Document:

exv4w6

Exhibit 4.6

			
	 	 	 
	 
	 	Shell Petroleum N.V.
	 
	 	Carel van Bylandtlaan 30
	 
	 	2596 HR The Hague
	Mr M.A. Brinded
	 	The Netherlands
	 	 	 
	XXXX	 	 

The Hague,

Re: Compromise Agreement

Dear Mr Brinded,

Reference is made to our recent discussions concerning your departure from Shell service. This
Compromise Agreement (the “Compromise Agreement”) serves to record the outcome of those
discussions.

In this Compromise Agreement, the term “Employee” refers to you, Mr. M.A. Brinded of XXXXX, the
Netherlands, and the term “Employer” refers to us, Shell Petroleum N.V., incorporated in The Hague
and registered at Carel van Bylandtlaan 30, 2596 HR, The Hague, as your employing company, each a
“party” and collectively the “parties” to this Compromise Agreement.

	1.	 	Termination of Employment Contract and Repatriation to Base Country
	 
	1.1	 	The parties agree that the Employee’s contract of employment with the Employer dated 17 June
2005 (the “Contract of Employment”) and any other contract of employment that may (be found
to) be in force on 8 April 2012 between the Employee on the one hand, and the Employer or any
of its Affiliates on the other, will terminate with effect from 8 April 2012 (the “Termination
Date”), without any notice being required. Article 4 (concerning confidentiality of
information) and Article 6 (concerning intellectual property rights and patents) of the
Contract of Employment shall survive termination of the Contract of Employment and the loan
assignment with Royal Dutch Shell plc. The Employer has agreed to waive its rights under
Article 5 (concerning non-compete) of the Contract of Employment. The parties have agreed that
at the Termination Date, the Employee will be deemed to have taken up any and all entitlements
to accrued and outstanding annual leave in respect of the period up to the Termination Date,
so that at the Termination Date, there will be no outstanding annual leave to be settled.
Notwithstanding the termination of the Contract of Employment, the Employee’s accrued
entitlements at the Termination Date under the Shell Contributory Pension Plan, the Shell
Overseas Contributory Pension Plan and the Shell Supplementary Pension Plan shall each remain
in effect in accordance with the pertinent trust deed and regulations.
	 
	1.2	 	The Employee will ultimately on 22 February 2012 deliver to the Employer properly signed
letters tendering the Employee’s resignation, with effect from 1 April 2012, as

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	 	 	director, general attorney, or officer of Royal Dutch Shell plc, the Employer and any other
company of the Royal Dutch Shell Group of which the Employee at such time is a director,
general attorney or other officer, in the forms set out in Appendix 1 and
Appendix 2. The Employee agrees that he will ultimately on 22 February 2012 deliver
to Shell Foundation a properly signed letter tendering the Employee’s resignation, with
effect from 1 April 2012, in writing from the directorship and trusteeship he holds in the
Shell Foundation, a company limited by guarantee and a registered UK charity, in the form
set out in Appendix 3. On 22 February 2012, the Employer will notify the Employee of
the termination, with effect from 1 April 2012, of his loan assignment with Royal Dutch
Shell plc. by sending him a copy of the letter set out in Appendix 4.
	 
	1.3	 	The Employer will arrange for the stock exchange announcement, internal announcement and
press release set out in Appendix 5 to be issued immediately following the signing of
this Compromise Agreement by both parties. The Employee agrees that the basic terms of this
Compromise Agreement and of any agreement made pursuant thereto or in furtherance thereof,
will be disclosed in the Royal Dutch Shell Annual Reports and Forms 20-F for the appropriate
years, specifically the Directors’ Remuneration Report (“DRR”) as required under the United
Kingdom Corporate Governance Code and that he will not be consulted as to the content of such
disclosure. The Employee also agrees that this Compromise Agreement and any agreement made
pursuant thereto or in furtherance thereof, may be disclosed or made available for inspection
to shareholders of Royal Dutch Shell plc or other third parties by or on behalf of Royal Dutch
Shell plc, as required to fulfill obligations arising under applicable laws or regulations,
and that the Employee will have no claim relating to any disclosure that Royal Dutch Shell plc
or any third party acting on behalf of Royal Dutch Shell plc, as the case may be, in its sole
discretion, determines to be required or advisable to fulfil such obligations.
	 
	1.4	 	The Employee will upon the Employer’s request take all action that may reasonably be required
of the Employee to ensure a smooth and complete handover, prior to the Termination Date, of
all of the Employee’s roles, responsibilities and activities to one or more persons designated
for these purposes by the Employer.
	 
	1.5	 	Prior to 9 April 2012, the Employee will repatriate to the United Kingdom, and the Employee
will become employed by Shell International Limited (“SIL”) as of that date until his
separation from employment on 30 April 2012. To that effect, the Employee will as soon as
possible following his return to the United Kingdom and in any event on or before 9 April 2012
enter into a standard employment contract with SIL on local terms, such employment to commence
on 9 April 2012. The Employer will provide relocation assistance for the costs of flights to
the UK for the Employee and eligible family members and the costs of packing and shipping the
Employee’s household goods from the Netherlands to the UK subject to the usual limits for such
costs applied under the International Mobility policy. The Employee’s employment with SIL
Company shall be at a base salary of GBP 920,000 gross per annum. Prior to the final
separation of the employment with SIL the Employee will enter into a Compromise Agreement with
SIL in the form attached to this Compromise Agreement as Appendix 6.
	 
	1.6	 	When used in this Compromise Agreement:
	 
	 	 	the terms “Group”, “companies of the Royal Dutch Shell Group” and any derivative term
denotes the Employer and its Affiliates; and
	 
	 	 	the term “Affiliate” shall mean:

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	 	(a)	 	Royal Dutch Shell plc; and
	 
	 	(b)	 	any company other than the Employer which is for the time being directly or
indirectly controlled by Royal Dutch Shell plc.

	 	 	For this purpose:

	 	(i)	 	a company is directly controlled by another company or companies if that latter
company or companies beneficially own(s) 50% or more of the voting rights attached to
the issued share capital of the first mentioned company; and
	 
	 	(ii)	 	a particular company is indirectly controlled by a company or companies if a
series of companies can be specified, beginning with that company or companies and
ending with the particular company, so related that each company of the series is
directly controlled by one or more of the companies earlier in the series.

	2.	 	Payments
	 
	2.1	 	The Employer shall not owe the Employee any amount for, or in connection with,

	 	(i)	 	the termination of the Contract of Employment and any other contract of
employment between the Employee on the one hand, and the Employer or any of its
Affiliates on the other, that may be (found to be) in force on the Termination Date in
accordance with article 1.1 above;
	 
	 	(ii)	 	the termination of the Employee’s loan assignment with Royal Dutch Shell plc in
accordance with article 1.2 above; or
	 
	 	(iii)	 	the loss of office resulting from the resignations referenced in article 1.2
above,

	 	 	and the Employee hereby waives any and all claims he may have against any of the companies
of the Royal Dutch Shell Group or Shell Foundation in accordance with article 3 below.
	 
	2.2	 	The Employer will pay the Employee his monthly entitlement to pensionable salary up to and
including the Termination Date in accordance with the terms of the Contract of Employment, as
well as any other amounts due and payable there under until such date. The Employee shall not
be eligible for any discretionary elements of variable pay (whether or not usual practices
exist for such elements), such as bonuses, DBP awards or LTIP awards, unless provided
otherwise in this Compromise Agreement or its Appendices.
	 
	3.	 	Waiver of Claims
	 
	 	 	The Employee hereby, with effect from the Termination Date, unconditionally waives and
unconditionally releases the Employer, any of its Affiliates, Shell Foundation and any of
their respective directors, officers, agents or employees of, any and all contractual,
statutory, tortuous or other claims of any nature he may have against the Employer, any of
its Affiliates, Shell Foundation or any of their respective directors, officers, agents or
employees, arising directly or indirectly out of or in connection with:

	 	(i)	 	the Employee’s past or present employment with the Employer or any of its
Affiliates, or the termination thereof; and/or

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	 	(ii)	 	the termination of the Employee’s loan assignment with Royal Dutch Shell plc in
accordance with article 1.2 above; and/or
	 
	 	(iii)	 	the Employee’s position as a director, general attorney or other officer of
any Group company or Shell Foundation, or the termination thereof;

	 	 	excluding only:

	 	(i)	 	claims to enforce the terms of this Compromise Agreement; and
	 
	 	(ii)	 	claims in respect of the Employee’s accrued pension rights under the Shell
Contributory Pension Plan, the Shell Overseas Contributory Pension Plan and the Shell
Supplementary Pension Plan.

	 	 	The waiver and release of claims set out above shall apply irrespective of whether the claim
concerned arises under the laws of the Netherlands, the laws of England and Wales or any
other law, and irrespective of whether such claim was known to (either of) the parties or
whether it was or could have been in the contemplation of (either of) the parties at the
time of signing this Compromise Agreement. The waiver and indemnity specifically include
claims which do not as a matter of law exist and whose existence cannot currently be
foreseen and any claims or rights of action arising from a subsequent retrospective change
or clarification of the law.
	 
	 	 	The Employee warrants that he has not instituted and will not institute and will
refrain from instituting any claim of the nature referred to in this Article 3 against
the Employer or any Affiliate or Shell Foundation before an a court of law, an
arbitration panel or any other judicial institution of any description.
	 
	 	 	Indemnification provisions set out in the Articles of Association and/or By-Laws of
companies of the Royal Dutch Shell group, including Shell Petroleum N.V. and Royal
Dutch Shell plc, or Shell Foundation shall continue to apply in accordance with their
terms with respect to those matters related to the period that the Employee was a
director of the entity concerned.
	 
	 	 	The parties intend that Affiliates and Shell Foundation can invoke this clause
against the Employee.
	 
	4.	 	Company Property and Lease Car
	 
	4.1	 	The Employee will, ultimately on the Termination Date, return to the Employer all property
directly or indirectly in his control or possession belonging to the Employer or any Affiliate
or provided to the Employee by the Employer or any Affiliate for the performance of the
Employee’s duties as an employee of the Employer or as employee of any of its Affiliates, or
which have come in the possession of the Employee in connection therewith, with the exception
of company IT equipment, such as a laptop, mobile phone and Blackberry, that Employee needs
for any work or handover of work to take place after the Termination Date as an employee of
SIL.

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	4.2	 	The Employee agrees that he will ultimately at the Termination Date return to Lease Plan (the
“Lease Company”) the lease car provided to the Employee under the terms of the Contract of
Employment. Until the lease car is returned to the Lease Company in accordance with the
foregoing, the Employee will continue to be entitled to use the lease car in accordance with
the terms governing such use. The Employer will request the Lease Company to offer the
Employee first opportunity to purchase the aforementioned lease car, should the Lease Company
decide to sell the car: but the Employee acknowledges that any decisions regarding the sale of
the lease car are the sole discretion of the Lease Company, and that the Employer can
therefore do no more than make the aforementioned request.
	 
	 	 	The Employer will pay the Lease Company the amounts due for early termination of the lease
agreement for the above mentioned lease car to the extent of the applicable lease norm. Any
amounts due to the Lease Company in excess of the amounts so paid by the Employer will be
for the sole account of the Employee.
	 
	5.	 	Share options, Deferred Bonus Plan and Long Term Incentive Plan Awards
	 
	5.1	 	The Employer confirms that it will procure the consent of Royal Dutch Shell plc that share
options awarded to the Employee during his employment with the Employer or any Affiliate which
are still outstanding on the Termination Date will continue in force in accordance with the
terms and conditions under which these share options were granted and the Employee may
continue to exercise these options until they lapse in accordance with their terms. Such share
options will remain subject always to the rules of such plan(s) and terms and conditions as
mentioned in the awards and in particular, but not limited to, any rules on vesting and lapse
of the options.
	 
	5.2	 	The Employer confirms that it will procure the consent of Royal Dutch Shell plc that any
awards the Employee may have received under the Deferred Bonus Plan or the Long Term Incentive
Plan during his employment with the Employer will not lapse on the Termination Date, but will
continue thereafter, subject always to the rules of the plans under which such awards were
made and terms and conditions as mentioned in the awards, in particular, but not limited to,
any rules on vesting, claw-back, pro-rating and lapse of the relevant entitlements.
	 
	 	 	An overview of the current Deferred Bonus Plan awards and Long Term Incentive Plan awards as
at 6 February 2012 to which this clause pertains are listed exhaustively in Appendix 7.
	 
	6.	 	Confidentiality
	 
	 	 	The Employee agrees that he shall keep the terms of this Compromise Agreement strictly
confidential and shall not disclose, communicate or otherwise make public the same or the
substance or content of the discussions involved in reaching this Compromise Agreement to
anyone other than the Employer (and will use his best endeavours to prevent the disclosure
of any such matter or information by third parties) save where such disclosure or
communication is:

	 	(a)	 	for the purposes of putting this Compromise Agreement into effect;
	 
	 	(b)	 	as required by law;
	 
	 	(c)	 	in confidence to the Employee’s professional advisers for the purpose of taking
legal or financial advice on this Compromise Agreement;

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	 	(d)	 	to the Dutch tax authorities or the UK Her Majesty’s Revenue and Customs or
equivalent other authority; or
	 
	 	(e)	 	as evidence in subsequent proceedings in which the Employer, Employee or any
Affiliate or Shell Foundation allege a breach of this Compromise Agreement.

	7.	 	Miscellaneous provisions
	 
	7.1	 	This Compromise Agreement and its Appendices constitutes the whole and only agreement between
the parties regarding the termination of the Contract of Employment and supersedes and
extinguishes any other agreement, document or pre-contractual statement relating thereto. Each
party acknowledges that it has not relied upon any pre-contractual statements in agreeing to
enter into this Compromise Agreement. For the purposes of this clause 7.1, “pre-contractual
statement” includes, without limitation, any agreement, undertaking, warranty, arrangement or
draft of any nature whatsoever, whether or not in writing, made by any person at any time
before the date of this Compromise Agreement relating to the subject matter of this Compromise
Agreement which is not repeated in this Compromise Agreement.
	 
	7.2	 	Save where the context requires otherwise, all references to clauses and Appendices are to
the clauses of and the appendices to this Compromise Agreement, and words importing the
singular number shall include the plural and vice versa.
	 
	7.3	 	This Compromise Agreement may only be validly amended or varied by means of a written
instrument, which has been properly executed by both parties.
	 
	7.4	 	If any provision of this Compromise Agreement is declared by any judicial or other competent
authority to be void or otherwise unenforceable, that provision shall be severed from this
Compromise Agreement and the remaining provisions of this Agreement shall remain in full force
and effect. The Compromise Agreement shall in such case be amended by the parties in such
manner so as to achieve, without illegality, the intention of the parties with respect to that
severed provision.
	 
	7.5	 	No failure or delay by any party to exercise any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof or the exercise of any other right,
power or privilege as herein provided.
	 
	7.6	 	For all purposes of the implementation of this Compromise Agreement on behalf of the
Employer, Employer hereby appoints Michael Reiff (email: Michael.Reiff@shell.com, telephone +
31 70 377 1662 and fax + 31 70 377 1314 as its representative.
	 
	7.7	 	This Compromise Agreement is an agreement within the meaning of article 7:900 and further of
the Dutch Civil Code (vaststellingsovereenkomst).
	 
	8.	 	Governing law and dispute settlement
	 
	 	 	This Compromise Agreement shall be governed solely by Netherlands law, even where the
Employee is working outside the Netherlands.
	 
	 	 	All disputes arising out of or in connection with this Compromise Agreement shall be
exclusively and finally resolved under the Rules of Arbitration of the International

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	 	 	Chamber of Commerce (“ICC”)(the “ICC Rules”), as amended from time to time. The tribunal
shall consist of three arbitrators to be appointed in accordance with the ICC Rules. Except
as otherwise agreed by the parties, the chairman of the tribunal must have at least 20 years
experience as a lawyer qualified to practise in a common law jurisdiction within the
Commonwealth (as constituted on 12 May 2005) and each other arbitrator must have at least 20
years experience as a qualified lawyer. The place of arbitration shall be The Hague, The
Netherlands. The language of the arbitration shall be English.
	 
	 	 	Each party hereby waives, to the fullest extent permitted by law:

	 	(i)	 	Any right under the laws of any jurisdiction to apply to any court of law or
other judicial authority to determine any preliminary point of law, and/or
	 
	 	(ii)	 	Any right it may otherwise have under the laws of any jurisdiction to appeal or
otherwise challenge the award, ruling or decision of the tribunal.

	 	 	For the purposes of this Article 8, the term “dispute” shall mean any dispute, controversy
or claim.

You are kindly requested to confirm your concurrence with the arrangements as recorded in this
Compromise Agreement by countersigning the enclosed copy of thereof, and returning it to us.

Yours sincerely,

Shell Petroleum N.V.

	 	 	 

	Name:

	 	Name:
	 
	 	 
	Date:

	 	Date:
	 
	 	 
	Place:

	 	Place:
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	Read and Agreed
	 	 
	 
	 	 
	 
	 	 
	M.A. Brinded
	 	 
	 
	 	 
	Date:
	 	 
	 
	 	 
	Place:
	 	 
	 
	 	 
	 
	 	 
	 

	 	 

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Appendix 1

Letter of resignation as director of Royal Dutch Shell plc and of the Employer, as referenced in Article 1.2:

Royal Dutch Shell Plc

For the attention of the Chairman of the Board

Dear Jorma,

I hereby tender my resignation as director of Royal Dutch Shell plc and of Shell Petroleum N.V.
with effect from 1 April 2012.

I confirm that I have no claim against either of these companies in respect of fees, remuneration
or compensation for the loss of office.

Yours sincerely,

Malcolm A. Brinded

cc: Shell Petroleum N.V

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Appendix 2

Letter of resignation as director, general attorney or officer of all Group companies other than as director of Royal Dutch Shell plc or the Employer, as referenced in Article 1.2:

Shell International B.V.

For the attention of Mr. M.C.M. Brandjes

General Counsel Corporate

Dear Michiel,

Please be advised that I hereby, with effect from 1 April 2012, resign as director, general
attorney or officer of each and every company of the Royal Dutch Shell Group of which I am
presently a director, general attorney or officer.

I confirm that I have no claim against either of these companies in respect of fees, remuneration
or compensation for the loss of office.

Yours sincerely,

Malcolm A. Brinded

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Appendix 3

Letter of resignation as director and foundation trustee of Shell Foundation, as referenced in Article 1.2:

Personal and Confidential

The Board of Trustees

Shell Foundation

Shell Centre

SE1 7NA

London

United Kingdom

[Insert Date]

Dear Sirs

I hereby tender my resignation as a Trustee of Shell Foundation with effect from 1 April 2012.

I confirm that I have no claim against Shell Foundation in respect of fees, remuneration or
compensation for the loss of office.

Yours sincerely,

M.A. Brinded

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Appendix 4

Letter terminating the Employee’s loan assignment with Royal Dutch Shell plc referenced in Article 1.2:

STRICTLY PERSONAL

Royal Dutch Shell plc

Mr M.C.M. Brandjes

Company Secretary

Re: Loan assignment of Mr. M. A. Brinded to Royal Dutch Shell plc

Dear Michiel,

We refer to the loan assignment letter dated 17 June 2005, under which Mr. M.A. Brinded has been
loan assigned to Royal Dutch Shell plc.

In view of the fact that Mr. Brinded will cease to be an Executive Director of Royal Dutch Shell
plc. with effect from 1 April 2012, Shell Petroleum N.V., under the terms of that loan assignment
letter, hereby gives written notice to Royal Dutch Shell plc that Mr. Brinded’s loan assignment to
Royal Dutch Shell plc terminates with effect from 1 April 2012.

Mr. Brinded is be notified accordingly by means of a copy of this letter.

Yours sincerely,

Shell Petroleum N.V.

P. R. Voser

cc: Mr. M. A. Brinded

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Appendix 5

Draft communications (subject to finalisation) referenced in Article 1.3:

	 	1)	 	Stock exchange announcement:

The Board of Royal Dutch Shell plc announced today that after a distinguished career of more
than 37 years, of which almost 10 years as an Executive Director, Mr Malcolm Brinded has agreed to
step down as an Executive Director with effect from 1 April 2012. Mr Andrew Brown currently
Executive Vice-President Qatar will take over the responsibilities for the Upstream International
Business as a member of the Executive Committee of the Company with effect from the same date.

	 	2)	 	Internal announcement (from Peter Voser):

Shell announces today that Malcolm Brinded has agreed to step down as an Executive Director of
the Company with effect from 1 April 2012. Malcolm has agreed to remain at Shell until 30 April
2012 in order to assist with the transition of his responsibilities.

Malcolm is currently Executive Director Upstream International. He first joined Shell in October
1974 and has served the company in Brunei, the Netherlands, Oman and the United Kingdom. In 1998 he
became Managing Director of Shell UK Exploration and Production and from 1999 until 2002 he was
Shell Country Chairman in the UK. Malcolm has been a member of the Royal Dutch Shell plc Board (and
its predecessors) since 2002. Prior to his current role, he was Executive Director in charge of
Exploration & Production.

Malcolm has had a distinguished career over many years and has made an important contribution to
Shell’s success during that time. He leaves the Upstream International business in a strong
position, well-placed to deliver on its targets and pursue the next stage of Shell’s growth. I am
sure you will join me in thanking Malcolm for his service to Shell and wish him and his wife Carola
every success in the future.

At the same time the Board of Royal Dutch Shell plc announced the appointment of Mr Andrew Brown as
Upstream International Director. He will be a member of the Executive Committee and will be based
in the Netherlands.

Mr Brown has worked for Shell for over 27 years in various Upstream leadership roles. Currently he
is Executive Vice-President Qatar. Mr Brown holds a degree in Engineering Science from Cambridge
University.

	 	3)	 	Press release:

Shell announces today that Malcolm Brinded has agreed to step down as an Executive Director of the
Company with effect from 1 April 2012. Mr Brinded has agreed to remain at Shell until 30 April 2012
in order to assist with the transition of his responsibilities.

Mr Brinded is currently Executive Director Upstream International. He first joined Shell in October
1974 and has served the company in Brunei, the Netherlands, Oman and the United Kingdom. In 1998 he
became Managing Director of Shell UK Exploration and Production and from 1999 until 2002 he was
Shell Country Chairman in the UK. He has been a member of the Royal Dutch Shell plc Board (and its
predecessors) since 2002. Prior to his current role, he was Executive Director in charge of
Exploration & Production.

Royal Dutch Shell Chief Executive Peter Voser commented “Malcolm Brinded has had a most
distinguished career over many years and has made an important contribution to

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Shell’s success during that time. He leaves the Upstream International business in a strong
position, well-placed to deliver on its targets and pursue the next stage of Shell’s growth.”

At the same time the Board of Royal Dutch Shell plc announced the appointment of Mr Andrew Brown as
Upstream International Director. He will be a member of the Executive Committee and will be based
in the Netherlands.

Mr Brown has worked for Shell for over 27 years in various Upstream leadership roles. Currently he
is Executive Vice-President Qatar. Mr Brown holds a degree in Engineering Science from Cambridge
University.

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Appendix 6

Compromise Agreement referenced in Article 1.5:

			
	 	 	 
	DATE
	 	[insert date] 2012          

PARTIES

	(1)	 	SHELL INTERNATIONAL LIMITED, incorporated under the laws of England and Wales, with
registered offices at Shell Centre, London, SE1 7NA, (the “Employer”);
	 
	 	 	and
	 
	(2)	 	Mr. M.A. Brinded of XXXXXX (the “Employee”).

INTRODUCTION

	(A)	 	The Employee is employed by the Employer.
	 
	(B)	 	The Employee’s employment with the Employer will end with effect from 30 April 2012 (the
“Termination Date”).

OPERATIVE PROVISIONS

Following discussions between the parties, it has been agreed between the parties as follows:-

	1.	 	Termination of Employment
	 
	 	 	The employment of the Employee by the Employer will terminate on 30 April 2012 (the
“Termination Date”) by reason of mutual agreement.
	 
	2.	 	Payments
	 
	2.1	 	Subject to the Employee complying with the terms of this Agreement and to the conditions of
clause 5 having been satisfied the Employer shall without admission of liability pay to the
Employee the following sum by way of an ex gratia payment (the “Payment”) subject always to
the applicable tax:
	 
	 	 	Euro 2,520,000 (Two million, five hundred and twenty thousand Euro)
	 
	2.2	 	The Payment shall be made in pounds sterling calculated at a rate of exchange of Euro to
pounds sterling at the date of payment as determined under the Employer’s payroll practices
and will be made within 21 days after the later of the Effective Date and the Termination
Date.
	 
	2.3	 	In addition to the Payment the Employee shall receive all accrued and outstanding basic
salary and regular allowances due under his contract of employment with the Employer in
respect of the period from 9 April 2012 up to and including the Termination Date subject to
appropriate deductions by the Employer prior to remittance in respect of income tax and
employee national insurance contributions.

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	2.4	 	In addition to the Payment the Employee shall receive a pro rated discretionary performance
bonus in respect of the period 1 January to 30 April 2012 of the performance year 2012 (the
“Bonus Payment”), such Bonus Payment to be paid in February 2013. The level of such Bonus
Payment shall be determined by the Remuneration Committee of the Group in its absolute
discretion by reference to a target bonus percentage of 110% of a gross annual base salary of
Euro 1,200,000 and applying the scorecard applied to the Executive Committee adjusted to take
account of the Employee’s performance as determined by the Remuneration Committee. The Bonus
Payment will be calculated in Euros and paid to the Employee in pounds sterling calculated at
a rate of exchange of Euro to pounds sterling at the date of payment as determined under the
Employer’s payroll practices and subject to appropriate deductions by the Employer prior to
remittance in respect of income tax and employee national insurance contributions.
	 
	3.	 	Tax Treatment
	 
	3.1	 	The first £30,000 of the Payment is expected to be treated by HM Revenue and Customs as free
from income tax and national insurance contributions under the provisions of Section 403 of
the Income Tax (Earnings and Pensions) Act 2003 and accordingly would not be subject to
deduction of income tax and employees’ national insurance contributions. The Employer offers
no warranty to this effect and the UK tax treatment of the Payment is ultimately determined by
HM Revenue and Customs.
	 
	3.2	 	In addition, the balance of the Payment over £30,000, being the appropriate amount of
overseas service tax relief, is expected to be treated by HM Revenue and Customs as free from
income tax and national insurance contributions under the provisions of section 413 of the
Income Tax (Earnings and Pension) Act 2003 and accordingly would not be subject to deduction
of income tax and employees’ national insurance contributions. The Employer offers no warranty
to this effect and the UK tax treatment of the Payment is ultimately determined by HM Revenue
and Customs.
	 
	3.3	 	The Employer will issue the Employee with the income tax form P45 as soon as practicable
after the Termination Date and in any event prior to the remittance of the Payment to the
Employee.
	 
	3.4	 	The Employee is responsible for making appropriate declarations on his UK self assessment
form for the tax year ended 5 April 2013 and paying any UK income tax and employee national
insurance contributions due on the Payment and any further UK income tax and employee national
insurance contributions due on the Bonus Payment over and above the amounts in respect of both
deducted by the Employer from the Bonus Payment prior to remittance to the Employee.
	 
	3.5	 	The Employee is responsible for making any appropriate declarations to the Dutch tax
authorities and paying any Dutch income tax and employee social security due on the Payment
and any Dutch income tax and employee social security due on the Bonus Payment over and above
the amounts in respect of UK income tax and employee national insurance contributions deducted
by the Employer from the Bonus Payment prior to remittance to the Employee.
	 
	3.6	 	The Employer shall procure that the Employee will receive such assistance as the Employer
considers reasonable with completing his Netherlands 2012 tax return to the extent that this
relates to his employment by SPNV or any other Affiliate on Dutch payroll and with completing
his 2011/2012 and 2012/2013 UK income tax return.

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	4.	 	Tax Indemnity
	 
	4.1	 	The Employee hereby indemnifies the Employer against any income tax, employee national
insurance contributions, interest and/or penalties thereon arising in respect of the Payment,
the Bonus Payment or any other payment or benefit arising under this Agreement which the
Employer, SPNV or any other Affiliate is called upon to pay by HM Revenue and Customs, the
National Insurance Contributions Office, the Dutch tax authorities or other statutory
authority in any jurisdiction (save to the extent that such interest and/or penalties are
caused by any act or default on the part of the Employer or any Affiliate) and, if the
Employer, SPNV or any other Affiliate satisfies any such liability, the Employee will, at the
Employer’s or SPNV’s written request, immediately reimburse the Employer, SPNV or any other
Affiliate a sum equivalent to such liability in full. The indemnity in this clause 4 shall not
apply to sums in respect of income tax and national insurance contributions which the
Employer, SPNV or any other Affiliate deducts from the Payment, the Bonus Payment or any other
payment made or benefit provided under this Agreement prior to the remittance of such payments
to the Employee.
	 
	4.2	 	The Employer agrees that if it is called upon to pay any sums which would form the subject of
the indemnity given by the Employee at clause 4.1 of this Agreement it will notify the
Employee in writing of such demand and of its intention to satisfy such demand prior to so
satisfying such demand.
	 
	5.	 	Independent Legal Advice
	 
	5.1	 	The Employee acknowledges that, before signing this Compromise Agreement, the Employee has
received independent legal advice from Danielle Kingdon, Senior Partner, Osborne Clarke, Apex
Plaza, Forbury Road, Reading RG1 1AX, a relevant independent adviser (the “Adviser”) who has
advised the Employee as to the terms and effect of this Compromise Agreement and in particular
of its effect on his ability to pursue his rights before an Employment Tribunal in respect of
any Complaint. The Employee agrees that he will be entering into this Compromise Agreement
voluntarily, without reservation and with the intention that it will be binding as a
compromise agreement.
	 
	5.2	 	The Employee shall procure that the Adviser will send a letter to the Employer in the form
set out in the schedule to this Compromise Agreement and it is a condition of this Compromise
Agreement that both the signed Compromise Agreement and the signed letter from the Adviser are
received by Michael Reiff (Ref: RDS-HRR) EVP Remuneration, Benefits and Services, Shell
International B.V., PO Box 162, 2502 AN — The Hague, The Netherlands on behalf of the Employer
by 23 April 2012 at the latest.
	 
	6.	 	Waiver of Claims by Employee
	 
	 	 	In consideration of the Employer entering into this Compromise Agreement the Employee waives
all Complaints of any nature the Employee may have directly or indirectly arising out of or
in connection with his employment with the Employer or its termination (whether or not such
claims are known or unknown to the parties and whether or not they are or could be in the
contemplation of the parties at the time of signing this Agreement, including claims which
do not as a matter of law exist and whose existence cannot currently be foreseen and any
claims or rights of action arising from a subsequent retrospective change or clarification
of the law) which the Employee may have against the Employer or any Affiliate or their
directors, officers,

16

 

	 	 	agents or employees including but not limited to any Complaint the Employee may have, but
excluding:

	 	(i)	 	claims of personal injury, save for a claim or potential claim for personal
injury of which the Employee was aware or ought reasonably to have been aware of at the
time of signing this Agreement; and/or
	 
	 	(ii)	 	claims in respect of accrued pension entitlement under the Shell Contributory
Pension Plan, the Shell Overseas Contributory Pension Plan and the Shell Supplementary
Pension Plan.

	7.	 	Warranty
	 
	 	 	The Employee warrants:

	 	(a)	 	that he has not instituted and will not institute and will refrain from
instituting any claim of the nature referred to in clause 6 above against the Employer
or any Affiliate before an Employment Tribunal or any other court of law; and
	 
	 	(b)	 	as to the accuracy of paragraph 3 of the schedule to this Agreement.

	8.	 	Conditions Regulating Compromise Agreements
	 
	 	 	The parties agree that this Agreement satisfies the conditions for regulating compromise
agreements or as applicable compromise contracts under section 203 of the Employment Rights
Act 1996 (including the provisions of that section as applied by regulation 9 of the Part
Time Workers (Prevention of Less Favourable Treatment) Regulations 2000), section 77 of the
Sex Discrimination Act 1975, section 72 of the Race Relations Act 1976, schedule 3A of the
Disability Discrimination Act 1995, Regulation 35 and Schedule 4 of the Employment Equality
(Sexual Orientation) Regulations 2003, Regulation 35 and Schedule 4 of the Employment
Equality (Religion and Belief) Regulations 2003, Regulation 43 and Schedule 5 of the
Employment Equality (Age) Regulations 2006, section 147 (3) (c) and (d) of the Equality Act,
Regulation 35 of the Working Time Regulations 1998, section 49 of the National Minimum Wage
Act 1998, Regulation 41 of the Transnational Information and Consultation of Employee
Regulations 1999, Regulation 9 of the Part-time Workers (Prevention of Less Favourable
Treatment) Regulations 2000, Regulation 10 of the Fixed term Employees (Prevention of Less
Favourable Treatment) Regulations 2002, Regulation 40 of the Information and Consultation of
Employees Regulations 2004, paragraph 13 of the Schedule of the Occupational and Personal
Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006,
section 288 of the Trade Union and Labour Relations (Consolidation) Act 1992 and Regulation
18 of the Transfer of Undertaking (Protection of Employment) Regulations 2006.
	 
	9.	 	XXXXXXX House
	 
	9.1	 	Subject always to clause 9.10, the Employer agrees that in the event the Employee enters
into a binding contract to sell his house at XXXXXXXX, The Netherlands (the “House”), the sale
of the House completes pursuant to such contract and the agreed sale price of the House
pursuant to that contract (the “Sale Price”) is less than the initial purchase price of Euro
3,375,532 (the “Purchase Price”), then subject to the Employee complying with his obligations
under clause 9.10 the Employer will compensate or will procure that an Affiliate will
compensate the Employee for the

17

 

	 	 	difference between the Sale Price and the Purchase Price and any UK income tax
and employee national insurance contributions chargeable on such sum through an
additional payment (the “House Payment”).
	 
	9.2	 	The payment of the House Payment is subject always to:

	 	(a)	 	the Employee producing such documentary evidence as the Employer may reasonably
require of the existence of such binding contract and of the Sale Price;
	 
	 	(b)	 	the Employee being tax resident in the UK at the time of the payment of the
House Payment; and
	 
	 	(c)	 	the Employee having offered the Employer or its nominated Affiliate the right
of first refusal in respect of the purchase of the House in the manner and
circumstances set out in clause 9.10 below.

	9.3	 	For the purposes of calculating the House Payment:

	 	(a)	 	The Purchase Price shall be deemed to be Euro 3,375,532;
	 
	 	(b)	 	the Sale Price shall be deemed to be the price attributed under such contract
to the value of the house and its land alone and shall not include (i) any value
attributed to furniture and fittings, or (ii) any fees the Employee may incur in
connection with the sale of the House; and
	 
	 	(c)	 	the difference between the Sale Price and the Purchase Price shall be
calculated to produce a net sum (the “Net House Payment”) and then grossed up by the
rate of UK income tax and employee national insurance contributions the Employer’s tax
advisers calculate as being the rate of total UK income tax and employee national
insurance contributions chargeable on the Net House Payment at the proposed time of
payment.

	9.4	 	It shall be the responsibility of the Employee to notify Michael Reiff of the
Employer in writing of the existence of any such binding contract for the sale of the House
and of the Sale Price, together with any appropriate documentary evidence of the same that the
Employer may reasonably require.
	 
	9.5	 	In the event Michael Reiff receives such written notification and documentary
evidence from the Employee, the Employer shall calculate the House Payment and notify the
Employee of that calculation and of any UK income tax and employee national insurance
contributions chargeable on the House Payment. The House Payment shall then be made to the
Employee within 60 days of receiving such written notification and documentary evidence from
the Employee of the actual transfer of the House pursuant to such binding contract for sale of
the House.
	 
	9.6	 	The Employee shall provide such reasonable cooperation with any internal or external
tax advisers appointed on behalf of the Employer and provide any reasonable information
requested by them to enable them to calculate the UK income tax and employee national
insurance contributions likely to be chargeable on the House Payment by HM Revenue and
Customs.
	 
	9.7	 	The House Payment shall be paid to the Employee subject to any deductions the
Employer is required to make in respect of UK income tax and employee national insurance
contributions prior to remittance to the Employee.

18

 

	9.8	 	It shall be the responsibility of the Employee to declare the House Payment on his UK
income tax self assessment for the UK tax year in which the House Payment is made and to pay
any UK income tax due on that House Payment over and above any such income tax deducted from
the House Payment by the Employer prior to remittance.
	 
	9.9	 	The Employee shall upon request of the Employer or any Affiliate cooperate with the
Employer or its nominated agent in any arrangements the Employer makes at any time following
the Termination Date and prior to the sale of the House for a market valuation of the House to
take place from time to time.
	 
	9.10	 	Prior to entering into any form of agreement (oral or written, for example a
“provisional” purchase agreement “voorlopig koopcontract”) for the sale of the House in
circumstances in which an obligation to make or procure that a House Payment is made would
arise on the Employer:

	 	(a)	 	the Employee will notify Michael Reiff or his nominee in writing of the
pending sale of the House and offer the Employer in writing the opportunity for it or
any Affiliate to purchase the House for the Purchase Price; and
	 
	 	(b)	 	the Employee shall not agree any binding contract with another purchaser for
the sale of the house until 30 days have elapsed from the written notification referred
to in clause 9.10(a); and
	 
	 	(c)	 	if the Employee receives an offer for the purchase of the House from the
Employer or an Affiliate within 30 days of the written notification referred to in
clause 9.10(a) for the Purchase Price, he shall proceed with negotiations to enter into
a binding contract for the sale of the House to the Employer or such Affiliate and in
the event such binding contract is entered into and the transfer of the house takes
place pursuant to such contract then the provisions in relation to the House Payment in
clauses 9.1 to 9.9 shall no longer apply.

	9.11	 	In the event a binding contract for the sale of the House to the Employer or any
Affiliate is entered into the Employer shall arrange for a market valuation of the House to
take place by an independent valuer(s) (the “Market Valuation”).
	 
	9.12	 	In the event a binding contract for the sale of the House to the Employer or any
Affiliate is entered into, the transfer of the House takes place pursuant to such contract and
the Employee incurs a liability to pay any UK or Dutch income tax or employee national
insurance contributions or social security payments that arise as a result of the amount the
Employer or any Affiliate pays to the Employee to purchase the House exceeding the Market
Valuation, then the Employer shall or shall procure that an Affiliate shall settle that
liability directly with the relevant tax or other authorities.
	 
	10.	 	Non Admission
	 
	 	 	The execution of this Compromise Agreement by the Employer shall not constitute or be
construed as an admission, express or implied, by the Employer or any Affiliate of liability
on its part.
	 
	11.	 	Confidentiality
	 
	 	 	The Employee agrees that he shall keep the terms of this Compromise Agreement strictly
confidential and shall not disclose, communicate or otherwise make public the

19

 

	 	 	same or the substance or content of the discussions involved in reaching this Compromise
Agreement to anyone other than the Employer (and will use his best endeavours to prevent the
disclosure of any such matter or information by third parties) save where such disclosure or
communication is:

	 	(a)	 	for the purposes of putting this Compromise Agreement into effect;
	 
	 	(b)	 	as required by law;
	 
	 	(c)	 	in confidence to the Employee’s professional advisers for the purpose of taking
legal or financial advice on this Compromise Agreement;
	 
	 	(d)	 	to the UK Her Majesty’s Revenue and Customs or equivalent Dutch tax or other
authority; or
	 
	 	(e)	 	as evidence in subsequent proceedings in which the Employer, Employee or any
Affiliate allege a breach of this Compromise Agreement.

	12.	 	Definitions
	 
	 	 	In this Compromise Agreement the following terms shall have the following meanings:
	 
	12.1	 	“Adviser” shall have the meaning given to it in clause 5.1 of this Compromise Agreement;
	 
	12.2	 	“Affiliate” shall mean Royal Dutch Shell plc and any company (other than the Employer), which
is for the time being directly or indirectly controlled by Royal Dutch Shell plc. For this
purpose:

	 	(i)	 	a company is directly controlled by another company or companies if that latter
company or companies beneficially owns 50% or more of the voting rights attached to the
issued share capital of the first mentioned company; and
	 
	 	(ii)	 	a particular company is indirectly controlled by a company or companies if a
series of companies can be specified, beginning with that company or companies and
ending with the particular company, so related that each company of the series is
directly controlled by one or more of the companies earlier in the series.

	12.3	 	“Bonus Payment” shall have the meaning given to it in clause 2.4 of this Agreement.
	 
	12.4	 	“Complaint” shall mean any claim for or relating to unfair dismissal, a statutory redundancy
payment, discrimination (whether based on direct or indirect grounds, on victimisation, on
harassment, on duty to make reasonable adjustments, or on any other basis giving rise to
liability), on the grounds of race, sex, gender re assignment, marriage and civil partnership,
disability, age, sexual orientation or religion or belief, equal pay, working time,
unauthorised deduction from wages or for the infringement of any other statutory employment
rights the Employee may have under the Employment Rights Act 1996, the Employment Relations
Act 1999, the Transfer of Undertaking (Protection of Employment) Regulations 2006 or
applicable antecedent legislation, the Trade Union and Labour Relations (Consolidation) Act
1992, the Sex Discrimination Act 1975, the Race Relations Act 1976, the Disability
Discrimination Act 1995, the Employment Equality (Sexual Orientation) Regulations 2003, the
Employment Equality (Religion and Belief) Regulations 2003, the Employment

20

 

	 	 	Equality (Age) Regulations 2006, the Equality Act 2010, the Occupational and Personal Pension Schemes
(Consultation by Employers and Miscellaneous Amendment) Regulations 2006, the Equal Pay Act 1970, the
Working Time Regulations 1998, the National Minimum Wage Act 1998, the Transnational Information and
Consultation of Employees Regulations 1999, the Part-time Workers (Prevention of Less Favourable
Treatment) Regulations 2000, the Fixed term Employees (Prevention of Less Favourable Treatment)
Regulations 2002 and the Public Interest Disclosure Act 1998 arising out of the Employee’s employment with
the Employer or its termination.
	 
	12.5	 	“Group” shall mean the Employer and the Affiliates collectively.
	 
	12.6	 	“House” shall have the meaning given to it in clause 9 of this Agreement.
	 
	12.7	 	“House Payment” shall have the meaning given to it in clause 9 of this Agreement.
	 
	12.8	 	“House Purchase Price” shall have the meaning given to it in clause 9 of this Agreement.
	 
	12.9	 	“Market Valuation” shall have the meaning given to it in clause 9 of this Agreement.
	 
	12.10	 	“Sale Price” shall have the meaning given to it in clause 9 of this Agreement.
	 
	12.11	 	“Termination Date” shall mean 30 April 2012.
	 
	13.	 	Third Party rights
	 
	 	 	Any Affiliate shall be entitled by virtue of the Contracts (Rights of Third Parties) Act
1999 to enforce the benefits conferred by clause 4, 6, and 9 of this Compromise Agreement.
Except as provided for in this clause 12 no term of this Compromise Agreement shall be
enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person who
is not a party to the Compromise Agreement. The consent of any Affiliate is not required for
the variation or termination of this Compromise Agreement.
	 
	14.	 	Whole agreement clause
	 
	14.1	 	This Compromise Agreement constitutes the whole and only agreement between the Employer and
the Employee relating to its subject matter and save supersedes and extinguishes any other
agreement, document or pre-contractual statement relating to the same subject matter. The
Employer and Employee each acknowledge that it has not relied upon any pre-contractual
statements in agreeing to enter into this Compromise Agreement.
	 
	14.2	 	Except in the case of fraud, neither the Employer nor the Employee shall have any right of
action against the other arising out of or in connection with any pre-contractual statement
except to the extent that it is repeated in this Compromise Agreement.
	 
	14.3	 	For the purposes of this clause, “pre-contractual statement” includes but is not limited to
any agreement, undertaking, representation, warranty, promise, assurance, arrangement or draft
of any nature whatsoever, whether or not in writing, relating to the subject matter of this
Compromise Agreement and which is not repeated in this Agreement made by any person at any
time before the date of this Compromise Agreement.
	 
	15.	 	Interpretation

21

 

	 	 	All headings and titles used in this Compromise Agreement are for convenience only. They
are not meant to be used in the construction or interpretation of this Compromise Agreement.
	 
	16.	 	Governing law
	 
	 	 	This Compromise Agreement is to be governed by the laws of England and Wales and in relation
to any legal action or proceedings arising out of or in connection with this Compromise
Agreement each of the parties irrevocably submits to the non exclusive jurisdiction of the
courts and tribunals of England and Wales.
	 
	17.	 	Legal Fees Contribution
	 
	 	 	Subject to the Employee having complied with clause 5.2 of this Agreement, the Employer
shall procure that Shell International Ltd. shall on production of an appropriate VAT
invoice addressed to the Employee and marked payable by Shell International Ltd., pay the
Employee’s Adviser the legal expenses incurred by the Employee in connection with the
negotiation and completion of this Compromise Agreement and the termination of his
employment up to a maximum of GBP3,500 (Three thousand and five hundred pounds sterling)
plus VAT.

Signed by

M.A. Brinded

Signed by

duly authorized for Shell International Limited

22

 

Schedule

On Headed Paper of the Relevant Independent Adviser

Michael Reiff (Ref: RDS/HRR)

EVP Remuneration, Benefits and Services

Shell International B.V.

PO Box 162

2502 AN – The Hague

The Netherlands

[Date]

			
	Re:	 	Mr. M.A. Brinded

I am writing in connection with the Compromise Agreement made between my client and Shell
International Limited (“the Employer”) of [insert date] (“the Compromise Agreement”).

I confirm that:-

	1.	 	I am a relevant independent adviser within the meaning of Section 203(3A) of the Employment
Rights Act 1996;
	 
	2.	 	I have not acted or am acting in connection with this matter for, or am employed by, the
Employer or any Affiliate (as defined in the Compromise Agreement);
	 
	3.	 	I have advised my client as to the terms and effect of the Compromise Agreement, and its
effect on his ability to pursue his rights before an Employment Tribunal;
	 
	4.	 	There is now in force, and there was at the time I gave my client the advice referred to
above, a contract of insurance or indemnity provided for members of a professional body or
profession covering the risk of a claim by my client in respect of loss arising in consequence
of the advice referred to in paragraph 3 above.

Yours faithfully

23

 

Appendix 7

List of share options, current Deferred Bonus Plan awards and Long Term Incentive Plan awards as at 6 February 2012 referenced in Article 5:

Share options

	 	 	 	 	 	 	 	 	 
	 	 	Number of options	 	Grant Price	 	Exercisable from	 	Expiry date
	 
	 	 	 	 	 	 	 	 
	Royal Dutch Shell plc Class A shares
	 	50,000	 	€31.05	 	21/03/2005	 	20/03/2012
	 
	 	 	 	 	 	 	 	 
	Royal Dutch Shell plc Class B shares
	 	229,866	 	£15.04	 	05/11/2007	 	04/11/2014

Deferred Bonus Plan

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Non-performance	 	 	 	Dividend shares	 	 
	 	 	 	 	related matching	 	Dividend shares	 	acquired in 2011	 	Total shares under
	 	 	Number of shares	 	shares delivered at	 	acquired prior to	 	(excluding Q4 2011	 	grant at 6 February
	 	 	deferred from bonus	 	grant	 	2011	 	dividend)	 	2012
	 
	 	 	 	 	 	 	 	 	 	 
	2012 to 2014
	 	36,214	 	-	 	-	 	-	 	36,214
	 
	 	 	 	 	 	 	 	 	 	 
	2011 to 2013
	 	45,289	 	-	 	-	 	2,203	 	47,492
	 
	 	 	 	 	 	 	 	 	 	 
	2010 to 2012
	 	37,474	 	-	 	2,240	 	1,932	 	41,646
	 
	 	 	 	 	 	 	 	 	 	 
	2009 to 2011
	 	44,073	 	11,018	 	7,127	 	3,026	 	65,244

Long Term Incentive Plan

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dividend shares	 	 
	 	 	 	 	Dividend shares	 	accrued during 2011	 	Total shares under
	 	 	 	 	accrued prior to	 	(excluding Q4 2011	 	grant at 6 February
	 	 	Original award	 	2011	 	dividend)	 	2012
	 
	 	 	 	 	 	 	 	 
	2012 to 2014
	 	104,296	 	-	 	-	 	104,296
	 
	 	 	 	 	 	 	 	 
	2011 to 2013
	 	110,961	 	-	 	5,397	 	116,358
	 
	 	 	 	 	 	 	 	 
	2010 to 2012
	 	148,660	 	8,888	 	7,663	 	165,211
	 
	 	 	 	 	 	 	 	 
	2009 to 2011
	 	153,855	 	19,904	 	8,452	 	182,211

24eh1200415_ex1016.htm

EXHIBIT 10.16

 

IVANHOE ENERGY INC.

 

EMPLOYEES’ AND DIRECTORS’ EQUITY INCENTIVE PLAN

 

AMENDED AND RESTATED

 

April 28, 2010

 

PART 1 – INTRODUCTION

 

	
1.1 

	
Purpose

 

The purpose of the Plan is to secure for the Company and its shareholders the benefits of incentive inherent in share ownership by the directors and key employees of the Company and its Affiliates who, in the judgment of the Board, will be largely responsible for its future growth and success.  It is generally recognized that share plans of the nature provided for herein aid in retaining and encouraging employees and directors of exceptional ability because of the opportunity offered to them to acquire a proprietary interest in the Company.

 

	
1.2 

	
Definitions

 

	
(a)

	
“Affiliate” has the meaning set forth in Section 1(2) of the Ontario Securities Act, as amended, and includes those issuers that are similarly related, whether or not any of the issuers are corporations, companies, partnerships, limited partnerships, trusts, income trusts or investment trusts or any other organized entity issuing securities.

 

	
(b)

	
“Associate” has the meaning assigned to it in the Ontario Securities Act, as amended.

 

	
(c)

	
“Board” means the board of directors of the Company.

 

	
(d)

	
“Blackout Period” means a period in which the trading of Shares or other securities of the Company is restricted under the Company’s Corporate Disclosure, Confidentiality and Securities Trading Policy, or under an insider trading policy or other policy of the Company then in effect.

 

	
(e)

	
“Code” means the United States Internal Revenue Code of 1986, as amended.

 

	
(f)

	
“Company” means Ivanhoe Energy Inc., a company incorporated under the laws of the Yukon Territory.

 

	
(g)

	
“Committee” has the meaning attributed thereto in Section 6.1.

 

	
(h)

	
“Eligible Directors” means the directors of the Company or any Affiliate thereof who are, as such, eligible for participation in the Plan.

 

	
(i)

	
“Eligible Employees” means full time and part time employees (including employees who are officers and directors) of the Company or any Affiliate thereof, whether or not they have a written employment contract with the Company, determined by the Board, upon recommendation of the Committee, to be employees, eligible for participation in the Plan.  “Eligible Employees” shall include Service Providers eligible for participation in the Plan as determined by the Board.

 

 

  

  

  

 

	
(j)

	
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

 

	
(k)

	
“Fair Market Value” means, with respect to a Share subject to Option, the weighted average price of the Shares on the Stock Exchange for the five days on which Shares were traded immediately preceding the date in respect of which Fair Market Value is to be determined.  If the Shares are not listed and posted for trading on a Stock Exchange on such day, the Fair Market Value shall be such price per Share as the Board, acting in good faith, may determine.

 

	
(l)

	
“Foreign Private Issuer” has the meaning assigned to it in the rules promulgated under the Exchange Act.

 

	
(m)

	
“Insider” has the meaning assigned to it in the Ontario Securities Act, as amended, and also includes an Associate or Affiliate of any person who is an Insider.

 

	
(n)

	
“Option” means an option granted under the terms of the Share Option Plan.

 

	
(o)

	
“Option Period” means the period during which an Option may be exercised.

 

	
(p)

	
“Optionee” means an Eligible Employee or Eligible Director to whom an Option has been granted under the terms of the Share Option Plan.

 

	
(q)

	
“Participant” means, in respect of any Plan, an Eligible Employee or Eligible Director who participates in such Plan.

 

	
(r)

	
“Plan” means, collectively the Share Option Plan, the Share Bonus Plan and the Share Purchase Plan and “Plan” means any such plan as the context requires.

 

	
(s)

	
“Service Provider” means a person or company engaged to provide ongoing management or consulting services for the Company or for any entity controlled by the Company.

 

	
(t)

	
“Share Bonus Plan” means the plan established and operated pursuant to Part 3 and Part 5 hereof.

 

	
(u)

	
“Share Option Plan” means the plan established and operated pursuant to Part 2 and Part 5 hereof.

 

	
(v)

	
“Share Purchase Plan” means the plan established and operated pursuant to Part 4 and Part 5 hereof.

 

	
(w)

	
“Shares” means the common shares of the Company.

 

	
(x)

	
“Stock Exchange” means the principal stock exchange upon which the Shares are listed or upon which the Shares have been approved for listing.

 

	
(y)

	
“U.S. Optionee” has the meaning assigned to it in Section 2.14 of this Plan.

 

 

  

  

  

 

PART 2 - SHARE OPTION PLAN

 

	
2.1  

	
Participation

 

Options shall be granted only to Eligible Employees and Eligible Directors.

 

	
2.2

	
Administration of Share Option Plan

 

The Share Option Plan shall be administered by the Committee.

 

	
2.3 

	
Price

 

The exercise price per Share of any Option shall be not less than one hundred per cent (100%) of the Fair Market Value on the date of grant.

 

	
2.4 

	
Grant of Option

 

The Board, on the recommendation of the Committee, may at any time authorize the granting of Options to such Eligible Employees and Eligible Directors as it may select for the number of Shares that it shall designate, subject to the provisions of the Share Option Plan.  The date of grant of an Option shall be (i) the date such grant was approved by the Committee for recommendation to the Board, provided the Board approves such grant; or (ii) for a grant of an Option not approved by the Committee for recommendation to the Board, the date such grant was approved by the Board.

 

Each Option granted to an Eligible Employee or to an Eligible Director shall be evidenced by a stock option agreement with terms and conditions consistent with the Share Option Plan and as approved by the Board on the recommendation of the Committee (which terms and conditions need not be the same in each case and may be changed from time to time, subject to section 5.7 of the Plan and the approval of any material changes by the Stock Exchange).

 

	
2.5 

	
Terms of Options

 

The Option Period shall be ten years from the date such Option is granted or such lesser duration as the Board, on the recommendation of the Committee, may determine at the date of grant, and may thereafter be reduced with respect to any such Option as provided in Section 2.8 hereof covering termination of employment or death of the Optionee; provided, however, that at any time the expiry date of the Option Period in respect of any outstanding Option under this Plan (either before or after its amendment or restatement on May 3, 2007) should be determined to occur either during a Blackout Period or within ten business days following the expiry of the Blackout Period, the expiry date of such Option Period shall be deemed to be the date that is the tenth business day following the expiry of the Blackout Period.

 

Unless otherwise determined from time to time by the Board, on the recommendation of the Committee, Options may be exercised (in each case to the nearest full Share) during the Option Period as follows:

 

	
(a)

	
at any time during the first year of the Option Period, the Optionee may purchase up to 33 1/3% of the total number of Shares reserved for issuance pursuant to his or her Option; and

 

	
(b)

	
at any time during each additional year of the Option Period the Optionee may purchase an additional 33 1/3% of the total number of Shares reserved for issuance pursuant to

 

 

  

  

  

 

	
 

	
his or her Option plus any Shares not purchased in accordance with the preceding subsection (a) until, in the third year of the Option Period, 100% of the Option will be exercisable.

 

Notwithstanding the foregoing, Options shall become exercisable at the rate of at least 20% per year over five years from the date the Option is granted, subject to reasonable conditions such as continued employment.  However, in the case of an Option granted to officers, directors or consultants of the Company or any of its Affiliates, the Option may become fully exercisable, subject to reasonable conditions such as continued employment, at any time or during any period established by the Company or any of its Affiliates.

 

Except as set forth in Section 2.8, no Option may be exercised unless the Optionee is at the time of such exercise:

 

	
(a) 

	
in the case of an Eligible Employee, in the employ of the Company or an Affiliate andshall have been continuously so employed since the grant of his Option, but absence onleave, having the approval of the Company or such Affiliate, shall not be considered an interruption of employment for any purpose of the Share Option Plan; or

 

	
(b) 

	
in the case of an Eligible Director, a director of the Company or an Affiliate and shallhave been such a director continuously since the grant of his Option.

 

The exercise of any Option will be contingent upon receipt by the Company of cash payment of the full purchase price of the Shares being purchased.  No Optionee or his legal representatives or legatees will be, or will be deemed to be, a holder of any Shares subject to an Option, unless and until certificates for such Shares are issued to him or them under the terms of the Share Option Plan.

 

	
2.6 

	
Share Appreciation Right

 

Participant have the right (the “Right”), in lieu of the right to exercise an Option, to terminate such Option in whole or in part (the “Terminated Option”) by notice in writing delivered by the Participant to the Company electing to exercise the Right, in lieu of receiving the Shares (the “Option Shares”) to which the Terminated Option relates, to receive the number of Shares, disregarding fractions, which is equal to the quotient obtained by:

 

	
(a)

	
subtracting the Option exercise price per Share from the Fair Market Value per Share on the day immediately prior to the exercise of the Right and multiplying the remainder by the number of Option Shares; and

 

	
(b)

	
dividing the product obtained under Section 2.6(a) by the Fair Market Value per Share on the day immediately prior to the exercise of the Right.

 

If a Participant exercises a Right in connection with an Option, it is exercisable only to the extent and on the same conditions that the related Option is exercisable under the Plan.

 

 

  

  

  

 

	
2.7 

	
Lapsed Options

 

If Options are surrendered, terminated or expire without being exercised in whole or in part, new Options may be granted covering the Shares not purchased under such lapsed Options, subject, in the case of the cancellation of an Option in connection with the grant of a new Option to the same person on different terms, to the consent of the Stock Exchange.

 

	
2.8

	
Effect of Termination of Employment or Death

 

If an Optionee:

 

	
(a) 

	
dies while employed by or while a director of the Company or its Affiliate, any Optionheld by him at the date of death shall become exercisable in whole or in part, but only bythe person or persons to whom the Optionee’s rights under the Option shall pass by the Optionee’s will or applicable laws of descent and distribution.  Unless otherwise determined by the Board, on the recommendation of the Committee, all such Options shall be exercisable only to the extent that the Optionee was entitled to exercise the Option at the date of his death and only for six months after the date of death or prior to the expiration of the Option Period in respect thereof, whichever is sooner;

 

	
(b) 

	
ceases to be employed by or act as a director of the Company or its Affiliate for cause,no Option held by such Optionee will, unless otherwise determined by the Board, on the recommendation of the Committee, be exercisable following the date on which such Optionee ceases to be so employed or ceases to be a director, as the case may be; or

 

	
(c) 

	
ceases to be employed by or act as a director of the Company or its Affiliate for anyreason other than cause then, unless otherwise determined by the Board, on therecommendation of the Committee, any Option held by such Optionee at the effective date thereof shall become exercisable in whole or in part for a period of up to six months thereafter, but in no event less than 30 days, subject to the earlier expiration of the Option Period.

 

	
2.9

	
Effect of Takeover Bid

 

If a bona fide offer (the “Offer”) for Shares is made to the Optionee or to shareholders 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 exercising control over the Company within the meaning of subsection 1(3) of the Ontario Securities Act (as amended from time to time), then the Company shall, immediately upon receipt of notice of the Offer, notify each Optionee currently holding an Option of the Offer, with full particulars thereof, whereupon, notwithstanding Section 2.5 hereof, such Option may be exercised in whole or in part by the Optionee so as to permit the Optionee to tender the Shares received upon such exercise (the “Optioned Shares”) pursuant to the Offer.

 

2.10           Effect of the Amalgamation or Merger

 

If the Company amalgamates or merges with or into another corporation, any Shares receivable on the exercise of an Option shall be converted into the securities, property or cash which the Participant would have received upon such amalgamation or merger if the Participant had exercised his Option immediately prior to the record date applicable to such amalgamation or merger, and the option price shall be adjusted appropriately by the Board and such adjustment shall be binding for all purposes of the Share Option Plan.  Any such adjustment shall be in accordance with regulatory policies.

 

 

  

  

  

 

	
2.11

	
Adjustment in Shares Subject to the Plan

 

If there is any change in the Shares through the declaration of stock dividends of Shares or consolidations, subdivisions or reclassification of Shares, or otherwise, the number of Shares available under the Share Option Plan, the Shares subject to any Option, and the Option price thereof shall be adjusted appropriately by the Board and such adjustment shall be effective and binding for all purposes of the Share Option Plan.

 

	
2.12

	
Loans to Employees

 

Subject to applicable law, the Board may at any time authorize the Company to loan money to an Eligible Employee (which for the purpose of this section 2.12 excludes any director or executive officer (or equivalent thereof) of the Company), on such terms and conditions as the Board may reasonably determine, to assist such Eligible Employee to exercise an Option held by him or her.  Such terms and conditions shall include, in any event, interest at prevailing market rates, a term not in excess of one year, and security in favour of the Company represented by that number of Shares issued pursuant to the exercise of an Option in respect of which such loan was made or equivalent security which equals the loaned amount divided by the Fair Market Value of the Shares on the date of exercise of the Option, which security may be granted on a non-recourse basis.

 

	
2.13

	
Transfer of Options

 

Options are non-transferable except by will or by the laws of descent and distribution.  Notwithstanding the foregoing, and to the extent permitted by Section 422 of the Code, the Board, in its discretion, may permit distribution of an Option to an inter vivos or testamentary trust in which the Option is to be passed to beneficiaries upon the death of the trustor (settlor).

 

	
2.14

	
United States Residents

 

Subject to Sections 2.14(b), (c) and (d) of this Plan, any Option granted under this Plan to an Optionee who is a citizen or resident of the United States (including its territories, possessions and all areas subject to its jurisdiction) (a “U.S. Optionee”) shall be an “incentive stock option” within the meaning of Section 422 of the Code (provided, for purposes of this Section 2.14 only, a U.S. Optionee who is a director is then also an officer or employee of the Company or one of its Affiliates).  In addition, no provision of this Plan, as it may be applied to a U.S. Optionee, shall be construed so as to be inconsistent with any provision of Section 422 of the Code.

 

Notwithstanding anything in this Plan to the contrary, the following provisions shall apply to each U.S. Optionee:

 

	
(a)

	
any director of the Company or one of its Affiliates who is a U.S. Optionee shall be ineligible to vote upon the granting of such Option to themselves;

 

	
(b)

	
subject to Section 2.14(d), any Option granted under this Plan to a U.S. Optionee shall be an incentive stock option within the meaning of Section 422 of the Code provided that the aggregate Fair Market Value (determined as of the time the Option is granted) of the Shares with respect to which incentive stock options are exercisable for the first time by such U.S. Optionee during any calendar year under this Share Option Plan and all other stock option plans of the Company or its Affiliates does not exceed US$100,000;

 

	
(c)

	
to the extent the aggregate Fair Market Value (determined as of the time the Option is granted) of the Shares with respect to which incentive stock options are exercisable for

 

 

  

  

  

 

	
 

	
the first time by such U.S. Optionee during any calendar year under this Share Option Plan and all other stock option plans of the Company or its Affiliates exceeds US$100,000, such Options shall be treated as nonqualified stock options (i.e. Options which fail to qualify as incentive stock options within the meaning of Section 422 of the Code) in accordance with Section 422(d) of the Code;

 

	
(d)

	
any U.S. Optionee who is a Service Provider or director (and who is not also an officer or employee) of the Company or one of its Affiliates will be ineligible to receive incentive stock options but will be permitted to receive nonqualified stock options pursuant to this Plan;

 

	
(e)

	
the purchase price for Shares under each Option granted to a U.S. Optionee pursuant to this Plan shall be not less than the Fair Market Value of such Shares at the time the Option is granted;

 

	
(f)

	
if any U.S. Optionee to whom an Option is to be granted under this Plan is at the time of the grant of such Option the owner of Shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or any of its Affiliates, then the following special provisions shall be applicable to the Option granted to such individual:

 

	
  

	
(i)

	
the purchase price per Share subject to such Option shall not be less than 110% of the Fair Market Value of one Share at the time of grant, provided however that this requirement will not apply with respect to any Option granted under the Plan that is subject to Section 2.14(c);

 

	
  

	
(ii)

	
for the purpose of this Section 2.14 only, the exercise period shall not exceed five years from the date of grant, provided however that this requirement will not apply with respect to any Option granted under the Plan that is subject to Section 2.14(c);

 

	
  

	
(iii)

	
notwithstanding Section 2.14(f)(i), in respect of California citizens or residents, the purchase price per Share subject to such Option shall in no event be less than 110% of the Fair Market Value of one Share at the time of grant;

 

	
(g)

	
no Option may be granted hereunder to a U.S. Optionee following the expiry of 10 years after the date on which this Plan is adopted by the Board or the date this Plan is approved by the shareholders of the Company, whichever is earlier; and

 

	
(h)

	
no Option granted to a U.S. Optionee under this Plan shall become exercisable unless and until this Plan shall have been approved by the shareholders of the Company.

 

PART 3 - SHARE BONUS PLAN

 

	
3.1

	
Participants

 

The Board on the recommendation of the Committee, shall have the right, subject to Section 3.2, to issue or reserve for issuance, for no cash consideration, to any Eligible Employee or Eligible Director any number of Shares as a discretionary bonus subject to such provisos and restrictions as the Board may determine.

 

 

  

  

  

 

 

	
3.2

	
Number of Shares

 

The aggregate maximum number of shares that may be issued pursuant to Section 3.1 will be limited to 3,400,000 Shares.  Shares reserved for issuance and issued under the Share Bonus Plan shall be subject to the limitations set out in Section 5.1.

 

The Board, on the recommendation of the Committee, in its absolute discretion, shall have the right to reallocate any of the Shares reserved for issuance under the Share Bonus Plan for future issuance under the Share Option Plan or the Share Purchase Plan and, in the event that any Shares specifically reserved under the Share Bonus Plan are reallocated to the Share Option Plan or the Share Purchase Plan, as the case may be, the aggregate maximum number of Shares reserved under the Share Bonus Plan will be reduced to that extent.  In no event will the number of Shares allocated for issuance under the Share Bonus Plan exceed 3,400,000 Shares.

 

	
3.3

	
Necessary Approvals

 

The obligation of the Company to issue and deliver any Shares pursuant to an award made under the Share Bonus Plan will be subject to all necessary approvals of any securities regulatory authority having jurisdiction over the Shares.

 

PART 4 - SHARE PURCHASE PLAN

 

	
4.1

	
Participants

 

Participants in the Share Purchase Plan will be Eligible Employees who have been continuously employed by the Company or any of its Affiliates on a full-time basis for at least 12 consecutive months and who have been designated by the Board, on the recommendation of the Committee, as participants in the Share Purchase Plan (“Share Purchase Plan Participants”).  The Board, on the recommendation of the Committee, shall have the right, in its absolute discretion, to waive such 12-month period or to refuse any Eligible Employee or group of Eligible Employees the right of participation or continued participation in the Share Purchase Plan.

 

	
4.2

	
Election to Participate in the Share Purchase Plan and Participant’s Contribution

 

Any Share Purchase Plan Participant may elect to contribute money (the “Participant’s Contribution”) to the Share Purchase Plan in any calendar year if the Share Purchase Plan Participant delivers to the Company a written direction in form and substance satisfactory to the Company authorizing the Company to deduct from the Share Purchase Plan Participant’s salary, in equal instalments, the Participant’s Contribution.  Such direction will remain effective until revoked in writing by the Share Purchase Plan Participant or until the Board terminates or suspends the Share Purchase Plan, whichever is earlier.

 

The Share Purchase Plan Participant’s Contribution as determined by the Board, on the recommendation of the Committee, shall not exceed 10% of the Share Purchase Plan Participant’s basic annual salary from the Company and its Affiliates at the time of delivery of the direction, before deductions, exclusive of any overtime pay, bonuses or allowances of any kind whatsoever (the “Basic Annual Salary”).  In the case of a Share Purchase Plan Participant for whom the Board, on the recommendation of the Committee, has waived the 12-month employment requirement, the Share Purchase Plan Participant’s Contribution shall not exceed 10% of his Basic Annual Salary from the Company and its Affiliates at the time of delivery of the direction, prorated over the remainder of the calendar year, before deductions and exclusive of any overtime pay, bonuses or allowances of any kind whatsoever.

 

 

  

  

  

 

	
4.3

	
Company’s Contribution

 

Immediately prior to the date any Shares are issued to a Share Purchase Plan Participant in accordance with Section 4.4, the Company will credit the Share Purchase Plan Participant with, and thereafter hold in trust for the Share Purchase Plan Participant, an amount (the “Company’s Contribution”) equal to the Participant’s Contribution then held in trust by the Company.

 

	
4.4

	
Issue of Shares

 

On March 31, June 30, September 30 and December 31 in each calendar year the Company will issue to each Share Purchase Plan Participant fully paid and non-assessable Shares, disregarding fractions, which is equal to the aggregate amount of the Participant’s Contribution and the Company’s Contribution divided by the Issue Price.  For the purposes of this Section 4.4, “Issue Price” means the weighted average price of the Shares on the Stock Exchange, for the 90-day period immediately preceding the date of issuance.  If the Shares are not traded on a Stock Exchange on the date of issuance, the Issue Price shall be such price per Share as the Board, acting in good faith, may determine.

 

The Company shall hold any unused balance of the Participant’s Contribution for a Share Purchase Plan Participant until used in accordance with the Share Purchase Plan.

 

	
4.5

	
Delivery of Shares

 

As soon as reasonably practicable following each issuance of Shares to a Share Purchase Plan Participant pursuant to Section 4.4, the Company will cause to be delivered to the Share Purchase Plan Participant a certificate in respect of such Shares provided that, if required by applicable law or the rules and policies of the Stock Exchange, a restrictive legend shall be inscribed on the certificate, which legend shall state that the Shares shall not be transferable for such period as may be prescribed by law or by any regulatory authority or Stock Exchange.

 

	
4.6

	
Effect of Termination of Employment or Death

 

If a Participant ceases to be employed by the Company or any of its Affiliates for any reason or receives notice from the Company of the termination of his or her employment, the Share Purchase Plan Participant’s participation in the Share Purchase Plan will be deemed to be terminated and any portion of the Participant’s Contribution then held in trust shall be paid to the Share Purchase Plan Participant or his estate or successor as the case may be.

 

	
4.7

	
Effect of Amalgamation or Merger

 

If the Company amalgamates or merges with or into another corporation, each Share Purchase Plan Participant to whom Shares are to be issued will receive, on the date on which any Shares would otherwise have been delivered to the Share Purchase Plan Participant in accordance with Section 4.5, the securities, property or cash to which the Share Purchase Plan Participant would have been entitled on such amalgamation, consolidation or merger had the Shares been issued immediately prior to the record date of such amalgamation or merger.

 

 

  

  

  

PART 5 – GENERAL

 

	
5.1

	
Number of Shares

 

The aggregate number of Shares that may be reserved for issuance under this Plan (together with any other securities – based on compensation arrangements of the Company in effect from time to time) shall not exceed 7% of the issued and outstanding Shares from time to time.  This prescribed maximum may be subsequently increased to any other specified amount, provided the increase is authorized by a vote of the shareholders of the Company.  In addition, the aggregate number of Shares reserved for issuance under the Plan:

 

	
(a) 

	
that may be reserved for issuance to Insiders for options granted under the Plan (orwhen combined with all of the Company’s other security based compensation arrangements) shall not exceed 10% of the Company’s outstanding issue from time to time;

 

	
(b) 

	
that may be issued to Insiders for options granted under the Plan (or whencombined with all of the Company’s other security based compensation arrangements) within any one-year period shall not exceed 10% of the Company’s outstanding issue from time to time; and

 

	
(c) 

	
that may be issued to any one Insider and his or her Associates for optionsgranted under the Plan within any one-year period shall not exceed 5% of the Company’s outstanding issue from time to time.

 

In no event will the number of Shares at any time reserved for issuance to any Participant exceed 5% of the Company’s outstanding issue from time to time.

 

For the purposes of this Section 5.1, “outstanding issue” means the total number of Shares, on a non-diluted basis, that are issued and outstanding immediately prior to the date that any Shares are issued or reserved for issuance pursuant to an award under the Plan.

 

For greater certainty, as this Plan is a rolling plan, the reloading of Options is permitted under the Plan and Options that are exercised, surrendered, terminated or expire without being exercised no longer represent Shares reserved for issuance under this Plan and do not decrease the number of Shares issuable under this Section 5.1 as determined from time to time, subject to the provisions of Section 2.7.

 

	
5.2

	
Transferability

 

Any benefits, rights and options accruing to any Participant in accordance with the terms and conditions of the Plan shall not be transferable unless specifically provided herein.  Except as otherwise provided in Section 2.13, during the lifetime of a Participant, all benefits, rights and options may only be exercised by the Participant.

 

	
5.3

	
Employment

 

Nothing contained in any Plan shall confer upon any Participant any right with respect to employment or continuance of employment with the Company or any Affiliate, or interfere in any way with the right of the Company or any Affiliate to terminate the Participant’s employment at any time.  Participation in any Plan by a Participant is voluntary.

 

 

  

  

  

 

	
5.4

	
Record Keeping

 

The Company shall maintain a register in which shall be recorded:

 

	
(a)

	
the name and address of each Participant;

 

	
(b)

	
the Plan or Plans in which the Participant participates;

 

	
(c)

	
any Participant’s Contributions;

 

	
(d)

	
the number of unissued Shares reserved for issuance pursuant to an Option or pursuant to an award made under the Share Bonus Plan in favour of a Participant; and

 

	
(e)

	
such other information as the Board may determine.

 

	
5.5

	
Necessary Approvals

 

The Plan shall be effective only upon formal adoption by the Board following the approval of the shareholders of the Company.  Any Option exercised before shareholder approval is obtained shall be rescinded if shareholder approval is not obtained within 12 months before or after the Plan is adopted.  Such shares shall not be counted in determining whether such approval is obtained.

 

The obligation of the Company to sell and deliver Shares in accordance with the Plan is subject to the approval of any Stock Exchange or governmental authority having jurisdiction in respect of the Shares which may be required in connection with the authorization, issuance or sale of such Shares by the Company.  If any Shares cannot be issued to any Participant for any reason including, without limitation, the failure to obtain such approval, the obligation of the Company to issue such Share shall terminate and any Participant’s Contribution or option price paid to the Company shall be returned to the Participant.

 

	
5.6

	
Income Taxes

 

As a condition of, and prior to participation in, the Plan, a Participant shall, at the Company’s request, authorize the Company in writing to withhold from any remuneration or consideration whatsoever payable to such Participant hereunder, any amounts required by any taxing authority to be withheld for taxes of any kind as a consequence of such participation in the Plan.

 

	
5.7

	
Amendments to Plan

 

The Board shall have the power to, at any time and from time to time, either prospectively or retrospectively, amend, suspend or terminate the Plan or any Option or other award granted under the Plan without shareholder approval, including, without limiting the generality of the foregoing: changes of a clerical or grammatical nature, changes regarding the persons eligible to participate in the Plan, changes to the exercise price, vesting, term and termination provisions of Options, changes to the share appreciation right provisions, changes to the share bonus plan provisions (other than the maximum number of Shares issuable under the Bonus Plan in Section 3.2 of the Plan), changes to the authority and role of the Compensation Committee under the Plan, changes to the acceleration and vesting of Options in the event of a takeover bid, and any other matter relating to the Plan and the Options and awards granted thereunder, provided however that:

 

 

  

  

  

 

 

	
(a)

	
such amendment, suspension or termination is in accordance with applicable laws and the rules of any stock exchange on which the Shares are listed;

 

	
(b)

	
no amendment to the Plan or to an Option granted hereunder will have the effect of impairing, derogating from or otherwise adversely affecting the terms of an Option which is outstanding at the time of such amendment without the written consent of the holder of such Option;

 

	
(c)

	
the expiry date of an Option Period in respect of an Option shall not be more than ten years from the date of grant of an Option except as expressly provided in Section 2.5;

 

	
(d)

	
the Directors shall obtain shareholder approval of:

 

	
  

	
(i)

	
any amendment to the aggregate maximum number of Shares specified in subsection 3.2 (Share Bonus Plan);

 

	
  

	
(ii)

	
any amendment to the aggregate percentage of Shares specified in subsection 5.1;

 

	
  

	
(iii)

	
any amendment to the limitation on Shares that may be reserved for issuance, or issued, to Insiders under subsection 5.1(a) and (c); or

 

	
  

	
(iv)

	
any amendment that would reduce the exercise price of an outstanding Option of an Insider other than pursuant to section 2.11;

 

	
  

	
(v)

	
any amendment that would extend the expiry date of the Option Period in respect of any Option granted under the Plan to an Insider except as expressly contemplated in subsection 2.5; and

 

	
  

	
(vi)

	
any amendment to the amending provision set out in subsection 5.7 (Amendments to Plan).

 

If the Plan is terminated, the provisions of the Plan and any administrative guidelines and other rules and regulations adopted by the Board and in force on the date of termination will continue in effect as long as any Option or any rights pursuant thereto remain outstanding and, notwithstanding the termination of the Plan, the Board shall remain able to make such amendments to the Plan or the Options as they would have been entitled to make if the Plan were still in effect.

 

	
5.8

	
Foreign Private Issuer Status

 

If, and for so long as, the Company is not a Foreign Private Issuer or if the directors and officers of the Company otherwise become subject to Section 16 of the Exchange Act, then notwithstanding any provision of the Plan to the contrary:

 

	
(a)

	
the Plan shall be administered by a committee consisting of two or more persons (the “Committee”) appointed by the Board, each of whom is a director qualifying as  a “disinterested” person, as such term is defined, from time to time, in Rule 16b-3 under the Exchange Act;

 

	
(b)

	
the Committee shall determine and designate, from time to time, the individuals to whom awards shall be made hereunder, the amount of the awards and the other terms and conditions of such awards;

 

 

  

  

  

 

 

	
(c)

	
each member of the Committee shall, upon his appointment or election to the Committee for the first time, automatically be granted an immediately exercisable Option to purchase 10,000 Shares at a price per share equal to the Fair Market Value at the date of grant for an Option Period of ten years but shall not otherwise be eligible to participate in the Plan;

 

	
(d)

	
no Option granted to a director or officer under the Plan may be exercised during the first six months following the date of grant;

 

	
(e)

	
directors and officers of the Company will be required to hold Shares acquired under the Share Purchase Plan for a period of six months, provided that no such hold period will be required in respect of any such director or officer who makes an irrevocable election to waive his right to withdraw from the Share Purchase Plan or to change his Participant’s Contribution at least six months prior to his acquisition of such Shares;

 

	
(f)

	
Subsections 5.8(c), (d) and (e) may only be amended or modified by the Board or the shareholders of the Company once in any six month period; and

 

	
(g)

	
the Board may, subject to Subsection 5.8(f) and Section 5.7, amend or modify the Plan to the extent that the Board, based upon the advice of legal counsel, considers necessary or desirable to bring the Plan into compliance with Rule 16b-3 under the Exchange Act.

 

	
5.9

	
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.

 

	
5.10

	
Audited Financial Statements

 

The Company shall provide annual financial statements of the Company to each Participant holding an outstanding award under the Plan.  Such financial statements need not be audited and need not be issued to key employees whose duties at the Company assure them access to equivalent information.

 

	
5.11

	
Compliance with Applicable Law, etc

 

If any provision of the Plan or any agreement entered into pursuant to the Plan contravenes any law or any order, policy, by-law or regulation of any regulatory body or Stock 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.

 

PART 6 - ADMINISTRATION OF THE PLAN

 

	
6.1

	
Administration by the Committee

 

	
(a)

	
Unless otherwise determined by the Board, the Plan shall be administered by the Compensation Committee (the “Committee”) appointed by the Board and constituted in accordance with such Committee’s charter.  The members of the Committee serve at the pleasure of the Board and vacancies occurring in the Committee shall be filled by the Board.

 

 

  

  

  

 

 

	
(b)

	
The Committee shall have the power, where consistent with the general purpose and intent of the Plan and subject to the specific provisions of the Plan, to:

 

	
  

	
(i)

	
adopt and amend rules and regulations relating to the administration of the Plan and make all other determinations necessary or desirable for the administration of the Plan.  The interpretation and construction of the provisions of the Plan and related agreements by the Committee shall be final and conclusive.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency; and

 

	
  

	
(ii)

	
otherwise exercise the powers delegated to the Committee by the Board and under the Plan as set forth herein.

 

	
6.2

	
Board Role

 

	
(a)

	
The Board, on the recommendation of the Committee, shall determine and designate from time to time the individuals to whom awards shall be made, the amounts of the awards and the other terms and conditions of the awards.

 

	
(b)

	
The Board may delegate any of its responsibilities or powers under the Plan to the Committee, provided that the grant of all Shares, Options or other awards under the Plan shall be subject to the approval of the Board.  No Option shall be exercisable in whole or in part unless and until such approval is obtained.

 

	
(c)

	
In the event the Committee is unable or unwilling to act in respect of a matter involving the Plan, the Board shall fulfill the role of the Committee provided for herein.

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