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ATTACHMENT - ITEM 19(b)3(f) - FORM INCENTIVE STOCK OPTION (2 YR)
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MEMORANDUM OF AGREEMENT MADE EFFECTIVE THIS 9TH DAY OF MAY, 1997.
BETWEEN: INTERNATIONAL URANIUM CORPORATION, A CORPORATION AMALGAMATED UNDER
THE LAWS OF THE PROVINCE OF ONTARIO AND HAVING OFFICES AT SUITE 1320 -
000 XXXX XXXXXXX XXXXXX, XX XXX XXXX XX XXXXXXXXX, XXXXXXXX XX XXXXXXX
XXXXXXXX;
(HEREINAFTER CALLED THE "COMPANY")
OF THE FIRST PART
AND: ;
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(HEREINAFTER CALLED THE "OPTIONEE")
OF THE SECOND PART
WHEREAS the Company has instituted the International Uranium
Corporation Share Option Plan dated the 9th day of May, 1997, as amended
effective the 4th day of February, 1998 (the "PLAN");
AND WHEREAS in the event that Options were granted to the Optionee on
an effective date occurring prior to February 4, 1998, the parties hereto
confirm that such Options shall be evidenced by this Agreement and shall be
governed by the terms hereof and of the Plan;
AND WHEREAS the Board has determined that it is in the best interests
of the Company to grant the Optionee who is of the Company the option
hereinafter provided;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and other good and valuable consideration (the receipt whereof is
hereby acknowledged) the parties hereto agree as follows:
1. The terms of the Option granted hereunder are as set forth in this
Agreement and in the Plan. This Agreement and the Option granted hereunder shall
in all respects be governed by the provisions of the Plan, a copy of which is
attached hereto as Appendix "1". All capitalized terms used but not defined in
this Agreement shall have the respective meanings given to them in the Plan. All
other capitalized terms shall have the respective meanings given to them in this
Agreement. The Optionee hereby acknowledges that the Optionee has read and
accepts the terms and conditions of the Plan.
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2. In this Agreement, the following terms shall be defined as follows:
(a) "ELECTION TO PURCHASE" means a notice in writing addressed to
the Company at its address first recited, which notice shall
specify therein the number of Optioned Shares in respect of
which the Option is being exercised;
(b) "EXPIRY DATE" means May 8, 2000;
(c) "OPTION" means the irrevocable right and option to purchase,
from time to time, all or any part of the Optioned Shares
granted to the Optionee by the Company pursuant to Paragraph 3
hereof;
(d) "OPTION PRICE" means the purchase price per Optioned Share
pursuant to Paragraph 3 hereof, as the same may be adjusted in
accordance with the Plan;
(e) "OPTIONED SHARE" or "OPTIONED SHARES" means the common shares
of the Company, subject to the Option.
3. The Company hereby grants to the Optionee as an incentive and in
consideration of the Optionee's services but not in lieu of salary, the Option
to purchase a total of () Optioned Shares at an Option Price of Canadian One
Dollar and Twenty-five Cents (C$1.25) per Optioned Share at any time before 4:30
o'clock p.m., Vancouver time, on the Expiry Date. The Option granted hereunder
shall vest as to one-half of the Optioned Shares on the date of grant, i.e. on
May 9, 1997, and as to the remaining one-half of the Optioned Shares one (1)
year following the date of grant and up to the Expiry Date, i.e. at any time
between May 9, 1998 and May 8, 2000; provided however, that any Shares not taken
up by the Optionee on May 9, 1998 may be carried forward and taken up during the
remaining 12 months of the Option.
4. The Option, to the extent that it has not been exercised shall, at
4:30 o'clock p.m., Vancouver time, on the Expiry Date, forthwith expire and
terminate and be of no further force and effect whatsoever.
5. In the event of the death of the Optionee on or prior to the Expiry
Date, the Option, to the extent that it has not been exercised, shall expire at
4:30 o'clock p.m., Vancouver time, on the last day of the twelfth (12th) month
following the day on which the Optionee dies and, in the event the Option is in
whole or in part unexercised on the day the Optionee dies, then it is understood
by the parties that the Option may be exercised on the Optionee's behalf by the
Optionee's legal personal representative(s) of the estate of the Optionee but
only to the extent that the Optionee was entitled to exercise such Option at the
date of the Optionee's death and only prior to the Expiry Date.
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6. In the event the Optionee ceases to be a part-time or full-time
employee, director or officer of the Company, or of any Subsidiary of the
Company as the case may be, prior to the Expiry Date the Option, to the extent
that it has not been exercised shall, at 4:30 o'clock p.m., Vancouver time, on
the thirtieth (30th) day following the day on which the Optionee ceases to be a
part-time or full-time employee, officer or director, terminate and be of no
further force or effect whatsoever. If the Optionee is a Consultant, the
Optionee's entitlement to the Option, including the termination thereof, shall
be in accordance with the terms of the consulting agreement entered into between
the Company or any Subsidiary and the Optionee, provided that in no event shall
the Option continue to be outstanding 12 months following the date upon which
such consulting agreement is terminated.
7.1 Subject to the provisions hereof and the Plan, the Option shall be
exercisable from time to time, in whole or in part, by delivery of a written
notice of exercise to the Company at the address set forth herein, accompanied
by such payment as permitted in subparagraph 7.2 hereof for the number of
Optioned Shares to be purchased as specified in such notice. Such notice shall
be in the form of an Election to Purchase, substantially in the form attached to
this Agreement as Appendix "2".
7.2 Notwithstanding any of the provisions contained in the Plan or in
this Agreement, the Company's obligations to issue Optioned Shares to the
Optionee pursuant to the exercise of the Option shall be subject to:
(a) completion of such registration or other qualification of such
Optioned Shares or obtaining approval of such governmental or
regulatory authority as counsel to the Company shall
reasonably determine to be necessary or advisable in
connection with the authorization, issuance or sale thereof;
(b) the listing of the Optioned Shares on the Exchange, if
applicable; and
(c) the receipt from the Optionee of such representations,
agreements and undertakings, including as to future dealings
in the Optioned 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.
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 the Optioned Shares in compliance with
applicable securities laws and for the listing of the Optioned Shares on the
Exchange.
Unless the Board at any time determines otherwise, the Option may be
exercised by the delivery of cash or cheque or other consideration acceptable to
the Company, in an amount equal to the Option Price. The Company may also permit
an Optionee to elect to pay the Option Price by authorizing a third party to
sell Shares (or
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a sufficient portion of such Shares) acquired upon exercise of the Option and
remit to the Company a sufficient portion of the sale proceeds to pay the entire
Option Price and any tax withholding resulting from such exercise.
7.3 Upon the exercise of all or any part of the Option, the Company shall
forthwith cause the registrar and transfer agent of the Company to deliver to
the Optionee or the Optionee's personal representative within a reasonable time
following the receipt by the Company of the Election to Purchase a
certificate(s) representing, in the aggregate, the number of Optioned Shares
specified in the Election to Purchase and in respect of which the Company has
received payment.
8. Nothing herein contained shall obligate the Optionee to purchase any
Optioned Shares except those Optioned Shares in respect of which the Optionee
shall have exercised the Option in the manner hereinbefore provided.
9. The Optionee shall not have any rights as a shareholder of the Company
with respect to the Optioned Shares until the Optionee shall have exercised the
Option in accordance with the provisions of Paragraph 7 hereof and the Plan
(including tendering of payment in full of the Option Price of the Optioned
Shares in respect of which the Option is being exercised) and the issuance of
Optioned Shares by the Company.
10.1 If the Optionee is a resident in the United States of America, the
Optionee recognizes and understands that Optioned Shares issued upon the
exercise of the Option will be acquired in reliance upon an exemption from the
registration requirements of the Securities Act of 1933, as amended (the "1933
ACT") pursuant to Section 3(b) and Rule 701 thereof, and hereby acknowledges and
represents that:
(a) The Optionee believes that the Optionee, either alone or with
the assistance of the Optionee's professional advisors, has
such knowledge and experience in financial and business
matters that the Optionee is capable of evaluating the merits
and risks of the Optionee's purchase of the Optioned Shares;
(b) The Optionee has sufficient financial resources to be able to
bear the risk of the Optionee's investment in the Optioned
Shares;
(c) The Optionee will be acquiring the Optioned Shares for
investment purposes only and without a current intention of
reselling or redistributing the same upon the occurrence or
non-occurrence of a predetermined event and understands that
the Optioned Shares being issued to him have not been, and may
not ever be, registered under the 1933 Act and, therefore,
cannot be sold unless subsequently registered under the 1933
Act or an exemption from registration is available;
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(d) The Optionee has either spoken or met with, or been given
reasonable opportunity to speak with or meet with,
representatives of the Company for the purpose of asking
questions of, and receiving answers and information from, such
representatives concerning the undersigned's investment in the
Optioned Shares.
(e) The Optionee understands that the Company will rely upon the
representations set forth herein to claim exempt status under
the 1933 Act.
10.2 Certificates representing Optioned Shares issued upon exercise of the
Option by an Optionee who is a resident of the United States shall have endorsed
thereon the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED,
(THE "SECURITIES ACT") OR STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT
OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS OR (D) PURSUANT TO ANOTHER EXEMPTION
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, AS EVIDENCED BY AN OPINION OF COUNSEL OF RECOGNIZED
STANDING IN FORM ACCEPTABLE TO THE COMPANY."
10.3 For employees of a U.S. Subsidiary, this Option is intended to
qualify as an Incentive Stock Option to the extent permitted by Section 422 of
the Code. If any portion of this Option fails to qualify as an Incentive Stock
Option under Section 422 of the Code, such portion will constitute a
Nonqualified Stock Option. To the extent that this Option constitutes an
Incentive Stock Option, the following additional terms shall apply:
(a) OPTION PRICE: The Option Price will be at least 100% of such
Option's Market Price, determined as of February 4, 1998,
being the date of amendment of the Plan and the effective
grant date (the "ISO Grant Date") of the Incentive Option. If
the Optionee owns more than 10% of the total voting power of
all classes of the Company's Shares, then the Option Price per
Share of an Incentive Stock Option shall not be less than 110%
of the Market Price of the Shares on the ISO Grant Date and
the Option term shall not exceed five years. The determination
of 10% ownership hereunder shall be made in accordance with
Section 422 of the Code.
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(b) ISO QUALIFICATION: To the extent that the aggregate fair
market value of the Shares with respect to which this Option
is exercisable for the first time by the Optionee during any
calendar year (under this Option and all other Incentive Stock
Options held by the Optionee) exceeds US$100,000, the excess
portion will be treated as a Nonqualified Stock Option, unless
the United States Internal Revenue Service changes the rules
and regulations governing the US$100,000 limit for Incentive
Stock Options.
(c) TERMINATION: Employment shall not be deemed to continue beyond
the first 30 days of a leave of absence unless the Optionee's
reemployment rights are guaranteed by statute or contract. A
transfer of employment or services between or among the
Company and its subsidiaries shall not be considered a
termination of employment or services.
(d) U.S. TAXATION OF OPTIONS. In order to obtain certain tax
benefits afforded to Incentive Stock Options under Section 422
of the Code, the Optionee must hold the Shares issued upon the
exercise of an Incentive Stock Option for two years after the
ISO Grant Date and one year from the date of exercise. The
Optionee may be subject to the alternative minimum tax at the
time of exercise. The Board may require the Optionee to give
the Company prompt notice of any disposition of Shares
acquired by the exercise of an Incentive Stock Option prior to
the expiration of such holding periods.
10.4 To the extent that the Optionee is, at the time of exercise of the
Option, subject to Section 16 of the Securities Exchange Act of 1934, as amended
(the "1934 ACT") with respect to the Company, then Shares obtained upon the
exercise of the Option by such Optionee may not be sold by such person until six
months after the ISO Grant Date.
10.5 Notwithstanding the foregoing Paragraphs 10.1 and 10.2, if at the
time of exercise of the Option the Company is subject to Section 12(b) or 12(g)
of the 1934 Act and has filed with the Securities and Exchange Commission a
registration statement on Form S-8 covering the issuance of the Optioned Shares,
then the representations set forth in Paragraph 10.1 and the legend set forth in
Paragraph 10.2 shall not apply.
11. Nothing in the Plan or the Option shall confer upon any Optionee any
right to continue in the employ of the Company or any Subsidiary of the Company
or affect in any way the right of the Company or any Subsidiary to terminate the
Optionee's employment at any time; nor shall anything in the Plan or the 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 which the Optionee would normally be retired pursuant
to the provisions of any
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present or future retirement plan of the Company or any Subsidiary, or beyond
the time at which the Optionee would otherwise be retired pursuant to the
provisions of any contract of employment with the Company or any Subsidiary.
12. No director or officer of the Company shall be liable or be held to
account for any action taken or made in good faith under the Plan or the Option
granted pursuant hereto.
13. Time shall be of the essence of this Agreement.
14. This Agreement shall enure to the benefit of and be binding upon the
Company, its successors and assigns, and the Optionee and the Optionee's heirs,
executors, administrators and personal representatives to the extent provided in
Paragraph 5 hereof.
15. Subject to Paragraph 5, this Agreement shall not be assignable or
transferable by the Optionee or the Optionee's heirs, executors, administrators
and personal representatives, and the Option may be exercised only by the
Optionee or the Optionee's heirs, executors, administrators and personal
representatives.
16. If at any time during the continuance of this Agreement the parties
hereto shall deem it necessary or expedient to make any alteration or addition
to this Agreement they may do so by means of a written agreement between them
which shall be supplemental hereto and form part hereof and which shall be
subject to any applicable approval by the requisite regulatory authorities
having jurisdiction.
17. The Optionee, by the execution of this Agreement, shall be deemed to
have (i) accepted the Option described in this Agreement and the Plan, (ii)
acknowledged receipt of a copy of this Agreement and a copy of the Plan and
(iii) read and understood the Agreement and the Plan.
18. Wherever the plural or masculine are used throughout this Agreement,
the same shall be construed as meaning singular or feminine or neuter or the
body politic or corporate where the context of the parties thereto require.
19. Unless otherwise indicated, all dollar amounts referred to in this
Agreement are in Canadian funds.
20. This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
21. This Agreement may be executed in several parts in the same form and
such parts as so executed shall together constitute one original agreement and
such parts, if more than one, shall be read together and construed as if all the
signing parties hereto had executed one copy of this Agreement.
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IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto on the 6th day of April, 1998, with effect as at and from the day and
year first above written.
INTERNATIONAL URANIUM CORPORATION
PER: (C/S)
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SIGNED, SEALED AND DELIVERED )
BY IN THE PRESENCE )
OF: )
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