Document:

exv10w27

 

Exhibit
10.27

Schedule “A”

TRIDENT EXPLORATION CORP.

STOCK OPTION PLAN

(Effective Date: August 1, 2002)

	1.	 	PURPOSE OF PLAN

	 	1.1	 	The purpose of the Plan is to assist directors, officers, employees and
consultants, and companies and entities controlled by them, of the Company and any
Subsidiary to participate in the growth and development of the Company and its
Subsidiaries by providing such persons with the opportunity, through share options, to
acquire an increased proprietary interest in the Company that will be aligned with the
interests of the shareholders of the Company.

	2.	 	DEFINED TERMS

In the Plan, the following terms shall have the following meanings, respectively:

	 	2.1	 	“Board” means the board of directors of the Company or, if established
and duly authorized to act with respect to this Plan, any committee of the board of
directors of the Company;
	 
	 	2.2	 	“Business Day” means any day, other than a Saturday or a Sunday, on
which Canadian chartered banks are open for business in Calgary, Alberta;
	 
	 	2.3	 	“Change of Control” means, with respect to a Holding Entity, any change
in the legal or beneficial ownership of such entity such that it is no longer a
“Holding Entity” within the meaning of the Plan;
	 
	 	2.4	 	“Company” or “TEC” means Trident Exploration Corp. or any
successor;
	 
	 	2.5	 	“Control Tag Along Offer” has the meaning attributed to it in the
Stockholder Agreement;
	 
	 	2.6	 	“Eligible Person” means any director, officer, employee or consultant
of the Company or any Subsidiary, and any Holding Entity;
	 
	 	2.7	 	“Employee Loan” means loans by TRC to any Eligible Person secured by
Options (and/or the Shares underlying such Options) held by such Eligible Person;
	 
	 	2.8	 	“Employee Loan Program” means the program established by TRC in respect
of the provision of Employee Loans.

 

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	 	2.9	 	“Exchange” means The TSX Venture Exchange, The Toronto Stock Exchange
or, where the context permits, any other exchange on which the Shares are or may be
listed from time to time;
	 
	 	2.10	 	“Exercise Price” means the price per Share at which Shares may be
purchased under the Option, as the same may be adjusted from time to time in accordance
with Section 7;
	 
	 	2.11	 	“Family Member” means any spouse or child of any director, officer,
employee or individual consultant of the Company or any Subsidiary or of any individual
who is the sole service provider of any corporate consultant of the Company or any
Subsidiary;
	 
	 	2.12	 	“Family Member Holding Entity” means a Holding Entity wholly-owned by a
Family Member or by any combination of Family Members;
	 
	 	2.13	 	“Family Member Optionee” means any director, officer, employee or
individual consultant related to the Family Member(s) who own equity interests in a
Family Holding Entity.
	 
	 	2.14	 	“Holding Entity” means any company, partnership or other entity wholly
owned (i) by any director, officer, employee or individual consultant of the Company or
any Subsidiary, or (ii) any corporate consultant of the Company or any Subsidiary,
owned by any individual who is the sole service provider of such corporate consultant
or any Family Member or combination of Family Members, or any combination thereof, or
(iii) any Family Member, or any combination of Family Members, or (iv) by any
combination of persons described in (i) and (iii) above;
	 
	 	2.15	 	“Insider” means:

	 	(a)	 	an insider as defined under Section 1(aa) of the Securities Act
other than a person who falls within that definition solely by virtue of being
a director or officer of a Subsidiary; and
	 
	 	(b)	 	an associate as defined under Section 1(c) of the Securities
Act of any person who is an insider by virtue of (i) above;

	 	2.16	 	“Market Price” at any date in respect of the Shares shall be either:

	 	(a)	 	if listed on an Exchange, the closing price of the Shares on
the Exchange on the last Business Day preceding the date on which the Option is
approved by the Board; or
	 
	 	(b)	 	in the discretion of the Board, such price as may be determined
by any mechanism for establishing the market value of the Shares approved by

 

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	 	 	 	the Board including the discretion of the Board (and satisfactory to the
Exchange, if the Shares are listed on the Exchange);

	 	2.17	 	“Option” means an option to purchase Shares granted under the Plan;
	 
	 	2.18	 	“Optionee” means an Eligible Person to whom an Option has been granted,
the Company or TRC;
	 
	 	2.19	 	“Plan” means this stock option plan, as amended from time to time;
	 
	 	2.20	 	“Shares” means the Class A Common Voting Shares of the Company, or, in
the event of an adjustment contemplated by Section 7, such other shares or securities
to which an Optionee may be entitled upon the exercise of an Option as a result of such
adjustment;
	 
	 	2.21	 	“Securities Act” means the Securities Act (Alberta) R.S.A. 2000, c.
S-4, as amended;
	 
	 	2.22	 	“Stockholder Agreement” means the agreement to be entered into among
TRC, TEC, certain TEC Shareholders and the TRC Stockholders with respect to the
business and affairs of TRC and TEC, as amended, restated or supplemented from time to
time;
	 
	 	2.23	 	“Subsidiary” means any subsidiary of the Company within the meaning of
the Business Corporations Act (Alberta);
	 
	 	2.24	 	“Tag Along Offer” has the meaning attributed to it in the Stockholder
Agreement;
	 
	 	2.25	 	“TEC Common Shares” means Class A Common Shares in the capital of TEC
and any other voting shares authorized by the articles of TEC outstanding from time to
time and does not include Class A Preference Shares or any other
class or series of shares of TEC which do not entitle the holder to receive notice of and attend meetings
of TEC Shareholders;
	 
	 	2.26	 	“TEC Shareholder” means a holder of TEC Common Shares;
	 
	 	2.27	 	“TRC” means Trident Resources Corp., a corporation incorporated
pursuant to the laws of Delaware;
	 
	 	2.28	 	“TRC Common Stock” means the common stock of TRC and any other voting
stock authorized by the certificate of incorporation of TRC outstanding from time to
time and does not include Series A Preference Stock or any other class or series of
stock of TRC which do not entitle the holder to receive notice of and attend meetings
of TRC Stockholders;
	 
	 	2.29	 	“TRC Exchange Rights Agreement” means the exchange rights agreement
dated December 4, 2003 among TRC, holders of TRC Common Stock, TEC, holders of

 

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	 	 	 	TEC Common Shares and holders of TEC Preference Shares, as amended, supplemented, or
restated from time to time;

	 	2.30	 	“TRC Stockholder” means a holder of TRC Common Stock; and
	 
	 	2.31	 	“Third Party Offer” has the meaning attributed to it in the Stockholder
Agreement.

	3.	 	ADMINISTRATION OF THE PLAN

	 	3.1	 	The Plan shall be administered by the Board.
	 
	 	3.2	 	The Board 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:

	 	(a)	 	establish policies and to adopt rules and regulations for
carrying out the purposes, provisions and administration of the Plan;
	 
	 	(b)	 	interpret and construe the Plan and to determine all questions
arising out of the Plan and any Option granted pursuant to the Plan, and any
such interpretation, construction or termination made by the Board shall be
final, binding and conclusive for all purposes on the Company and the Optionee;
	 
	 	(c)	 	grant Options;
	 
	 	(d)	 	determine which Eligible Persons are granted Options;
	 
	 	(e)	 	determine the number of Shares covered by each Option;
	 
	 	(f)	 	determine the Exercise Price;
	 
	 	(g)	 	determine the time or times when Options will be granted and
exercisable (including without limitation the imposition of conditions of
grants and vesting restrictions);
	 
	 	(h)	 	determine if the Shares that are subject to an Option will be
subject to any conditions or restrictions upon the exercise of such Option;
and
	 
	 	(i)	 	prescribe the form of documents relating to the grant, exercise
and other terms of Options.

	4.	 	SHARES SUBJECT TO PLAN

	 	4.1	 	Options may be granted in respect of authorized and unissued Shares, provided
that the aggregate number of Shares reserved for issuance under this Plan, subject to
adjustment or increase of such number pursuant to the provisions of Section 7,

 

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	 	 	 	shall not exceed such number of the issued and outstanding Shares, as the Board of
Directors may determine from time to time. Shares in respect of which Options are
not exercised shall be available for subsequent Options under the Plan. No
fractional shares may be purchased or issued under the Plan.

	5.	 	ELIGIBILITY, GRANT AND TERMS OF OPTIONS

	 	5.1	 	Options may be granted to any Eligible Person.
	 
	 	5.2	 	Subject to, and except as herein and as otherwise specifically provided for in,
this Plan, the number of Shares subject to each Option, the Exercise Price, the
expiration date of each Option, the extent to which each Option is exercisable from
time to time during the term of the Option and other terms and conditions relating to
each such Option shall be determined by the Board; provided, however, that if no
specific determination is made by the Board with respect to any of the following
matters, each Option shall, subject to any other specific provisions of the Plan,
contain the following terms and conditions:

	 	(a)	 	the period during which an Option shall be exercisable shall be
ten years from the date the Option is granted to the Optionee; and
	 
	 	(b)	 	the Exercise Price shall be deemed to be the closing price of
the Shares on the last Business Day preceding the date on which the Option is
granted by the Board.

	 	5.3	 	Unless the Board shall otherwise determine, no separate agreement between the
Company and the Optionee shall be necessary to create and grant any Option, and the
Board may, by resolution, create and grant Options and stipulate such additional terms
as are consistent with this Stock Option Plan.
	 
	 	5.4	 	If the Shares are listed on the Exchange, the Exercise Price on Shares that are
subject to any Option shall in no circumstances be lower than the Market Price of the
Shares at the date of the grant of the Option.
	 
	 	5.5	 	The total number of Shares to be optioned to any Optionee under this Plan shall
not exceed 10% of the issued and outstanding Shares (on a non-diluted basis) at the
date of the grant of the Option.
	 
	 	5.6	 	Subject to the security granted pursuant to the terms of the Employee Loan
Program and/or any Employee Loans and any transfer made pursuant thereto, an Option is
personal to the Optionee and is non-transferable and non-assignable and to the extent
an Optionee attempts to transfer or assign an Option (other than in accordance with the
terms of this Plan), such transfer or assignment shall be null and void, provided
however in the case of an Optionee that is an individual, that such individual Optionee
may transfer, upon written notice to the Company, all or any part of his or her Options
to a Holding Entity (and such Holding Entity may

 

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	 	 	 	transfer, upon written notice to the Company, such Options back to such Optionee,
provided such Holding Entity continues to be a Holding Entity of the Optionee) which
shall thereupon be an Optionee hereunder.
	 
	 	5.7	 	In the event there occurs a Change of Control with respect to a Holding Entity,
thereafter all Options that have been transferred or granted to it shall be
automatically cancelled without further action of the Company and without notice to the
Optionee.

	6.	 	TERMINATION OF EMPLOYMENT

	 	6.1	 	An Option, and all rights to purchase Shares pursuant thereto, shall expire and
terminate immediately upon the Optionee (including a Holding Entity that is a corporate
consultant) ceasing, by reason of termination of such Optionee’s employment or
engagement by the Company or Subsidiary (as applicable) with cause, to be a director,
officer, employee or consultant of the Company or of any Subsidiary, or in the case of
an Optionee that is a Holding Entity that has not been engaged as a consultant,
immediately upon the director, officer, employee or consultant of the Company or any
Subsidiary who owned equity interests in such Holding Entity at the time the Option was
granted or transferred to the Holding Entity, or in the case of a Family Member Holding
Entity, the Family Member Optionee, ceasing by reason of termination of such
director’s, officer’s, employee’s or consultant’s employment or engagement by the
Company or Subsidiary (as applicable) with cause, to be a director, officer or
full-time employee or consultant of the Company or any Subsidiary. For the purposes of
this Section 6.2, a director, officer or consultant shall be deemed to be an employee.
	 
	 	6.2	 	If, before the expiry of an Option in accordance with the terms thereof, the
employment or engagement of the Optionee (including a Holding Entity that is engaged as
a consultant) by the Company or by any Subsidiary, or in the case of an Optionee that
is a Holding Entity that is not engaged as a consultant, the employment or engagement
of the director, officer, employee or consultant who owned equity interests in such
Holding Entity at the time the Option was granted or transferred to the Holding Entity,
or in the case of a Family Member Holding Entity, the Family Member Optionee, shall
terminate for any reason whatsoever other than termination by the Company for cause,
but including termination by reason of the death of the Optionee or the service
provider of the Optionee, or with respect to a Family Member Holding Entity, the death
of the Family Member Optionee, such Option may, subject to the terms thereof (including
any restrictions on the exercise thereof) and any other terms of the Plan, be exercised
by the Optionee or, in the case of death by the legal personal representative(s) of the
estate of the deceased or the Optionee (as applicable) during the Exercise Period that
begins on the date of death or at any time during the Exercise Period that begins on
the date that notice of dismissal is given to the director, officer, employee or
consultant (but in either case prior to the expiry of the Option in

 

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	 	 	 	accordance with the terms thereof). For the purposes of this Section 6.2, “Exercise
Period” means 90 days plus any applicable notice period that applies to such
termination whether pursuant to an employment agreement or common law. For the
purposes of this Section 6.2, a director, officer or consultant shall be deemed to
be an employee. For greater certainty, such Option shall expire and terminate upon
the expiration of such applicable Exercise Periods but shall continue to vest within
such Exercise Periods.
	 
	 	6.3	 	Options shall not be affected by any change of the employment or consulting
terms of the Optionee (or in the case of a Holding Entity that is not a consultant, the
employment or consulting terms of the employee or consultant who owned equity interests
in such Holding Entity at the time the Option was granted or transferred to the Holding
Entity, or in the case of a Family Member Holding Entity, the Family Member Optionee);
or by the Optionee ceasing to be a director or officer (or the director or officer who
at the time of the grant of the Options owned equity interests in a Holding Entity, or
in the case of a Family Member Holding Entity, the Family Member Optionee, ceasing to
be a director or officer), where the director or officer (or the director or officer
who owned equity interests in a Holding Entity at the time the Option was granted or
transferred to the Holding Entity, or in the case of a Family Member Holding Entity,
the Family Member Optionee) continues to be employed or continues to be retained by, or
continues to be a director or officer of, the Company or any Subsidiary, provided
further that Exercise Periods set forth in Section 6.2 shall be determined on the basis
of employment or engagement status of the relevant person on the date of death or
termination.

	7.	 	EXERCISE OF OPTIONS

	 	7.1	 	Subject to the provisions of the Plan and any restrictions or other provisions
with respect to the exercise of Options, an Option may be exercised from time to time
by delivery to the Company at its head office of a written notice of exercise addressed
to the Corporate Secretary specifying the number of Shares with respect to which the
Option is being exercised and accompanied by payment in full of the Exercise Price of
the Shares to be purchased. Certificates for such Shares shall be issued and delivered
to the Optionee within a reasonable time following the receipt of such notice and
payment.
	 
	 	7.2	 	Notwithstanding any of the provisions contained in the Plan or in any Option,
the Company’s obligation to issue Shares to an Optionee pursuant to the exercise of an
Option shall be subject to:

	 	(a)	 	completion of such registration or other qualification of such
Shares or obtaining approval of such governmental or regulatory authority as
the Company shall determine to be necessary or advisable in connection with the
authorization, issuance or sale thereof;

 

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	 	(b)	 	the listing of such Shares on any stock exchange on which the
Shares may then be listed (if applicable);
	 
	 	(c)	 	the receipt from the Optionee of such representations,
agreements and undertakings, including as to future dealings in such Shares, as
the Company or its counsel determines to be necessary or advisable in order to
safeguard against the violation of the securities laws of any jurisdiction; and
	 
	 	(d)	 	the repayment of all Employee Loans that are outstanding with
respect to the Optionee and compliance with the terms and conditions of the
Employee Loan Program and any documentation executed in connection with any
such Employee Loans.

In this connection the Company shall, to the extent necessary, take all reasonable
steps to obtain such approvals, registrations and qualifications as may be necessary
for the issuance of such Shares in compliance with applicable securities laws and
for the listing of such Shares on any stock exchange on which the Shares are then
listed.

	8.	 	CHANGE OF CONTROL AND CERTAIN ADJUSTMENTS

	 	8.1	 	If, during the term of the Option, the Company shall file articles of
arrangement providing that its outstanding Shares are transferred in exchange for
securities of another corporation or shall merge into or amalgamate with any other
corporation or shall sell the whole or substantially the whole of its assets and
undertaking for securities of another corporation, the Company will make provision
that, upon the exercise of any option during its unexpired period after the effective
date of such arrangement, merger, amalgamation or sale, the Optionee shall receive such
number of securities of the other, continuing or successor Company in such arrangement,
merger or amalgamation or of the shares of the purchasing corporation in such sale as
he or she would have received as a result of such arrangement, merger, amalgamation or
sale if the Optionee had purchased Shares immediately prior thereto for the same
consideration paid on the exercise of the Option and had held such Shares on the
effective date of such arrangement, merger, amalgamation or sale. Upon such provision
being made, the obligation of the Company to the Optionee in respect of the Shares then
remaining subject to this option shall terminate and be at an end.
	 
	 	8.2	 	If, during the term of the Option, a “take-over bid” as defined in the
Securities Act (other than an offer by a “control person”, unless the Shares subject to
such offer together with the offeror’s securities constitute in the aggregate 50% or
more of all of the outstanding Shares) shall be made for the Shares, unless otherwise
directed by the Board, all Options shall immediately vest and become exercisable by the
Optionee notwithstanding Section 5.2 hereof or any prior determination regarding such
matter made by the Board, and the Optionee shall have the right to exercise

 

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	 	 	 	the Option to purchase all of the Shares optioned which have not previously been
purchased under the Option, but such Shares may only be purchased for tender
pursuant to such take-over bid, provided further, that if such take-over bid is a
Third Party Offer that triggers an obligation pursuant to the Stockholder Agreement
of TEC Shareholders to tender their TEC Common Shares to a Third Party Offer, the
Optionee shall exercise the Option and tender such Shares to the Third Party Offer.
If for any reason such Shares are not so tendered or, if tendered, are not, for any
reason, taken up and paid for by the offeror pursuant to the take-over bid, any such
Shares so purchased by the Optionee shall be and shall be deemed to be cancelled and
returned to the treasury of the Company, shall be added back to the number of
Shares, if any, remaining unexercised under the Option and upon presentation to the
Company of share certificates representing such Shares properly endorsed for
transfer back to the Company, the Company shall refund to the Optionee all
consideration paid by him in the initial purchase thereof.
	 
	 	8.3	 	If, during the term of the Option, (a) a Tag Along Offer occurs, (b) a Control
Tag Along Offer occurs, or (c) a Third Party Offer occurs and any TRC Stockholder is
obligated to sell shares of TRC Common Stock to the offeror of such Third Party Offer
pursuant to the terms of any drag along right contained in the Stockholder Agreement (a
“Drag Along Event”), then, unless otherwise directed by the Board, all Options shall
immediately vest and become exercisable by the Optionee notwithstanding Section 5.2
hereof or any prior determination regarding such matter made by the Board, and the
Optionee shall have the right to exercise the Option to purchase all of the Shares
optioned which have not previously been purchased under the Option, but such Shares may
only be purchased for exchange to shares of TRC Common Stock for tender pursuant to the
Tag Along Offer, the Control Tag Along Offer or the Drag Along Offer, provided further,
that if such event is a Drag Along Offer, the Optionee shall exercise the Option and
exchange such Shares for shares of TRC Common Stock and tender such shares to the Third
Party Offer that constitutes the Drag Along Offer. If for any reason such shares of
TRC Common Stock are not so tendered or, if tendered, are not, for any reason, taken up
and paid for by the offeror pursuant to the Tag Along Offer, Control Tag Along Offer or
Drag Along Offer, any such shares of TRC Common Stock so purchased by the Optionee
shall be and shall be deemed to be cancelled and returned to the treasury of TRC, the
underlying Shares shall be added back to the number of Shares, if any, remaining
unexercised under the Option and upon presentation to the Company of share certificates
representing such Shares properly endorsed for transfer back to the Company, the
Company shall refund to the Optionee all consideration paid by him in the initial
purchase thereof.
	 
	 	8.4	 	Any Optionee who exercises their Option to purchase Shares (other than any
exercise of Options pursuant to the realization by TRC of any Employee Loans), who at
the time of such exercise is not then a TEC Shareholder or a TRC Stockholder, shall
immediately prior to such exercise, and as a condition to such

 

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	 	 	 	issuance of Shares, execute and deliver to TRC and TEC a written agreement, in the
form required pursuant to each applicable agreement, agreeing to be bound by the
terms and conditions of the Stockholder Agreement and the TRC Exchange Rights
Agreement.
	 
	 	8.5	 	Appropriate adjustments as regards Options granted or to be granted, in the
number of Shares optioned and in the Exercise Price, shall be made by the Board to give
effect to adjustments in the number of Shares resulting from subdivisions,
consolidations or reclassifications of the Shares, the payment of stock dividends by
the Company (other than dividends in the ordinary course) or other relevant changes in
the capital stock of the Company. The appropriate adjustment in any particular
circumstance shall be conclusively determined by the Board in its sole discretion,
subject to approval by the shareholders of the Company and to acceptance by the
Exchange, respectively, if required by applicable law or regulatory policy.

	9.	 	AMENDMENT OR DISCONTINUANCE OF PLAN

	 	9.1	 	The Board may amend, suspend or discontinue the Plan at any time; provided,
however, that no such amendment may change the manner of determining the Exercise Price
or, without the consent of the Optionee, alter or impair any Option previously granted
to an Optionee under the Plan.
	 
	 	9.2	 	No amendment, suspension or discontinuance of the Plan may contravene the
requirements of the Exchange or any securities commission or regulatory body to which
the Plan or the Company is now or may hereafter be subject to.

	10.	 	ACCOUNTS AND STATEMENTS

	 	10.1	 	The Company shall maintain records of the details of each Option granted to
each Optionee under the Plan. Upon request therefor from an Optionee and at such other
times as the Company shall determine, the Company shall furnish the Optionee with a
statement setting forth details of his Options. Such statement shall be deemed to have
been accepted by the Optionee as correct unless written notice to the contrary is given
to the Company within 10 days after such statement is given to the Optionee.

	11.	 	RIGHT OF FIRST REFUSAL

	 	11.1	 	If any Optionee (the “Offeror”) shall desire or be obliged by law or otherwise
to transfer into the name of some other person or persons (the “Proposed Transferee”)
or to sell, assign, or dispose of any Shares it has acquired pursuant to the exercise
of any Option (the “Subject Shares”) to any Proposed Transferee, or shall desire or be
obliged by law or otherwise effect a Change of Control with respect to an Optionee that
is a Holding Entity, unless any of the above events occurs in connection with the
realization by TRC of any Employee Loan, the

 

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Company, its successors and assigns (the “Offeree”) shall have the prior right to
purchase the Subject Shares to be transferred, or the Subject Shares held by the
Optionee in relation to which a Change of Control may occur, (as applicable) on the
terms and in accordance with the procedure contained in paragraph 11.2 and such
Optionee shall deliver to the Offeree the written notice contemplated by Section
11.2.

	11.2	 	The procedure on proposed transfers, sales, assignments and disposals and
Changes of Control is as follows:

	 	(a)	 	An Offeror shall deliver a written notice of such transfer,
sale, assignment or disposal or Change of Control (in this paragraph 11.2(a),
an “offer”) to the Offeree (the “Selling Notice”) which shall set out:

	 	(i)	 	the name of the Proposed Transferee;
	 
	 	(ii)	 	the price per Share offered in such offer and
the terms of payment;
	 
	 	(iii)	 	any other material terms of such offer;
	 
	 	(iv)	 	the notice address of the Offeror; and
	 
	 	(v)	 	the notice shall specifically refer to this
Section of this Stock Option Plan and state that the notice is given
pursuant to this Section;

provided that if the event giving rise to the obligation to deliver a notice
under this Section 11.2 is a desire or obligation to effect a Change of
Control, the name of the Proposed Transferee shall be the proposed
transferees of any legal or beneficial ownership in the Holding Entity, the
price per share shall be the Market Price as determined by the directors of
the Company, the terms of sale shall be as set forth in Section 11.3, and
the material terms of the offer shall describe the material terms of the
proposed Change of Control.

	 	(b)	 	The written notice described in Section 11.2(a) shall be deemed
to be an offer to sell the Subject Shares of the Offeror to the Offeree at the
same price and on the same other terms as contained in the offer of the
Proposed Transferee or, in the case of a Change of Control, an offer to sell
the Subject Shares to the Offeror at the Market Price as determined by the
directors of the Company and on the terms set out in this Article 11. This
offer to sell to the Offeree shall be open for acceptance by the Offeree for
forty-five (45) days after actual receipt by the Offeree of such notice.
	 
	 	(c)	 	If the Offeree does not accept the offer made by delivery of
the notice pursuant to Section 11.2(a) within the forty-five (45) day period
stipulated

 

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	 	 	 	therein, the Offeror shall be free for a period of forty-five (45) days
after the end of such forty-five (45) day period to sell the Subject Shares
to the Proposed Transferee at the price and on the terms set out in the
notice given pursuant to Section 11.2(a) or to effect the Change of Control
described in the notice given pursuant to Section 11.2(a).
	 
	 	(d)	 	The Subject Shares held by a Shareholder shall not be sold for
other than cash consideration and no Shareholder shall deliver a notice
pursuant to Section 11.2(a) in respect of an offer made to purchase its Subject
Shares which is other than upon terms of the present payment (and not payment
over time) of cash consideration therefor.
	 
	 	(e)	 	Any purchase and sale of Subject Shares pursuant to this
Section shall be completed in accordance with the provisions of Section 11 at
2:00 p.m. on the first Business Day which is at least thirty (30) days and no
later than ninety (90) days after acceptance of the offer to sell created by
the delivery of the notice pursuant to Section 11.2(a) (the “Closing Date”) at
which time the Shareholder selling its Subject Shares pursuant to this Section
(the “Seller”) shall execute and deliver to the person purchasing such Subject
Shares (the “Buyer”) all such instruments, conveyances, assignments and
releases as the Buyer may reasonably require. The place of closing shall be
the head office of the Company.
	 
	 	(f)	 	The Buyer will pay to the Seller the purchase price for the
Subject Shares of the Seller being purchased and sold under this Section on the
Closing Date.

	11.3	 	Any sale of Subject Shares to be sold by a Seller to a Buyer pursuant of the
provisions of Section 11 shall be subject to the following provisions:

	 	 	(a)	The Seller shall deliver to the Buyer on the Closing Date:

	 	(i)	 	the certificate(s) representing the Subject
Shares endorsed in blank for transfer;
	 
	 	(ii)	 	a warranty duly executed by the Seller to the
Buyer to the effect that:

	 	A.	 	there are no contractual or other
restrictions to the transfer and assignment of the Subject
Shares being sold (other than the restrictions set out in the
Memorandum and Articles of the Company and this Stock Option
Plan); and
	 
	 	B.	 	the Seller is the sole beneficial
owner of the Subject Shares being sold with full right, title
and authority to sell, transfer and assign the said Shares to
the Buyer and that such

 

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	 	 	 	Subject Shares are free and clear of all liens, charges,
pledges, claims, demands, security interests, adverse claims
and encumbrances of every nature and kind whatsoever.

	 	(b)	 	The Buyer shall deliver to the Seller on the Closing Date,
payment by the Borrower, in cash, of the purchase price of the Subject Shares.
	 
	 	(c)	 	In the event the Seller is not present at the designated place
of closing at the designated time on the Closing Date, or is present but fails
for any reason whatsoever to produce and deliver to the Buyer certificate(s)
for the Seller’s Subject Shares duly endorsed in blank as provided under this
Section 11 and any and all other instruments or writings required to be so
produced and delivered by the Seller (collectively the “Offered Securities”),
then the stipulated purchase price and the other payments, instruments or
writings to be delivered by the Buyer may be deposited by the Buyer with the
Company’s solicitors in the name of the Seller or its legal representative.
Such deposit shall constitute valid and effective payment of such designated
purchase price for the Offered Securities to the Seller even though the Seller
has voluntarily encumbered or disposed of any of the Shares and notwithstanding
the fact that a certificate or certificates for any of the Offered Securities
have been delivered to any pledge, transferee or other Person; and if the
designated purchase price for the Offered Securities is deposited pursuant to
this clause with the Company’s solicitors in the name of the Seller or his
legal representative, then and after the date of such deposit and even though
the certificate evidencing the Offered Securities has not been delivered to the
Buyer, the purchase and sale of the Offered Securities shall be deemed to have
been duly completed and all right, title, benefit and interest, both at law and
in equity, to the Offered Securities shall be conclusively deemed to have been
conveyed, transferred and assigned to and become vested in the Buyer and all
right, title, benefit and interest, both at law and in equity, of the Seller or
any transferee, assignee or other person having any interest, legal or
equitable therein or thereto whether as a shareholder or creditor or otherwise,
shall terminate, provided however, that the Seller shall be entitled to
receive the said designated purchase price (without interest) together with the
other payments (without interest), instruments or writings so deposited. The
Seller hereby irrevocably constitutes and appoints the Buyer as his or its true
and lawful attorney-in-fact and agent for, in the name of and on behalf of the
Seller to execute and deliver in the name of the Seller all such assignments,
conveyances, transfers, deeds and instruments as may be necessary to
effectively convey, transfer and assign the Offered Securities or any part
thereof to the Buyer or his or its nominee or nominees or his or its successors
and assignees on the books of the Company or to take all other requisite steps
or proceedings to effect the purchase of the Offered Securities by the Buyer;
and such appointment

 

 - 14 -

	 	 	 	and power of attorney, being coupled with an interest, shall not be revoked
by the insolvency, bankruptcy, death or incapacity of the Seller and the
Seller hereby ratifies and confirms and agrees to ratify and confirm all
that the Buyer may lawfully do or cause to be done by virtue of the
provisions hereof. The Seller hereby irrevocably consents to the transfer
of the Subject Shares or any part thereof made pursuant to the provisions of
this Section and shall be entitled to receive the designated purchase price
deposited with the Company’s solicitors upon delivery to the Buyer of
certificate(s) evidencing the Offered Securities so purchased duly endorsed
in blank for transfer as aforesaid and all payments, instruments, deeds or
writings which are required to be submitted by the Seller under this Section
11.

	 	11.4	 	All rights and benefits of the Company arising under this Section 11 including
the right to purchase any Subject Shares from any particular Offeror with respect to
any particular offer to sell, may be assigned by the Company in whole or in part to any
shareholder or shareholders of the Company without the consent of the Optionee,
provided the Company shall give notice of such assignment to the Optionee including a
notice address of the assignee.

	12.	 	NOTICES

	 	12.1	 	Any payment, notice, statement, certificate or other instrument required or
permitted to be given to an Optionee or any person claiming or deriving any rights
through him shall be given by:

	 	(a)	 	delivering it personally to the Optionee or the person claiming
or deriving rights to him, as the case may be; or
	 
	 	(b)	 	mailing it, postage paid (provided that the postal service is
then in operation) or delivering it to the address which is maintained for the
Optionee in the Company’s or the Subsidiary’s (as the case may be) personnel
records.

	 	12.2	 	Any payment, notice, statement, certificate or instrument required or permitted
to be given to the Company shall be given by mailing it, postage prepaid (provided that
the postal service is then in operation) or delivering it to the Company at the
following address:

Trident Exploration Corp.

444 - 7th Avenue SW, Suite 1000

Calgary, Alberta T2P 0X8

Facsimile: (403) 668-5805

Attention: President

 

 - 15 -

	 	12.3	 	Any payment, notice, statement, certificate or instrument referred to in
Sections 12.1 and 12.2, if delivered, shall be deemed to have been given or delivered,
on the date on which it was delivered or, if mailed (provided that the postal service
is then in operation), shall be deemed to have been given or delivered on the second
business day following the date on which it was mailed.

	13.	 	MISCELLANEOUS

	 	13.1	 	The holder of an Option shall not have any rights or obligations as a
shareholder of the Company with respect to any of the Shares covered by such Option
until such holder shall have exercised such Option in accordance with the terms of the
Plan and the issuance of the Shares by the Company.
	 
	 	13.2	 	Nothing in the Plan or any Option shall confer upon any Optionee or any
director, officer, employee or consultant who owns equity interests in a Holding Entity
that is an Optionee, any right to continue in the employ of the Company or any
Subsidiary or affect in any way the right of the Company or any such Subsidiary to
terminate his or her employment at any time; nor shall anything in the Plan or any
Option be deemed or construed to constitute an agreement, or an expression of intent,
on the part of the Company or any Subsidiary to extend the employment of any Optionee
beyond the time that he or she would normally be retired pursuant to the provisions of
any present or future retirement plan of the Company or any Subsidiary or any present
or future retirement policy of the Company or any Subsidiary, or beyond the time at
which he or she would otherwise be retired pursuant to the provisions of any contract
of employment with the Company or any Subsidiary.
	 
	 	13.3	 	To the extent required by law or regulatory policy or necessary to allow Shares
issued on exercise of an Option to be free of resale restrictions, the Company shall
report the grant, exercise or termination of the Option to the Exchange and the
appropriate securities regulatory authorities.
	 
	 	13.4	 	This Plan shall be construed and interpreted in accordance with the laws of
Alberta.
	 
	 	13.5	 	If any provision of this Plan is determined to be void, the remaining
provisions shall be binding as though the void parts were deleted.exv10w28

 

Exhibit 10.28

TRIDENT EXPLORATION CORP.

SENIOR EXECUTIVES’ DEFERRED SHARE UNIT PLAN

 

 

Section 1 Interpretation

	1.1	 	Purpose
	 
	 	 	The purposes of the Plan are:

	 	(a)	 	to promote a greater alignment of interests between senior executives of the
Company and the shareholders of the Company;
	 
	 	(b)	 	to provide a compensation system for senior executives that is reflective of
the responsibility, commitment and risk accompanying their management role;
	 
	 	(c)	 	to assist the Company to attract and retain individuals with experience and
ability to act as senior management of the Company; and
	 
	 	(d)	 	to allow the senior executives of the Company to participate in the long-term
success of the Company.

	1.2	 	Definitions
	 
	 	 	As used in the Plan, the following terms have the following meanings:

	 	(a)	 	“Account” has the meaning ascribed thereto in Section 2.4;
	 
	 	(b)	 	“Aurora Energy Partners, LP” means Aurora Energy Partners, L.P., a limited
partnership formed pursuant to the laws of the State of Utah; and
	 
	 	(c)	 	“Beneficiary” means an individual who, on the date of an Eligible Executive’s
death, is the person who has been designated in accordance with Section 4.6 and the
laws applying to the Plan, or where no such individual has been validly designated by
the Eligible Executive, or where the individual does not survive the Eligible
Executive, the Eligible Executive’s legal representative;
	 
	 	(d)	 	“Board” means those individuals who serve from time to time as the Board of
Directors of the Company;
	 
	 	(e)	 	“Change of Control” means and shall be deemed to have occurred if and when:

	 	(i)	 	any person or persons acting jointly or in concert (within the
meaning ascribed to such phrase in Section 159(1) of the Securities Act
(Alberta)) shall (i) beneficially hold, directly or indirectly, a majority of
the voting interests of TRC, or (ii) shall have obtained the power (whether or
not exercised) to elect a majority of the board of directors of TRC; provided
that for the purposes hereof, the McNeil Group and Aurora Energy Partners, LP
shall be deemed to not be acting jointly or in concert on the date hereof and
hereafter;

 

- 2 -

	 	(ii)	 	the Company shall cease to be a subsidiary (within the meaning
ascribed to such term in the Business Corporations Act (Alberta)) of TRC;
	 
	 	(iii)	 	any person or persons acting jointly or in concert (within the
meaning ascribed to such phrase in Section 159(1) of the Securities Act
(Alberta)) shall have beneficially acquired more than a 50% Effective
Ownership; or
	 
	 	(iv)	 	the Company sells all or substantially all of the assets of the
Company (other than to a wholly-owned subsidiary of the Company or to a
partnership to which the Company is a partner);

	 	(f)	 	“Committee” means the Board of Directors of the Company, or such other persons
or committee of the Board of Directors of the Company, as may be designated by the
Board;
	 
	 	(g)	 	“Company” means Trident Exploration Corp., its permitted successors and
assigns;
	 
	 	(h)	 	“Disability Date” means the date as of which an Eligible Executive commences
receiving or is eligible to receive long-term disability benefits under the Company’s
long-term disability plan;
	 
	 	(i)	 	“Discretionary DSU” means a unit credited by the Company to an Eligible
Executive pursuant to Section 2.2 by way of a bookkeeping entry in the books of the
Company and administered pursuant to the terms of the Plan, the value of which, on a
particular date, shall be equal to the Fair Market Value at that date;
	 
	 	(j)	 	“Effective Ownership” means either:

	 	(i)	 	the sum of (A) such person or persons’ direct or indirect
percentage of the voting ownership of issued and outstanding shares in the
capital of the Company, excluding any such shares attributable to ownership
through TRC, plus (B) the product obtained by multiplying (x) such person or
persons’ direct or indirect percentage of the voting ownership of issued and
outstanding shares in the capital of TRC by (y) TRC’s direct or indirect voting
ownership of issued and outstanding shares in the capital of the Company; or
	 
	 	(ii)	 	the sum of (A) such person or persons’ direct or indirect
percentage of the economic ownership of the Company, excluding any such shares
attributable to ownership through TRC, plus (B) the product obtained by
multiplying (x) such person or persons’ direct or indirect percentage of the
economic ownership of TRC by (y) TRC’s direct or indirect economic ownership of
the Company;

 

- 3 -

	 	(k)	 	“Eligible Executive” means such employees of the Company as the Committee may
designate from time to time as eligible to participate in the Plan, provided such
employees are resident in Canada for the purposes of the Income Tax Act (Canada);
	 
	 	(l)	 	“Employer” means, with respect to an Eligible Executive, a company that is any
of the Company or a Related Corporation and that employs such Eligible Executive or
that last employed such Eligible Executive prior to their Termination Date;
	 
	 	(m)	 	“Entitlement Date” has the meaning ascribed thereto in Section 3.1;
	 
	 	(n)	 	“Exchange” means The TSX Venture Exchange, The Toronto Stock Exchange or any
other exchange on which the Shares are or may be listed from time to time;
	 
	 	(o)	 	“Fair Market Value” at any date in respect of the Shares shall be;

	 	(i)	 	if the Shares are listed on an Exchange and TRC is a Related
Corporation on such date, the average closing price of the Shares on the
Exchange on the ten trading days prior to such date;
	 
	 	(ii)	 	if (i) above is not applicable and the Class A common shares of
the Company are listed on an Exchange, the average closing price of such shares
on the Exchange on the ten trading days prior to such date;
	 
	 	(iii)	 	if neither (i) or (ii) above are applicable and TRC is a
Related Corporation on such date, and TRC has completed a private placement
offering of Shares to a person with whom TRC deals at arm’s length for the
purposes of the Income Tax Act (Canada) (an “Arm’s Length Private Placement”)
within the period that commences one year before such date and ends on such
date, the price at which such Shares were issued pursuant to the most recent
Arm’s Length Private Placement preceding such date, unless there has been an
Arm’s Length Sale (as defined below) within the period that commences at the
time of such Arm’s Length Private Placement and ending on such date;
	 
	 	(iv)	 	if none of (i), (ii) or (iii) above are applicable and TRC has
sold any Class A common shares of the Company to a person with whom TRC deals
at arm’s length for the purposes of the Income Tax Act (Canada) (an “Arm’s
Length Sale”) within the period that commences one year before such date and
ends on such date, the price per share of such Class A common shares under the
terms of the most recent Arm’s Length Sale preceding such date;
	 
	 	(v)	 	if none of (i), (ii), (iii) or (iv) above are applicable, the
price per Share determined by a professional independent valuator, appointed by
the

 

- 4 -

	 	 	 	Company, as being the highest price per Class A common share of the Company
that informed and prudent parties dealing at arm’s length for the purposes
of the Income Tax Act (Canada) and under no compulsion to act would
transact, without premiums for control or discounts for minority interests
or restrictions on transfer;

	 	(p)	 	“McNeil Group” means Charles S. McNeil and The McNeil Family Irrevocable GST
Trust, and any future partnership, limited liability company or other entity of which
they are the sole owners;
	 
	 	(q)	 	“Plan” means this Senior Executives’ Deferred Share Unit Plan, as amended from
time to time;
	 
	 	(r)	 	“Related Corporation” means a corporation related to the Company for the
purposes of the Income Tax Act (Canada);
	 
	 	(s)	 	“Share” means TRC Common Stock and such other share or stock as is substituted
therefore as a result of amendments to the Certificate of Incorporation of TRC,
reorganization or otherwise including any rights that form part of the TRC Common Stock
of such substituted share or stock, but not including any other rights that are
attached thereto and traded therewith or any other share or stock that is added
thereto.
	 
	 	(t)	 	“Termination Date” means, with respect to an Eligible Executive the earliest
date on which both of the following conditions are met: (i) the Eligible Executive has
ceased to be employed by the Company or any affiliate thereof (as the term “affiliate”
is defined in paragraph 8 of the Canada Revenue Agency’s Interpretation Bulletin
IT-337R4 dated October 21, 2003) for any reason whatsoever; and (ii) the Eligible
Executive is not a member of the Board nor a director of an affiliate of the Company
(as defined in the above-noted Interpretation Bulletin);
	 
	 	(u)	 	“TRC” means Trident Resources Corp., its permitted successors and assigns;
	 
	 	(v)	 	“TRC Common Stock” means the common stock of TRC;
	 
	 	(w)	 	“Vested DSU” means each Discretionary DSU which has vested in accordance with
Section 2.1.

	1.3	 	Effective Date
	 
	 	 	The Plan shall be effective as of December 17, 2004.
	 
	1.4	 	Construction

     In this Plan, all references to the masculine include the feminine; reference to the singular
shall include the plural and vice versa, as the context shall require. If any provision of the
Plan

 

- 5 -

or part thereof is determined to be void or unenforceable in whole or in part, such
determination shall not affect the validity or enforcement of any other provision or part thereof.
Headings wherever used herein are for reference purposes only and do not limit or extend the
meaning of the provisions contained herein. References to “Section” or “Sections” mean a section
or sections contained in the Plan unless expressly stated otherwise.

	1.5	 	Administration

     The Committee shall, in its sole and absolute discretion: (i) interpret and administer the
Plan; (ii) establish, amend and rescind any rules and regulations relating to the Plan; (iii) have
the power to delegate, on such terms as the Committee deems appropriate, any or all of its powers
hereunder to the President and Chief Executive Officer of the Company; and (iv) make any other
determinations that the Committee deems necessary or desirable for the administration of the Plan.
The Committee may correct any defect or supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent the Committee deems, in its sole and absolute discretion,
necessary or desirable. Any decision of the Committee with respect to the administration and
interpretation of the Plan shall be conclusive and binding on the Eligible Executive and any other
person claiming an entitlement or benefit through the Eligible Executive. All expenses of
administration of the Plan as determined by the Committee shall be borne by the Company.

	1.6	 	Governing Law

     The Plan shall be governed by and construed in accordance with the laws of the Province of
Alberta and the federal laws of Canada applicable therein.

Section 2 Crediting of DSUs Under the Plan

	2.1	 	Award of Discretionary DSUs

     The Committee may in its sole discretion grant, from time to time, Discretionary DSUs to an
Eligible Executive, who has elected to participate in the Plan, in recognition of services
performed or to be performed by an Eligible Executive as an employee of the Company or a Related
Corporation in such number as the Committee may specify. The Committee shall determine the date on
which such Discretionary DSUs may be granted, which date shall in any event precede the Eligible
Executive’s Termination Date and shall not be earlier than his date of employment by the Company or
a Related Corporation. The Committee may, in its sole discretion, attach vesting conditions to any
such grant of Discretionary DSUs which, if not satisfied prior to the date of termination of
employment of the applicable Eligible Executive, may result in the forfeiture of such non-vested
Discretionary DSUs. Each award of Discretionary DSUs, including the number of Discretionary DSU’s
awarded and any related vesting requirement, shall be confirmed by an instrument in writing issued
by the Company to the Eligible Executive.

 

- 6 -

	2.2	 	Date of Crediting Discretionary DSUs

2.2.1 Discretionary DSUs shall be credited to the Account of an Eligible Executive as of the date
specified by the Committee in accordance with Section 2.1. Except as provided in Section 2.2.2
below, if the employment of an Eligible Executive is terminated (whether voluntary or involuntary)
for any reason following the date of grant of Discretionary DSUs and prior to satisfaction of the
vesting conditions relating to such Discretionary DSUs, the Eligible Executive shall (subject to
the terms of the applicable instrument issued pursuant to Section 2.1) forfeit all rights, title
and interest with respect to such Discretionary DSUs including, for greater certainty, any
additional Discretionary DSUs granted pursuant to Section 2.3 in respect of those Discretionary
DSUs.

2.2.2 Notwithstanding any other provision of this Plan or the vesting conditions attached to a
grant of Discretionary DSU by the Committee pursuant to Section 2.1, all Discretionary DSUs
recorded in an Eligible Executive’s Account, including for greater certainty any additional
Discretionary DSUs granted pursuant to Section 2.3, shall vest immediately, and shall not be
considered forfeited under this Section 2.2, upon the earliest of the Eligible Executive’s death, a
Change of Control, the Eligible Executive’s Disability Date, the involuntary termination of
Eligible Executive’s employment without cause, and the termination of the Plan in accordance with
Section 4.4.

2.2.3 Except where the context requires otherwise, each Discretionary DSU which is vested pursuant
to this Section 2.2 shall be referred to herein as a “Vested DSU” and collectively as “Vested
DSUs”.

	2.3	 	Dividend Equivalents

     On the payment date for dividends paid on Shares, an Eligible Executive shall be credited with
dividend equivalents in respect of Discretionary DSUs, credited to the Eligible Executive’s Account
as of the record date for payment of dividends. Such dividend equivalents shall be converted into
additional Discretionary DSUs, corresponding to the Discretionary DSUs then credited to the
Eligible Executive’s Account (including fractions thereof) based on the Fair Market Value on the
date such dividend equivalents are credited.

	2.4	 	Eligible Executives’ Accounts

     The Company shall maintain or cause to be maintained in its books an account for each Eligible
Executive (“Account”) recording at all times the number of Discretionary DSUs standing to the
credit of the Eligible Executive. Upon payment in satisfaction of Vested DSUs credited to an
Eligible Executive in the manner described herein, such Vested DSUs shall be cancelled. Upon
forfeiture of Discretionary DSUs pursuant to Section 2.2, such Discretionary DSUs, recorded in the
Eligible Executive’s Account shall be cancelled. A written confirmation of the balance in an
Eligible Executive’s Account, including the vesting status of Discretionary DSUs shall be mailed by
the Company to the Eligible Executive at least annually.

 

- 7 -

	2.5	 	Adjustments and Reorganizations

2.5.1 In the event of any stock dividend, stock split, combination or exchange of Shares, merger,
consolidation, spin-off or other distribution (other than normal cash dividends) of the Company’s
or TRC’s assets to shareholders, or any other change in the capital of the Company or TRC affecting
the Shares, such proportionate adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change, shall be made with respect to the number of Discretionary DSUs
outstanding under the Plan.

2.5.2 Notwithstanding any other provision of the Plan, the value of each Discretionary DSU shall
always depend on the value of shares of the Company or a Related Corporation.

2.5.3 For greater certainty, no amount will be paid to, or in respect of, an Eligible Executive
under the Plan or pursuant to any other arrangement and no additional Discretionary DSUs will be
granted to an Eligible Executive to compensate for a downward fluctuation in the Fair Market Value
of the Shares, nor will any other form of benefit be conferred upon, or in respect of, an Eligible
Executive for such purpose.

Section 3 Termination of Service

	3.1	 	Entitlement Date for Redemption of Vested DSUs

     Subject to Sections 3.2 and 3.4, an Eligible Executive may elect the date as of which the
Vested DSUs credited to the Eligible Executive’s Account shall be redeemed (the “Entitlement Date”)
by filing an irrevocable written election with the Company no later than November 15 of the
calendar year commencing immediately after the Eligible Executive’s Termination Date. The
Entitlement Date elected by an Eligible Executive pursuant to this Section 3.1 shall not be before
the later of the date on which the election is filed with the Company and 30 days after the
Eligible Executive’s Termination Date and shall not be later than December 15 of the calendar year
commencing immediately after the Eligible Executive’s Termination Date. Where an Eligible
Executive does not elect a particular date within the permissible period set out above as his
Entitlement Date, the Entitlement Date for such Eligible Executive shall be December 15 of the
calendar year commencing immediately after the Eligible Executive’s Termination Date. The value of
the Vested DSUs credited to the Eligible Executive’s Account as at the Entitlement Date, as may be
adjusted pursuant to Section 3.2 or Section 3.4, shall be redeemable by and payable to the Eligible
Executive or the Eligible Executive’s Beneficiary, as applicable. The value of the Vested DSUs
redeemed by or in respect of an Eligible Executive shall, after deduction of any applicable taxes
and other source deductions required to be withheld, be paid by the Company as a lump sum in cash
to the Eligible Executive or the Eligible Executive’s Beneficiary, as applicable.

	3.2	 	Extended Entitlement Date

     In the event that an Eligible Executive’s Entitlement Date would otherwise fall between the
record date for a dividend on the Shares and the related dividend payment date then,
notwithstanding Section 3.1, the Entitlement Date shall be the day immediately following the

 

- 8 -

date of payment of such dividend for the purpose of calculating the value of an Eligible
Executive’s Vested DSUs contemplated by this Section 3. In the event that the Committee is unable,
by an Eligible Executive’s Entitlement Date, to compute the final value of the Vested DSUs recorded
in such Eligible Executive’s Account by reason of the fact that any data required in order to
compute the Fair Market Value of a Share has not been made available to the Committee, then the
Entitlement Date shall be the next following trading day on which such data is made available to
the Committee.

	3.3	 	Limitation on Extension of Entitlement Date

     Notwithstanding any other provision of the Plan, all amounts payable to, or in respect of, an
Eligible Executive hereunder shall be paid on or before December 31 of the calendar year commencing
immediately after the Eligible Executive’s Termination Date.

	3.4	 	Postponed Entitlement Date

     Notwithstanding any other provision of the Plan, if in the opinion of the Committee, an
Eligible Executive is in possession of material undisclosed information regarding either or both of
the Company and the Shares on his Entitlement Date, such Eligible Executive’s Entitlement Date
shall be postponed until the earliest of the date on which (i) the Committee is satisfied the
Eligible Executive is no longer in possession of any such material undisclosed information, or (ii)
December 15 of the year following the year of the Eligible Executive’s Termination Date.

Section 4 General

	4.1	 	Unfunded Plan

     Unless otherwise determined by the Committee, the Plan shall be unfunded. To the extent any
individual holds any rights by virtue of an election under the Plan, such rights (unless otherwise
determined by the Committee) shall be no greater than the rights of an unsecured general creditor
of the Company.

	4.2	 	Successors and Assigns

     The Plan shall be binding on all successors and assigns of the Company and an Eligible
Executive, including without limitation, the estate of such Eligible Executive and the legal
representative of such estate, or any receiver or trustee in bankruptcy or representative of the
Company’s or the Eligible Executive’s creditors.

	4.3	 	Plan Amendment

     The Board may amend the Plan as it deems necessary or appropriate, but no such amendment
shall, without the consent of the Eligible Executive or unless required by law, adversely affect
the rights of an Eligible Executive with respect to Discretionary DSUs to which the Eligible
Executive is then entitled under the Plan. Notwithstanding the foregoing, an amendment of the Plan
shall be such that the Plan continuously meets the requirements of

 

- 9 -

paragraph 6801(d) of the regulations under the Income Tax Act (Canada) or any successor to
such provision.

	4.4	 	Plan Termination

     The Board may terminate the Plan at any time, but no such termination shall, without the
consent of the Eligible Executive or unless required by law, adversely affect the rights of an
Eligible Executive with respect to Discretionary DSUs to which the Eligible Executive is then
entitled under the Plan. If the Board terminates the Plan, prior grants of Discretionary DSUs
shall remain outstanding and in effect and shall be paid in due course upon the Entitlement Date
for purposes of the Plan in accordance with the terms and conditions applicable to such
Discretionary DSUs immediately prior to the termination of the Plan. Notwithstanding the
foregoing, termination of the Plan shall be such that the Plan continuously meets the requirements
of paragraph 6801(d) of the regulations under the Income Tax Act (Canada) or any successor to such
provision.

	4.5	 	Currency

     All payments and benefits under the Plan shall be determined and paid in the lawful currency
of Canada.

	4.6	 	Designation of Beneficiary

     Subject to the requirements of applicable laws, an Eligible Executive shall designate in
writing a person who is a dependant or relation of the Eligible Executive as a beneficiary to
receive any benefits that are payable under the Plan upon the death of such Eligible Executive.
The Eligible Executive may, subject to applicable laws, change such designation from time to time.
Such designation or change shall be in such form and executed and filed in such manner as the
Committee may from time to time determine.

	4.7	 	Death of Participant

     In the event of an Eligible Executive’s death, any and all Discretionary DSUs then credited to
the Eligible Executive’s Account shall become payable to the Eligible Executive’s Beneficiary in
accordance with Section 3.

	4.8	 	Rights of Participants

4.8.1 Except as specifically set out in the Plan, no employee of the Company, or any Related
Corporation, including any Eligible Executive, or other person shall have any claim or right to any
Shares or other benefit in respect of Discretionary DSUs granted pursuant to the Plan.

4.8.2 Rights of Eligible Executives respecting Discretionary DSUs shall not be transferable or
assignable other than by will or the laws of descent and distribution.

4.8.3 Neither the Plan nor any award thereunder shall be construed as granting an Eligible
Executive a right to be retained in employment or a claim or right to any future grants of

 

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Discretionary DSUs. Neither the Plan nor any action taken thereunder shall interfere with the
right of an Employer to terminate the employment of an Eligible Executive at any time. For greater
certainty, a period of notice, if any, or payment in lieu thereof, upon termination of employment,
wrongful or otherwise, shall not be considered as extending the period of employment for the
purposes of the Plan.

4.8.4 Under no circumstances shall Discretionary DSUs be considered Shares nor shall they entitle
any Eligible Executive or other person to exercise voting rights or any other rights attaching to
the ownership of Shares, nor shall any Eligible Executive or other person be considered the owner
of Shares by virtue of this Plan.

	4.9	 	Compliance with Law

     Any obligation of the Company with respect to the Shares pursuant to the terms of the Plan is
subject to compliance with all applicable laws. The Eligible Executive shall comply with all
applicable laws and furnish the Company with any and all information and undertakings as may be
required to ensure compliance therewith.

	4.10	 	Withholding

     An Employer shall be entitled to deduct any amount of withholding taxes and other withholdings
from any amount paid or credited hereunder.

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