DEEP WELL OIL & GAS, INC. NON-QUALIFIED STOCK OPTION AGREEMENT
Exhibit
10.26
DEEP
WELL OIL & GAS, INC.
This
NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) is made this 28 day of
November, 2005, by and between Deep Well Oil & Gas, Inc., a Nevada
corporation (the “Corporation”) and _________________., an Alberta Company
(“Optionee”).
Whereas
the Optionee has entered in to a consulting services agreement with a subsidiary
of the Corporation dated July 1, 2005 (“Consulting Agreement”)
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1.
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Amendment
to Existing Agreement
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This
Agreement shall be in addition to the and amend it
accordingly.
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2.
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Grant
of Option
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The
Corporation hereby grants Optionee the option (the “Option”) to purchase
all or any part of an aggregate of 390,000 shares (the “Shares”) of Common
Stock of the Corporation at the exercise price of $0.71 per share
according to the terms and conditions set forth in this Agreement
and in
the Deep Well Oil & Gas, Inc. November 28, 2005 Stock Option Plan (the
“Plan”). The Option will not be treated as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”). The Option is issued under the Plan and is
subject to its terms and conditions. A copy of the Plan will be furnished
upon request of Optionee.
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The
Option shall terminate at the close of business five years from the
date
hereof (the “Option Termination Date”).
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3.
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Vesting
of Option Rights; Transferability
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(A)
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This
Option shall be exercisable, in whole or in part, according to the
following vesting schedule:
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(i)
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130,000
Shares on July 1, 2006,
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(ii)
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130,000
Shares on July 1, 2007,
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(iii)
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130,000
Shares on July 1, 2008,
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subject
to Optionee’s continuing to provide services to the Corporation or any
Subsidiary as an employee, director or consultant, as the case may
be,
provided that the Optionee continues to provide services on such
anniversary date.
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(iv)
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During
the lifetime of the consulting contract with the Optionee, the Option
shall be exercisable only by Optionee and shall not be assignable
or
transferable by Optionee.
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4.
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Exercise
of Option after Death or Termination of Services or
Employment
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Except
as otherwise determined by the Board:
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(A)
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In
the event that an Optionee ceases to provide services to the Corporation
as a result of termination for cause (as such term is defined in
clause
22.3 of the Consulting Agreement), each of the Options held by the
Optionee shall cease to be exercisable after the date of termination
of
services as a consultant.
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(B)
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In
the event that an Optionee ceases to provide services to the Corporation
for any reason other than termination for cause, any vested Option
held by
Optionee may continue to be exercised by the Optionee to and until
the
earlier of:
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(i)
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the
applicable expiration of the Option Period in respect of such Option;
and
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(ii)
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the
period after the date on which Optionee ceases to provide services
to the
Corporation that is permitted by the applicable laws, policies, rules
and
regulations of any stock exchange upon which the Underlying Shares
are
then listed, posted and/or quoted for trading;
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(C)
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Notwithstanding
the above, in no case may the Option be exercised to any extent by
anyone
after the Option Termination Date.
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5.
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Method
of Exercise of Option
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Subject
to the foregoing, the Option may be exercised in whole or in part
from
time to time by serving written notice of exercise on the Corporation
at
its principal office within the Option period. The notice shall state
the
number of Shares as to which the Option is being exercised and shall
be
accompanied by payment of the exercise price. Payment of the exercise
price shall be made;
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(A)
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in
cash (including bank check, personal check or money order payable
to the
Corporation),
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(B)
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with
the approval of the Corporation (which may be given in its sole
discretion), by delivering to the Corporation for cancellation shares
of
the Corporation’s Common Stock already owned by Optionee having a Fair
Market Value (as defined in the Plan) equal to the full exercise
price of
the Shares being acquired,
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(C)
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with
the approval of the Corporation (which may be given in its sole
discretion), by electing to have the Corporation retain from the
number of
Shares to be issued to the Optionee upon the exercise of such Option
Shares having a Fair Market Value on the date of exercise equal to
the
aggregate exercise price payable upon exercise of such
Option;
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(D)
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through
a special sale and remittance procedure pursuant to which Optionee
(or any
other person or persons permitted to exercise the option) shall
concurrently provide irrevocable instructions
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(i)
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to
a Corporation designated brokerage firm to effect the immediate sale
of
the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the
aggregate exercise price payable for the purchased shares plus all
applicable income and employment taxes required to be withheld by
the
Corporation by reason of such exercise and
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(ii)
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to
the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale;
or
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| (E) | by any combination of the methods of payment described above. | |
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6.
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Securities
Law Matters.
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(A)
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Restricted
Securities. The Optionee understands and acknowledges that neither the
Option nor the Shares have been registered under the United States
Securities Act of 1933, as amended (the “Securities Act”), that the Option
has been issued to it in reliance on an exemption from the registration
requirements of the Securities Act, and that the Option and the Shares
are, or will be, as applicable, “restricted securities” as defined in Rule
144 under the Securities Act.
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(B)
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Accredited
Investor. The Optionee represents that it is an “accredited investor”
within the meaning of Rule 501(a) under the Securities
Act.
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(C)
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Restrictions
on Exercise. The Optionee understands and acknowledges that the Option
may be exercised only pursuant to an exemption from the registration
requirements of the Securities Act and applicable state securities
laws,
and that at the time of any proposed exercise, the Corporation may
require
an opinion of counsel or other evidence satisfactory to it to the
effect
that the Shares may be issued pursuant to such exercise without
registration under the Securities Act or applicable state securities
laws.
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(D)
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Resale
Restrictions. The Optionee understands and acknowledges that
notwithstanding anything to the contrary contained in this Agreement,
the
Option and the Shares may be offered, sold, pledged or otherwise
transferred only
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(i)
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to
the Corporation;
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(ii)
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outside
the United States in accordance with Rule 904 of Regulation S under
the
Securities Act and in compliance with applicable Canadian local laws
and
regulations; or
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(iii)
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within
the United States, in a transaction that does not require registration
under the Securities Act or any applicable state securities laws.
In
connection with any proposed sale, pledge or other transfer of the
Option
or the Shares, the Corporation may require an opinion of counsel
or other
evidence satisfactory to it to the effect that the proposed sale,
pledge
or other transfer may be effected without registration under the
Securities Act or applicable state securities laws.
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(E)
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Legend.
The Optionee understands and acknowledges that upon the original
issuance
of the Shares, as applicable, and until such time as the same is
no longer
required under applicable requirements of the Securities Act or state
securities laws, the certificates representing the Shares, and all
certificates issued in exchange therefor or in substitution thereof,
shall
bear a legend with respect to the transfer restrictions set forth
above.
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7.
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Miscellaneous
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(A)
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Plan
Provisions Control.
In the event that any provision of the Agreement conflicts with or
is
inconsistent in any respect with the terms of the Plan, the terms
of the
Plan shall control.
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(B)
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No
Rights of Stockholders.
Neither Optionee, Optionee’s legal representative nor a permissible
assignee of this Option shall have any of the rights and privileges
of a
stockholder of the Corporation with respect to the Shares, unless
and
until such Shares have been issued in the name of Optionee, Optionee’s
legal representative or permissible assignee, as
applicable.
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(C)
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No
Right to Employment.
The grant of the Option shall not be construed as giving Optionee
the
right to be retained in the employ of, or as giving a director of
the
Corporation or a Subsidiary (as defined in the Plan) the right to
continue
as a director of the Corporation or a Subsidiary, nor will it affect
in
any way the right of the Corporation or a Subsidiary to terminate
such
employment or position at any time, with or without cause. In addition,
the Corporation or Subsidiary may at any time dismiss Optionee from
employment, or terminate the term of a director of the Corporation
or a
Subsidiary, free from any liability or any claim under the Plan or
the
Agreement. Nothing in the Agreement shall confer on any person any
legal
or equitable right against the Corporation or any Subsidiary, directly
or
indirectly, or give rise to any cause of action at law or in equity
against the Corporation or a Subsidiary. The Option granted hereunder
shall not form any part of the wages or salary of Optionee for purposes
of
severance pay or termination indemnities, irrespective of the reason
for
termination of employment. Under no circumstances shall any person
ceasing
to be an employee of the Corporation or any Subsidiary be entitled
to any
compensation for any loss of any right or benefit under the Agreement
or
Plan which such optionee might otherwise have enjoyed but for termination
of employment, whether such compensation is claimed by way of damages
for
wrongful or unfair dismissal, breach of contract or otherwise. By
participating in the Plan, Optionee shall be deemed to have accepted
all
the conditions of the Plan and the Agreement and the terms and conditions
of any rules and regulations adopted by the Committee and shall be
fully
bound thereby.
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(D)
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Governing
Law.
The validity, construction and effect of the Plan and the Agreement,
and
any rules and regulations relating to the Plan and the Agreement,
shall be
determined in accordance with the internal laws, and not the law
of
conflicts, of the State of Nevada.
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(E)
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Severability.
If any provision of the Agreement is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or would disqualify
the Agreement under any law deemed applicable by the Committee (as
defined
in the Plan), such provision shall be construed or deemed amended
to
conform to applicable laws, or if it cannot be so construed or deemed
amended without, in the determination of the Committee, materially
altering the purpose or intent of the Plan or the Agreement, such
provision shall be stricken as to such jurisdiction or the Agreement,
and
the remainder of the Agreement shall remain in full force and
effect.
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(F)
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No
Trust or Fund Created.
Neither the Plan nor the Agreement shall create or be construed to
create
a trust or separate fund of any kind or a fiduciary relationship
between
the Corporation or any Subsidiary and Optionee or any other
person.
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(G)
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Headings.
Headings are given to the Sections and subsections of the Agreement
solely
as a convenience to facilitate reference. Such headings shall not
be
deemed in any way material or relevant to the construction or
interpretation of the Agreement or any provision
thereof.
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(H)
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Conditions
Precedent to Issuance of Shares;
Repurchase Rights. Shares shall not be issued pursuant to the exercise
of the Option unless such exercise and the issuance and delivery
of the
applicable Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities
Act of
1933, as amended, the Exchange Act of 1934, as amended, the rules
and
regulations promulgated thereunder, the requirements of any applicable
Stock Exchange or the Nasdaq National Market and the corporate laws
of the
state of Nevada. As a condition to the exercise of the purchase price
relating to the Option, the Corporation may require that the person
exercising or paying the purchase price represent and warrant that
the
Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of
counsel
for the Corporation, such a representation and warranty is required
by
law.
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(I)
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Withholding.
In order to comply with all applicable federal, state or provincial
income
tax laws or regulations, the Corporation may take such action as
it deems
appropriate to assure that all applicable federal, state or provincial
payroll, withholding, income or other taxes are withheld or collected
from
Optionee.
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(J)
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Adjustment
to Number of Shares and Exercise Price. Subject to approval if
necessary of any relevant stock exchange, the Board will adjust the
number
of Shares subject to an Option, and the exercise price per Share
payable
upon exercise of an Option, upon the occurrence of any stock dividend,
stock split, reverse stock split, combination of shares, reclassification
of shares, recapitalization or other similar corporate transaction
with
respect to the Shares. Notwithstanding the preceding sentence to
the
contrary, no such adjustment will be made upon the conversion of
any debt
instrument, share of preferred stock or other convertible security
of the
Corporation into Shares.
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(K)
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Review
of Plan. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms
and
provisions thereof. Optionee has reviewed the Plan and this Option
in
their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Option and fully understands all provisions
of the
Option. Optionee hereby agrees to accept as binding, conclusive and
final
all decisions or interpretations of the Board upon any questions
arising
under the Plan or this Option.
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(L)
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Change
of Address. Optionee further agrees to notify the Corporation upon any
change in the residence address indicated
below.
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IN
WITNESS WHEREOF, the Corporation and Optionee have executed this Agreement
as of
the date set forth in the first paragraph.
| DEEP WELL OIL & GAS, INC. | ||
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| By: | ||
| Name: | ||
| Title: | ||
| OPTIONEE | ||
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| Name: | ||
| Address: | ||
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