THIS STOCK OPTION AGREEMENT is made as of December 18, 2001.
BETWEEN:
Sense Technologies Inc., a body corporate duly incorporated in the
Province of British Columbia and having its head office at 000 - 000
Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
(the "Company")
OF THE FIRST PART
AND:
Xxxx Xxxxx, of
Suite 3, 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
(the "Optionee")
OF THE SECOND PART
WHEREAS the Company wishes to encourage the best efforts of the Optionee
and to recognize the Optionee's efforts by granting to the Optionee an option to
purchase shares in the capital stock of the Company in accordance with any
applicable regulatory requirements.
NOW THEREFORE in consideration of the mutual covenants and agreements
herein, the parties agree as follows:
1. For the purposes of this Agreement, all references to the "Company" will
include all subsidiaries, if any, of the Company.
2. The Optionee represents and warrants that the Optionee is one or more of
the following (any of which are referred to herein as a "qualifying
relationship"):
(a) a director, senior officer [as that term is defined in the Securities
----------
Act (British Columbia)1, the "Act"] or Management Company Employee of
---
the Company, or a director, senior officer or Management Company
Employee of the Company's subsidiary(ies) to whom stock options can
be granted in reliance on a Prospectus exemption under applicable
Securities Laws;
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1 A Senior Officer of the Company includes the five highest paid employees
(officers are deemed employees for purposes of this determination), but
excluding commissioned salespersons who do not act in a managerial capacity.
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(b) an employee of the Company, or a corporation providing services to
the Company, by meeting the criteria of one of the following
categories:
(i) an individual who is considered an employee under the Income
Tax Act (i.e. for whom income tax, employment insurance and
CPP deductions must be made at source)
(ii) an individual who works full-time for the Company 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) an individual who works for the Company on a continuing and
regular basis for a minimum number of hours 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.
(c) an individual (or a Company wholly-owned by Individuals) who is a
Consultant of the Company that, in relation to the Company:
(i) provides ongoing consulting services to the Company or an
affiliate of the Company ("Affiliate"), under written
contract to the Company;
(ii) possesses technical, business or management expertise of
value to the Company or an Affiliate of the Company;
(iii) spends a significant amount of time and attention on the
business and affairs of the Company or an Affiliate of the
Company; and
(iv) has a relationship with the Company or an Affiliate of the
Company that enables the individual to be knowledgeable about
the business and affairs of the Company.
3. If the Optionee is a corporation, the Optionee represents and warrants
that:
(a) all of the issued and outstanding voting shares of the Optionee are
beneficially owned by the Director, Senior Officer or individual who
carries out the Optionee's work on behalf of the Company; and
(b) the execution of this Agreement and all related documents by the
Optionee have been duly authorized, and the Optionee has the full
power and capacity to enter into this Agreement.
Page 3
4. The Company hereby grants to the Optionee an option (the "Option") to
purchase all or any portion of 250,000 fully paid common shares (the "Optioned
Shares") of the Company from treasury, exercisable at the price of US$2.30 per
share (the "Exercise Price"), on or before December 18, 2006 (the "Expiry
Date").
5. The Option is exercisable by notice in writing to the Company accompanied
by a certified cheque in favour of the Company for the full amount of the
purchase price of the shares being then purchased at least 24 hours in advance
of the termination or expiry of the Option; provided that if the Optionee is an
employee, the Optionee will have satisfied the conditions precedent, if any, to
the exercise of the Option set out in any existing employment or services
agreement between the parties. When due notice and payment are received, the
Company covenants and agrees to issue and deliver to the Optionee share
certificates in the name of the Optionee for the number of shares so purchased.
6. For a period of forty (40) days following the date of exercise of the
Option any Optioned Shares issued upon the exercise shall be subject to the
following restrictions:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONVERTED OR EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
7. This is an option agreement only and does not impose upon the Optionee
any obligation to take up and pay for any of the Optioned Shares.
8. The Option will not be transferable or assignable by the Optionee
otherwise than by Will or the law of intestacy and the Option may be exercised
during the lifetime of the Optionee only by the Optionee.
9. The Optionee acknowledges that if the undersigned is a resident of a
jurisdiction other than the Province of British Columbia, Canada, the Optioned
Shares may be subject to hold periods.
10. If the Optionee should die while a Director, Senior Officer or employee of
the Company, the Option may then be exercised by the legal heirs or personal
representatives of the Optionee, to the same extent as if the Optionee were
alive and a Director, Senior Officer or employee of the Company for a period not
exceeding the earlier of 6 months after the death of the Optionee, or the Expiry
Date but only for such shares as the Optionee was entitled to at the date of the
death of the Optionee.
11. Subject to paragraphs 8 and 10 hereof, the Option will terminate on the
earlier of 30 days after the Optionee ceases to be in a qualifying relationship
with the Company, and the Expiry Date. For greater certainty, the Option also
Page 4
terminates 30 days after the disposition of a controlling interest in a
subsidiary, if such disposition xxxxxx the qualifying relationship of the
Optionee to the Company.
12. If the Optionee's qualifying relationship to the Company is terminated
by the Directors for cause, or terminated by regulatory sanction or by reason of
judicial order, the Option will immediately expire. The Optionee acknowledges
that the Company is under no obligation to provide advance notice of the
termination of the Option.
13. In the event of any subdivision, consolidation or other change in the
share capital of the Company while any portion of the Option is outstanding, the
number of shares under option to the Optionee and the price thereof will be
adjusted in accordance with such subdivision, consolidation or other change in
the share capital of the Company. For greater certainty, upon a consolidation of
capital of the Company, the number of Optioned Shares will be reduced by
dividing the number of outstanding Optioned Shares by the consolidation ratio,
and multiplying the Exercise Price by the consolidation ratio.
14. In the event that the Company shall amalgamate, consolidate with, or
merge into another corporation, the Optionee will receive, upon the exercise of
the Option, the securities or property to which a holder of the number of common
shares then deliverable upon the exercise of the Option would have been entitled
to upon such amalgamation, consolidation or merger. The Company agrees to take
such reasonable steps in connection with such amalgamation, consolidation or
merger as may be necessary to ensure that the provisions herein will be
applicable, as near as reasonably possible. A sale of all or substantially all
of the assets of the Company for consideration (apart from the assumption of
obligations), a substantial portion of which consists of securities will be
deemed a amalgamation, consolidation or merger for the purposes herein.
16. The Optionee covenants and agrees to complete, execute and deliver to
the Company such documents as may be necessary to carry out the intent of this
Agreement.
17. The Company hereby covenants and agrees that it will reserve in its
treasury sufficient shares to permit the issuance and allotment of shares to the
Optionee in the event the Option is exercised.
18. This Agreement will be governed, construed and enforced according to the
laws of the Province of British Columbia and is subject to the exclusive
jurisdiction of the courts of the Province of British Columbia.
19. Time will be of the essence of this Agreement.
20. This Agreement will enure to the benefit of or be binding upon the Company,
its successors and assigns and the Optionee and the Optionee's personal
representatives to the extent provided in paragraph 8.
21. This Agreement may be executed in counterparts which may be delivered by
facsimile. Each executed counterpart shall be deemed to be an original and all
such counterparts when read together constitute one and the same instrument.
Page 5
IN WITNESS WHEREOF the parties have hereunto caused these presents to be
executed as of the day and year first above written.
SENSE TECHNOLOGIES INC.
Per: /s/ Xxxx Xxxxxxx
---------------------------------
Authorized Signatory
SIGNED, SEALED AND DELIVERED by )
XXXX XXXXX in the presence of: )
)
/s/ Xxxxx XxXxxxxxx )
----------------------------------------- )
Name )
)
0000 Xxxxxxx Xxxx ) /s/ Xxxx Xxxxx
----------------------------------------- ) --------------------------
Address ) XXXX XXXXX
)
Xxxxxxxxx, XX 00000 )
----------------------------------------- )
)
Office Manager )
----------------------------------------- )
Occupation )
