SUPERIOR RESOURCES LIMITED — Governance Information 2007

Nov 7, 2007

ANNEXURE 1 SUPERIOR RESOURCES LIMITED ABN 72 112 844 407

EMPLOYEES AND OFFICERS OPTION PLAN 2007

1 PURPOSE OF THE PLAN

• 1.1 The Board of Directors of the Company proposes to introduce a directors, employees and consultants option plan, to be called the Superior Resources Limited employees and officers option plan 2007 ("Option Plan") for the purpose of:
  • (a) providing Eligible Persons with an additional incentive to work to improve the performance of the Company;
  • (b) attracting and retaining Eligible Persons essential for the continued growth and development of the Company;
  • (c) to promote and foster loyalty and support amongst Eligible Persons for the benefit of the Company; and
  • (d) to enhance the relationship between the Company and Eligible Persons for the long term mutual benefit of all parties.

2 COMMENCEMENT

Subject to approval by shareholders of the Company by passing a resolution at a general meeting authorising the establishment of the Option Plan, and to due compliance with the Corporations Act, the Option Plan shall take effect from such date subsequent to the general meeting as is resolved by the Board of Directors.

3 INTERPRETATION

3.1 In these Rules, unless the context otherwise requires:

"Associated Body Corporate" means a body corporate (whether incorporated in Australia or elsewhere) in which the Company holds a relevant interest (as defined in the Corporations Act and as if the body corporate was incorporated in Australia) of at least 30%;

"ASX" means ASX Limited ABN 98 008 624 691;

"Company" means Superior Resources Limited ABN 72 112 844 407;

"Board of Directors" means the Board of Directors of the Company from time to time acting by resolution made in accordance with the Corporations Act and the Constitution of the Company;

"Director" means a director from time to time of the Company;

"Eligible Person" means a person who is:

(i) an employee of; (ii) a Director or other officer of; or (iii) a consultant to,

the Company or an Associated Body Corporate and, in the case of employees and consultants, includes bodies corporate;

"Listing Rules" means the Listing Rules from time to time of the ASX or other applicable stock exchange;

"Official List" means the official list of the ASX or other applicable stock exchange;

"Option" means an option issued under this Option Plan to subscribe for a Share;

"Option Plan" means the Superior Resources Limited Employees and Officers Option Plan 2007 as contained in these Rules;

"Option holder" means a person who holds Unexercised Options;

"Rules" means these rules as amended from time to time;

"Share" means an ordinary fully paid share in the capital of the Company; and

"Unexercised Options" means Options issued under this Option Plan from time to time which have not lapsed under this Option Plan and have not been exercised under this Option Plan.

3.2 In these Rules, unless the context otherwise requires, the singular shall include the plural and vice versa.

4 MAXIMUM NUMBER OF OPTIONS TO BE ISSUED UNDER THE OPTION PLAN

The number of Unexercised Options issued from time to time pursuant to the Option Plan shall not exceed 10,000,000.

5 OPTION PERIODS

• 5.1 Options issued under the Option Plan cannot be exercised within six months from date of issue.
• 5.2 Options issued under the Option Plan shall be exercisable (irrespective of the respective date of grant of the Options) at any time from six months after date of issue up to the expiry date of 5:00pm (Brisbane time) on 30 June 2011.

6 EXERCISE PRICE

The exercise price of an Option issued under the Option Plan is $0.50 (50 cents).

7 ENTITLEMENTS

Subject to the Listing Rules (If applicable), the Board shall determine the number of Options (if any) to be allocated to an Eligible Person.

8 APPLICATION

• 8.1 If the Board of Directors determines that Options are to be allocated to any Eligible Person under the Option Plan, that Eligible Person shall be invited to apply in his or her name or in the name of his or her nominee (provided that such nominee is approved by the Board of Directors in its absolute discretion) for all or part of the Options allocated to that Eligible Person under the Option Plan. A reference in these Rules to the nominee of an eligible person is a reference to such nominee as approved by the Board and to whom an invitation to apply in the name of that nominee is made by the Board under this subclause 8.1.
• 8.2 The Board of Directors retains the right to withdraw an invitation at any time prior to receiving an application from the Eligible Person to whom the invitation was made, or that Eligible Person's nominee.

9 ACCEPTANCE

• 9.1 The Company shall be obliged to accept any application made pursuant to Rule 8, provided that the application accords, in all respects, with these Rules and is for such number of Options, or part thereof, to which the Eligible Person the subject of the invitation is entitled. Upon acceptance of a duly complying application the Company, within ten business days, shall deliver an Option Certificate in respect of the Options granted to the Eligible Person.
• 9.2 Each Eligible Person (and, if applicable, his or her nominee) will be taken to agree to be bound by these Rules upon the acceptance of the offer from the Board of Directors to take up Options under this Option Plan.

10 OPTION CONDITIONS

• 10.1 No monies will be payable for the grant of the Options.

• 10.2 Each Option shall carry the right in favour of an Option holder to subscribe for one Share.

• 10.3 Options cannot be exercised within six months from date of issue of the Options.

• 10.4 The Options expire at 5.00pm ( Brisbane time) on 30 June 2011.

• 10.5 The Share issued on exercise of an Option shall be issued at the exercise price calculated in accordance with Rule 6 of this Option Plan.

• 10.6 The issue price of a Share the subject of an Option shall be payable in full on exercise of the Option by the Eligible Person (or, if applicable, his or her nominee).

• 10.7 Subject to these Rules, the Options shall be capable of assignment.

• 10.8 The instrument of assignment shall be duly stamped and shall be lodged at the registered office of the Company together with such other information as the Company may reasonably require with respect to the assignment, and the Company shall enter the name of the assignee in a register of Options as the holder of the relevant Options.

• 10.9 The Company shall not be bound to recognise the assignment until a copy of the duly executed instrument of assignment is lodged with the Company.

• 10.10 Options shall not be listed for official quotation on the ASX or other stock exchange.

• 10.11 Options shall be exercisable by the delivery to the registered office of the Company of a notice in writing stating the intention of the Option holder to exercise all or a specified number of Options, accompanied by the relevant Option Certificate and a cheque made payable to the Company for the subscription price for the Shares.

• 10.12 An exercise of only some Options shall not affect the rights of the Option holder under the balance of the Options held by him or her as appropriate.

• 10.13 The Company shall issue the resultant Share and deliver notification of share holdings within five business days of the exercise of an Option.

• 10.14 Shares issued pursuant to an exercise of Options shall rank from the date of issue, equally with existing Shares of the Company in all respects.

• 10.15 If at the relevant time the ordinary shares of the Company are admitted to quotation by the ASX or other stock exchange, the Company shall in accordance with the Listing Rules make application to have Shares issued pursuant to an exercise of Options listed for official quotation by the ASX or other applicable stock exchange.

• 10.16 The Option holder will be permitted to participate in any new pro-rata issue of securities of the Company subject to the prior exercise of the Options, in which case the Option holder will be notified by the Company of the proposed pro-rata issue at least 10 business days before the books closing date (to determine entitlements to the issue) and afforded that period to exercise the Options.

• 10.17 In the event of any reconstructions (including consolidation, subdivision, reduction or return) of the issued capital of the Company:

  • (a) if at the time of the reconstruction any securities of the Company are admitted to quotation by the ASX or other stock exchange, the Options will be reorganised in accordance with the Listing Rules applying at the time of the reorganisation; or
  • (b) if at the time of the reconstruction no securities of the Company are admitted to quotation by the ASX or other stock exchange, the Options will be reorganised in the same proportion as the underlying ordinary shares (in such a way as not to cause a change in the total exercise price for a post reconstruction holding of options, disregarding the effect of any fractions or rounding).

• 10.18 The Options will not give any right to participate in dividends until Shares are issued pursuant to the exercise of the relevant Options.

• 10.19 If at the relevant time any securities of the Company are admitted to quotation by the ASX or other stock exchange, Options cannot be granted to Directors or associates of the Company unless prior approval of shareholders is obtained in accordance with the Listing Rules.

11 RESTRICTIONS ON ALTERATIONS TO THE OPTION PLAN

The Option Plan may only be amended with the prior approval by resolution of the shareholders of the Company in general meeting. In addition, if at the relevant time any securities of the Company are admitted to quotation by the ASX or other stock exchange, Option Plan may only be amended in accordance with the applicable Listing Rules.

12 RIGHTS OF EMPLOYEES

The Option Plan shall not form part of any contract of employment between the Company and any of its employees and shall not confer directly or indirectly on any employee any legal or equitable rights whatsoever against the Company. Without limiting the generality of the following, nothing in these Rules:

• (a) confers on any Eligible Person the right to receive any Options;
• (b) confers on any person the right to continue as an employee;
• (c) affects any rights which the Company may have to terminate the employment of any employee; or
• (d) may be used to increase damages in any action brought against the Company in respect of such termination.

13 TERMINATION OF RIGHT TO EXERCISE OPTION

• 13.1 Subject to Rule 13.2, an Option holder's right to exercise Options under this Option Plan shall terminate within one month of the Option holder ceasing to be an Eligible Person (or, if the Option holder is a nominee of an Eligible Person, the Eligible Person who nominated the nominee ceasing to be an Eligible Person) provided that:
  • (a) where an Eligible Person dies and at the date of his or her death that Eligible Person (and his or her nominees) held any Unexercised Options, such Options may be exercised by the legal personal representatives of the Option holder (or, if applicable, his or her nominees) within 12 months of the date of the Eligible Person's death; or
  • (b) where an Eligible Person ceases to be an Eligible Person by reason of the cessation of employment for whatever reason, other than the circumstances referred to in Rule 13.1(d) and on the date the Eligible Person ceases to be an Eligible Person, the Eligible Person (and his or her nominees) held any Unexercised Options, such Options may be exercised at any time within 90 days or such other period, being not less than 90 days, as determined by the Board of Directors (in its absolute discretion) immediately following the date upon which the Eligible Person so ceased to be an Eligible Person; or
  • (c) where an Eligible Person ceases to be an Eligible Person by reason of:
    • A. the retirement of the Eligible Person at or after attaining the age of 60 years;
    • B. retirement of the Eligible Person before age 75 years with the consent of the Board of Directors; or
    • C. ill health of, or accident affecting, the Eligible Person,

and on the date the Eligible Person ceases to be an Eligible Person, the Eligible Person (and his or her nominees) held any Unexercised Options, such Options may be exercised at any time before the expiry of 6 months from the date upon which the Eligible Person ceased to be an Eligible Person; or

(d) where an Eligible Person ceases to be an Eligible Person by reason of the Company terminating the Eligible Person's contract of service in circumstances where the Eligible Person is found to be guilty of gross misconduct, gross negligence, wilful disobedience or any other cause or matter which entitles the Company to dismiss the Eligible Person without notice and on the date the Eligible Person ceases to be an Eligible Person, the Eligible Person (and his or her nominees) held any Unexercised Options, such Options shall immediately and automatically lapse and the right of the Eligible Person (and his or her nominees) to exercise those Unexercised Options shall terminate immediately upon dismissal of the Eligible Person; or

• (e) where Options have been assigned in accordance with the terms of this Option Plan and an event has occurred in respect of the original Option holder (or, in the event that the original Option holder was a nominee of an Eligible Person, then that Eligible Person) of the nature referred to in Rule 13.1(a), (b), (c) or (d), the person then the Option holder at that time shall only be entitled to exercise the Unexercised Options within the same time limits specified in Rule 13.1(a), (b), (c) or (d), but otherwise the Unexercised Options shall lapse.
• 13.2 Subject to compliance with the Listing Rules (particularly but not only Listing Rule 6.23 or its equivalent (if applicable), if at the relevant time any securities of the Company are admitted to quotation by the ASX or other stock exchange), the Board of Directors may, in its discretion, extend the time periods in, or waive the application of any provision of, Rule 13.1 of these Rules.

14 POWERS OF THE DIRECTORS

The Option Plan shall be administered by the Board of Directors who shall have the power to:

• (a) determine procedures from time to time for administration of the Option Plan consistent with these Rules;
• (b) subject to Rule 10 and (if applicable) the Listing Rules, amend or modify these Rules; and
• (c) resolve conclusively all questions of fact or interpretation arising in connection with the Option Plan.

15 TERMINATION OR SUSPENSION OF OPTION PLAN

• 15.1 The Option Plan may at any time be terminated by the Board of Directors but such termination shall not affect the rights of Option holders granted prior to such termination.
• 15.2 The Board of Directors may suspend the operation of the Option Plan for any period it considers desirable, but such suspension will not affect of holders of Options granted prior to such suspension.

16 LISTING RULES

If at any relevant time any securities of the Company are admitted to quotation by the ASX or other stock exchange, these Rules shall be interpreted and applied in accordance with and subject to all applicable Listing Rules.