(SAMPLE AGREEMENT)
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT made effective ________, 2000
BETWEEN:
XXXXXXX.XXX INC., a body corporate, duly incorporated under
the laws of the Province of British Columbia and having its
office located at Suite 505 - 1155 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(hereinafter called the "Company")
OF THE FIRST PART
AND: (NAME OF OPTIONEE)
(hereinafter called the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionee is devoting considerable time and effort to the affairs of
the Company; and
B. The Company is desirous of granting a Stock Option to the Optionee in
order to provide an incentive for his/her to contribute to the advancement of
the Company;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises,
the mutual covenants and agreements herein contained, the parties hereto agree
as follows:
1. The Company hereby gives and grants to the Optionee, upon the terms and
conditions hereinafter contained, the sole and exclusive right and option to
purchase ____fully paid and non-assessable shares of the capital stock of the
Company at a price of $____per share, such option to be exercised in whole or in
part at any time up to ___ years from the date of this Agreement.
2. The Option granted pursuant to this Agreement is subject to the prior
approval of:
a. the Canadian Venture Exchange (the "Exchange"), and
b. the shareholders of the Company (the "Shareholders") if the Optionee is
an insider of the Company (as defined in the Securities Act, S.B.C. 1985,c.83,
as amended)("Insider"),and any amendments to this Agreement are subject to the
prior approval of
c. the Exchange, and
d. the Shareholders if the option as constituted and granted hereunder was
approved by the Shareholders or the Optionee is an Insider at the time of the
amendment. Accordingly, the option granted pursuant to this Agreement and any
amendments hereto may not be exercised prior to the required approvals having
been obtained.
3. The Optionee represents that he/she is an employee or director of the
Company or its subsidiary and the Optionee agrees that in the event the Optionee
ceases to act in his capacity as an employee with the Company or its
wholly-owned subsidiary, all the rights granted to him hereunder as to any of
the shares optioned to him under this Agreement which have not theretofore been
purchased, shall thereupon cease, terminate, and be of no further force and
effect.
a for the purposes of this agreement employees include persons who
the Company considers to be employees, and certain persons who, although in
form are independent contractors, in substance are employees:
i Deductions at Source - A person will be deemed to be
an employee if the person's employer is making
deductions at source (income tax, UIC and CPP).
ii Full time Dependent Contractor - Dependent
contractors generally do not have deductions at
source. However, clearly, in certain circumstances,
the relationship of a dependent contractor to the
person contracting the services in one of employment.
The criteria which is used by courts to determine
whether the nature of the relationship is in
substance an employer\employee relationship is the
"control test": does the person contracting the
contractor exercise control and have the right over
direction over the contractor and his\her work (e.g.
does the employer not only have right to direct what
is done but how it is done). To be considered a full
time dependent contractor, the contractor must meet
the "control test" and work full time for the person
contracting the services (35 - 40 hours per week).
iii Part Time Dependent Contractor - Certain part time
dependent contractors will be considered employees
based on the "control test" set out above but only if
the dependent contractor is obligated by the person
contracting the services to work a set number of
hours per week. This number should be disclosed.
4. In the event of the death of the Optionee during the term of this
option, his personal representative shall be entitled to purchase all or any
part of the optioned shares to which the Optionee would have been entitled
pursuant to the provisions of this Agreement, for a period not exceeding one (1)
year following the date of the death of the Optionee.
5. The option hereunder granted shall be non-transferable and
non-assignable and subject to section 4 hereof, shall be exercisable only by the
Optionee by giving notice in writing addressed to the Company at its registered
office, which notice shall specify therein the number of optioned shares in
respect of which the option is being exercised and shall include payment
therewith, by cash or certified cheque, of the full amount of the purchase price
for the number of shares purchased. Upon such exercise of the option, the
Company shall forthwith cause the Registrar and Transfer Agent of the Company to
deliver to the Optionee, or his agent a Certificate or Certificates in the name
of the Optionee, representing in the aggregate such number of optioned shares as
the Optionee purchases.
6. Nothing herein contained shall obligate the Optionee to purchase or pay
for any optioned shares except those optioned shares in respect of which the
Optionee shall have exercised his option to purchase in the manner hereinbefore
provided.
7. In the event the issued and outstanding shares of the Company are
changed by a stock dividend, subdivision, consolidation, reduction in capital or
otherwise recapitalized or reclassified (whether in connection with a merger or
otherwise but not in connection with any issuance of additional shares for
consideration) this option shall be adjusted (written notice of which adjustment
shall be delivered to the Optionee or as the case may require, his personal
representative at such last known address as may appear on the records of the
Company) as follows:
a. the number and class of shares subject hereto shall then be such as to
permit the Optionee upon the exercise hereof to acquire the same equity in the
Company as he would have acquired if immediately prior to such capital
transaction he had been the holder of that number of shares then under option
but not theretofore purchased and issued hereunder; and
b. the purchase price of each shall then be increased or decreased
proportionately as the case may require in order that the purchase price for the
equity in the Company actually purchased shall be the equivalent of the purchase
price for such equity immediately prior to such capital transaction.
8. If the Company shall be dissolved or amalgamated with another company
into a new company or merged with another company so that such other company is
the surviving corporation, this option shall terminate; PROVIDED HOWEVER that
the Optionee shall have the right between the time of the last required official
action of shareholders and/or directors meetings and the final step consummating
such dissolution, merger or amalgamation to exercise this option in whole or in
part.
9. The Company agrees to furnish the Optionee with not less than thirty
(30) days written notice delivered to such last known address of the Optionee or
his personal representative as may appear on the records of the Company, of the
events contemplated in the last preceding section and of any other contemplated
distribution, rights offering or similar benefit conferred upon the holders of
shares of the Company in order for the Optionee or his personal representative
to determine whether or not to exercise this option in whole or in part.
10. This Agreement shall enure to the benefit of the Optionee and his
heirs, executors and administrators and wherever reference is made to the
Optionee, the same shall be construed to mean his personal legal representative,
wherever the context so requires.
11. The term of this option shall expire on_________, in the event the
Optionee has not provided the Company with notice of intention to exercise the
option.
12. Wherever the singular or masculine are used throughout this Agreement,
the same shall be construed as being the plural or feminine or neuter where the
context so requires.
13. Time shall be of the essence of this Agreement.
14. This option may be terminated by the Company by notice in writing to
the Optionee on the occurrence of either of the following events:
a. if the Optionee engages in any act which constitutes a breach of any
Securities Act having jurisdiction over the Company or any regulation or written
policy statement imposed thereunder; or
b. if the Optionee engages in act which constitutes a breach of any rule,
by-law or written policy of any stock exchange having jurisdiction over the
Company.
15. Termination under section 14 shall be effective at the time of delivery
of a notice of termination to the Optionee at the address for the Optionee first
set out above.
16. Any notice required to be given under this Agreement shall be deemed to
be well and sufficiently given if delivered, telegraphed or mailed by registered
mail to the party to receive such notice at the address of such party first set
out above. Any notice given as aforesaid shall be deemed to have been given if
delivered when delivered, if telegraphed, on the second business day after the
date of telegraphing, or if mailed, on the second business day after the date of
mailing. Either party may from time to time by notice in writing change its
address for the purposes of this section.
17. This option supersedes and takes the place of any prior stock options
between the parties, which options are hereby cancelled and of no force and
effect.
18. For the purposes of Section 55(2)(9) of the Securities Act, S.B.C.
1985, c.83, as amended, the Company hereby declares that the Optionee is under
no requirement to exercise the
option herein granted, in whole or in part, in expectation or as a condition
of the Optionee acting or continuing to act as a Director or Employee of the
Company or its subsidiary as the case may require.
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their respective
hands and seals or corporate seals, as the case may be, both as of the day and
year first above written.
THE CORPORATE SEAL of )
XXXXXXX.XXX INC. was hereunto )
affixed in the presence of: )
) c/s
)
____________________________________________)
)
)
____________________________________________)
SIGNED, SEALED, and DELIVERED )
by _________in the presence of: )
)
)
)
____________________________________________) _________________________
Witness ) (NAME OF OPTIONEE)
)
____________________________________________)
Address )
