EMPLOYEE'S OPTION AGREEMENT
THIS AGREEMENT IS MADE AS OF THE _____ DAY OF
_______________, 200__ (THE "AGREEMENT DATE").
BETWEEN:
MDI Technologies, Inc., a company duly incorporated under the
laws of the State of Delaware, having a place of business at
000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000,
XXX.
(the "Company")
and
_________________________________________________[Name of
Employee], of
_________________________________________________
_________________________________________________[address]
(the "Employee").
WHEREAS, the Company would like to grant to the Employee an
option to purchase common Shares of the Company on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, THIS AGREEMENT WITNESSES that in
consideration of the promise and of the covenants and
agreements herein contained the parties hereto covenant and
agree (the "Agreement") as follows:
1. From and including the Agreement Date through to and
including the day four years from the Agreement Date (the
"Termination Date"), the Employee shall have and be entitled
to and the Company hereby grants to the Employee an option
(the "Option") to purchase all or any portion of
_______________ common shares without par value in the
capital stock of the Company from the treasury at the price
of US$__________ per share.
2. Subject to paragraph 3 hereof, the right to take up
shares pursuant to this Option shall vest with the Employee
as follows:
(a) the right to take up one-third (1/3) of the shares
shall vest on a date that is six months after the Agreement
Date;
(b) the right to take up the second one-third (1/3) of
the shares shall vest on a date that is twelve months after
the Agreement Date; and
(c) the right to take up the final one-third (1/3) of
the shares shall vest on a date that is eighteen months after
the Agreement Date;
3. The Option shall immediately vest such that the entire
Option will be immediately exercisable by the Employee if:
(a) there is a merger or amalgamation of the Company
with another corporation; or
(b) there is any transaction whereby all of the
Company's issued and outstanding shares are acquired by or
become subject to a takeover bid by another corporation
4. Subject to the terms of this Agreement, the right to take
up shares pursuant to the Option is exercisable by the
Employee giving notice in writing to the Company accompanied
by a cheque certified if so required by the Company, in
favour of the Company for the full amount of the purchase
price of the shares then being purchased, provided such
written notice and payment are received by the Company prior
to 5:00 p.m. local time on the Termination Date at its
address first above written. The Company covenants and
agrees to issue and deliver to the Employee, forthwith
thereafter, a share certificate for the number of shares so
purchased registered in the Employee's name.
5. This is an Option only and does not impose upon the
Employee any obligation to take up and pay for any of the
shares under Option.
6. The Option shall not be assignable or transferable by the
Employee otherwise than by Will or the law if intestacy and
the Option may be exercised during the lifetime of the
Employee only by the Employee himself or herself, as the case
may be.
7. This Option shall terminate 30 days after the Employee
ceases to be an employee of the Company save and except where
the Employee ceases to be an employee of the Company as a
result of:
(a) termination for cause; or
(b) by order of the Executive Director of the British
Columbia Securities Commission, TSX Venture Exchange or any
securities regulatory body having jurisdiction to so order
in which case the option shall terminate on the date the
Employee ceases to be an employee of the Company.
8. If the Employee should die while still an employee of the
Company, the Option may then be exercised by the Employee's
legal heirs or personal representatives to the same extent as
if the Employee were alive and an employee of the Company for
a period of one year after the Employee's death but only for
such shares as the Employee was entitled to purchase pursuant
to the Option at the date of the Employee's death.
9. This agreement is made pursuant to the Company's Stock
Option Plan (as amended) which was approved by the TSX
Venture Exchange (formerly the Canadian Venture Exchange) on
August 20, 2001. Any amendments hereto are subject to the
approval of the TSX Venture Exchange and if the Employee is
an insider (as that term is defined in the securities Act.
R.S.B.C. 1996 c. 418) of the Company, by the members of the
Company, as well as by the TSX Venture Exchange. In the
event such approvals are not obtained within 60 days of the
Agreement Date, this Agreement shall be null and void and of
no further force and effect.
10. Any shares of the Company which are issued pursuant to
the exercise of the Option shall bear the following legends:
(A) Unless the period stated in the legend has
expired:
"WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE
EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES
LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH
THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN
CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL
- [insert a date that is four months and a day after the date
of grant of the Option}"
AND
(B):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"), OR ANY APPLICABLE STATE
SECURITIES LAW, AND MAY NOT BE DISTRIBUTED, ASSIGNED,
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED
OF EXCEPT (a) TO THE COMPANY, (b) OUTSIDE THE UNITED STATES
IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE 1933
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAW,
(c) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 OR 144A
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS, OR (d) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE
STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF
SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED
TO THE COMPANY AN OPINION OF COUNSEL, OF RECOGNIZED STANDING,
OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO
THE COMPANY. HEDGING TRANSACTIONS INVOLVING THE SECURITIES
REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE 1933 ACT."
11. 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 the
option to the Employee and the exercise price thereof shall
be adjusted in accordance with such subdivision,
consolidation or other change in the share capital of the
Company.
12. In the event that the Company undertakes an
amalgamation, merger, reorganization or other arrangement
while any portion of the Option is outstanding, the number of
shares under option to the Employee and the exercise price
thereof shall be adjusted in accordance with such
amalgamation, merger, reorganization or other arrangement.
13. The Company hereby covenants and agrees to and with the
Employee that it will reserve in its treasury sufficient
shares to permit the issuance and allotment of shares to the
Employee in the event the Employee exercises the Option.
14. The Company hereby represents that as of the Agreement
date the Employee is a bona fide employee of either the
Company, a subsidiary of the Company or a management company
providing services to the Company (other than investor
relations).
IN WITNESS WHEREOF, the parties have hereunto caused these
presents to be executed effective as of the day and year
first above written.
MDI TECHNOLOGIES, INC.
Per:
______________________________
Authorized Signatory
SIGNED, SEALED & DELIVERED
By____________________________[Employee]
in the presence of:
______________________________
Name of Witness
Address:______________________
______________________________
Occupation:___________________
