Capstone Copper Corp. — Governance Information 2024

Mar 8, 2024

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CAPSTONE COPPER CORP.

INCENTIVE SHARE OPTION AND BONUS SHARE PLAN

FEBRUARY 9, 2011, AS AMENDED MARCH 27, 2014, FEBRUARY 15, 2017 AND MARCH 23, 2022

Approved by Capstone Mining Corp. Shareholders on April 20, 2014

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TABLE OF CONTENTS

Page

INCENTIVE SHARE OPTION AND BONUS SHARE PLAN................................................................................................... 2	INCENTIVE SHARE OPTION AND BONUS SHARE PLAN................................................................................................... 2
ARTICLE 1 DEFINITIONS AND INTERPRETATION ............................................................................................................ 2
1.1	Definitions .................................................................................................................................................. 2
1.2	Choice of Law.............................................................................................................................................. 5
1.3	Headings and References ........................................................................................................................... 5
1.4	Singular and Plural ...................................................................................................................................... 5
ARTICLE 2 PURPOSE AND PARTICIPATION ..................................................................................................................... 5
2.1	Purpose ....................................................................................................................................................... 5
2.2	Participation ............................................................................................................................................... 5
2.3	Non-Employee Director Participation ........................................................................................................ 6
2.4	Notification of Award ................................................................................................................................. 6
2.5	Copy of Plan ................................................................................................................................................ 6
2.6	Limitation .................................................................................................................................................... 6
ARTICLE 3 TERMS AND CONDITIONS OF OPTIONS AND BONUS SHARES ...................................................................... 6
3.1	Issuance of Shares ...................................................................................................................................... 6
3.2	Option Grants ............................................................................................................................................. 6
3.3	Bonus Shares .............................................................................................................................................. 7
3.4	Number of Shares ....................................................................................................................................... 7
3.5	Award Date ................................................................................................................................................. 7
3.6	Term of Option ........................................................................................................................................... 7
3.7	Termination of Option ................................................................................................................................ 7
3.8	Exercise Price .............................................................................................................................................. 8
3.9	Additional Terms ........................................................................................................................................ 8
3.10	Assignment of Options ............................................................................................................................... 9
3.11	Adjustments ............................................................................................................................................... 9
3.12	Vesting ........................................................................................................................................................ 9
3.13	Change of Control ....................................................................................................................................... 9
ARTICLE 4 EXERCISE OF OPTION .................................................................................................................................... 9
4.1	Exercise of Option....................................................................................................................................... 9
4.2	Issue of Share Certificates ........................................................................................................................ 10
4.3	Conditions of Issue ................................................................................................................................... 10
4.4	Fully Paid and Financial Assistance ........................................................................................................... 10
ARTICLE 5 ADMINISTRATION ....................................................................................................................................... 10
5.1	Administration .......................................................................................................................................... 10
5.2	Interpretation ........................................................................................................................................... 10
ARTICLE 6 AMENDMENT AND TERMINATION ............................................................................................................. 10
6.1	Amendment, Modification or Termination of the Plan ............................................................................ 10
6.2	Termination .............................................................................................................................................. 11
ARTICLE 7 GENERAL ..................................................................................................................................................... 12
7.1	Withholding Taxes .................................................................................................................................... 12
7.2	Agreement ................................................................................................................................................ 12
7.3	Prior Plan .................................................................................................................................................. 12

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INCENTIVE SHARE OPTION AND BONUS SHARE PLAN

ARTICLE 1

DEFINITIONS AND INTERPRETATION

1.1 Definitions

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

• (a) “Administrator” means the Corporate Secretary of the Company or such other director or other senior officer or employee of the Company as may be designated as Administrator by the Board from time to time;

• (b) “Award Date” means the date on which the Board awards a particular Option;

• (c) “Blackout Period” means, in respect of an Option Holder, a period during which such Option Holder is prohibited from trading in securities of the Company pursuant to

• (i) any existing policy of the Company; or

• (ii) at the direction of Senior Management of the Company or the Board.

• (d) “Board” means the board of directors of the Company or any committee thereof to which the board of directors of the Company has delegated the power to administer and grant options under the Plan;

• (e) “Bonus Shares” means Shares issued to Directors and Employees pursuant to the terms of this Plan (and, for greater certainty and where the context so requires, includes Shares of the Company that were exchanged for common shares in the capital of Capstone Mining Corp. pursuant to the Arrangement Agreement dated November 30, 2021 between Capstone Mining Corp. and Mantos Copper (Bermuda) Limited).

• (f) “Cause” means:

• (i) “Cause” as such term is defined in the written employment agreement, if any, between the Company and the Employee; or

• (ii) in the event there is no written employment agreement between the Company and the Employee or “Cause” is not defined in the written employment agreement between the Company and the Employee, the usual meaning of just cause under the common law or the laws of British Columbia;

• (g) “Change of Control” means the occurrence of any one or more of the following events:

• (i) the sale of all or substantially all of the Company’s assets to another arm’s length person not affiliated with the Company or any of the Company’s affiliates;

• (ii) the acquisition or right to acquire shares of the Company as a result of which any person would beneficially own shares that would entitle the holders thereof to: (a) cast more than 50% of the votes attaching to all shares in the capital of the Company; or (b) more than 50% of the equity of the Company;

• (iii) the merger or consolidation of the Company with or into another person not affiliated with the Company in which the Company is not the surviving entity (except for a

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transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated), or a reverse merger in which the Company is the surviving entity but in which 50% or more of each class of the issued and outstanding shares of the Company are transferred to beneficial holders different from those who held the shares immediately prior to the merger;

• (iv) a resolution is adopted to wind-up, dissolve or liquidate the Company;

• (v) as a result of or in connection with: (a) a contested election of directors; or (b) a consolidation, merger, amalgamation, arrangement or other reorganization or acquisition involving the Company or any of its affiliates and another corporation or other entity, the nominees named in the most recent management information circular of the Company for election to the Board shall not constitute a majority of the Board; or

• (vi) the Board adopts a resolution to the effect that a Change of Control as defined herein has occurred or is imminent.

• (h)

• “Company” means Capstone Copper Corp.;

• (i) “Director” means any individual holding the office of director or senior officer of the Company or any of its Subsidiaries to whom share options can be granted in reliance on a prospectus exemption under applicable Securities Laws;

• (j) “Eligible Person” means any natural person providing continuous services to the Company or any of its subsidiaries and who is:

• (i) an Employee; or

• (ii) a non-Employee Director;

• (k) “Employee” means an individual who:

• (i) is considered an employee under the Income Tax Act (Canada) (i.e. for whom income tax, employment insurance and CPP deductions must be made at source);

• (ii) works full-time for the Company or any of its Subsidiaries providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions are not made at source; or

• (iii) works for the Company or any of its Subsidiaries on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions are not made at source;

• (l)

• “Equity Awards” means Options and Bonus Shares;

• (m) “Exercise Notice” means the notice respecting the exercise of an Option, in the form set out as Schedule “B” hereto, as it may be amended from time to time, duly executed by the Option Holder;

• (n) “Exercise Period” means the period during which a particular Option may be exercised and, subject to the provisions of the Plan, is the period from and including the Award Date through to and including the Expiry Date;

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• (o) “Exercise Price” means the price at which an Option may be exercised as determined in accordance with paragraph 3.8;

• (p) “Expiry Date” means the date determined in accordance with paragraphs 3.6 and 3.7 and after which a particular Option cannot be exercised;

• (q) “Insider” has the meaning given to it in the Securities Act (British Columbia);

• (r) “Market Price” means, as of any date, the volume weighted average trading price of the Shares on the TSX or on another stock exchange on which the majority of the trading volume of the Shares occurs, calculated by dividing the total value by the total volume of Shares traded, for the five trading days immediately preceding such date, subject to any conditions or restrictions imposed by the TSX;

• (s) “Option” means an option to acquire Shares (and, for greater certainty and where the context so requires, includes the Options of the Company that ceased to represent an option to purchase common shares of Capstone Mining Corp. and were exchanged for Options to purchase Company Shares, on the same terms and conditions, pursuant to the Arrangement Agreement dated November 30, 2021 between Capstone Mining Corp. and Mantos Copper (Bermuda) Limited).

• (t) “Option Certificate” means the certificate, in the form set out as Schedule “A” hereto, as it may be amended from time to time, evidencing an Option;

• (u) “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;

• (v) “Participant” means every Eligible Person who is approved for participation in the Plan by the Board;

• (w) “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;

• (x) “Plan” means this Incentive Share Option and Bonus Share Plan;

• (y) “Prior Plan” means Capstone Mining Corp.’s Incentive Share Option and Bonus Share Plan dated May 17, 2010 and approved by the Company’s shareholders on May 17, 2010 ;

• (z) “Regulatory Authorities” means all stock exchanges and other organized trading facilities on which the Company’s Shares are listed and all securities commissions or similar securities regulatory authorities having jurisdiction over the Company;

• (aa) “Securities Laws” means securities legislation, securities regulations and securities rules, as amended, and the policies, notices, instruments and orders in relation thereto in force from time to time that are applicable to the Company;

• (bb) “Security Based Compensation Arrangements” has the meaning ascribed to it by the TSX Company Manual;

• (cc) “Shares” means the common shares without par value of the Company;

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• (dd) “Subsidiary” means any corporation which is a subsidiary of the Company for the purposes of the Business Corporations Act (British Columbia);

• (ee) “Termination Date” means:

  • (i) in the case of the resignation of the Option Holder as an Employee or Director of the Company, the date set out in the resignation notice delivered by the Employee or Director, as applicable, to the Company as the last day the Employee or Director will be an Employee or Director, as applicable, of the Company; or

  • (ii) in the case of any other termination of the Option Holder’s employment or directorship with the Company by the Company for any reason other than death, the date that the Company provides notice of termination of the Option Holder’s employment or directorship, as applicable, to the Option Holder; or

  • (iii) in the case of the termination of the written contract of the Option Holder to provide services to the Company, the date that one of the parties to the written contract provides notice of termination of the written contract to the other party; and

• (ff) “TSX” means the Toronto Stock Exchange.

• 1.2 Choice of Law

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

1.3 Headings and References

The headings used herein are for convenience only and are not to affect the interpretation of the Plan. References to numbered paragraphs are to such numbered paragraphs of the Plan. References to “herein”, “hereunder” and “hereof” and similar terms are references to the Plan as a whole.

1.4 Singular and Plural

Unless the context requires otherwise, words in the singular include the plural and words in the plural include the singular.

ARTICLE 2

PURPOSE AND PARTICIPATION

2.1 Purpose

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

2.2 Participation

The Board shall, from time to time and in its sole discretion, determine those Directors and Employees, if any, to whom Options or Bonus Shares are to be awarded. The Board may only grant Options to an Employee or Director if such Employee or Director is a bona fide Employee or Director, as applicable, of the Company or any of its Subsidiaries. The Board may, in its sole discretion, grant the majority of the Options granted on any particular occasion to Insiders. However, in no case will:

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• (a) Options to acquire more than 5% of the issued and outstanding Shares be granted to any one individual in any one year period;

• (b) the maximum number of Shares issuable to Insiders pursuant to the Plan, together with the maximum number of Shares issuable to Insiders pursuant to all other Security Based Compensation Arrangements, at any time exceed 10% of issued and outstanding Shares; or

• (c) the maximum number of Shares issued to Insiders pursuant to the Plan, together with the maximum number of Shares issued to Insiders pursuant to all other Security Based Compensation Arrangements, within a one year period, exceed 10% of the issued and outstanding Shares.

2.3 Non-Employee Director Participation

At any given time, the number of Equity Awards granted to non-Employee Directors under the Plan, in combination with all other equity awards granted to non-Employee Directors under any other Security Based Compensation Arrangements, shall be limited to the lesser of (i) a reserve, as a group, of equity awards entitling them to acquire up to 1% of the issued and outstanding Shares and (ii) an annual equity award value of $150,000 per non-Employee Director, provided that the total value of Options issuable to any one non-Employee Director in any one year period shall not exceed $100,000.

2.4 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.

2.5 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.

2.6 Limitation

The Plan does not give any Option Holder that is a Director the right to serve or continue to serve as a Director of the Company and does not give any Option Holder that is an Employee the right to be or to continue to be employed by the Company. An Option Holder shall not have any rights as a shareholder of the Company with respect to any Shares issuable upon the exercise of any Option until such Option has been duly exercised in accordance with the terms and conditions of the Plan and such Shares have been issued to such Option Holder.

ARTICLE 3 TERMS AND CONDITIONS OF OPTIONS AND BONUS SHARES

3.1 Issuance of Shares

The Shares to be issued to Option Holders upon the exercise of Options shall be authorized and unissued Shares, the issuance of which shall have been authorized by the Board.

3.2 Option Grants

Subject to the provisions of the Plan, the Board shall have the authority to determine the limitations, restrictions and conditions, if any, in addition to those set forth in Section 3.9 hereof, applicable to the exercise of an Option, including, without limitation, the nature and duration of the restrictions, if any, to be imposed upon the exercise of the Options or the sale or other disposition of Shares acquired upon exercise of the Option, and the nature of the events, if any, and the duration of the period in which any Participant's rights in respect of Shares acquired upon exercise of an Option may be forfeited, with the discretion of the Board to modify or rescind such restrictions in the event of certain corporate developments such as a take-over bid, reorganization, merger, change in capital or

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amalgamation. An Eligible Person may receive Options on more than one occasion under the Plan and may receive separate Options on any one occasion; however, the maximum number of options that any Eligible Person may hold is Options to acquire up to 5% of the outstanding number of issued shares of the Company at the time of granting.

3.3 Bonus Shares

Subject to the provisions of the Plan, the Board shall have the authority to determine the limitations, restrictions and conditions, applicable to the reservation and grant of Bonus Shares, including, without limitation, the nature and duration of the restrictions, if any, to be imposed upon the sale or other disposition of the Bonus Shares, and the nature of the events, if any, and the duration of the period in which any Participant’s rights in respect of Bonus Shares may be forfeited, with the discretion of the Board to modify or rescind such restrictions in the event of certain corporate developments such as a take-over bid, reorganization, merger, change in capital or amalgamation. An Employee or Director may receive Bonus Shares on more than one occasion under the Plan and may receive separate Bonus Shares on any one occasion; however, no more than 500,000 of the issued Shares of the Company may be issued as Bonus Shares in any fiscal year.

3.4 Number of Shares

Subject to adjustment as provided for in paragraph 3.11, the number of Shares which will be available for issuance pursuant to Options granted under the Plan, and under the Prior Plan, or as Bonus Shares at any time will not exceed 10% of the issued and outstanding Shares at such time. Any issuance of Shares by the Company, including issuances pursuant to the exercise of Options or pursuant to the issuance of Bonus Shares, shall automatically replenish the number of Shares issuable under the Plan. Provided that the maximum number of Shares is not exceeded, following the expiration, cancellation or other termination of any Options under the Plan, a number of Shares equal to the number of Options so expired, cancelled or terminated shall automatically become available for issuance in respect of Options that may subsequently be granted under the Plan.

3.5 Award Date

The Award Date of an Option will be the date on which the Board makes the determination to grant such Option; provided, however, that if the Board makes the determination to grant an Option during a Blackout Period, the Award Date of such Option shall be deemed to be the date two business days following the end of such Blackout Period and the end of such Blackout Period shall be determined in accordance with the Insider Trading Policy of the Company dated March 23, 2022, as it is amended or replaced from time-to-time.

3.6 Term of Option

Subject to paragraph 3.7, the Expiry Date of an Option shall be the date so fixed by the Board at the time the particular Option is awarded, provided that such date shall be no later than the tenth anniversary of the Award Date of such Option.

3.7 Termination of Option

Subject to such other terms or conditions as may be attached to Options granted hereunder, an Option Holder may exercise an Option in whole or in part at any time or from time to time during the Exercise Period. Any Option or part thereof not exercised within the Exercise Period shall terminate and become null, void and of no effect as of 4:30 p.m. local time in Vancouver, British Columbia on the Expiry Date. The Expiry Date of an Option shall be the earlier of the date so fixed by the Board at the time the Option is awarded (or amended) and the date established, if applicable, in subparagraphs (a) to (c) below:

(a) Death of Option Holder

In the event that the Option Holder should die while he or she is still a Director (if he or she holds his or her Option as a Director), or an Employee (if he or she holds his or her Option as an Employee), the Expiry Date shall be the first anniversary of the Option Holder’s date of death.

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(b) Ceasing to hold Office

In the event that the Option Holder holds his or her Option as a Director of the Company and such Option Holder ceases to be a Director of the Company other than by reason of death, the Expiry Date of the Option shall be, unless otherwise provided in the Option Certificate or otherwise determined by the Board, 30 days from the date the Option Holder ceases to be a Director of the Company.

(c) Ceasing to be an Employee

In the event that the Option Holder holds his or her Option as an Employee of the Company and such Option Holder ceases to be an Employee of the Company other than by reason of death, unless otherwise provided in the Option Certificate or otherwise determined by the Board, the Expiry Date of the Option shall be:

• (i) the Termination Date, if the Option Holder ceases to be an Employee of the Company as a result of termination for Cause or as a result of an order made by any Regulatory Authority having jurisdiction to so order; or

• (ii) on the resignation of an Employee or on termination other than for Cause, 30 days after the date set out in the termination notice delivered by the Company to the Employee or the resignation notice delivered by the Employee to the Company, as the case may be, as the last day the Employee will be an Employee of the Company.

Notwithstanding anything contained herein, in no case will an Option be exercisable later than the Expiry Date of such Option fixed by the Board at the time the Option is awarded to the Option Holder; provided, however, that to the extent it would not result in the imposition of an additional tax under section 409A of the United States of America Internal Revenue Code of 1986, as amended, if the term of an Option expires during a Blackout Period or within 10 business days after the date on which the Blackout Period ends, then the term of such Option shall be extended to the date which is 10 business days after such date on which the Blackout Period ends.

3.8 Exercise Price

The price at which an Option Holder may purchase a Share upon the exercise of an Option shall be as set out in the Option Certificate issued in respect of such Option and in any event shall not be less than the Market Price of the Shares as of the Award Date.

Notwithstanding anything else contained herein, in no case will the Exercise Price be less than the minimum prescribed by the TSX or any other securities exchange upon which the Company has listed or posted its securities for trading as of the relevant Award Date.

3.9 Additional Terms

Subject to all applicable Securities Laws, the Board may attach other terms and conditions to the grant of a particular Option, such terms and conditions to be referred to in a schedule attached to the Option Certificate. These terms and conditions may include, but are not necessarily limited to, the following:

• (a) providing that an Option expires on a date other than as provided for herein;

• (b) providing that a portion or portions of an Option vest after certain periods of time or upon the occurrence of certain events, or expire after certain periods of time or upon the occurrence of certain events; and

• (c) providing that an Option be exercisable immediately, in full, notwithstanding that it has vesting provisions, upon the occurrence of certain events.

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3.10 Assignment of Options

Options may not be assigned or transferred; provided, however, that the Personal Representative of an Option Holder may, to the extent permitted by paragraph 4.1, exercise the Option within the Exercise Period.

3.11 Adjustments

In the event that the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, consolidation, combination, reclassification or similar change in the capital structure of the Company without consideration, then:

• (a) the number of Shares reserved for issuance under the Plan;

• (b) the number of Shares subject to outstanding Options; and

• (c) the Exercise Prices of outstanding Options,

will be proportionally adjusted by the Board in compliance with applicable securities laws and the rules of any securities exchange upon which the Company has listed or posted its securities for trading; provided, however, that no fractional shares shall be issued upon the exercise of an Option and, accordingly, if as a result of a stock dividend, recapitalization, stock split, reverse stock split, subdivision, consolidation, combination, reclassification or similar change in the capital structure of the Company, an Option Holder would become entitled to a fractional share, such Option Holder shall have the right to purchase only the next lowest whole number of Shares and no payment or other adjustment will be made with respect to the fractional interest so disregarded.

3.12 Vesting

Options granted to Directors and Employees will vest as and when determined by the Board as evidenced by a schedule to the relevant Option Certificate; provided, however, that if no such determination has been made in respect of an Option as evidenced by such a schedule, such Option will vest fully at the time it is granted.

In respect of an Option granted to an Employee of the Company, upon such Employee ceasing to be an Employee of the Company, any Option granted to such Employee shall cease to vest on the Termination Date.

3.13 Change of Control

In the event that a Participant’s employment is terminated without cause by the Company or a Subsidiary within 12 months of a Change of Control, all unvested Options shall vest immediately and become exercisable, notwithstanding any determination of the Board pursuant to paragraph 3.12, if applicable.

ARTICLE 4 EXERCISE OF OPTION

4.1 Exercise of Option

An Option may be exercised only by the Option Holder or the Personal Representative of the Option Holder. An Option Holder or the Personal Representative of an Option Holder may exercise an Option in whole or in part at any time or from time to time during the Exercise Period up to 4:30 p.m. local time in Vancouver, British Columbia on the Expiry Date by delivering to the Administrator an Exercise Notice, the applicable Option Certificate and a cheque, or at the Company’s option, a certified cheque or bank draft, payable to “Capstone Copper Corp.” in an amount equal to the aggregate Exercise Price of the Shares to be purchased pursuant to the exercise of the Option, and if applicable, any withholding taxes in respect of which the Option is being exercised.

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4.2 Issue of Share Certificates

As soon as practicable following the receipt of the Exercise Notice and the other documents contemplated by paragraph 4.1, the Administrator shall cause to be delivered to the Option Holder a certificate for the Shares so purchased.

4.3 Conditions of Issue

The Options and the issue of Shares by the Company pursuant to the exercise of Options are subject to the terms and conditions of the Plan and compliance with the rules and policies of all applicable Regulatory Authorities relating to the granting of such Options and to the issuance and distribution of such Shares, and to all applicable Securities Laws. The Option Holder agrees to comply with all Securities Laws and to furnish to the Company any information, reports or undertakings required to comply with, and to fully cooperate with the Company in complying with, such Securities Laws.

4.4 Fully Paid and Financial Assistance

The Company will not issue any Shares pursuant to the exercise of Options until it has received the Exercise Price plus any required payment for withholding taxes for the issuance of such Shares. The Company will not provide financial assistance to an Option Holder to assist him or her in exercising his or her Option.

ARTICLE 5 ADMINISTRATION

5.1 Administration

The Plan shall be administered by the Administrator on the instructions of the Board. The Board may make, amend and repeal at any time and from time to time such regulations not inconsistent with the Plan as it may deem necessary or advisable for the proper administration and operation of the Plan and such regulations shall form part of the Plan. The Board may delegate to the Administrator or any Director, senior officer or employee of the Company such administrative duties and powers as it may see fit in connection with the Plan.

5.2 Interpretation

The interpretation by the Board of any of the provisions of the Plan and any determination by it pursuant hereto shall be final and conclusive and shall not be subject to any dispute by any Option Holder. No member of the Board or any person acting pursuant to authority delegated by it hereunder shall be liable for any action or determination in connection with the Plan made or taken in good faith and each member of the Board and each such person shall be entitled to indemnification with respect to any such action or determination in the manner provided for by the Company.

ARTICLE 6 AMENDMENT AND TERMINATION

6.1 Amendment, Modification or Termination of the Plan

The Board shall have the power to, at any time and from time to time, either prospectively or retrospectively, and without shareholder approval, amend, suspend or terminate the Plan or any Option granted under the Plan, including, without limiting the generality of the foregoing:

• (a) amendments of a “housekeeping” or ministerial nature, including, without limitation, any amendment for the purpose of curing any ambiguity, error or omission in the Plan or to correct or supplement any provision of the Plan that is inconsistent with any other provision of the Plan;

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• (b) amendments necessary to comply with the provisions of applicable law (including, without limitation, the rules of the TSX or any other applicable stock exchange);

• (c) any amendment which increases the Exercise Price of an Option;

• (d) any expansion of the scope of persons eligible to participate in the Plan;

• (e) amendments respecting administration of the Plan;

• (f) any amendment to the vesting provisions of the Plan or any Option;

• (g) any amendment to the early termination provisions of the Plan or any Option, whether or not such Option is held by an Insider, provided such amendment does not entail an extension beyond the original Expiry Date of such Option;

• (h) to add or change provisions relating to any form of financial assistance provided by the Company to Eligible Persons that would facilitate the purchase of securities under the Plan; and

• (i) to add a cashless exercise feature to any Option or to the Plan, including providing for the payment in cash or securities upon the exercise of Options;

provided however that:

• (j) such amendment, suspension or termination is in accordance with applicable laws and the rules of any securities exchange on which the Company has listed or posted its securities for trading;

• (k) the Board shall obtain shareholder approval in respect of the following:

• (i) any amendment to the number of Shares (or other securities) issuable under Sections 2.2, 3.2, 3.3 and 3.4 of the Plan;

• (ii) any amendment which reduces the Exercise Price of an Option (other than pursuant to Section 3.11);

• (iii) any amendment to the transferability or assignability of an Option (other than for normal estate settlement purposes);

• (iv) any amendment extending the term of an Option beyond its original Expiry Date (other than an extension as a result of a Blackout Period pursuant to Section 3.7);

• (v) any amendment to the amendment provisions of the Plan contained in this Article ARTICLE 6;

• (vi) any amendment to the number of Equity Awards which may be granted to non-Employee Directors as set out in Section 2.3 of this Plan; and

• (vii) amendments required to be approved by shareholders under applicable law.

Where shareholder approval is sought for amendments under clauses (k)(ii) and (iv) above, the votes attached to Shares held directly or indirectly by Insiders who would benefit from the amendment will be excluded.

6.2 Termination

The Board may terminate the Plan at any time provided that such termination shall not alter the terms or conditions of any Option or impair any right of any Option Holder pursuant to any Option awarded prior to the date of such termination which shall continue to be governed by the provisions of the Plan.

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ARTICLE 7 GENERAL

7.1 Withholding Taxes

The Company may withhold from any amount payable to a Participant, either under this Plan or otherwise, such amount as it reasonably believes is necessary to enable the Company to comply with the applicable requirements of any federal, provincial, local, or foreign law, or any administrative policy of any applicable tax authority, relating to the withholding of tax or any other required deductions with respect to options (“ Withholding Obligations ”). The Company may also satisfy any liability for any such Withholding Obligations, on such terms and conditions as the Company may determine in its discretion, by (a) requiring a Participant, as a condition to the exercise of any Options, to make such arrangements as the Company may require so that the Company can satisfy such Withholding Obligations including, without limitation, requiring the Participant to remit to the Company in advance, or reimburse the Company for, any such Withholding Obligations or (b) selling on the Participant’s behalf, or requiring the Participant to sell, any Shares acquired by the Participant under the Plan, or retaining any amount which would otherwise be payable to the Participant in connection with any such sale.

7.2 Agreement

The Company and every Option awarded hereunder shall be bound by and subject to the terms and conditions of the Plan. By accepting an Option granted hereunder, the Option Holder expressly agrees with the Company to be bound by the terms and conditions of the Plan.

7.3 Prior Plan

The Plan supersedes and replaces the Prior Plan. All options previously granted by the Company that are outstanding as at the date of the adoption of the Plan by the Board shall be deemed to be granted under the Plan and to be Options which are subject to the terms and conditions hereof.

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51308727.2

SCHEDULE “A”

CAPSTONE COPPER CORP. INCENTIVE SHARE OPTION AND BONUS SHARE PLAN

OPTION CERTIFICATE

This Certificate is issued pursuant to the provisions of the Capstone Copper Corp. (the “Company”) Incentive Share Option and Bonus Share Plan (the “Plan”) and evidences that ____ is the holder (the “Option Holder”) of an option (the “Option”) to purchase up to ___ common shares (the “Shares”) of the Company at a purchase price of $____ per Share. Subject to the provisions of the Plan:

(a) the Award Date of the Option is _____; and

• (b) the Expiry Date of the Option is _____.

Subject to the provisions of the Plan, the Option may be exercised at any time and from time to time from and including the Award Date through to and including up to 4:30 p.m. local time in Vancouver, British Columbia on the Expiry Date by delivery to the Administrator of the Plan of an Exercise Notice, in the form provided in the Plan, together with this Certificate and a certified cheque or bank draft payable to “ Capstone Copper Corp. ” in an amount equal to the aggregate Exercise Price of the Shares, and if applicable, any withholding taxes in respect of which the Option is being exercised.

This Certificate and the Option evidenced hereby are not assignable, transferable or negotiable and are subject to the detailed terms and conditions contained in the Plan, the terms and conditions of which the Option Holder, by accepting such Option, hereby expressly agrees with the Company to be bound by. This Certificate is issued for convenience only and in the case of any dispute with regard to any matter relating to the Option, the provisions of the Plan and the records of the Company shall prevail.

The Option is also subject to the terms and conditions contained in the schedules, if any, attached hereto.

The Option has been awarded this _ day of ____, 20_.

CAPSTONE COPPER CORP.

Per:

Administrator Capstone Copper Corp. Incentive Share Option and Bonus Share Plan

51308727.2

OPTION CERTIFICATE – SCHEDULE

The additional terms and conditions attached to the Option represented by this Certificate are as follows:

1. _ of the Options granted under the Plan will vest on __;

2. _ of the Options granted under the Plan will vest on _______; and

3. _ of the Options granted under the Plan will vest on __;

or such other vesting schedule as may be agreed upon by the Board of Directors.

CAPSTONE COPPER CORP.

Per:

Administrator Capstone Copper Corp. Incentive Share Option and Bonus Share Plan

51308727.2

SCHEDULE “B”

EXERCISE NOTICE

• To: Administrator, Incentive Share Option and Bonus Share Plan (the “Plan”) Capstone Copper Corp. (the “ Company ”)

I, ______, hereby give notice, pursuant to the Company’s Plan, of the exercise of the Option to acquire and subscribe for ___ Shares.

Calculation of total Exercise Price:

(a) number of Shares to be acquired on exercise: ___ Shares (b) multiplied by the Exercise Price per Share: $__ TOTAL EXERCISE PRICE [(a) x (b)] : $_______ , calculation of tax remittance: calculation of tax remittance: (c) sale price/market price on exercise: $__ (d) share option benefit [((c) - (b)) x (a)]: $___ (e) tax remittance: $__ (f) deduction (i.e. CPP): $__ TOTAL TAX REMITTANCE : $_______*

If applicable , calculation of tax remittance: calculation of tax remittance:

* Calculation acknowledged by the Option Holder

TOTAL PAYABLE TO THE COMPANY BY THE OPTION HOLDER:

$______

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The undersigned tenders herewith a cheque or bank draft in an amount equal to the total Exercise Price, and if applicable , the Tax Remittance of the aforesaid Shares, as calculated above, and directs the Company to issue the share certificate evidencing said Shares in the name of the undersigned to be mailed to the undersigned at the following address:

---

DATED the _ day of ___, 20.

Signature of Option Holder

Name of Option Holder (please print)

51308727.2