Exhibit 2(12)
FORM OF OPTION AGREEMENT
THIS AGREEMENT made as of the th day of ,1998
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BETWEEN:
, an individual resident in California (the
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"Executive")
- and -
DYNAMIC DIGITAL DEPTH INC. (FORMERLY XENOTECH INC.), a body corporate,
having its registered office in the City of Calgary, in the Province of
Alberta (the "Corporation")
DIRECTORS' AND MANAGEMENT STOCK OPTION AGREEMENT
WHEREAS:
A. the Corporation is incorporated under the laws of the Province of Alberta,
having an authorized capital consisting of an unlimited number of Common
Shares and an unlimited number of Preferred Shares, all without nominal or
par value; and
B. the Board of Directors have agreed to grant unto the Executive an option to
purchase an aggregate of____________(________) Common Shares without par
value of its authorized unissued share capital in consideration of the
Executive's ongoing services and contributions to the Corporation; and
C. the granting of such option to the Executive was authorized by the Board of
Directors of the Corporation effective ____________, 1998;
NOW, THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises
and mutual covenants hereinafter set forth, and for other valuable
consideration, the Parties have agreed as follows:
ARTICLE I
DEFINITIONS
1.1 In this Agreement the following terms shall have the following meanings:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Corporation" means Dynamic Digital Depth Inc. and any
successor or continuing corporation resulting from any form of
corporate reorganization.
(c) "Option Shares" means the Shares the Executive is entitled to
purchase under a Share Option.
(d) "Parties" means the Executive and the Corporation,
collectively.
(e) "Share Option" means an option to purchase treasury shares
granted to the Executive pursuant to this Agreement, and
includes any portion of that option.
(f) "Share Option Agreement" means this Agreement and any
novations thereof.
(g) "Expiration Date" means
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(h) "Option Date" in respect of the Share Option means the date of
this Agreement.
(i) "Option Price" means the price per share for each portion of
the Share Option set forth in Clause 2.1 hereof.
(j) "Share" means a Common Share of the Corporation as constituted
at the date hereof.
(k) "Treasury Share" means a theretofore unissued Share which is
purchased directly from the Corporation by or for the account
of the Executive.
(l) "Market Price" means the price at which the Shares are being
offered for upon the Exchange.
(m) "Option Period" means the period commencing upon the Option
Date and expiring upon the Expiration Date.
(n) "Exchange" means the stock exchanges upon which the
Corporation may be listed upon during the Option Period.
1.2 In this Agreement, the masculine gender shall include the feminine
gender and the singular shall include the plural and vice versa
wherever the context requires.
ARTICLE II
SHARE OPTION
2.1 Subject to the Executive receiving a USA work visa, and subject to the
terms and conditions hereinafter set out, the Corporation hereby grants
to the Executive, an irrevocable option to purchase
( ) Shares of the Corporation at a price of CDN $ per
Share which may be exercised on the following basis:
2.2 At 4:30 p.m., Calgary time, on the Expiration Date, the Share Option
shall forthwith expire and terminate and be of no further force or
effect whatsoever as to such of the Option Shares in respect of which
the Share Option hereby granted has not then been exercised.
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ARTICLE III
CURRENCY DURING TERM OF EMPLOYMENT
3.1 If subsequent to the Option Date and prior to the Expiration Date, the
Executive's position as a director, an officer, a consultant to the
Corporation and/or the Corporation's subsidiary, or as an employee of
the Corporation and/or the Corporation's subsidiary, as the case may
be, is terminated by reason of the death or disability of the
Executive, the Share Option may be exercised during the period expiring
the earlier of the Expiration Date or one year after such date of death
or the date of termination of his employment by reason of disability.
In the event of the Executive's death or disability, the rights of the
Executive under the Share Option may be exercised by the person or
persons to whom the Executive's rights under the Share Option shall
pass by will or applicable law or, if no such person has such right, by
the Executive's executors or administrators, subject to the time
limitations as aforesaid.
3.2 If subsequent to the Option Date and prior to the Expiration Date, the
Executive's position as a director, an officer, a consultant to the
Corporation and/or the Corporation's subsidiary, or an employee of the
Corporation and/or the Corporation's subsidiary, as the case may be, is
terminated for any reason other than the death or disability of the
Executive, the Share Option may be exercised during the ninety (90) day
period following the date on which the Executive's position is
terminated, and upon the expiry of such ninety (90) day period, the
Share Option shall expire.
ARTICLE IV
MATERIAL CHANGE
4.1 In the event that, prior to the Expiration Date or exercise in full of
the Share Option, the outstanding share capital of the Corporation
shall be subdivided or consolidated into a greater or lesser number of
Shares, or, in the event of the payment of a stock dividend by the
Corporation, or in the event that all of the shareholders of the
Corporation are granted the right to purchase additional Shares of the
Corporation, the number and price of Option Shares remaining subject to
the Share Option hereunder shall be increased or reduced accordingly,
as the case may be.
4.2 If, prior to the Expiration Date or exercise in full of the Share
Option granted hereby, the Corporation shall, at any time arrange with
or merge into another corporation, the Executive will thereafter
receive, upon the exercise of the Share Option, the securities or
properties to which a holder of the number of shares then deliverable
upon the exercise of the Share Option would have been entitled upon
such arrangement or merger, and the Corporation will take steps in
connection with such arrangement or merger as may be necessary to
assure that the provisions hereof shall thereafter be applicable, in
relation to any securities or property thereafter deliverable upon the
exercise of the Option granted hereby. A sale of all or substantially
all of the assets of the Corporation for consideration, (apart from the
assumption of obligations), consisting primarily of securities shall be
deemed to be an arrangement or merger for the foregoing purposes.
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ARTICLE V
ADJUSTMENT FOR RIGHTS ISSUE
5.1 If, subsequent to the Option Date and prior to the Expiration Date,
(a) Shares are offered pro rata for subscription by the
shareholders of the Corporation, generally by way of a rights
issue; and
(b) the price at which each Share is so offered is less than the
Market Price in force on the date of public announcement of
the right issue,
the subscription price applicable to each Share then comprised in the
Option Period shall be reduced by the value of the theoretical rights
entitlement per cum rights share and that theoretical rights
entitlement per cum rights share shall be taken to have a value
calculated by applying the formula:
P-(S+D)
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N+1
where:
P = the weighted average price of fully paid Shares sold in the
ordinary course of trading on the Exchange during the five
business days after public announcement of the rights issue;
S = the aggregate amount per share payable for each new share
under the rights issue;
D = any dividends due but not yet paid on existing Shares which
will not be payable in respect of new Shares issued under the
rights issue; and
N = the number of cum rights Shares required to be held to receive
a right to one new Share under the rights issue.
ARTICLE VI
ADJUSTMENT FOR BONDS ISSUE
6.1 ADDITIONAL SHARES
If, during the Option Period, Shares are issued pro rata to the
shareholders of the Corporation generally by way of bonus issue
involving capitalization of reserves or distributable profits, the
Executive shall be entitled, upon later exercise of the Share Option
Period as to some or all of the Shares comprised in it, to receive in
addition to the Option Shares an allotment of so many additional shares
as would have been issued to a shareholder of the Corporation who, on
the date for determining entitlements under the bonus issue, held
Shares equal in number to the Option Shares.
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6.2 USE OF SHARE PREMIUM RESERVE
The Corporation's Share Premium reserve shall be applied in paying up
any such additional Shares at the time of allotment of them.
ARTICLE VII
RESERVATION OF TREASURY SHARES
7.1 The Corporation shall at all times during the term of this Agreement,
reserve and keep available a sufficient number of Treasury Shares to
satisfy the requirements hereof.
ARTICLE VIII
RESTRICTION ON ASSIGNMENT
8.1 The Share Option granted hereby is, insofar as the Executive is
concerned, personal and non-assignable and neither this Agreement nor
any rights in regard thereto shall be transferable or assignable except
upon the death of the Executive pursuant to Clause 3.1 hereof.
ARTICLE IX
EXERCISE OF THE SHARE OPTION
9.1 The Share Option may be exercised by the Executive in accordance with
the provisions hereof in whole or in part, from time to time, by
delivery of written notice of such exercise and by tendering the
payment therefor in cash or by certified cheque to the Corporation at
its principal and registered office in the City of Calgary, in the
Province of Alberta. Such notice shall state the number of the Option
Shares with respect to which the Share Option is then being exercised.
The Share Option shall be deemed for all purposes to have been
exercised to the extent stated in such notice upon delivery of the
notice and a tender of payment in full, notwithstanding any delay in
the issuance and delivery of the certificates for the Shares so
purchased.
ARTICLE X
RIGHTS OF THE EXECUTIVE PRIOR TO EXERCISE DATE
10.1 The Share Option herein granted shall not entitle the Executive to any
rights whatsoever as a shareholder of the Corporation with respect to
any Shares subject to the Share Option until it has been exercised in
accordance with Clause 9.1 and Option Shares have been issued as fully
paid and non-assessable.
ARTICLE XI
FURTHER ASSURANCES
11.1 The Parties covenant that they shall and will from time to time and at
all times hereafter do and perform all such acts and things and execute
all such additional documents as may be required to give effect to the
terms and intention of this Agreement.
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ARTICLE XII
INTERPRETATION
12.1 It is understood and agreed by the Parties that questions may arise as
to the interpretation, construction or enforcement of this Agreement
and the parties are desirous of having the Board determine any such
question of interpretation, construction or enforcement. It is
therefore understood and agreed by and between the Parties that any
question arising under the terms of this Agreement as to
interpretation, construction or enforcement shall be referred to the
Board and their majority decision shall be final and binding on both of
the Parties.
ARTICLE XIII
ENTIRE AGREEMENT
13.1 This Agreement supersedes all other agreements, documents, writings and
verbal understandings among the parties relating to the subject matter
hereof and represents the entire agreement between the parties relating
to the subject matter hereof.
ARTICLE XIV
ENUREMENT
14.1 Subject to the other provisions hereof, this Agreement shall enure to
the benefit of and be binding upon the Parties and their respective
heirs, executors, administrators, successors and permitted assigns.
14.2 This Agreement shall continue to constitute a binding obligation of the
Corporation notwithstanding any change of control of its voting
securities during the term hereof.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and
year first above written.
SIGNED, SEALED AND DELIVERED )
in the presence of: )
)
)
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Witness )
DYNAMIC DIGITAL DEPTH INC.
Per:
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Per:
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