benefit plans, but excludes
employer contributions to or benefits payable under such plans.

     (d)  "EMPLOYEE" means any person who is customarily employed for more than
twenty (20) hours per week by Ltd.

     (e)  "MONTH OF SERVICE" means a calendar month in which an Employee has
completed an hour of service.

     (f)  "OFFERING COMMENCEMENT DATE" with respect to an Offering under the
Plan means the first day of the applicable semi-annual period for such Offering
pursuant to Section 4 hereof.

     (g)  "OFFERING TERMINATION DATE" with respect to an Offering under the Plan
means the last day of the applicable semi-annual period for such Offering
pursuant to Section 4 hereof.

     (h)  "PARTICIPANT" means an Employee who is participating in this Plan in
accordance with the provisions hereof.

     (i)  "PLAN ADMINISTRATOR" means the Treasurer of the Company.

<Page>

3.   ELIGIBILITY.

     (a)  Any Employee who shall have completed twelve (12) Months of Service
with Ltd., based upon the Employee's adjusted date of hire as computed by the
Company or Ltd. in accordance with its usual policies and procedures, and shall
be employed by Ltd. on the last day of such twelve (12) month period and upon
the first Offering Commencement Date thereafter, shall be eligible to
participate in the Plan.

     (b)  Any provision of the Plan to the contrary notwithstanding, no Employee
may participate, or continue to participate, in the Plan:

          (i)     if, immediately after the grant of any option to purchase
     Common Stock hereunder, such Employee would own and/or hold outstanding
     options to purchase stock possessing five percent (5%) or more of the total
     combined voting power or value of all classes of stock of the Company or of
     any parent or subsidiary thereof; or

          (ii)    if any option to purchase Common Stock hereunder would permit
     such Employee's rights to purchase stock under all employee stock purchase
     plans of the Company and its parent and subsidiary corporations to accrue
     at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of the fair
     market value of the Common Stock determined at the time such option is
     granted) for each calendar year in which such Option is outstanding at any
     time.

4.   OFFERINGS.

     The Plan will be implemented by consecutive semi-annual offerings (referred
to herein collectively as "Offerings" and individually as an "Offering").
Offerings will begin each January 1 and July 1, or the first business day
thereafter. The Board may, at its discretion, choose a different offering period
of twelve (12) months or less for subsequent Offerings. Participation in any one
or more of the Offerings under the Plan shall neither limit, nor require,
participation in any other Offering

5.   PARTICIPATION.

     (a)  An eligible Employee may participate in the Plan by completing an
authorization for payroll deduction on the form provided (an "Authorization")
and filing it with the Plan Administrator. Each Authorization shall authorize a
regular payroll deduction from the Employee's Compensation. Once an Employee has
filed an Authorization, he or she will automatically participate in subsequent
Offerings until and unless he or she withdraws from an Offering pursuant to
Sections 7(b) or 9 hereof, or his or her participation is terminated by the
Company pursuant to Section 14 hereof.

     (b)  The Plan Administrator will maintain payroll deduction accounts for
all Participants. A Participant may authorize a payroll deduction of a specified
whole percentage of Compensation, up to a maximum of ten percent (10%) of his or
her Compensation for the period during which he or she elects to participate in
the Plan, but in no event may any Participant authorize a deduction of more than
Twenty Thousand Dollars ($20,000) in any calendar year.

                                        2
<Page>

All payroll deductions made for a Participant shall be credited to his or her
account under the Plan. No Participant may make any separate cash payment into
such account.

     (c)  Except as provided in this paragraph (c) and Sections 7(b) or 9, a
Participant may not make any changes to his or her participation during an
Offering, except insofar as a change in the amount of Compensation affects the
amount represented by the percentage of Compensation elected by the Participant.
By written notice to the Plan Administrator, a Participant may make a change in
his or her payroll deduction once during each Offering. A Participant may make a
change in his or her payroll deduction for a subsequent Offering by filing a new
Authorization with the Plan Administrator prior to the Offering Commencement
Date of such Offering.

6.   GRANTING OF OPTION.

     (a)  For each of the Offerings, a Participant shall be deemed to have been
granted an option (the "Option") to purchase, on the applicable Offering
Termination Date, that number of shares of Common Stock determined by dividing
the market value of a share of Common Stock on the applicable Offering
Commencement Date into Twelve Thousand Five Hundred Dollars ($12,500).

     (b)  For purposes hereof, the market value of Common Stock shall be the
official closing price of the Common Stock on the American Stock Exchange or
such other exchange or automated quotation system upon which the Common Stock
shall from time to time be regularly traded, on the Offering Commencement Date
and Offering Termination Date applicable to such Offering (or on the next
regular business date on which shares of Common Stock shall be traded in the
event that no shares of Common Stock shall have been traded on the relevant
date).

7.   EXERCISE OF OPTION.

     With respect to each Offering during the term of the Plan:

     (a)  Unless a Participant gives written notice of withdrawal to the Plan
Administrator or his or her employment is terminated, or his or her
participation is terminated by the Company pursuant to Section 14 hereof, in
each case as hereinafter provided, his or her Option will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering to the extent of that number of shares (including fractional shares) of
Common Stock which the accumulated payroll deductions credited to his or her
account at that time will purchase at the applicable Option Exercise Price,
defined for purposes of each such Offering as eighty-five percent (85%) of the
market value of a share of Common Stock on (i) the applicable Offering
Commencement Date, or (ii) the applicable Offering Termination Date, whichever
is lower. If the amount then credited to the Participant's account exceeds the
purchase price of the number of shares of Common Stock with respect to which an
Option has been granted to the Participant as provided in Section 6 hereof
pursuant to such Offering, any excess shall be paid to the Participant (or if
the Participant dies prior to payment, to his or her Beneficiary) within a
reasonable period following said Offering Termination Date.

     (b)  By written notice to the Plan Administrator a minimum of one (1) month
prior to the Offering Termination Date applicable to any such Offering, a
Participant may elect to cease all future payroll deductions and to withdraw all
accumulated payroll deductions in his or her

                                        3
<Page>

account. Such accumulated payroll deductions shall be paid to the Participant
(or, if the Participant dies prior to payment, to his or her Beneficiary) within
a reasonable period following said Offering Termination Date.

8.   DELIVERY.

     Within a reasonable period after the Offering Termination Date of each
Offering, the Plan Administrator will deliver the shares of Common Stock
purchased upon the exercise of such Participant's Option to the Participant's
account with the its agent. Upon the Participant's request, the agent will
deliver one or more certificates representing such shares to the Participant by
mail or, at the Participant's option, directly to a broker designated by the
Participant.

9.   WITHDRAWAL.

     (a)  As provided in Section 7(b), a Participant may withdraw all, but not
less than all, payroll deductions credited to his or her account under any
Offering by giving written notice of withdrawal to the Plan Administrator a
minimum of one (1) month prior to the Offering Termination Date. All of the
Participant's payroll deductions credited to his or her account will be paid to
the Participant (or if the Participant dies subsequent to such notice but prior
to payment, to his or her Beneficiary) within a reasonable period following said
Offering Termination Date, and no further payroll deductions will be made from
his or her pay during such Offering. The Plan Administrator may, at its option,
treat an attempt by a Participant to borrow on the security of accumulated
payroll deductions as an election pursuant to Section 7(b) to withdraw such
deductions.

     (b)  A Participant's withdrawal from an Offering will not have any effect
upon his or her eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by the Company or Ltd.

     (c)  Upon termination of the Participant's employment with Ltd. for any
reason other than death or disability, the payroll deductions credited to his or
her account will be returned to the Participant (or, if the Participant dies
subsequent to such termination of employment, to his or her Beneficiary) if such
termination occurred a minimum of one (1) month prior to the Offering
Termination Date. If such termination occurred less than one (1) month prior to
such Date, the Participant's Option will be deemed to have been automatically
exercised in accordance with Section 7(a) hereof.

     (d)  Upon termination of the Participant's employment due to death or
disability, the Participant or his or her Beneficiary, by written notice given
to the Plan Administrator within thirty (30) days following such termination,
but in any event prior to the Offering Termination Date, may elect to:

          (i)     withdraw all payroll deductions credited to the Participant's
                  account under the Plan; or

          (ii)    exercise the Participant's option pursuant to Section 7(a)
                  hereof.

                                        4
<Page>

     In the event that no such written notice of election shall be timely
received by the Plan Administrator, the Participant or Beneficiary shall
automatically be deemed to have elected to withdraw the payroll deductions
credited to the Participant's account and the same shall be paid within a
reasonable period to the Participant or said Beneficiary.

10.  INTEREST.

     No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any Participant.

11.  STOCK.

     (a)  The maximum number of shares of Common Stock which shall be made
available for sale under the Plan is 500,000 shares, subject to further
adjustment upon changes in capitalization of the Company as provided in Section
16 hereof. If the total number of shares for which Options are exercised on any
Offering Termination Date in accordance with Section 7 hereof exceeds the number
of shares of Common Stock which remain available for issue under the Plan, the
Plan Administrator shall make a pro rata allocation of the shares available for
delivery and distribution in as nearly a uniform manner as shall be practicable
and as it shall determine to be equitable, and the balance of payroll deductions
credited to the account of each Participant under the Plan shall be returned to
him or her as promptly as possible. The Company may purchase shares on the open
market in order to have shares available for purchase by Participants in each
Offering.

     (b)  The Participant will have no interest in Common Stock to which his or
her Option pertains until such Option has been exercised.

     (c)  Common Stock to be delivered to a Participant under the Plan will be
registered in the name of the Participant or, if the Participant so directs by
written notice to the Plan Administrator prior to the Offering Termination Date
applicable thereto, in the names of the Participant and one such other adult
natural person as may be designated by the Participant, as joint tenants with
rights of survivorship, to the extent permitted by applicable law.

12.  ADMINISTRATION.

     The Plan shall be administered by the Plan Administrator. The
interpretation and construction of any provision of the Plan and the adoption of
rules and regulations for administering the Plan shall be made by the Plan
Administrator, subject to review and modification by the Board, at its option.
Determinations made by the Plan Administrator or the Board with respect to any
matter or provision contained in the Plan shall, subject to Board review at its
option, be final, conclusive and binding upon the Company, Ltd., and upon all
Participants, their heirs or legal representatives. Any rule or regulation
adopted by the Plan Administrator shall remain in full force and effect unless
and until altered, amended, or repealed by the Plan Administrator or the Board.
The Company shall indemnify the Plan Administrator and Board members to the
fullest extent permitted by applicable law for any expenses incurred in
defending a civil or criminal action or proceeding arising out of such
individual's actions with respect to administration of the Plan in advance of
the final disposition of such action or proceeding, upon receipt of an
undertaking by the person indemnified to repay such payment if

                                        5
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such individual shall be adjudicated not to have acted in good faith in the
reasonable belief that such individual's action was in the best interest of the
Company.

13.  DESIGNATION OF BENEFICIARY.

     A Participant may file a written designation of a Beneficiary who is to
receive any shares of Common Stock and/or cash in the event of the death of the
Participant prior to the delivery of such shares or cash to the Participant.
Such designation of Beneficiary may be changed by the Participant at any time by
written notice to the Plan Administrator. Within thirty (30) days after the
death of a Participant, the Beneficiary may, as provided in paragraph 9(d)
hereof, elect to exercise the Participant's Option when it becomes exercisable
on the Offering Termination Date of the then-current Offering. Upon the death of
a Participant and upon receipt by the Plan Administrator of proof of identity
and existence at the Participant's death of a Beneficiary validly designated by
the Participant under the Plan, and notice of election of the Beneficiary to
exercise the Option, the Plan Administrator shall deliver such Stock and/or cash
to such Beneficiary. In the event of the death of a Participant and in the
absence of a Beneficiary validly designated under the Plan who is living at the
time of such Participant's death, the Plan Administrator shall deliver such
Stock and/or cash to the executor or administrator of the estate of the
Participant or, if no such executor or administrator has been appointed (to the
knowledge of the Plan Administrator), the Plan Administrator, in its discretion,
may deliver such Stock and/or cash to the spouse or to any one or more
dependents of the Participant as the Plan Administrator may designate, and such
persons shall be deemed Beneficiaries for purposes hereof. No Beneficiary shall,
prior to the death of the Participant by whom he or she has been designated,
acquire any interest in the Stock or cash credited to the Participant.

14.  UK TAX LIABILITY.

     Participants shall agree to pay all income tax and employee's national
insurance contributions arising on the exercise of each such Option, and shall
either enter into an election to assume liability for, or will reimburse Ltd. or
its affiliates for all liabilities for, employer's national insurance
contributions arising on the exercise of each such Option. The Company or Ltd
shall from time to time determine the form and substance of the agreement or
election to be signed by Participants pursuant to this Section 14. If a
Participant is in breach of any such agreement or election, or fails to sign
such an election or agreement when requested to do so, pursuant to this Section
14 the Company may, acting in its absolute discretion, terminate the
Participants right to participate in current and/or future Offerings. In the
event of such termination prior to an Offering Termination Date, any payroll
deductions credited to the Participant's account under such Offering shall be
returned to the Participant (subject to deduction for any amounts of income tax
and/or national insurance for which the Participant is liable).

15.  TRANSFERABILITY.

     Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an Option or to receive Stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the Participant otherwise than by will or the laws of descent and
distribution, and any such rights are exercisable during the lifetime of the

                                        6
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Participant only by him or her. Any such attempted assignment transfer, pledge,
or other disposition, or exercise of such rights, shall be without effect,
except that the Plan Administrator may treat such act as an election to withdraw
funds in accordance with Section 7(b) hereof.

16.  USE OF FUNDS.

     All payroll deductions received or held by Ltd. under this Plan may be used
by Ltd. for any corporate purpose, and Ltd. shall not be obligated to segregate
such payroll deductions.

17.  EFFECT OF CHANGES OF COMMON STOCK.

     In the event of any changes in the outstanding shares of the Common Stock
by reason of stock dividends, subdivisions, combinations and exchanges of
shares, recapitalizations or merger in which the Company is the surviving
corporation, the aggregate number and class of shares available under this Plan
and the Option Exercise Price per share shall be appropriately adjusted by the
Plan Administrator, subject to review by the Board at its option, whose
determination shall be conclusive. Any such adjustments may provide for the
elimination of any fractional shares which would otherwise become subject to any
Options.

18.  AMENDMENT OR TERMINATION.

     The Board may at any time terminate or amend the Plan. Except as
hereinafter provided, no such termination shall affect Options previously
granted, nor shall an amendment make any change in any Option theretofore
granted which would adversely affect the rights of any Participant.

19.  NOTICES.

     All notices or other communications by a Participant or Beneficiary to Ltd.
or the Company under or in connection with the Plan shall be deemed to have been
duly given when received by the Plan Administrator.

20.  MERGER OR CONSOLIDATION.

     If the Company shall at any time merge into or consolidate with another
corporation and the Company is the surviving entity, the holder of each Option
then outstanding will thereafter be entitled to receive at the next Offering
Termination Date upon the exercise of such Option for each share as to which
such Option shall be exercised the securities or property which a holder of one
share of the Common Stock was entitled to upon and at the time of such merger or
consolidation, and the Board shall take such steps in connection with such
merger or consolidation as the Board shall deem necessary to assure that the
provisions of Section 16 hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the said securities or property as to which
such holder of such Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation in which the Company is not the
surviving entity, or of a sale of assets in which the Company is not the
surviving entity, the Plan shall terminate, and all payroll deductions credited
to Participants' accounts shall be returned to them; PROVIDED, HOWEVER, that the
Board may, in the event of such merger, consolidation or sale,

                                        7
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accelerate the Offering Termination Date of the Offering then in effect and
permit Participants to purchase shares under the Plan at such accelerated
Offering Termination Date.

21.  REGISTRATION AND QUALIFICATION OF THE PLAN UNDER APPLICABLE SECURITIES
LAWS.

     No Option shall be exercised under the Plan until such time as the Company
has qualified or registered the shares which are subject to the Options under
the applicable securities laws, to the extent required by such laws.

                                        8

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