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Title:

Stock Option Plan

Entities:

Luna Gold Corp

Date:

2003

Size:

28KB total

Price:

$39

ID:

#1347938

► Plans ► Option ► Stock Option Plans

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STOCK OPTION PLAN

Accepted for filing by the TSX Venture Exchange on July 10, 2003

Table of Contents

ARTICLE I - DEFINITIONS AND INTERPRETATION
	1.1	Definitions	4
	1.2	Choice of Law	6
	1.3	Headings	6
ARTICLE II - PURPOSE AND PARTICIPATION
	2.1	Purpose	7
	2.2	Participation	7
	2.3	Notification of Award	7
	2.4	Copy of Plan	7
	2.5	Limitation	7
ARTICLE III - TERMS AND CONDITIONS OF OPTIONS
	3.1	Board to Allot Shares	8
	3.2	Number of Shares	8
	3.3	Terms of Option	8
	3.4	Termination of Option	8
	3.5	Exercise Price	10
	3.6	Assignment of Options	10
	3.7	Adjustments	10
	3.8	Vesting	10
ARTICLE IV - EXERCISE OF OPTION
	4.1	Exercise of Option	11
	4.2	Exercise Restrictions	11
	4.3	Issue of Share Certificates	12
	4.4	Condition of Issue	12
ARTICLE V - ADMINISTRATION
	5.1	Administration	12
	5.2	Interpretation	12

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ARTICLE VI - AMENDMENT AND TERMINATION
	6.1	Prospective Amendment	13
	6.2	Retrospective Amendment	13
	6.3	Termination	13
	6.4	Termination Agreement
ARTICLE VII - APPROVALS REQUIRED FOR PLAN
	7.1	Approvals Required for Plan	13
	7.2	Substantive Amendments to Plan	13

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ARTICLE I
DEFINITIONS AND INTERPRETATION

1.1 DEFINITIONS

As used herein, unless anything in the subject matter or context is inconsistent therewith, the following terms shall have the meanings set forth below:

(a) "Administrator" means, initially, the secretary of the Corporation and thereafter shall mean such director or other senior officer or employee of the Corporation as may be designated as Administrator by the Board from time to time;

(b) "Award Date" means the date on which the Board grants and announces a particular Option;

(d) "Company" unless specifically indicated otherwise, means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual;

(e) "Corporation" means Luna Gold Corp., or any "Affiliate" thereof, within the meaning of the Securities Act;

(f) "Director" means directors, senior officers and Management Corporation Employees of the Corporation or directors, senior officers and Management Corporation Employees of any subsidiary of the Corporation to whom stock options can be granted in reliance on a prospectus exemption under applicable securities laws;

(g) "Employee" means (i) an individual considered an employee under the Canada Income Tax Act (i.e. for whom income tax and other deductions are made by the Corporation); (ii) an individual who works full-time for the Corporation providing services normally provided by an employee of the Corporation but for whom income tax and other deductions are not made by the Corporation; (iii) an individual who works for the Corporation on a continuing and regular basis for a minimum amount of time per week, but for whom income tax and other deductions are not made by the Corporation; and (iv) other persons who are providing, have provided, or have agreed to provide a service of value to the Corporation;

(h) "Exchange" means the TSX Venture Exchange;

(i) "Exercise Notice" means the notice respecting the exercise of an Option, in the form set out as Schedule AB" hereto, duly executed by the Option Holder;

(j) "Exercise Period" means the period during which a particular Option may be exercised and is the period from and including the Award Date through to and including the Expiry Date;

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(k) "Exercise Price" means the price at which an Option may be exercised as determined in accordance with section 3.5;

(l) "Expiry Date" means the date determined in accordance with section 3.3 and after which a particular Option cannot be exercised;

(m) "Investor Relations Activities" means any activities or oral or written communications, by or on behalf of the Corporation or shareholder of the Corporation, that promote or reasonably could be expected to promote the purchase or sale of securities of the Corporation, but does not include:

(i) the dissemination of information provided, or records prepared, in the ordinary course of business of the Corporation

(A) to promote the sale or products or services of the Corporation, or

(B) to raise public awareness of the Corporation,

that cannot reasonably be considered to promote the purchase or sale of securities of the Corporation;

(ii) activities or communications necessary to comply with the requirements of

(A) applicable Securities Laws,

(B) Exchange requirements or the by-laws, rules or other regulatory instruments of any other self regulatory body or exchange having jurisdiction over the Corporation;

(iii) communications by a purchaser of, or writer for, a newspaper, magazine or business or financial publication, that is of general and regular paid circulation, distribution only to subscribers to it for value or to purchasers of it, if

(A) the communication is only through the newspaper, magazine or publication, and

(B) the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer; or

(iv) activities or communications that may be otherwise specified by the Exchange;

(n) "Management Corporation Employee" means an individual employed by a Person providing management services to the Corporation, which are required for the ongoing successful operations of the business enterprises of the Corporation, but excluding a Person engaged in Investor Relations Activities;

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(o) "Option" means an option to acquire Shares, awarded to a Director or Employee pursuant to the Plan;

(p) "Option Certificate" means the certificate, substantially in the form set out as Schedule "A" hereto, evidencing an Option;

(q) "Option Holder" means a Director or Employee or former Director or Employee who holds an unexercised and unexpired Option or, where applicable, the Personal Representative of such person;

(r) "Person" means a Company or an individual;

(s) "Personal Representative" means (i) in the case of a deceased Option Holder, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and (ii) in the case of an Option Holder who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such Option Holder;

(t) "Plan" means this stock option plan;

(u) "Securities Act" means the Securities Act (British Columbia); and

(v) "Share" or "Shares" means, as the case may be, one or more common shares without par value in the capital of the Corporation.

1.2 CHOICE OF LAW

The Plan is established under, and the provisions of the Plan shall be interpreted and construed solely in accordance with, the laws of the Province of British Columbia.

1.3 HEADINGS

The headings used herein are for convenience only and are not to affect the interpretation of the Plan.

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ARTICLE II
PURPOSE AND PARTICIPATION

2.1 PURPOSE

The purpose of the Plan is to provide the Corporation with a share-related mechanism to attract, retain and motivate Directors or Employees, to reward such of those Directors or Employees as may be awarded Options under the Plan by the Board from time to time for their contributions toward the long term goals of the Corporation and to enable and encourage such Directors or Employees to acquire Shares as long term investments.

2.2 PARTICIPATION

The Board shall, from time to time, in its sole discretion determine those Directors or Employees, if any, to whom Options are to be awarded. If the Board elects to award an Option to a Director, the Board shall, in its sole discretion but subject to section 3.2, determine the number of Shares to be acquired on the exercise of such Option. If the Board elects to award an Option to an Employee, the number of Shares to be acquired on the exercise of such Option shall be determined by the Board in its sole discretion, and in so doing the Board may take into account the following criteria:

(a) the Employee's remuneration as at the Award Date in relation to the total remuneration payable by the Corporation to all of its Employees as at the Award Date;

(b) the length of time that the Employee has provided services to the Corporation; and

2.3 NOTIFICATION OF AWARD

Following the approval by the Board of the awarding of an Option, the Administrator shall notify the Option Holder in writing of the award and shall enclose with such notice the Option Certificate representing the Option so awarded.

2.4 COPY OF PLAN

Each Option Holder, concurrently with the notice of the award of the Option, shall be provided with a copy of the Plan. A copy of any amendment to the Plan shall be promptly provided by the Administrator to each Option Holder.

2.5 LIMITATION

The Plan does not give any Option Holder who is a Director the right to serve or continue to serve as a Director nor does it give any Option Holder who is an Employee, the right to be or to continue to be employed or engaged by the Corporation.

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ARTICLE III
TERMS AND CONDITIONS OF OPTIONS

3.1 BOARD TO ALLOT SHARES

The Shares to be issued to Option Holders upon the exercise of Options shall be allotted and authorized for issuance by the Board prior to the exercise thereof.

3.2 NUMBER OF SHARES

The maximum number of Shares reserved for issuance under the Plan at any one time shall not exceed 2,028,389 Shares, being 20% of the issued and outstanding share capital of the Company on the date of receipt of shareholder approval to the Plan. The total number of Options awarded to all consultants and to all persons employed by the Corporation who perform investor relations activities for the Corporation shall not exceed 2% of the issued and outstanding Shares at the time of award without consent being obtained from the Exchange.

If any Option expires or otherwise terminates for any reason without having been exercised in full, the number of Shares in respect of which Option expired or terminated shall again be available for the purposes of the Plan.