<PAGE> 1
As filed with the Securities and Exchange Commission on September 1, 1999__
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
GENETRONICS BIOMEDICAL LTD.
(Exact Name Of Registrant As Specified In Its Charter)
BRITISH COLUMBIA, CANADA 33-002-4450
(State or Other Jurisdiction of (I.R.S. Employer Identification No.
Incorporation or Organization) for Genetronics, Inc.)
------------------
11199 SORRENTO VALLEY ROAD
SAN DIEGO, CA 92121-1334
(619) 597-6006
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
------------------
1995 STOCK OPTION PLAN
1997 STOCK OPTION PLAN
SHARES ISSUABLE UPON EXERCISE OF CERTAIN
OUTSTANDING STOCK OPTIONS GRANTED OUTSIDE THE OPTION PLANS
(Full Title Of The Plan)
LOIS J. CRANDELL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
GENETRONICS BIOMEDICAL LTD.
11199 SORRENTO VALLEY ROAD
SAN DIEGO, CA 92121-1334
(619) 597-6006
(Name, Address, Including Zip Code, And Telephone Number, Including Area Code,
Of Agent For Service)
---------
COPIES TO:
M. WAINWRIGHT FISHBURN, JR., ESQ.
COOLEY GODWARD LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CA 92121-2128
<PAGE> 2
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par 5,550,219 $.83-$3.78 $13,362,029 $3,715.00
value
=========================================================================================================
</TABLE>
================================================================================
(1) Includes 1,593,400 shares issuable upon the exercise of options granted
under the 1995 Stock Option Plan of Genetronics Biomedical Ltd. (the
"Company" or the "Registrant"), 2,677,736 shares issuable under the
Company's 1997 Stock Option Plan and 125,000 shares issuable upon the
exercise of options granted outside of either stock option plan.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rules 457(c) and (h)(1) of the Securities
Act of 1933, as amended (the "Securities Act"). The price per share and
aggregate offering price are calculated based upon (a) the weighted
average of $.83 to $3.78, the exercise price for 4,396,136 shares
subject to outstanding options granted under the Company's 1995 Stock
Option Plan, 1997 Stock Option Plan (the "Plans") and granted outside
the Plans, and (b) the average of the high and low prices of Company's
Common Stock on August 25, 1999 ($2.53) as reported on the American
Stock Exchange for the remaining 1,154,083 shares subject to the 1997
Stock Option Plan.
================================================================================
<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated by reference into this Registration
Statement:
(a) The Company's latest annual report on Form 10-K filed pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") containing audited financial statements for the Company's latest fiscal
year.
(b) The Company's quarterly report on Form 10-Q for the period
ended June 30, 1999, filed pursuant to Section 13(a) or 15(d) of the Exchange
Act.
(c) All other reports filed pursuant to Sections 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the annual report
referred to above.
(d) A description of the Company's Common Stock which is contained
in the Form 10-K, including any amendment or reports filed for the purpose of
updating such description.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part of this
registration statement from the date of the filing of such reports and
documents.
DESCRIPTION OF SECURITIES
Not applicable.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
As specified in the Company's Articles of Incorporation, subject to the
provisions of the Company Act of the Province of British Columbia (the "Company
Act"), the Directors shall cause the Company to indemnify a Director or a former
Director of the Company and the Directors may cause the Company to indemnify a
Director or former Director of a corporation of which the Company is or was a
member and the heirs and personal representatives of any such person against all
costs, charges and expenses, including an amount paid to settle an action or
satisfy a judgment, actually and reasonably incurred by him or them including an
amount paid to settle an action or satisfy a judgment in a civil, criminal or
administrative action or proceeding to which he is or they are made a party by
reason of his being or having been a Director of the Company or a Director of
such corporation, including any action brought by the Company or any such
corporation. Each Director of the Company on being elected or appointed shall be
deemed to have contracted with the Company on the terms of the foregoing
indemnity.
Additionally, the Directors may cause the Company to indemnify any
officer, employee or agent of the Company, or of a corporation of which the
Company is or was a member, and his heirs and personal representatives, against
all costs, charges and expenses whatsoever incurred by him or them and resulting
from his acting as an officer, employee or agent of the Company or such
corporation. The Company shall also indemnify the Secretary and any Assistant
Secretary of the Company if he is not a full-time employee of the Company and
notwithstanding that he may also be a Director and his respective heirs and
legal representatives against all costs, charges and expenses whatsoever
incurred by him or them and arising out of the functions assigned to the
Secretary by the Company Act or the Articles and each such Secretary and
Assistant Secretary shall, on being appointed, be deemed to have contracted with
the Company on the terms of the foregoing indemnity.
<PAGE> 4
The Directors may cause the Company to purchase and maintain insurance
for the benefit of any person who is or was serving as a Director, officer,
employee or agent of the Company or as a director, officer, employee or agent of
any corporation of which the Company is or was a shareholder and his heirs or
personal representatives against any liability incurred by him as such director,
officer, employee or agent.
EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Catalyst Corporate Finance Lawyers.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Catalyst Corporate Finance Lawyers is contained in
Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney is contained on the signature pages.
99.1 1995 Stock Option Plan.
99.2 Forms of Incentive and Nonstatutory Stock Option Agreements
used in connection with the 1995 Stock Option Plan.
99.3 1997 Stock Option Plan.
99.4 Forms of Incentive and Nonstatutory Stock Option Agreements
used in connection with the 1997 Stock Option Plan.
99.5 Form of Stock Option Agreement used in connection with an
option grant outside either of the stock option plans.
<PAGE> 5
UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference herein.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on September 1, 1999.
GENETRONICS BIOMEDICAL LTD
By /s/ LOIS J. CRANDELL
----------------------------------------
Lois J. Crandell,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints LOIS J. CRANDELL, GUNTER HOFMANN and
MARTIN NASH and each or any one of them, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ GUNTER HOFMANN, PH.D. Chairman of the Board and Chief September 1, 1999
- ------------------------------------
Gunter Hofmann, Ph.D. Scientific Officer
/s/ LOIS J. CRANDELL President, Chief Executive September 1, 1999
- ------------------------------------
Lois J. Crandell Officer and Director
/s/ MARTIN NASH Chief Financial Officer and September 1, 1999
- ------------------------------------
Martin Nash Director
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ JAMES L. HEPPELL Director September 1, 1999
- ------------------------------------
James L. Heppell
/s/ GORDON POLITESKI Director September 1, 1999
- ------------------------------------
Gordon Politeski
/s/ WAYNE SCHNARR, PH.D. Director September 1, 1999
- ------------------------------------
Wayne Schnarr, Ph.D.
/s/ SUZANNE L. WOODS Director September 1, 1999
- -----------------------------
Suzanne L. Wood
/s/ STAN YAKATAN Director September 1, 1999
- ------------------------------------
Stan Yakatan
</TABLE>
<PAGE> 8
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Catalyst Corporate Finance Lawyers.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Catalyst Corporate Finance Lawyers is contained in
Exhibit 5.1 to this Registration Statement.
24.1 Power of Attorney is contained on the signature pages.
99.1 1995 Stock Option Plan.
99.2 Forms of Incentive and Nonstatutory Stock Option Agreements
used in connection with the 1995 Stock Option Plan.
99.3 1997 Stock Option Plan.
99.4 Forms of Incentive and Nonstatutory Stock Option Agreements
used in connection with the 1997 Stock Option Plan.
99.5 Form of Stock Option Agreement used in connection with an
option grant outside of either of the stock option plans.
<PAGE> 1
EXHIBIT 5.1
[CATALYST CORPORATE FINANCE LAWYERS LETTERHEAD]
September 1, 1999
Genetronics Biomedical Ltd.
11199 Sorrento Valley Road
San Diego, CA USA
92121-1334
Dear Sirs:
GENETRONICS BIOMEDICAL LTD. (THE "COMPANY")
We are Canadian counsel for the Company, a corporation incorporated pursuant to
the laws of the province of British Columbia. We write to provide our opinion in
connection with the filing of the Registration Statement on Form S-8 of the
Company registering the common shares (the "Common Shares") of the Company
currently issuable pursuant to the exercise of stock options granted by the
Company.
We have made or caused to be made such investigations and examined originals or
copies certified or otherwise identified to our satisfaction, of such records
and corporate proceedings, certificates and other documents that we have
considered relevant to this opinion. We have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity to authentic original documents and of all documents
submitted to us as certified or confirmed copies or facsimiles. We have assumed
that the Common Shares to be issued by the Company will not exceed the
authorized share capital of the Company at the time of issuance.
The opinions expressed herein are limited to the application of the laws of the
Province of British Columbia and the laws of Canada applicable therein, in
effect on the date hereof.
This opinion is given to you as of the date hereof and we disclaim any
obligation to advise you of any change after the date hereof in any matter set
forth herein, and we express no opinion as the effect of any subsequent course
of dealing or conduct between the parties referred to herein.
Based on and subject to the foregoing, we are of the opinion that the Common
Shares have been duly authorized and that the Common Shares will be validly
issued, fully paid and non-assessable upon the exercise of the stock options in
accordance with the terms thereof.
James L. Heppell a director of the Company, is a partner in the law firm of
Catalyst Corporate Finance Lawyers. Mr. Heppell owns, directly or indirectly,
20,500 common shares of the Company.
This opinion may be delivered only to the Securities and Exchange Commission
(the "SEC") and is solely for the benefit of the SEC in connection with the
filing of the Registration Statement on Form S-8 of the Company. This opinion
may not be relied upon by the SEC for any other purpose or by any other person,
firm, or corporation for any purpose without the prior written consent of this
firm.
Yours truly,
CATALYST
/s/ CATALYST
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement Form
S-8 pertaining to the 1995 Stock Option Plan, the 1997 Stock Option Plan and
shares issuable upon exercise of certain outstanding stock options granted
outside the option plans of Genetronics Biomedical Ltd. of our report dated May
3, 1999 [except for note 16 which is as of June 10, 1999], with respect to the
consolidated financial statements of Genetronics Biomedical Ltd. included in its
Annual Report on Form 10-K for the year ended March 31, 1999.
/s/ ERNST & YOUNG LLP
Vancouver, Canada Chartered Accountants
August 31, 1999
<PAGE> 1
EXHIBIT 99.1
- 1 -
GENETRONICS BIOMEDICAL LTD.
AMENDED 1995 STOCK OPTION PLAN
1. INTERPRETATION
1 DEFINED TERMS - For the purposes of this Plan, the following terms shall
have the following meanings:
(a) "AFFILIATE" means a Parent Corporation or a Subsidiary
Corporation of a corporation;
(b) "ASSOCIATE" means, where used to indicate a relationship with
any Person,
(i) any relative of that Person,
(ii) any person of the opposite sex to whom that Person is
married or with whom that Person is living in a conjugal
relationship outside marriage,
(iii) any relative of a Person mentioned in clause (ii) who
has the same home as that Person,
(iv) any partner of that Person,
(v) any trust or estate in which such Person has a
substantial beneficial interest or as to which such
Person serves as trustee or in a similar capacity, or
(vi) any corporation of which such Person beneficially owns,
directly or indirectly, voting securities carrying more
than 10 percent of the voting rights attached to all
outstanding voting securities of the corporation;
(c) "BENEFICIAL OWNER" of a security includes any Person who,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has voting power over
the security or the power to dispose or direct the disposition
of the security, and any Person who uses a trust or other
arrangement with the purpose or effect of divesting such Person
of beneficial ownership as part of a plan to evade the reporting
requirements of section 13 of the Exchange
<PAGE> 2
- 2 -
Act shall be deemed to be the Beneficial Owner of the security;
(d) "BOARD" means the Board of Directors of Genetronics Biomedical
Ltd.;
(e) "CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time;
(f) "COMMITTEE" means a committee of the Board appointed in
accordance with this Plan, or if no such committee is appointed,
the Board itself;
(g) "COMPANY" means GENETRONICS BIOMEDICAL LTD.;
(h) "DATE OF GRANT" means the date on which a grant of an Option is
effective;
(j) "DIRECT OR INDIRECT OWNERSHIP" of securities by a Person is
calculated in accordance with the following rules:
(i) the Person shall be deemed to own stock owned, directly
or indirectly, by or for his brothers and sisters
(including half-brothers and half-sisters), spouse,
ancestors and lineal descendants, and
(ii) stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust, shall be
deemed to be owned proportionately by or for its
shareholders, partners or beneficiaries;
(j) "DISABILITY" means a medically determinable physical or mental
impairment which causes an individual to be unable to engage in
any substantial gainful activity, as determined by the
Committee;
(k) "DISINTERESTED PERSON" means a director who qualifies as a
"Disinterested Person" as defined in subclause
240.16b-3(c)(2)(i) of Title 17 of the Code of Federal
Regulations of the United States ("CFR"); meaning a director who
has not been granted or awarded equity securities pursuant to
the Plan or any other plan of the Company or its Affiliates for
one year prior to the initiation of his service as an
administrator of the
<PAGE> 3
- 3 -
Plan, other than securities received pursuant to an annual
retainer fee;
(l) "DISPOSITION" includes a sale, exchange, gift, or transfer of
legal title, but does not include a pledge, hypothecation,
transfer from a decedent to an estate, transfer by bequest or
inheritance, or the other excepted circumstances referred to in
section 424(c) of the Code;
(m) "EFFECTIVE DATE" means the effective date of this Plan, which is
June 7, 1995;
(n) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended;
(o) "FAIR MARKET VALUE" means:
(i) where the Shares are listed for trading on a stock
exchange or over the counter market, the closing price
of the Shares on such stock exchange or over the counter
market as may be selected for such purpose by the
Committee, or
(ii) where the Shares are not listed for trading on a stock
exchange or over the counter market, the value which is
determined by the Committee to be the fair value of the
Shares at the Date of Grant, taking into consideration
all factors that the Committee deems appropriate,
including, without limitation, recent sale and offer
prices of the Shares in private transactions negotiated
at arm's length, and in any event consistent with Rule
260.140.50 of the California Code of Regulations, Title
10, Chapter 3, Subchapter 2;
(p) "GUARDIAN" means the guardian, if any, appointed for an
Optionee;
(q) "ISO" means an Option granted to an employee of the Company or
an Affiliate of the Company that qualifies as an "incentive
stock option" for purposes of section 422 of the Code and is
therefore subject to favourable tax treatment under the Code;
<PAGE> 4
- 4 -
(r) "ISO OPTIONEE" means an Optionee to whom an ISO has been
granted;
(s) "MODIFICATION" means any change in the terms of an Option which
gives the Optionee additional benefits under the Option within
the meaning of section 424(h) of the Code, but such change shall
not include a change in the terms of an Option:
(i) in the case of an Option not immediately exercisable in
full, to accelerate the time within which the Option may
be exercised, or
(ii) attributable to the issuance or assumption of an Option
by reason of a corporate merger, consolidation,
acquisition of property or stock, separation,
reorganization or liquidation if the new Option or
assumption of the old Option does not give the Optionee
additional benefits which he did not have under the old
Option;
(t) "NON-ISO" means an Option that is not an "incentive stock
option" for purposes of section 422 of the Code, and is
therefore not subject to favourable tax treatment under the
Code;
(u) "NON-ISO OPTIONEE" means an Optionee to whom a Non-ISO has been
granted;
(v) "OPTION" means an option to purchase Shares granted pursuant to
the terms of this Plan;
(w) "OPTION AGREEMENT" means a written agreement between an Optionee
and the Company, specifying the terms of the Option being
granted to the Optionee under the Plan;
(x) "OPTION PRICE" means the price at which an Option is exercisable
to purchase Shares;
(y) "OPTIONEE" means a person to whom an Option has been granted;
(z) "PARENT CORPORATION" means any corporation in an unbroken chain
of corporations ending with Genetronics Biomedical Ltd. if, at
the Date of Grant, each corporation other than Genetronics
Biomedical Ltd. owns
<PAGE> 5
- 5 -
stock possessing 50 percent or more of the total combined voting
power of all classes of stock in one of the other corporations
in such chain;
(aa) "PERSON" means a natural person, company, government, or
political subdivision or agency of a government; and where two
or more Persons act as a partnership, limited partnership,
syndicate or other group for the purpose of acquiring, holding
or disposing of securities of an issuer, such syndicate or group
shall be deemed to be a Person;
(bb) "PLAN" means this Stock Option Plan of the Company;
(cc) "QUALIFIED SUCCESSOR" means a person who is entitled to
ownership of an Option upon the death of an Optionee, pursuant
to a will or the applicable laws of descent and distribution
upon death;
(dd) "SHARES" means the common shares without par value in the
capital of Genetronics Biomedical Ltd.;
(ee) "SUBSIDIARY CORPORATION" means any corporation in an unbroken
chain of corporations beginning with Genetronics Biomedical Ltd.
if, at the Date of Grant, each of the corporations other than
the last corporation owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain;
(ff) "TERM" means the period of time during which an Option is
exercisable; and
(gg) "TERMINATING EVENT" means:
(i) the dissolution or liquidation of the Company,
(ii) a merger or consolidation of the Company with one or
more corporations as a result of which, immediately
following such merger or consolidation, the shareholders
of the Company as a group will hold less than a majority
of the outstanding capital stock of the surviving
corporation,
<PAGE> 6
- 6 -
(iii) the sale or other disposition of all or substantially
all of the assets of the Company,
(iv) the occurrence of an event whereby any Person or entity
becomes the Beneficial Owner of Shares representing 50%
or more of the combined voting power of the voting
securities of the Company, or
(v) a material change in the capital structure of the
Company that is deemed to be a Terminating Event by
virtue of the last sentence of Section 11.1 of this Plan
or by virtue of Section 11.4 of this Plan.
2. STATEMENT OF PURPOSE
1 PRINCIPAL PURPOSES - The principal purposes of the Plan are to provide
the Company with the advantages of the incentive inherent in stock ownership on
the part of employees, officers, directors, and consultants responsible for the
continued success of the Company; to create in such individuals a proprietary
interest in, and a greater concern for, the welfare and success of the Company;
to encourage such individuals to remain with the Company; and to attract new
employees, officers, directors and consultants to the Company.
2 ISOS AND NON-ISOS - Under this Plan, the Company may grant either ISOs
or Non-ISOs. Each ISO granted hereunder is intended to constitute an "incentive
stock option," for the purposes of section 422 of the Code, and this Plan and
each such ISO is intended to comply with all of the requirements of Section 422
of the Code and of all other provisions of the Code applicable to incentive
stock options and to plans issuing the same. Each Non-ISO granted hereunder is
intended to constitute an Option that is not an "incentive stock option" for the
purposes of section 422 of the Code, and that does not comply with the
requirements of Section 422 of the Code.
3 BENEFIT TO SHAREHOLDERS - The Plan is expected to benefit shareholders
by enabling the Company to attract and retain personnel of the highest caliber
by offering them an opportunity to share in any increase in value of the Shares
resulting from their efforts.
<PAGE> 7
- 7 -
3. ADMINISTRATION
1 BOARD OR COMMITTEE - The Plan shall be administered by the Board or by a
committee of the Board appointed in accordance with Section 3.2 or 3.4(b) below.
2 APPOINTMENT OF COMMITTEE - The Board may at any time appoint a
Committee, consisting of not less than two of its members, to administer the
Plan on behalf of the Board in accordance with such terms and conditions as the
Board may prescribe, consistent with this Plan. Once appointed, the Committee
shall continue to serve until otherwise directed by the Board. From time to
time, the Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and appoint new members in their
place, fill vacancies however caused, or remove all members of the Committee and
thereafter directly administer the Plan.
3 QUORUM AND VOTING - A majority of the members of the Committee shall
constitute a quorum, and, subject to the limitations in this Section 3, all
actions of the Committee shall require the affirmative vote of members who
constitute a majority of such quorum. Members of the Committee who are not
Disinterested Persons may vote on any matters affecting the administration of
the Plan or the grant of Options pursuant to the Plan, except that no such
member shall act upon the granting of an Option to himself (but any such member
may be counted in determining the existence of a quorum at any meeting of the
Committee during which action is taken with respect to the granting of Options
to him).
4 ADMINISTRATION OF PLAN UPON REGISTRATION OF EQUITY SECURITIES -
Notwithstanding the foregoing provisions of this Section 3, if the Company
registers any class of any equity security pursuant to section 12 of the
Exchange Act the Plan shall, from the effective date of such registration until
six months after the termination of such registration, be administered as
follows:
(a) the Plan shall be administered by the Board so long as each
member of the Board is a Disinterested Person; and,
(b) if at any time not all members of the Board are Disinterested
Persons, then the Board shall appoint a Committee consisting of
two or more of its members, all of whom are Disinterested
Persons, to administer the
<PAGE> 8
- 8 -
Plan on behalf of the Board in accordance with such terms and
conditions as the Board may prescribe, consistent with this
Plan. Once appointed, the Committee shall continue to serve
until otherwise directed by the Board. From time to time the
Board may increase the size of the Committee and appoint
additional members (all of whom shall be Disinterested Persons),
remove members (with or without cause) and appoint new members
in their place, fill vacancies however caused, or remove all
members of the Committee and thereafter directly administer the
Plan so long as all members of the Board are Disinterested
Persons. At no time shall a person who is not a Disinterested
Person serve on the Committee appointed under this Section
3.4(b), nor shall such Committee at any time consist of less
than two members of the Board.
5 POWERS OF COMMITTEE - Any Committee appointed under Section 3.2 or
3.4(b) above shall have the authority to do the following:
(a) administer the Plan in accordance with its express terms;
(b) determine all questions arising in connection with the
administration, interpretation, and application of the Plan,
including all questions relating to the value of the Shares;
(c) correct any defect, supply any information, or reconcile any
inconsistency in the Plan in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purposes
of the Plan;
(d) prescribe, amend, and rescind rules and regulations relating to
the administration of the Plan;
(e) determine the duration and purposes of leaves of absence from
employment which may be granted to Optionees without
constituting a termination of employment for purposes of the
Plan;
(f) do the following with respect to the granting of Options:
(i) determine the employees, officers, directors, or
consultants to whom Options shall be granted,
<PAGE> 9
- 9 -
based on the eligibility criteria set out in this Plan,
(ii) determine whether such Options shall be ISOs or
Non-ISOs,
(iii) determine the terms and provisions of the Option
Agreement to be entered into with any Optionee (which
need not be identical with the terms of any other Option
Agreement),
(iv) amend the terms and provisions of Option Agreements,
provided the Committee obtains:
A. the consent of the Optionee, if the amendment
would adversely affect the rights, or increase
the obligations, of the Optionee under the
Option; and
B. the approval of any stock exchange on which the
Company is listed,
(v) determine when Options shall be granted,
(vi) determine the number of Shares subject to each Option,
and
(g) make all other determinations necessary or advisable for
administration of the Plan.
6 OBTAIN REGULATORY APPROVALS - In administering this Plan the Committee
will obtain any regulatory approvals which may be required pursuant to
applicable securities laws or the rules of any stock exchange or over the
counter market on which the Shares are listed.
<PAGE> 10
- 10 -
7 ADMINISTRATION BY COMMITTEE - The Committee's exercise of the authority
set out in Section 3.5 shall be consistent with the intent that ISOs issued
under the Plan be qualified under the terms of Section 422 of the Code, and that
Non-ISOs shall not be so qualified. All determinations made by the Committee in
good faith on matters referred to in Section 3.5 shall be final, conclusive, and
binding upon all Persons. The Committee shall have all powers necessary or
appropriate to accomplish its duties under this Plan. In addition, the
Committee's administration of the Plan shall in all respects be consistent with
the policies and rules of any stock exchange or over the counter market on which
the Shares are listed.
4. ELIGIBILITY
1 ELIGIBILITY FOR ISOS - ISOs may be granted to any employee of the
Company or an Affiliate of the Company, including directors or officers who are
employees of the Company or an Affiliate of the Company. An Optionee who is not
an employee of the Company or an Affiliate of the Company is not eligible to
receive an ISO under the Plan.
2 ELIGIBILITY FOR NON-ISOS - Non-ISOs may be granted to any employee,
officer, director or consultant of the Company or an Affiliate of the Company.
3 NO VIOLATION OF SECURITIES LAWS - No Option shall be granted to any
Optionee unless the Committee has determined that the grant of such Option and
the exercise thereof by the Optionee will not violate the securities law of the
jurisdiction where the Optionee resides.
4 LIMIT ON MAXIMUM GRANT TO ANY OPTIONEE - Notwithstanding anything in
this Plan to the contrary, no officer or employee of the Company or an Affiliate
of the Company shall receive Options exercisable for more than 1,250,000 Shares
over any three year period.
<PAGE> 11
- 11 -
5. SHARES SUBJECT TO THE PLAN
1 NUMBER OF SHARES - The Committee, from time to time, may grant Options
to purchase an aggregate of up to 3,500,000 Shares, subject to regulatory
approval, to be made available from authorized, but unissued or reacquired,
Shares. In calculating the foregoing 3,500,000 Shares, the Committee shall
include all Shares subject to options outstanding prior to the Effective Date of
the Plan, all shares issued pursuant to the exercise of options, and shares
subject to options granted since the Effective Date of the Plan, aggregating
2,477,500. The foregoing number of Shares shall be adjusted, where necessary, to
take account of the events referred to in Section 11 hereof.
2 DECREASE IN NUMBER OF SHARES SUBJECT TO PLAN - Upon exercise of an
Option, the number of Shares thereafter available under the Plan and under the
Option shall decrease by the number of Shares as to which the Option was
exercised.
3 EXPIRY OF OPTION - If an Option expires or terminates for any reason
without having been exercised in full, the unpurchased Shares subject thereto
shall again be available for the purposes of the Plan.
4 RESERVATION OF SHARES - The Company will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
6. OPTION TERMS
1 OPTION AGREEMENT - With respect to each Option to be granted to an
Optionee, the Committee shall specify the following terms in the Option
Agreement between the Company and the Optionee:
(a) whether such Option is an ISO or a Non-ISO;
(b) the number of Shares subject to purchase pursuant to such
Option, provided that the number of Shares reserved for issuance
to any one person pursuant to Options does not exceed 5% of the
outstanding Shares;
(c) the Date of Grant;
(d) the Term, provided that:
<PAGE> 12
- 12 -
(i) the Term shall in no event be more than ten years
following the Date of Grant; and
(ii) if an ISO Option is granted to an Optionee who on the
Date of Grant has Direct or Indirect Ownership of more
than 10% of the total combined voting power of all
classes of stock of the Company, the Term of the Option
shall not exceed five years;
(e) the Option Price, provided that:
(i) the Option Price shall not be less than the Fair Market
Value of the Shares on the trading day preceding the
Date of Grant; and
(ii) if an Option is granted to an Optionee who on the Date
of Grant has Direct or Indirect Ownership of more than
10% of the total combined voting power of all classes of
stock of the Company or an Affiliate of the Company,
then the Option Price shall be at least 110% of the Fair
Market Value of the Shares on the Date of Grant;
(f) any vesting schedule upon which the exercise of an Option is
contingent; provided that the Committee shall have complete
discretion with respect to the terms of any such vesting
schedule, including, without limitation, discretion to:
(i) allow full and immediate vesting upon the grant of such
Option,
(ii) to permit partial vesting in stated percentage amounts
based on the length of the Term of such Option, but in
no event longer than an aggregate of five years and at a
rate of not less than 20% per year, and
(iii) to permit full vesting after a stated period of time has
passed from the Date of Grant; and
(g) such other terms and conditions as the Committee deems advisable
and are consistent with the purposes of this Plan.
<PAGE> 13
- 13 -
2 NO GRANT AFTER TEN YEARS FROM EFFECTIVE DATE - No Option shall be
granted under the Plan later than ten years from the Effective Date of the Plan.
Except as expressly provided herein, nothing contained in this Plan shall
require that the terms and conditions of Options granted under the Plan be
uniform.
3 NO DISPOSITION FOR SIX MONTHS - An Optionee who is subject to section 16
of the Exchange Act shall not make a Disposition of any Shares issued upon
exercise of an Option unless at least six months has elapsed between the Date of
Grant of the Option and the date of Disposition of the Shares issued upon
exercise of such Option.
7. LIMITATION ON GRANTS OF OPTIONS
1 NON-ISO IF EXCEED $100,000 (U.S.) - If the aggregate Fair Market Value
(valued as at the Date of Grant) of:
(a) Shares underlying ISOs which have been granted to an Optionee
under this Plan and which are exercisable for the first time
during a calendar year, and
(b) Shares underlying incentive stock options which have been
granted to such Optionee under any other plan of the Company or
its Affiliates and which are exercisable for the first time
during that calendar year,
exceeds $100,000 (U.S.), as such amount may be adjusted from time to time under
Section 422(d) of the Code, then to the extent of such excess such Options shall
be treated as Non-ISOs.
2 ISO OPTIONEE OWNING GREATER THAN 10% OF VOTING SECURITIES - The
Committee may grant an ISO to an employee of the Company or an Affiliate of the
Company who, at the Date of Grant, owns securities of the Company or its
Affiliates representing more than 10% of the total combined voting power of all
classes of stock of the Company or an Affiliate of the Company, only if:
(a) the Option Price is at least 110% of the Fair Market Value of
the Shares at the Date of Grant; and
(b) the Term is five years or less.
8. EXERCISE OF OPTION
<PAGE> 14
- 14 -
1 METHOD OF EXERCISE - Subject to any limitations or conditions imposed
upon an Optionee pursuant to the Option Agreement or Section 6 above, an
Optionee may exercise an Option by giving written notice thereof to the Company
at its principal place of business.
2 PAYMENT OF OPTION PRICE - The notice described in Section 8.1 shall be
accompanied by full payment of the aggregate Option Price to the extent the
Option is so exercised, and full payment of any amounts the Company determines
must be withheld for tax purposes from the Optionee pursuant to the Option
Agreement. Such payment shall be:
(a) in lawful money (Canadian funds) by cheque;
(b) at the discretion of the Committee and if such form of payment
is permitted under the corporate laws then governing the
Company, by delivery of the Optionee's personal recourse note
bearing interest at a rate deemed appropriate by the Committee;
(c) at the discretion of the Committee, and subject to all
applicable securities laws, through delivery by the Optionee
and/or withholding by the Company, of Shares having a market
value as of the date of exercise equal to the cash exercise
price of the Option plus any amounts that the Company determines
must be withheld from the Optionee for U.S. or Canadian tax
purposes. The market value of each of the Shares on the date of
delivery shall be determined in good faith by the Committee,
which determination shall be binding for all purposes hereunder;
or
(d) at the discretion of the Committee, by any combination of
Sections 8.2(a) to 8.2(c) above.
3 ISSUANCE OF STOCK CERTIFICATE - As soon as practicable after exercise of
an Option in accordance with Sections 8.1 and 8.2 above, the Company shall issue
a stock certificate evidencing the Shares with respect to which the Option has
been exercised. Until the issuance of such stock certificate, no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to such Shares, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right
<PAGE> 15
- 15 -
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 11 below.
9. TRANSFERABILITY OF OPTIONS
1 NON-TRANSFERABLE - Except as provided otherwise in this Section 9,
Options are non-assignable and non-transferable.
2 DEATH OF OPTIONEE - If the employment of an Optionee as an employee or
consultant of the Company or an Affiliate of the Company, or the position of an
Optionee as a director of the Company or an Affiliate of the Company, terminates
as a result of his or her death, any Options held by such Optionee shall pass to
the Qualified Successor of the Optionee, and shall be exercisable by the
Qualified Successor for a period of 12 months following such death.
3 DISABILITY OF OPTIONEE - If the employment of an Optionee as an employee
or consultant of the Company or an Affiliate of the Company, or the position of
an Optionee as a director of the Company or an Affiliate of the Company, is
terminated by the Company or its Affiliate by reason of such Optionee's
Disability, any Option held by such Optionee that could have been exercised
immediately prior to such termination of service shall be exercisable by such
Optionee, or by his Guardian, for a period of one year following the termination
of service of such Optionee.
4 DISABILITY AND DEATH OF OPTIONEE - If an Optionee who has ceased to be
employed by the Company or an Affiliate of the Company by reason of such
Optionee's Disability dies within six months after the termination of such
employment, any Option held by such Optionee that could have been exercised
immediately prior to his or her death shall pass to the Qualified Successor of
such Optionee, and shall be exercisable by the Qualified Successor:
(a) in the case of an ISO, for a period of six months following the
death of such Optionee, and
(b) in the case of a Non-ISO, for a period of 12 months following
the death of such Optionee.
5 VESTING - Options held by a Qualified Successor or exercisable by a
Guardian shall, during the period prior to their termination, continue to vest
in accordance with any vesting schedule to which such Options are subject.
<PAGE> 16
- 16 -
6 UNANIMOUS AGREEMENT - If two or more persons constitute the Qualified
Successor or the Guardian of an Optionee, the rights of such Qualified Successor
or such Guardian shall be exercisable only upon the unanimous agreement of such
persons.
7 DEEMED NON-INTERRUPTION OF EMPLOYMENT - Employment shall be deemed to
continue intact during any military or sick leave or other bona fide leave of
absence if the period of such leave does not exceed 90 days or, if longer, for
so long as the Optionee's right to reemployment with the Company or an Affiliate
of the Company is guaranteed either by statute or by contract. If the period of
such leave exceeds 90 days and the Optionee's reemployment is not so guaranteed,
then his or her employment shall be deemed to have terminated on the
ninety-first day of such leave.
10. TERMINATION OF OPTIONS
1 TERMINATION OF OPTIONS - To the extent not earlier exercised or
terminated in accordance with section 9 above, an Option shall terminate at the
earliest of the following dates:
(a) the termination date specified for such Option in the Option
Agreement;
(b) where the Optionee's position as an employee, consultant or
director of the Company or an Affiliate of the Company is
terminated for just cause, 30 days after the date of such
termination for just cause;
(c) where the Optionee's position as an employee, consultant or
director of the Company or an Affiliate of the Company
terminates for a reason other than the Optionee's Disability,
death, or termination for just cause, 60 days after such date of
termination;
(d) the date of any sale, transfer, assignment or hypothecation, or
any attempted sale, transfer, assignment or hypothecation, of
such Option in violation of Section 9.1 above; and
(e) the date specified in Section 11.2 below for such termination in
the event of a Terminating Event.
<PAGE> 17
- 17 -
11. ADJUSTMENTS TO OPTIONS
1 ALTERATION IN CAPITAL STRUCTURE - If there is a material alteration in
the capital structure of the Company resulting from a recapitalization, stock
split, reverse stock split, stock dividend, or otherwise, the Committee shall
make such adjustments to this Plan and to the Options then outstanding under
this Plan as the Committee determines to be appropriate and equitable under the
circumstances, so that the proportionate interest of each holder of any such
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustments may include, without limitation (a) a change in
the number or kind of shares of stock of the Company covered by such Options, or
other property for which Shares are exchanged as part of such adjustment, and
(b) a change in the Option Price payable per share; provided, however, that the
aggregate Option Price applicable to the unexercised portion of existing Options
shall not be altered, it being intended that any adjustments made with respect
to such Options shall apply only to the price per share and the number of shares
subject thereto. For purposes of this Section 11.1, neither (i) the issuance of
additional shares of stock of the Company in exchange for adequate consideration
(including services), nor (ii) the conversion of outstanding preferred shares of
the Company into Shares shall be deemed to be material alterations of the
capital structure of the Company. If the Committee determines that the nature of
a material alteration in the capital structure of the Company is such that it is
not practical or feasible to make appropriate adjustments to this Plan or to the
Options granted hereunder, such event shall be deemed a Terminating Event for
the purposes of this Plan.
2 TERMINATING EVENTS - Subject to Section 11.3, all Options granted under
the Plan shall terminate upon the occurrence of a Terminating Event.
3 NOTICE OF TERMINATING EVENT - The Committee shall give notice to
Optionees not less than thirty days prior to the consummation of a Terminating
Event.
4 CORPORATE REORGANIZATION - In the event of a reorganization as defined
in this Section 11.4 in which the Company is not the surviving or acquiring
corporation, or in which the Company is or becomes a wholly-owned subsidiary of
another corporation after the effective date of the reorganization, then unless
provision is made by the acquiring corporation for the assumption of each
<PAGE> 18
- 18 -
Option granted under this Plan, or the substitution of an option therefor, such
that no Modification of any such Option occurs, all Options granted under this
Plan shall terminate and such event shall be deemed a Terminating Event. For
purposes of this Section 11.4, reorganization shall mean any statutory merger,
statutory consolidation, sale of all or substantially all of the assets of the
Company, or sale, pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a wholly-owned
subsidiary of another corporation after the effective date of the
reorganization.
5 DETERMINATIONS TO BE MADE BY COMMITTEE - Adjustments and determinations
under this Section 11 shall be made by the Committee, whose decisions as to what
adjustments or determination shall be made, and the extent thereof, shall be
final, binding, and conclusive.
12. TERMINATION AND AMENDMENT OF PLAN
1 TERMINATION OF PLAN - Unless earlier terminated as provided in Section
11 above or in Section 12.2 below, the Plan shall terminate on, and no Option
shall be granted under the Plan, after ten years has passed from the Effective
Date of the Plan.
2 POWER OF COMMITTEE TO TERMINATE OR AMEND PLAN - Subject to the approval
of any stock exchange on which the Company is listed, the Committee may
terminate, suspend or amend the terms of the Plan; provided, however, that,
except as provided in Section 11 above, the Committee may not do any of the
following without obtaining, within 12 months either before or after the
Committee's adoption of a resolution authorizing such action, approval by the
affirmative votes of the holders of a majority of the voting securities of the
Company present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable corporate laws, or by the written consent of the
holders of a majority of the securities of the Company entitled to vote:
(a) increase the aggregate number of Shares which may be issued
under the Plan;
(b) materially modify the requirements as to eligibility for
participation in the Plan, or change the designation of the
employees or class of employees eligible to receive ISOs under
the Plan;
<PAGE> 19
- 19 -
(c) materially increase the benefits accruing to participants under
the Plan; or
(d) make any change in the terms of the Plan that would cause the
ISOs granted hereunder to lose their qualification as "incentive
stock options" under Section 422 of the Code;
however, the Committee may amend the terms of the Plan to comply with the
requirements of any applicable regulatory authority, without obtaining the
approval of its shareholders.
3 NO GRANT DURING SUSPENSION OF PLAN - No Option may be granted during any
suspension, or after termination, of the Plan. Amendment, suspension, or
termination of the Plan shall not, without the consent of the Optionee, impair
any rights or increase any obligations under any Option previously granted.
13. CONVERSION OF ISOS INTO NON-ISOS
1 CONVERSION OF ISOS INTO NON-ISOS - At the written request of any ISO
Optionee, the Committee may in its discretion take such actions as may be
necessary to convert such Optionee's ISOs (or any installments or portions of
installments thereof) that have not been exercised on the date of conversion
into Non-ISOs at any time prior to the expiration of such ISOs, regardless of
whether the Optionee is an employee of the Company or an Affiliate of the
Company at the time of such conversion. Such actions include, but shall not be
limited to, extending the exercise period of such ISOs. At the time of such
conversion, the Committee, with the consent of the Optionee, may impose such
conditions on the exercise of the resulting Non-ISOs as the Committee in its
discretion may determine, provided that such conditions are consistent with this
Plan. Nothing in the Plan shall be deemed to give any Optionee the right to have
such Optionee's ISOs converted into Non-ISOs, and no such conversion shall occur
until and unless the Committee takes appropriate action. The Committee, with the
consent of the Optionee, may also terminate any portion of any ISO that has not
been exercised at the time of such conversion.
<PAGE> 20
- 20 -
14. CONDITIONS PRECEDENT TO ISSUANCE OF SHARES
1 COMPLIANCE WITH SECURITIES LAWS - Options shall not be granted and
Shares shall not be issued pursuant to the exercise of any Option unless the
grant and exercise of such Option and the issuance and delivery of such Shares
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, any applicable state or
provincial securities law, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed
or otherwise traded.
2 REPRESENTATIONS BY OPTIONEE - As a condition precedent to the exercise
of any Option, the Company may require the Optionee to represent and warrant, at
the time of exercise, 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 Company, such representations and warranties are
required by any applicable law.
3 REGULATORY APPROVAL TO ISSUANCE OF SHARES - The Company's inability to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability with
respect to the failure to issue or sell such Shares.
15. USE OF PROCEEDS
1 USE OF PROCEEDS - Proceeds from the sale of Shares pursuant to the
Options granted and exercised under the Plan shall constitute general funds of
the Company and shall be used for general corporate purposes.
16. NOTICES
1 NOTICES - All notices, requests, demands and other communications
required or permitted to be given under this Plan and the Options granted under
this Plan shall be in writing and shall be either served personally on the party
to whom notice is to be given, in which case notice shall be deemed to have been
duly given on the date of such service; telefaxed, in which case notice shall be
deemed to have been duly given on the date the telefax is sent; or mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, return receipt requested, postage prepaid, and addressed to the party
at
<PAGE> 21
- 21 -
his or its most recent known address, in which case such notice shall be deemed
to have been duly given on the tenth postal delivery day following the date of
such mailing. 1
17. MISCELLANEOUS PROVISIONS
1 NO OBLIGATION TO EXERCISE - Optionees shall be under no obligation to
exercise Options granted under this Plan.
2 NO OBLIGATION TO RETAIN OPTIONEE - Nothing contained in this Plan shall
obligate the Company or an Affiliate of the Company to retain an Optionee as an
employee, officer, director, or consultant for any period, nor shall this Plan
interfere in any way with the right of the Company or Affiliates of the Company
to reduce such Optionee's compensation.
3 BINDING AGREEMENT - The provisions of this Plan and each Option
Agreement with an Optionee shall be binding upon such Optionee and the Qualified
Successor or Guardian of such Optionee.
4 USE OF TERMS - Where the context so requires, references herein to the
singular shall include the plural, and vice versa, and references to a
particular gender shall include either or both genders.
5 DELIVERY OF FINANCIAL STATEMENTS - Throughout the term of any Option,
the Company shall deliver to the holder of such Option, not later than 120 days
after the close of each of the Company's fiscal years during the Option term,
balance sheets and an income statement. This section shall not apply when the
Company's granting of Options is limited to key employees whose duties in
connection with the Company or an Affiliate of the Company assure them access to
equivalent information.
6 HEADINGS - The headings used in this Plan are for convenience of
reference only and shall not in any way affect or be used in interpreting any of
the provisions of this Plan.
18. SHAREHOLDER APPROVAL TO PLAN
1 SHAREHOLDER APPROVAL TO PLAN - This Plan must be approved by a majority
of the votes cast at a meeting of the shareholders of the Company , other than
votes attaching to securities beneficially owned by:
<PAGE> 22
- 22 -
(a) insiders of the Company, meaning directors, officers and greater
than 10 percent shareholders; and
(b) Associates of persons referred to in (a).
19. EFFECTIVE DATE OF PLAN
1 EFFECTIVE DATE OF PLAN - This Plan was adopted by the Board of Directors
on June 7, 1995 and approved by the shareholders of the Company on July 17,
1995. The Effective Date of the Plan is June 7, 1995. The Plan was amended (the
"Amended Plan") by the Stock Option Committee of the Company on January 27, 1997
and was approved by the Vancouver Stock Exchange on March 5, 1997, and will be
submitted to the shareholders of the Company for approval at the Company's next
annual general meeting, provided that any Options granted after the Amended Plan
was approved by the Vancouver Stock Exchange but prior to the date on which
shareholder approval to the Amended Plan is given, may not be exercised until
the Amended Plan and any such Options receive shareholder approval.
<PAGE> 1
EXHIBIT 99.2
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
ISO
GENETRONICS BIOMEDICAL LTD.
INCENTIVE STOCK OPTION AGREEMENT
Genetronics Biomedical Ltd. (the "Company") has granted to _________ (the
"Optionee"), an option to purchase a total of _____________ (_______) shares of
Common Stock (the "Shares"), at the price set out herein, and, except as
otherwise specifically provided herein, in all respects subject to the terms,
definitions and provisions of the 1995 Stock Option Plan (the "Plan") adopted by
the Company which is incorporated herein by reference. The terms defined in the
Plan shall have the same defined meanings herein.
1. NATURE OF THE OPTION. This Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. EXERCISE PRICE. The exercise price is $_____ (Canadian funds) for each
share: of Common Stock.
3. EXERCISE OF OPTION. This Option shall, be exercisable during its term in
accordance with the provisions of the Plan as follows:
3.1 RIGHT TO EXERCISE.
(a) Subject to subsection 3.1(b) below, this Option shall be
exercisable as follows:
(i) immediately, as to ___ of the Shares subject to the
Option;
(ii) as to a further ___ the Shares subject to the Option,
or any portion thereof, during the period commencing one year from the Date of
Grant and ending ________ (the "Expiry Date");
(iii) as to a further ___ of the Shares subject to the
Option, or any portion thereof, during the period commencing two years from the
Date of Grant and ending on the Expiry Date;
(iv) as to the balance of the Shares subject to the Option,
or any portion thereof, during the period commencing three years from the Date
of Grant and ending on the Expiry Date;
Notwithstanding the foregoing, to the extent that the aggregate Fair Market
Value (determined as of the Date of the Grant) of stock with respect to which
all Incentive Stock Options (including this Option) are exercisable for the
first time by the Optionee during any
1.
<PAGE> 2
calendar year under all stock option plans of the Company and its Affiliates
exceeds one hundred thousand dollars ($100,000 U.S.), the Options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Non Statutory Stock Options, i.e., an Option which
for purposes of U.S. tax law is not treated as an Incentive Stock Option and is
governed under die provisions of Section 83 of the Code.
(b) This Option may not be exercised for a fraction of a share.
(c) In the event of Optionee's death, disability or other termination
of employment, the exercisability of the Option is governed by the provisions of
the Plan.
3.2 REORGANIZATION. In the event of a reorganization as defined in this
Section 3.2 in which the Company is not the surviving or acquiring company, or
in which the Company is or becomes a wholly-owned subsidiary of another company
an or after the effective date of the reorganization, then unless provision is
made by the acquiring corporation for the assumption of each Option granted
under this Plan, or the substitution of in option therefor, such that no
"modification" of any such Option occurs under Section 424 of the Code, the
Options granted under this Agreement shall terminate. The term "reorganization"
as used in this Section 3.2 shall mean any statutory merger, statutory
consolidation, sale of all or substantially all of the assets of the Company, or
sale, pursuant to an agreement with the Company, of securities of the Company
pursuant to which the Company is or becomes a wholly-owned subsidiary of another
corporation after the effective date of the reorganization.
3.3 METHOD OF EXERCISE. This Option shall be exercisable by written notice
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the Optionee's investment intent with respect to such
shares of Common Stock as my be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company. The written
notice shall be accompanied by payment of the exercise price as provided in
Section 5 below.
No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
4. OPTIONEE'S REPRESENTATIONS. If the Optionee is a resident or citizen of the
United States of America, in the event the Shares purchasable pursuant to the
exercise of this Option have not been registered under the Securities Act of
1933, as amended, at the time this Option is exercised, the Optionee shall,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company the Optionee's Investment Representation Statement in such form, as
may be required in the opinion of the Company's legal counsel to comply with
applicable state and federal securities laws.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by way of cheque,
in Canadian funds (or U.S. equivalent), made payable, to the Company in an
amount equal to the full purchase price of the number of optioned Shares
specified in the notice of exercise.
2.
<PAGE> 3
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the issuance
of such Shares upon such exercise or the method of payment of consideration for
such shares would violate any applicable federal or state securities or other
law or regulation, or the rules, regulations or listing requirements of any
stock exchange upon which the shares are listed or included.
7. RESIDENTS OF THE UNITED STATES. If the Optionee is a resident or citizen of
the United States of America at the time of the exercise of the Option, the
certificate(s) representing the optioned Shares may be endorsed with the
following or a similar legend: "The shares represented by this Certificate have
not been registered under the Securities Act of 1933, as amended, of the United
States of America (the "Act") or the securities laws of any state ("State") of
the United States of America and may not be sold, transferred, pledged,
hypothecated or distributed, directly or indirectly, to a U.S. person (as
defined in Regulation S adopted by the U.S. Securities and Exchange Commission
under the Act) or within the United States unless such shares are (i) registered
under the Act and any applicable State securities act (a "State Act"), or (ii)
exempt from registration under the Act and any applicable State Act and the
Company has received an opinion of counsel to such effect reasonably
satisfactory to it, or (iii) sold in accordance with Regulation S."
8. CALIFORNIA LEGEND. If the Optionee is subject to the requirements of the
California Corporate Securities Act of 1968, as amended, at the time of the
exercise of this Option. the certificate(s) representing the optioned Shares may
be endorsed with the following or a similar legend, prominently stamped or
printed thereon in capital letters of not less than 10-point size, reading as
follows:
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by the Optionee or by the
Optionee's Guardian, if any, as provided in the Plan. The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
10. TERM OF OPTION. The term of this Option may not exceed five years if the
Optionee owns, immediately before this Option is granted, stock representing
more than ten percent of the total combined voting power of all classes of stock
of the Company or of any Affiliate, and may be exercised during such term only
in accordance with the Plan and the terms of this Option. This Option is for a
term of Ten (10) years, expiring on October 14, 2006.
11. EARLY DISPOSITION OF STOCK. The Optionee understands that if the Optionee
disposes of any Shares received under this Option within two years after the
date of this Agreement or within one year after such Shares were transferred to
the Optionee, the Optionee may be treated for federal income tax purposes as
having received ordinary income at the time of such disposition
3.
<PAGE> 4
in an amount equal to the excess of the fair market value of the Shares at the
time such Shares were delivered to Optionee over the price paid for the Shares.
The Optionee hereby agrees to notify the Company in writing 30 days after the
date of any such disposition.
(The remainder of this page is intentionally left blank) 12.
4.
<PAGE> 5
12. NO EMPLOYMENT AGREEMENT. This agreement is not an employment agreement, and
nothing contained in this agreement shall obligate the Company or an Affiliate,
of the Company to retain an Optionee as an employee, officer, director, or
consultant for any period, nor shall this agreement interfere in any way with
the right of the Company or Affiliates of the Company to reduce such Optionee's
compensation.
DATE OF GRANT: _______________
GENETRONICS BIOMEDICAL LTD.
- ---------------------------------
- ---------------------------------
Print Name
Optionee acknowledges receipt of a copy of the Plan, a copy of which is annexed
hereto; represents that Optionee is familiar with the terms and provisions of
the Plan; and hereby accepts this Option subject to all of the terms and
provisions of the Plan. Optionee further acknowledges that if the Plan has not
been approved by the Company's shareholders on the date of grant of this Option,
this Option is not exercisable until such approval has been obtained. If
Optionee is subject to the requirements of the California Corporate Securities
Act of 1968, as amended, Optionee further acknowledges receipt of a copy of the
Rules of the Commissioner of Corporations of the State of California, U.S.A.,
found at Section 260.141. 11 of Title 10 of the California Code of Regulations,
which is attached hereto.
OPTIONEE:
Dated:
- ---------------------------------- ----------------------
Signature of Optionee
- ----------------------------------
Dated:
- ---------------------------------- ----------------------
Print Name
- ----------------------------------
Address
5.
<PAGE> 6
EXHIBIT A
STOCK OPTION EXERCISE NOTICE
AND
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: _____________________________
Company: GENETRONICS BIOMEDICAL LTD.
SECURITY: COMMON STOCK
AMOUNT:
DATE:
I hereby give notice of my election to purchase the above-described Securities
pursuant to exercise of options granted under the GENETRONICS, BIOMEDICAL LTD.
1995 Stock Option Plan. In connection with the purchase of the above-listed
Securities, I, the Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933 ("Securities Act").
(b) I understand that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission ("SEC"), the statutory basis
for such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. I understand that the
Company is under no obligation to register the Securities. In addition, I
understand that the certificate evidencing the Securities will be imprinted with
a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Purchaser satisfactory to the Company or a no-action letter is received from
the Securities and Exchange Commission.
(d) I am aware of the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, if applicable, including, among other
things: the availability of certain public information about the Company; the
resale occurring not less than two years after the party has purchased and paid
for the securities to be
6.
<PAGE> 7
sold; the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934) and the amount of Securities
being sold during any three month period not exceeding the specified limitations
stated therein.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, I would be precluded from selling the Securities under Rule 144 even
if the two-year minimum holding period has been satisfied.
(f) I further understand that in the event all of the requirements
of Rule 144 are not satisfied, registration under the Securities Act or
compliance with a registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the Staff of the SEC
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk.
(g) I further understand that if the Plan has not been approved by
the Company's shareholders this Option is not exercisable until such approval
has been obtained.
Signature of Purchaser:
- -----------------------------------
- -----------------------------------
Name of Purchaser
Date:
------------------------------
7.
<PAGE> 8
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
NON-ISO
GENETRONICS BIOMEDICAL LTD.
NONSTATUTORY STOCK OPTION AGREEMENT
Genetronics Biomedical Ltd. (the "Company") has granted to _________________
(the "Optionee"), an option to purchase a total of _________________ shares of
Common Stock, at the price set out herein, and in all respects subject to the
terms, definitions and provisions of the 1995 Stock Option Plan (the "Plan")
adopted by the Company which is incorporated herein by reference. The terms
defined in the Plan shall have the same defined meaning herein.
1. NATURE OF THE OPTION. This Option is nonstatutory option and is not
intended to qualify for any special tax benefits to the Optionee.
2. EXERCISE PRICE. The exercise price is $_____ (Canadian funds) for each
share of Common Stock.
3. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the provisions of the Plan as follows:
3.1 RIGHT TO EXERCISE.
(a) This option shall be exercisable immediately.
(b) This Option may not be exercised for a fraction of a share.
(c) In the event of Optionee's death, disability, divorce or
termination of service with the Company, the exercisability of the Option is
governed by the provisions of the Plan.
3.2 METHOD OF EXERCISE. This Option shall be exercisable by written notice
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the Optionee's investment intent with respect to such
shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company. The written
notice shall be accompanied by payment of the exercise price as provided in
Section 5 below.
1.
<PAGE> 9
No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law,
including all tax withholding laws, and the requirements of any stock exchange
upon which the Shares may then be listed.
4. OPTIONEE'S REPRESENTATIONS. If the Optionee is a resident or citizen of the
United States of America, in the event the Shares purchasable pursuant to the
exercise of this Option have not been registered under the Securities Act of
1933, as amended, at the time this Option is exercised, Optionee shall,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company the Optionee's Investment Representation Statement in such form as
may be required in the opinion of the Company's legal counsel to comply with
applicable state and federal securities laws.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by way of cheque,
in Canadian funds, made payable to the Company in an amount equal to the full
purchase price of the number of optioned Shares specified in th notice of
exercise.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the issuance
of such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulation, or the rules, regulations or listing
requirements of any stock exchange upon which the shares are listed or included.
7. RESIDENTS OF THE UNITED STATES. If the Optionee is a resident or citizen of
the United States of America at the time of the exercise of the Option, the
certificate(s) representing the optioned Shares may be endorsed with the
following or a similar legend: "The shares represented by this Certificate have
not been registered under the Securities Act of 1933, as amended, of the United
States of America (the "Act") or the securities laws of any state ("State") of
the United States of America and may not be sold, transferred, pledged,
hypothecated or distributed, directly or indirectly, to a U.S. person (as
defined in Regulation S adopted by the U.S. Securities and Exchange Commission
under the Act) or within the United States unless such shares are (i) registered
under the Act and any applicable State securities act (a "State Act"), or (ii)
exempt from registration under the Act and any applicable State Act and the
Company has received an opinion of counsel to such effect reasonably
satisfactory to it, or (iii) sold in accordance with Regulation S."
8. CALIFORNIA LEGEND. If the Optionee is subject to the requirements of the
California Corporate Securities Act of 1968, as amended, at the time of the
exercise of this Option, the certificate(s) representing the optioned Shares may
be endorsed with the following or a similar legend, prominently stamped or
printed thereon in capital letters of not less than 10-point size, reading as
follows:
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY,
OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF
CORPORATIONS OF THE STATE
2.
<PAGE> 10
OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution, and may
be exercised during the lifetime of Optionee only by the Optionee or by the
Optionee's Guardian, if any, as provided in the Plan. The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
10. TERM OF OPTION. This Option is for a term of ten years expiring on December
14, 2005.
11. TAXATION UPON EXERCISE OF OPTION. Optionee understands that, pursuant to
certain provisions of the Code, upon exercise of this Option, an Optionee who is
subject to the Code must recognize income for tax purposes in an amount equal to
the excess of the then fair market value of the shares over the exercise price.
If this is the case, the Company will withhold tax from Optionee's current
compensation with respect to such income; to the extent that Optionee's current
compensation is insufficient to satisfy the withholding tax liability, the
Company may require the Optionee to make a cash payment to cover such liability
as a condition of exercise of this Option.
12. NOT EMPLOYMENT AGREEMENT. This agreement is not an employment agreement,
and nothing contained in this agreement shall obligate the Company or an
Affiliate of the Company to retain an Optionee as an employee, officer,
director, or consultant for any period, not shall this agreement interfere in
any way with the right of the Company or Affiliates of the Company to reduce
such Optionee's compensation.
DATE OF GRANT: _________________
GENETRONICS BIOMEDICAL LTD.
By:
---------------------------------------
Authorized Signatory
---------------------------------------
Print Name
3.
<PAGE> 11
Optionee acknowledges receipt of a copy of the Plan, a copy of which is
annexed hereto; represents that Optionee is familiar with the terms and
provisions of the Plan; and hereby accepts this Option subject to all of the
terms and provisions of the Plan. Optionee further acknowledges that if the Plan
has not been approved by the Company's shareholders on the date of grant of this
Option, this Option is not exercisable until such approval has been obtained. If
Optionee is subject to the requirements of the California Corporate Securities
Act of 1968, as amended, Optionee further acknowledges receipt of a copy of the
Rules of the Commissioner of Corporations of the State of California, U.S.A.
found at Section 260.141.11 of Title 10 of the California Code of Regulations,
which is attached hereto.
OPTIONEE:
DATE SIGNED:
- -------------------------------- --------------------------
NAME
- --------------------------------
PRINT NAME
- --------------------------------
ADDRESS
- --------------------------------
4.
<PAGE> 12
EXHIBIT A
STOCK OPTION EXERCISE NOTICE
AND
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
COMPANY: GENETRONICS BIOMEDICAL LTD.
SECURITY: COMMON STOCK
AMOUNT:
DATE:
- ------------------------------------------------------------------------------
I hereby give notice of my election to purchase the above-described Securities
pursuant to exercise of options granted under the Genetronics Biomedical Ltd.
1995 Stock Option Plan. In connection with the purchase of the above-listed
Securities, I, the Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933 ("Securities Act").
(b) I understand that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other th8ings, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission ("SEC"), the statutory basis
for such exemption may be unavailable if my representation as predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. I understand that the
Company is under no obligation to register the Securities. In addition, I
understand that the certificate evidencing the Securities will be imprinted with
a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Purchaser satisfactory to the Company or a no-action letter is received from
the Securities and Exchange Commission.
5.
<PAGE> 13
(d) I am aware of the provision of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited resale of "restricted
securities" acquired directly or indirectly, from the issuer thereof (or from an
affiliate of such issuer), in a non-public offering subject to the satisfaction
of certain conditions, if applicable, including, among other things: the
availability of certain public information about the Company; the resale
occurring not less than two years after the party has purchased and paid for the
securities to be sold; the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934) and the amount of
Securities being sold during any three month period not exceeding the specified
limitations stated therein.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, I would be precluded from selling the Securities under Rule 144 even
if the two-year minimum holding period has been satisfied.
(f) I further understand that in the event all of the requirements of
Rule 144 are not satisfied, registration under the Securities Act or compliance
with a registration exemption will be required; and that, notwithstanding the
fact that Rule 144 is not exclusive, the Staff of the SEC has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
(g) I further understand that the Plan has not been approved by the
Company's shareholders and that this Option is not exercisable until such
approval has been obtained.
SIGNATURE OF PURCHASER:
Date:
- --------------------------------- --------------------------
6.
<PAGE> 1
EXHIBIT 99.3
GENETRONICS BIOMEDICAL LTD.
AMENDED 1997 STOCK OPTION PLAN
1. INTERPRETATION
1.1 DEFINED TERMS - For the purposes of this Plan, the following terms shall
have the following meanings:
(a) "AFFILIATE" means a Parent Corporation or a Subsidiary
Corporation of a corporation;
(b) "ASSOCIATE" means, where used to indicate a relationship with
any Person,
(i) any relative of that Person,
(ii) any person of the opposite sex to whom that Person is
married or with whom that Person is living in a conjugal
relationship outside marriage,
(iii) any relative of a Person mentioned in clause (ii) who
has the same home as that Person,
(iv) any partner of that Person,
(v) any trust or estate in which such Person has a
substantial beneficial interest or as to which such
Person serves as trustee or in a similar capacity, or
(vi) any corporation of which such Person beneficially owns,
directly or indirectly, voting securities carrying more
than 10 percent of the voting rights attached to all
outstanding voting securities of the corporation;
(c) "BENEFICIAL OWNER" of a security includes any Person who,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has voting power over
the security or the power to dispose or direct the disposition
of the security, and any Person who uses a trust or other
arrangement with the purpose or effect of divesting such Person
of beneficial ownership as part of a plan to evade the reporting
requirements of section 13 of the Exchange Act shall be deemed
to be the Beneficial Owner of the security;
(d) "BOARD" means the Board of Directors of Genetronics Biomedical
Ltd.;
(e) "CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time;
<PAGE> 2
- 2 -
(f) "COMMITTEE" means a committee of the Board appointed in
accordance with this Plan, or if no such committee is appointed,
the Board itself;
(g) "COMPANY" means GENETRONICS BIOMEDICAL LTD.;
(h) "COVERED EMPLOYEE" means the chief executive officer and the
four (4) other highest compensated officers of the Company for
whom total compensation is required to be reported to
shareholders under the Exchange Act, as determined for purposes
of Section 162(m) of the Code;
(i) "DATE OF GRANT" means the date on which a grant of an Option is
effective;
(j) "DIRECT OR INDIRECT OWNERSHIP" of securities by a Person is
calculated in accordance with the following rules:
(i) the Person shall be deemed to own stock owned, directly
or indirectly, by or for siblings (including half
siblings), spouse, ancestors and lineal descendants, and
(ii) stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust, shall be
deemed to be owned proportionately by or for its
shareholders, partners or beneficiaries;
(k) "DISABILITY" means a medically determinable physical or mental
impairment which causes an individual to be unable to engage in
any substantial gainful activity, as determined by the
Committee;
(l) "DISPOSITION" includes a sale, exchange, gift, or transfer of
legal title, but does not include a pledge, hypothecation,
transfer from a decedent to an estate, transfer by bequest or
inheritance, or the other excepted circumstances referred to in
section 424(c) of the Code;
(m) "EFFECTIVE DATE" means that the Plan was adopted by the Board on
June 20, 1997 and approved by the shareholders of the Company on
July 28, 1997. The Effective Date of the Plan is June 20, 1997.
The Plan was amended (the "Amended Plan") by the Compensation
Committee of the Company on September 14 1998, and was approved
by The Toronto Stock Exchange on , 1998, and will be
submitted to the shareholders of the Company for approval at the
Company's next annual general meeting, provided that any Options
granted after the Amended Plan is approved by The Toronto Stock
Exchange but prior to the date on which shareholder approval to
the Amended Plan is given, may not be exercised until the
Amended Plan and any such Options receive shareholder approval;
(n) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended;
<PAGE> 3
- 3 -
(o) "FAIR MARKET VALUE" means:
(i) where the Shares are listed for trading on a stock
exchange or over the counter market, the closing price
of the Shares on the trading day immediately prior to
the date of grant on such stock exchange or over the
counter market as may be selected for such purpose by
the Committee, or
(ii) where the Shares are not listed for trading on a stock
exchange or over the counter market, the value which is
determined by the Committee to be the fair value of the
Shares at the Date of Grant, taking into consideration
all factors that the Committee deems appropriate,
including, without limitation, recent sale and offer
prices of the Shares in private transactions negotiated
at arm's length, and in any event consistent with
Section 260.140.50 of Title 10 of the California Code of
Regulations;
(p) "GUARDIAN" means the guardian, if any, appointed for an
Optionee;
(q) "ISO" means an Option granted to an employee of the Company or
an Affiliate of the Company that is intended to qualify as an
"incentive stock option" for purposes of section 422 of the Code
and is therefore subject to favourable tax treatment under the
Code;
(r) "ISO OPTIONEE" means an Optionee to whom an ISO has been
granted;
(s) "MODIFICATION" means any change in the terms of an Option which
gives the Optionee additional benefits under the Option within
the meaning of section 424(h) of the Code, but such change shall
not include a change in the terms of an Option:
(i) in the case of an Option not immediately exercisable in
full, to accelerate the time within which the Option may
be exercised, or
(ii) attributable to the issuance or assumption of an Option
by reason of a corporate merger, consolidation,
acquisition of property or stock, separation,
reorganization or liquidation if the new Option or
assumption of the old Option does not give the Optionee
additional benefits which he did not have under the old
Option;
(t) "NON-EMPLOYEE DIRECTOR" means a member of the Board who either
(i) is not a current employee or officer (within the meaning of
Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder) of the Company or an Affiliate of the
Company, does not receive compensation (directly or indirectly)
from the Company or an Affiliate of the Company for services
rendered as a consultant or in any capacity other than as a
director
<PAGE> 4
- 4 -
(except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated
pursuant to the Securities Act ("Regulation S-K"), does not
possess an interest in any other transaction as to which
disclosure would be required under Item 404(a) of Regulation
S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation
S-K; or (ii) is otherwise considered a "non-employee director"
for purposes of Rule 16b-3;
(u) "NON-ISO" means an Option that is not intended to qualify as an
"incentive stock option" for purposes of section 422 of the
Code;
(v) "NON-ISO OPTIONEE" means an Optionee to whom a Non-ISO has been
granted;
(w) "NON-OFFICER EMPLOYEE" means an employee who is not an officer
or director within the meaning of Section 260.140.41 of Title 10
of the California Code of Regulations;
(x) "OPTION" means an option to purchase Shares granted pursuant to
the terms of this Plan;
(y) "OPTION AGREEMENT" means a written agreement between an Optionee
and the Company, specifying the terms of the Option being
granted to the Optionee under the Plan;
(z) "OPTION PRICE" means the price at which an Option is exercisable
to purchase Shares;
(aa) "OPTIONEE" means a person to whom an Option has been granted;
(bb) "OUTSIDE DIRECTOR" means a director who either (i) is not a
current employee of the Company or an "affiliated corporation"
(within the meaning of the United States Treasury regulations
promulgated under Section 162(m) of the Code), is not a former
employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax
qualified pension plan), was not an officer of the Company or an
"affiliated corporation" at any time, and is not currently
receiving direct or indirect remuneration from the Company or an
"affiliated corporation" for services in any capacity other than
as a director, or (ii) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code;
(cc) "PARENT CORPORATION" means any corporation in an unbroken chain
of corporations ending with Genetronics Biomedical Ltd. if, at
the Date of Grant, each corporation other than Genetronics
Biomedical Ltd. owns stock
<PAGE> 5
- 5 -
possessing 50 percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such
chain;
(dd) "PERSON" means a natural person, company, government, or
political subdivision or agency of a government; and where two
or more Persons act as a partnership, limited partnership,
syndicate or other group for the purpose of acquiring, holding
or disposing of securities of an issuer, such syndicate or group
shall be deemed to be a Person;
(ee) "PLAN" means this Stock Option Plan of the Company;
(ff) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3 as in effect with respect to the Company
at the time discretion is being exercised regarding the Plan;
(gg) "QUALIFIED SUCCESSOR" means a person who is entitled to
ownership of an Option upon the death of an Optionee, pursuant
to a will or the applicable laws of descent and distribution
upon death;
(hh) "SECURITIES ACT" means the Securities Act of 1933, as amended;
(ii) "SHARES" means the common shares without par value in the
capital of Genetronics Biomedical Ltd.;
(jj) "SUBSIDIARY CORPORATION" means any corporation in an unbroken
chain of corporations beginning with Genetronics Biomedical Ltd.
if, at the Date of Grant, each of the corporations other than
the last corporation owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one
of the other corporations in such chain;
(kk) "TERM" means the period of time during which an Option is
exercisable; and
(ll) "TERMINATING EVENT" means:
(i) the dissolution or liquidation of the Company,
(ii) a merger or consolidation of the Company with one or
more corporations as a result of which, immediately
following such merger or consolidation, the shareholders
of the Company as a group will hold less than a majority
of the outstanding capital stock of the surviving
corporation,
(iii) the sale or other disposition of all or substantially
all of the assets of the Company,
<PAGE> 6
- 6 -
(iv) the occurrence of an event whereby any Person or entity
becomes the Beneficial Owner of Shares representing 50%
or more of the combined voting power of the voting
securities of the Company, or
(v) a material change in the capital structure of the
Company that is deemed to be a Terminating Event by
virtue of the last sentence of Section 11.1 of this Plan
or by virtue of Section 11.4 of this Plan.
2. STATEMENT OF PURPOSE
2.1 PRINCIPAL PURPOSES - The principal purposes of the Plan are to provide
the Company and its shareholders with the advantages of the incentive inherent
in stock ownership on the part of employees, officers, directors, and
consultants responsible for the continued success of the Company; to create in
such individuals a proprietary interest in, and a greater concern for, the
welfare and success of the Company; to encourage such individuals to remain with
the Company; and to attract new employees, officers, directors and consultants
to the Company.
2.2 ISOS AND NON-ISOS - Under this Plan, the Company may grant either ISOs
or Non-ISOs. Each ISO granted hereunder is intended to constitute an "incentive
stock option," for the purposes of section 422 of the Code, and this Plan and
each such ISO is intended to comply with all of the requirements of Section 422
of the Code and of all other provisions of the Code applicable to incentive
stock options and to plans issuing the same. Each Non-ISO granted hereunder is
intended to constitute an Option that is not an "incentive stock option" for the
purposes of section 422 of the Code, and that does not comply with the
requirements of Section 422 of the Code.
3. ADMINISTRATION
3.1 BOARD OR COMMITTEE - The Plan shall be administered by the Board or by a
committee of the Board appointed in accordance with Section 3.2 or 3.4(b) below.
3.2 APPOINTMENT OF COMMITTEE - The Board may at any time appoint a
Committee, consisting of not less than two of its members, to administer the
Plan on behalf of the Board in accordance with such terms and conditions as the
Board may prescribe, consistent with this Plan. Once appointed, the Committee
shall continue to serve until otherwise directed by the Board. From time to
time, the Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and appoint new members in their
place, fill vacancies however caused, or remove all members of the Committee and
thereafter directly administer the Plan. In the discretion of the Board, a
Committee may consist solely of two (2) or more Non-Employee Directors, and/or
Outside Directors. Notwithstanding anything in this Section 3 to the contrary,
the Board or the Committee may delegate to a Committee of one or
<PAGE> 7
- 7 -
more members of the Board the authority to grant Options to eligible persons who
(a) are not then subject to Section 16 of the Exchange Act and/or (b) are either
(i) not then Covered Employees and are not expected to be Covered Employees at
the time of recognition of income resulting from such Options, or (ii) not
persons with respect to whom the Company wishes to comply with Section 162(m) of
the Code.
3.3 QUORUM AND VOTING - A majority of the members of the Committee shall
constitute a quorum, and, subject to the limitations in this Section 3, all
actions of the Committee shall require the affirmative vote of members who
constitute a majority of such quorum. Members of the Committee who are not
Disinterested Persons may vote on any matters affecting the administration of
the Plan or the grant of Options pursuant to the Plan, except that no such
member shall act upon the granting of an Option to himself (but any such member
may be counted in determining the existence of a quorum at any meeting of the
Committee during which action is taken with respect to the granting of Options
to him).
3.4 ADMINISTRATION OF PLAN UPON REGISTRATION OF EQUITY SECURITIES -
Notwithstanding the foregoing provisions of this Section 3, if the Company
registers any class of any equity security pursuant to section 12 of the
Exchange Act the Plan shall, from the effective date of such registration until
six months after the termination of such registration, be administered as
follows:
(a) the Plan shall be administered by the Board so long as each
member of the Board is a Disinterested Person; and,
(b) if at any time not all members of the Board are Disinterested
Persons, then the Board shall appoint a Committee consisting of
two or more of its members, all of whom are Disinterested
Persons, to administer the Plan on behalf of the Board in
accordance with such terms and conditions as the Board may
prescribe, consistent with this Plan. Once appointed, the
Committee shall continue to serve until otherwise directed by
the Board. From time to time the Board may increase the size of
the Committee and appoint additional members (all of whom shall
be Disinterested Persons), remove members (with or without
cause) and appoint new members in their place, fill vacancies
however caused, or remove all members of the Committee and
thereafter directly administer the Plan so long as all members
of the Board are Disinterested Persons. At no time shall a
person who is not a Disinterested Person serve on the Committee
appointed under this Section 3.4(b), nor shall such Committee at
any time consist of less than two members of the Board.
3.5 POWERS OF COMMITTEE - Any Committee appointed under Section 3.2 or
3.4(b) above shall have the authority to do the following:
<PAGE> 8
- 8 -
(a) administer the Plan in accordance with its express terms;
(b) determine all questions arising in connection with the
administration, interpretation, and application of the Plan,
including all questions relating to the value of the Shares;
(c) correct any defect, supply any information, or reconcile any
inconsistency in the Plan in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purposes
of the Plan;
(d) prescribe, amend, and rescind rules and regulations relating to
the administration of the Plan;
(e) determine the duration and purposes of leaves of absence from
employment which may be granted to Optionees without
constituting a termination of employment for purposes of the
Plan;
(f) do the following with respect to the granting of Options:
(i) determine the employees, officers, directors, or
consultants to whom Options shall be granted, based on
the eligibility criteria set out in this Plan,
(ii) determine whether such Options shall be ISOs or
Non-ISOs,
(iii) determine the terms and provisions of the Option
Agreement to be entered into with any Optionee (which
need not be identical with the terms of any other Option
Agreement),
(iv) amend the terms and provisions of Option Agreements,
provided the Committee obtains:
(A) the consent of the Optionee, if the amendment
would adversely affect the rights, or increase
the obligations, of the Optionee under the
Option; and
(B) the approval of any stock exchange on which the
Company is listed, (v) determine when Options
shall be granted,
(vi) determine the number of Shares subject to each Option,
and
(g) make all other determinations necessary or advisable for
administration of the Plan.
<PAGE> 9
- 9 -
3.6 ADMINISTRATION BY COMMITTEE - The Committee's exercise of the authority
set out in Section 3.4 shall be consistent with the intent that ISOs issued
under the Plan be qualified under the terms of Section 422 of the Code, and that
Non-ISOs shall not be so qualified. All determinations made by the Committee in
good faith on matters referred to in Section 3.4 shall be final, conclusive, and
binding upon all Persons. The Committee shall have all powers necessary or
appropriate to accomplish its duties under this Plan. In addition, the
Committee's administration of the Plan shall in all respects be consistent with
the policies and rules of any stock exchange or over the counter market on which
the Shares are listed.
4. ELIGIBILITY
4.1 ELIGIBILITY FOR ISOS - An ISO may only granted to a person who is an
employee of the Company or an Affiliate of the Company, including directors or
officers who are employees of the Company or an Affiliate of the Company.
4.2 ELIGIBILITY FOR NON-ISOS - Non-ISOs may be granted to any employee,
officer, director or consultant of the Company or an Affiliate of the Company.
4.3 NO VIOLATION OF SECURITIES LAWS - No Option shall be granted to any
Optionee unless the Committee has determined that the grant of such Option and
the exercise thereof by the Optionee will not violate the securities law of the
jurisdiction where the Optionee resides at the time of grant.
4.4 LIMIT ON MAXIMUM GRANT TO ANY OPTIONEE - Notwithstanding anything in
this Plan to the contrary, no officer or employee of the Company or an Affiliate
of the Company shall receive Options exercisable for more than two million one
hundred thousand (2,100,000) Shares over any three year period, nine hundred
thirty-five thousand (935,000) Shares over any one year period or 5% of the
outstanding Shares.
5. SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES - The Committee, from time to time, may grant Options
to purchase an aggregate of up to four million seven hundred thousand
(4,700,000) Shares, subject to regulatory approval, to be made available from
authorized, but unissued or reacquired, Shares. In calculating the foregoing
four million seven hundred thousand (4,700,000) Shares, the Committee shall
include all Shares subject to options outstanding prior to the Effective Date of
the Plan. The foregoing number of Shares shall be adjusted, where necessary, to
take account of the events referred to in Section 11 hereof.
<PAGE> 10
- 10 -
5.2 DECREASE IN NUMBER OF SHARES SUBJECT TO PLAN - Upon exercise of an
Option, the number of Shares thereafter available under the Plan and under the
Option shall decrease by the number of Shares as to which the Option was
exercised.
5.3 EXPIRY OF OPTION - If an Option expires or terminates for any reason
without having been exercised in full, the unpurchased Shares subject thereto
shall again be available for the purposes of the Plan.
5.4 RESERVATION OF SHARES - The Company will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
6. OPTION TERMS
6.1 OPTION AGREEMENT - With respect to each Option to be granted to an
Optionee, the Committee shall specify the following terms in the Option
Agreement between the Company and the Optionee:
(a) whether such Option is an ISO or a Non-ISO;
(b) the number of Shares subject to purchase pursuant to such
Option, provided that the number of Shares reserved for issuance
to any one person pursuant to Options does not exceed 5% of the
outstanding Shares;
(c) the Date of Grant;
(d) the Term, provided that:
(i) the Term shall in no event be more than ten (10) years
following the Date of Grant; and
(ii) if an ISO Option is granted to an Optionee who on the
Date of Grant has Direct or Indirect Ownership of more
than 10% of the total combined voting power of all
classes of stock of the Company, the Term of the Option
shall not exceed five (5) years;
(e) the Option Price, provided that:
(i) the Option Price shall not be less than the Fair Market
Value of the Shares on the trading day preceding the
Date of Grant; and
(ii) if an Option is granted to an Optionee who on the Date
of Grant has Direct or Indirect Ownership of more than
10% of the total combined voting power of all classes of
stock of the Company or an Affiliate of the Company,
then the Option Price shall be at least 110% of the Fair
Market Value of the Shares on the Date of Grant;
<PAGE> 11
- 11 -
(f) any vesting schedule upon which the exercise of an Option is
contingent, including discretion to;
(i) allow full and immediate vesting upon the grant of such
Option,
(ii) permit partial vesting in stated percentage amounts
based on the length of the Term of such Option;
provided, however, that an Option granted to a
non-officer employee must provide for the right to
exercise at the rate of at least twenty percent (20%)
per year over five (5) years from the date of the Option
is granted,
(iii) permit full vesting after a stated period of time has
passed from the Date of Grant; subject to the
limitations described in the preceding sub-subparagraph;
(iv) permit exercise of an Option for unvested Shares,
provided however, that generally any unvested Shares so
purchased shall be subject to a repurchase right in
favor of the Company, with the repurchase price to be
equal to the original purchase price of the stock, or to
any other restriction the Board determines to be
appropriate, but that (A) in the case of the unvested
Shares received by a non-officer employee, the right to
repurchase at the original purchase price shall lapse at
a minimum rate of 20% per year over five (5) years from
the date the Option was granted, and (B) such repurchase
right shall be exercisable only within (I) the ninety
(90) day period following the termination of employment
or the relationship as a director or Consultant, or (II)
such longer period as may be agreed to by the Company
and the Optionee (for example, for purposes of
satisfying the requirements of Section 1202(c)(3) of the
Code (regarding "qualified small business stock")), and
(C) such right shall be exercisable only for cash or
cancellation of purchase money indebtedness for the
shares; but unvested Shares received on exercise of an
Option by an officer, director or consultant (within the
meaning of Section 260.140.41 of Title 10 of the
California Code of Regulations) may be subject to
additional or greater restrictions; and
(g) such other terms and conditions as the Committee deems advisable
and are consistent with the purposes of this Plan.
6.2 NO GRANT AFTER TEN YEARS FROM EFFECTIVE DATE - No Option shall be
granted under the Plan later than ten (10) years from the Effective Date of the
Plan. Except as expressly provided herein, nothing contained in this Plan shall
require that the terms and conditions of Options granted under the Plan be
uniform.
6.3 NO DISPOSITION FOR SIX MONTHS - An Optionee who is subject to Section 16
of the Exchange Act and whose Option grant is not exempt from Section 16 under
Rule
<PAGE> 12
- 12 -
16b-3 shall not make a Disposition of any Shares issued upon exercise of an
Option unless at least six (6) months has elapsed between the Date of Grant of
the Option and the date of Disposition of the Shares issued upon exercise of
such Option.
7. LIMITATION ON GRANTS OF OPTIONS
7.1 US$100,000 LIMIT ON ISOS.- If the aggregate Fair Market Value (valued as
of the Date of Grant of each ISO) of:
(a) Shares underlying ISOs which have been granted to an Optionee
under this Plan and which are exercisable for the first time
during a calendar year, and
(b) Shares underlying incentive stock options which have been
granted to such Optionee under any other plan of the Company or
its Affiliates and which are exercisable for the first time
during that calendar year,
exceeds US$100,000, as such amount may be adjusted from time to time under
Section 422(d) of the Code, then to the extent of such excess such options shall
be treated as options that are not "incentive stock options" for purposes of the
Code.
8. EXERCISE OF OPTION
8.1 METHOD OF EXERCISE - Subject to any limitations or conditions imposed
upon an Optionee pursuant to the Option Agreement or Section 6 above, an
Optionee may exercise an Option by giving written notice thereof to the Company
at its principal place of business.
8.2 PAYMENT OF OPTION PRICE - The notice described in Section 8.1 shall be
accompanied by full payment of the aggregate Option Price to the extent the
Option is so exercised, and full payment of any amounts the Company determines
must be withheld for tax purposes from the Optionee pursuant to the Option
Agreement. Such payment shall be:
(a) in lawful money (Canadian funds) by cheque;
(b) at the discretion of the Committee and if such form of payment
is permitted under the corporate laws then governing the Company
and if the Company has disclosed to its shareholders that it
will accept such payment for the exercise of Options, by
delivery of the Optionee's personal recourse note bearing
interest at a rate deemed appropriate by the Committee;
(c) at the discretion of the Committee, and subject to all
applicable securities laws, through delivery by the Optionee
and/or withholding by the Company,
<PAGE> 13
- 13 -
of Shares having a market value as of the date of exercise equal
to the cash exercise price of the Option plus any amounts that
the Company determines must be withheld from the Optionee for
U.S. or Canadian tax purposes. The market value of each of the
Shares on the date of delivery shall be determined in good faith
by the Committee, which determination shall be binding for all
purposes hereunder; or
(d) at the discretion of the Committee, by any combination of
Sections 8.2(a) to 8.2(c) above.
8.3 ISSUANCE OF STOCK CERTIFICATE - As soon as practicable after exercise of
an Option in accordance with Sections 8.1 and 8.2 above, the Company shall issue
a stock certificate evidencing the Shares with respect to which the Option has
been exercised. Until the issuance of such stock certificate, no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to such Shares, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 below.
9. TRANSFERABILITY OF OPTIONS
9.1 NON-TRANSFERABLE - Except as provided otherwise in this Section 9,
Options are non-assignable and non-transferable.
9.2 DEATH OF OPTIONEE - If the employment of an Optionee as an employee or
consultant of the Company or an Affiliate of the Company, or the position of an
Optionee as a director of the Company or an Affiliate of the Company, terminates
as a result of Optionee's death, any Options held by such Optionee shall pass to
the Qualified Successor of the Optionee, and shall be exercisable by the
Qualified Successor on or before the date which is the earlier of twelve (12)
months following the date of death and ten (10) years following the Date of
Grant.
9.3 DISABILITY OF OPTIONEE - If the employment of an Optionee as an employee
or consultant of the Company or an Affiliate of the Company, or the position of
an Optionee as a director of the Company or an Affiliate of the Company, is
terminated by the Company or its Affiliate by reason of such Optionee's
Disability, any Option held by such Optionee that could have been exercised
immediately prior to such termination of service shall be exercisable by such
Optionee, or by such Optionee's Guardian, on or before the date which is the
earlier of twelve (12) months following the termination of service of such
Optionee, and the last day of the Term.
9.4 DISABILITY AND DEATH OF OPTIONEE - If an Optionee who has ceased to be
employed by the Company or an Affiliate of the Company by reason of such
Optionee's Disability dies within six (6) months after the termination of such
<PAGE> 14
- 14 -
employment, any Option held by such Optionee that could have been exercised
immediately prior to such Optionee's death shall pass to the Qualified Successor
of such Optionee, and shall be exercisable by the Qualified Successor:
(a) in the case of an ISO, on or before a date which is the earlier
of six (6) months following the death of such Optionee, and ten
years following the Date of Grant, and
(b) in the case of a Non-ISO, on or before a date which is the
earlier of twelve (12) months following the death of such
Optionee, and ten (10) years following the Date of Grant.
9.5 UNANIMOUS AGREEMENT - If two or more persons constitute the Qualified
Successor or the Guardian of an Optionee, the rights of such Qualified Successor
or such Guardian shall be exercisable only upon the unanimous agreement of such
persons.
9.6 DEEMED NON-INTERRUPTION OF EMPLOYMENT - Employment shall be deemed to
continue intact during any military or sick leave or other bona fide leave of
absence if the period of such leave does not exceed ninety (90) days or, if
longer, for so long as the Optionee's right to re-employment with the Company or
an Affiliate of the Company is guaranteed either by statute or by contract. If
the period of such leave exceeds ninety (90) days and the Optionee's
re-employment is not so guaranteed, then such Optionee's employment shall be
deemed to have terminated ninety-one (91) days from the date such leave
commenced.
10. TERMINATION OF OPTIONS
10.1 TERMINATION OF OPTIONS - To the extent not earlier exercised or
terminated in accordance with Section 9 above, an Option shall terminate at the
earliest of the following dates:
(a) the termination date specified for such Option in the Option
Agreement;
(b) if the Optionee's position as an employee, consultant or
director of the Company or an Affiliate of the Company is
terminated for just cause, (as determined by the Company), then
thirty (30) days after the date of such termination for just
cause;
(c) if the Optionee's position as an employee, consultant or
director of the Company or an Affiliate of the Company
terminates for a reason other than the Optionee's Disability,
death, or termination for just cause, (as determined by the
Company), then sixty (60) days after such date of termination;
<PAGE> 15
- 15 -
(d) the date of any sale, transfer, assignment or hypothecation, or
any attempted sale, transfer, assignment or hypothecation, of
such Option in violation of Section 9.1 above; and
(e) the date specified in Section 11.2 below for such termination in
the event of a Terminating Event.
10.2 VESTING - In the event that an Optionee's position as an employee,
consultant or director of the Company or of an Affiliate of the Company is
terminated, the Option held by such Optionee shall cease to vest as at the date
of termination.
11. ADJUSTMENTS TO OPTIONS
11.1 ALTERATION IN CAPITAL STRUCTURE - If there is a material alteration in
the capital structure of the Company resulting from a recapitalization, stock
split, reverse stock split, stock dividend, or otherwise, the Committee shall
make such adjustments to this Plan (and to the Options then outstanding under
this Plan) as the Committee determines to be appropriate and equitable under the
circumstances, so that the proportionate interest of each holder of any such
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustments may include, without limitation (a) a change in
the number or kind of shares of stock of the Company covered by such Options, or
other property for which Shares are exchanged as part of such adjustment, and
(b) a change in the Option Price payable per share; provided, however, that the
aggregate Option Price applicable to the unexercised portion of existing Options
shall not be altered, it being intended that any adjustments made with respect
to such Options shall apply only to the price per share and the number of shares
subject thereto. For purposes of this Section 11.1, neither (i) the issuance of
additional shares of stock of the Company in exchange for adequate consideration
(including services), nor (ii) the conversion of outstanding preferred shares of
the Company into Shares shall be deemed to be material alterations of the
capital structure of the Company. If the Committee determines that the nature of
a material alteration in the capital structure of the Company is such that it is
not practical or feasible to make appropriate adjustments to this Plan or to the
Options granted hereunder, such event shall be deemed a Terminating Event for
the purposes of this Plan.
11.2 TERMINATING EVENTS - Subject to Section 11.3, all Options granted under
the Plan shall terminate upon the occurrence of a Terminating Event.
11.3 NOTICE OF TERMINATING EVENT - The Committee shall give notice of the
imminent consummation of a Terminating Event to Optionees and persons whose
Shares are subject to a repurchasing right under the Plan, not less than thirty
days prior to the consummation of a Terminating Event. Upon the giving of such
notice, all repurchase rights of the Company under the Plan shall terminate, and
all Options,
<PAGE> 16
- 16 -
shall become immediately exercisable, notwithstanding any contingent vesting
provisions to which such Options may have otherwise been subject.
11.4 CORPORATE REORGANIZATION - In the event of a reorganization as defined
in this Section 11.4 in which the Company is not the surviving or acquiring
corporation, or in which the Company is or becomes a wholly-owned subsidiary of
another corporation after the effective date of the reorganization, then unless
provision is made by the acquiring corporation for the assumption of each Option
granted under this Plan, or the substitution of an option therefor, such that no
Modification of any such Option occurs, all Options granted under this Plan
shall terminate and such event shall be deemed a Terminating Event. For purposes
of this Section 11.4, "reorganization" shall mean any statutory merger,
statutory consolidation, sale of all or substantially all of the assets of the
Company, or sale, pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a wholly-owned
subsidiary of another corporation after the effective date of the
reorganization.
11.5 DETERMINATIONS TO BE MADE BY COMMITTEE - Adjustments and determinations
under this Section 11 shall be made by the Committee, whose decisions as to what
adjustments or determination shall be made, and the extent thereof, shall be
final, binding, and conclusive.
12. TERMINATION AND AMENDMENT OF PLAN
12.1 TERMINATION OF PLAN - Unless earlier terminated as provided in Section
11 above or in Section 12.2 below, the Plan shall terminate on, and no Option
shall be granted under the Plan, after the end of the day prior to the tenth
anniversary of the Effective Date.
12.2 POWER OF COMMITTEE TO TERMINATE OR AMEND PLAN - Subject to the approval
of any stock exchange on which the Company is listed, the Committee may
terminate, suspend or amend the terms of the Plan; provided, however, that,
except as provided in Section 11 above no amendment shall be effective unless
approved by the shareholders of the Company within twelve (12) months before or
after the adoption of the amendment, where the amendment will: (a) increase the
number of shares reserved for Options under the Plan; (b) modify the
requirements as to eligibility for participation in the Plan (to the extent such
modification requires shareholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code); or (c) modify the Plan in any other
way if such modification requires shareholder approval in order for the Plan to
satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.
12.3 NO GRANT DURING SUSPENSION OF PLAN - No Option may be granted during any
suspension, or after
<PAGE> 17
- 17 -
termination, of the Plan. Amendment, suspension, or termination of the Plan
shall not, without the consent of the Optionee, impair any rights or increase
any obligations of the Optionee under any Option previously granted prior to
such amendment, suspension or termination.
13. CONVERSION OF ISOS INTO NON-ISOS
13.1 CONVERSION OF ISOS INTO NON-ISOS - At the written request of any ISO
Optionee, the Committee may in its discretion take such actions as may be
necessary to convert such Optionee's ISOs (or any installments or portions of
installments thereof) that have not been exercised on the date of conversion
into Non-ISOs at any time prior to the expiration of such ISOs, regardless of
whether the Optionee is an employee of the Company or an Affiliate of the
Company at the time of such conversion. Such actions include, but shall not be
limited to, extending the exercise period of such ISOs. At the time of such
conversion, the Committee, with the consent of the Optionee, may impose such
conditions on the exercise of the resulting Non-ISOs as the Committee in its
discretion may determine, provided that such conditions are consistent with this
Plan. Nothing in the Plan shall be deemed to give any Optionee the right to have
such Optionee's ISOs converted into Non-ISOs, and no such conversion shall occur
until and unless the Committee takes appropriate action. The Committee, with the
consent of the Optionee, may also terminate any portion of any ISO that has not
been exercised at the time of such conversion.
14. CONDITIONS PRECEDENT TO ISSUANCE OF SHARES
14.1 COMPLIANCE WITH SECURITIES LAWS - Options shall not be granted and
Shares shall not be issued pursuant to the exercise of any Option unless the
grant and exercise of such Option and the issuance and delivery of such Shares
comply with all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, any applicable state or provincial securities
law, the rules and regulations promulgated thereunder, and the requirements of
any stock exchange upon which the Shares may then be listed or otherwise traded.
14.2 REPRESENTATIONS BY OPTIONEE - As a condition precedent to the exercise
of any Option, the Company may require the Optionee to represent and warrant, at
the time of exercise, 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 Company, such representations and warranties are
required by any applicable law.
14.3 REGULATORY APPROVAL TO ISSUANCE OF SHARES - The Company shall seek to
obtain from regulatory commission or agency having jurisdiction over the Plan
such authority as may be required to issue and sell Shares upon the exercise of
any Option; provided, however, that this undertaking shall not require the
Company to
<PAGE> 18
- 18 -
register under the Securities Act (or any other applicable law for the
registration and sale of securities) either the Plan, any Option or any Shares
issued or issuable pursuant to any such Option. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be relieved from
any liability for failure to issue and sell stock upon exercise of any such
Options unless and until such authority is obtained.
15. USE OF PROCEEDS
15.1 USE OF PROCEEDS - Proceeds from the sale of Shares made pursuant to the
exercise of an Option shall constitute general funds of the Company and shall be
used for general corporate purposes.
16. NOTICES
16.1 NOTICES - All notices, requests, demands and other communications
required or permitted to be given under this Plan and the Options granted under
this Plan shall be in writing and shall be either served personally on the party
to whom notice is to be given, in which case notice shall be deemed to have been
duly given on the date of such service; telefaxed, in which case notice shall be
deemed to have been duly given on the date the telefax is sent; or mailed to the
party to whom notice is to be given, by registered or certified first class
mail, return receipt requested, postage prepaid, and addressed to the party at
his, her or its most recent known address, in which case such notice shall be
deemed to have been duly given on the tenth postal delivery day following the
date of such mailing.
17. MISCELLANEOUS PROVISIONS
17.1 NO OBLIGATION TO EXERCISE - An Optionee shall be under no obligation to
exercise such Optionee's Option.
17.2 NO OBLIGATION TO RETAIN OPTIONEE - Nothing contained in this Plan shall
obligate the Company or an Affiliate of the Company to retain an Optionee as an
employee, officer, director, or consultant for any period, nor shall this Plan
interfere in any way with the right of the Company or an Affiliate of the
Company to reduce such Optionee's compensation.
17.3 BINDING AGREEMENT - The provisions of this Plan and each Option
Agreement with an Optionee shall be binding upon such Optionee and any Qualified
Successor or Guardian of such Optionee.
<PAGE> 19
- 19 -
17.4 USE OF TERMS - Where the context so requires, references herein to the
singular shall include the plural, and vice versa.
17.5 DELIVERY OF FINANCIAL STATEMENTS - Throughout the term of any Option,
the Company shall deliver to the holder of such Option, not later than one
hundred twenty (120) days after the close of each of the Company's fiscal years
during the Option term, a balance sheet and an income statement. This section
shall not apply when the Company's granting of Options is limited to key
employees whose duties in connection with the Company or an Affiliate of the
Company assure them access to equivalent information.
17.6 HEADINGS - The headings used in this Plan are for convenience of
reference only and shall not in any way affect or be used in interpreting any of
the provisions of this Plan.
18. SHAREHOLDER APPROVAL OF PLAN
18.1 SHAREHOLDER APPROVAL OF PLAN - This Plan must be approved by a majority
of the votes cast at a meeting of the shareholders of the Company, other than
votes attaching to securities beneficially owned by:
(a) insiders of the Company, meaning directors, officers and greater
than 10% shareholders; and
(b) Associates of persons referred to in subparagraph 18.1(a) above.
19. EFFECTIVE DATE OF PLAN
19.1 EFFECTIVE DATE OF PLAN - This Plan was approved and adopted by the Board
of Directors on June 20, 1997 and was submitted and approved by the shareholders
of the Company on July 28, 1997. The Effective Date of the Plan is June 20,
1997. The Plan was amended by the Board of Directors of the Company on
, 1998 and is subject to the approval of The Toronto Stock
Exchange and will be submitted to the shareholders of the Company for approval
at the next annual general meeting, provided that no Option granted under the
Amended Plan shall be exercised unless and until the Amended Plan has been
approved by the shareholders of the Company.
<PAGE> 1
EXHIBIT 99.4
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OF THE UNITED STATES OF AMERICA (THE "ACT")
OR THE SECURITIES LAWS OF ANY STATE "STATE") OF THE UNITED STATES OF AMERICA AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR DISTRIBUTED, DIRECTLY OR
INDIRECTLY, TO A U.S. PERSON (AS DEFINED IN REGULATION S ADOPTED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT) OR WITHIN THE UNITED STATES
UNLESS SUCH SHARES ARE (I) REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES ACT (A "STATE ACT"), OR (II) EXEMPT FROM REGISTRATION UNDER THE ACT
AND ANY APPLICABLE STATE ACT AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
TO SUCH EFFECT REASONABLY SATISFACTORY TO IT, OR (III) SOLD IN ACCORDANCE WITH
REGULATIONS S, OR (IV) SOLD PURSUANT TO RULE 144 OF THE ACT.
ISO
GENETRONICS BIOMEDICAL LTD.
INCENTIVE STOCK OPTION AGREEMENT
GENETRONICS BIOMEDICAL LTD. (the "Company") has granted to
________________________(the "Optionee"), an option to purchase a total of
________ (_______) shares of Common Stock (the "Shares"), at the price set out
herein, and, except as otherwise specifically provided herein, in all respects
subject to the terms, definitions and provisions of the AMENDED 1997 STOCK
OPTION PLAN (the "Plan") adopted by the Company which is incorporated herein by
reference. Terms defined in the Plan shall have the same defined meanings
herein.
1. NATURE OF THE OPTION. This Option is granted in connection with and in
furtherance of the Company's compensatory benefit plan for employees (including
officers), directors and consultants and is intended to: (i) qualify as an
"incentive stock option" within the meaning of Section 422 of the Code, (ii)
comply with the provisions of Rule 701 promulgated by the Securities and
Exchange Commission under the Securities Act, and (iii) satisfy the requirements
of Section 25102(o) of the California Corporate Securities Law of 1968, as
amended.
2. EXERCISE PRICE. The EXERCISE PRICE IS $ (U.S. funds) for each share of
Common Stock.
3. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the provisions of the Plan as follows:
3.1 RIGHT TO EXERCISE.
(a) Subject to subsection 3.1(b) below, this Option shall be
exercisable cumulatively as follows:
(i) immediately, as to __________ (_____) of the Shares
subject to the Option, and ending on the Expiry Date;
<PAGE> 2
(ii) as to a further _________ (_____)of the Shares subject
to the Option, or any portion thereof, during the period commencing ______ year
from the Date of Grant and ending on the Expiry Date;
(iii) as to a further of the Shares subject to the Option, or
any portion thereof, during the period commencing
from the Date of Grant and ending on the Expiry Date;
(iv) as to or the balance of the Shares subject to the
Option, or any portion thereof, during the period commencing from the Date of
Grant and ending on the Expiry Date; PROVIDED THAT, IF ON THE DATE OF GRANT OF
THIS OPTION THE PLAN, OR ANY AMENDMENTS THERETO, HAVE NOT BEEN APPROVED BY THE
COMPANY'S SHAREHOLDERS, THIS OPTION SHALL NOT BE EXERCISABLE UNTIL SUCH APPROVAL
HAS BEEN OBTAINED.
Notwithstanding the foregoing, no portion of the Option shall be
exercisable to the extent that the Fair Market Value of the Shares subject to
the Option first becoming exercisable would exceed US$100,000 (valued as at the
Date of Grant) in a single calendar year, and such excess portion shall first
become exercisable on the first day of the next subsequent calendar year to the
extent that the Fair Market Value of the Shares (valued as at the Date of Grant)
which first become exercisable in that year do not exceed US$100,000.
In calculating this US$100,000 limit, all Options granted to the Optionee
under the Plan and any other stock option plan sponsored by the Company or an
Affiliate of the Company shall be taken into account, and if Shares under more
than this Option have their exercisability delayed by operation of this rule,
such Shares shall become exercisable in accordance with this rule in the order
in which the affected options were granted.
(b) This Option may not be exercised for a fraction of a share.
(c) In the event of the Optionee's death, disability or other
termination of employment, the exercisability of this Option is governed by the
provisions of the Plan.
(d) By exercising an Option an Optionee agrees to notify the Company
in writing of any disposition of any of Shares issued upon exercise of this
Option within fifteen (15) days after the date of any disposition of any of such
Shares that occurs within two (2) years after the date of grant of this Option
or within one (1) year after such Shares are transferred upon exercise of this
Option.
(e) By exercising this Option the Optionee agrees that the Company
(or a representative of the underwriters) may, in connection with the first
underwritten registration of the offering of any securities of the Company under
the Securities Act, require that the Optionee not sell, dispose of, transfer,
make any short sale of, grant any
<PAGE> 3
option for the purchase of, or enter into any hedging or similar transaction
with the same economic effect as a sale, any Shares or other securities of the
Company held by the
Optionee, for a period of time specified by the underwriter(s) (not to exceed
one hundred eighty (180) days) following the effective date of a registration
statement of the Company filed under the Securities Act. The Optionee further
agrees to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) which are consistent with the
foregoing or which are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Optionee's Stock until the end of such period.
3.2 REORGANIZATION. In the event of a reorganization as defined in this
Section 3.2 in which the Company is not the surviving or acquiring company, or
in which the Company is or becomes a wholly-owned subsidiary of another company
on or after the effective date of the reorganization, then unless provision is
made by the acquiring corporation for the assumption of each Option granted
under this Plan, or the substitution of an option therefor, such that no
"modification" of any such Option occurs under Section 424 of the Code, the
Option granted under this agreement shall become exercisable in full upon the
Committee giving the Optionee the notice provided for in subparagraph 11.3 of
the Plan, notwithstanding the cumulative schedule set forth in subsection 3.1(b)
above, and such Option shall terminate upon the consummation of such
reorganization. The term "reorganization" as used in this subsection 3.2 shall
mean any statutory merger, statutory consolidation, sale of all or substantially
all of the assets of the Company, or sale, pursuant to an agreement with the
Company, of securities of the Company pursuant to which the Company is or
becomes a wholly-owned subsidiary of another corporation after the effective
date of the reorganization.
3.3 METHOD OF EXERCISE. This Option shall be exercisable by written notice
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the Optionee's investment intent with respect to such
shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company. The written
notice shall be accompanied by payment of the exercise price as provided in
Section 5 below.
No Shares will be issued pursuant to the exercise of this Option unless
such issuance and such exercise shall comply with all relevant provisions of
law, including all tax withholding laws, and the requirements of any stock
exchange upon which the Shares may then be listed.
4. OPTIONEE'S REPRESENTATIONS. If the Optionee is a resident or citizen of the
United States of America, then in the event the Shares purchasable pursuant to
the exercise of this Option have not been registered under the Securities Act of
1933, as amended, at the
<PAGE> 4
time this Option is exercised, the Optionee shall, concurrently with the
exercise of all or any portion of this Option, deliver to the Company the
Optionee's Investment Representation Statement in such form as may be required
in the opinion of the Company's legal counsel to comply with applicable state
and federal securities laws.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by way of cheque,
in Canadian funds, made payable to the Company in an amount equal to the full
purchase price of the number of Shares specified in the notice of exercise.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the issuance
of Shares upon such exercise or the method of payment of consideration for such
shares would violate any applicable federal or state securities or other law or
regulation, or the rules, regulations or listing requirements of any stock
exchange upon which the shares are listed or included.
7. RESIDENTS OF THE UNITED STATES. If the Optionee is a resident or citizen of
the United States of America at the time of the exercise of the Option, the
certificate(s) representing the Shares may be endorsed with the following or a
similar legend: "The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, of the United States of
America (the "Act") or the securities laws of any state ("State") of the United
States of America and may not be sold, transferred, pledged, hypothecated or
distributed, directly or indirectly, to a U.S. person (as defined in Regulation
S adopted by the U.S. Securities and Exchange Commission under the Act) or
within the United States of America unless such shares are (i) registered under
the Act and any applicable State securities act (a "State Act"), or (ii) exempt
from registration under the Act and any applicable State Act and the Company has
received an opinion of counsel to such effect reasonably satisfactory to it, or
(iii) sold in accordance with Regulation S."
8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner other than by will or by the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by the Optionee or by the
Optionee's Guardian, if any, as provided in the Plan. The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
9. TERM OF OPTION. The term of this Option may not exceed five (5) years if
the Optionee owns, immediately before this Option is granted, stock representing
more than 10% of the total combined voting power of all classes of stock of the
Company or of any Affiliate, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. This Option is for a TERM
OF TEN (10) YEARS, expiring on ___________, (the "Expiry Date").
10. EARLY DISPOSITION OF STOCK. The Optionee understands that if the Optionee
disposes of any Shares received under this Option within two (2) years after the
date of this agreement or within one year after such Shares were transferred to
the Optionee, the Optionee may be treated for United States of America federal
income tax purposes as
<PAGE> 5
having received ordinary income at the time of such disposition in an amount
equal to the excess of the fair market value of the Shares at the time such
Shares were delivered to Optionee over the price paid for the Shares. The
Optionee hereby agrees to notify the Company in writing within fifteen (15) days
after the date of any such disposition.
11. NOT EMPLOYMENT AGREEMENT. This agreement is not an employment agreement,
and nothing contained in this agreement shall obligate the Company or an
Affiliate of the Company to retain the Optionee as an employee, officer,
director, or consultant for any period, nor shall this agreement interfere in
any way with the right of the Company or Affiliates of the Company to reduce the
Optionee's compensation.
DATE OF GRANT:
-----------------
GENETRONICS BIOMEDICAL LTD.
By:
-----------------------------------------
Lois J. Crandell, President & CEO
Optionee acknowledges receipt of a copy of the Plan, a copy of which is annexed
hereto; represents that Optionee is familiar with the terms and provisions of
the Plan; and hereby accepts this Option subject to all of the terms and
provisions of the Plan. Optionee further acknowledges that if the Plan has not
been approved by the Company's shareholders on the date of grant of this Option,
this Option is not exercisable until such approval has been obtained.
OPTIONEE:
Date Signed:
- --------------------------------- --------------------------
Name Here
Address:
- ---------------------------------
- ---------------------------------
<PAGE> 6
EXHIBIT A
STOCK OPTION EXERCISE NOTICE
AND
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: Name here
COMPANY: GENETRONICS BIOMEDICAL LTD.
SECURITY: COMMON STOCK
AMOUNT: ________________________________
(No. of shares to be exercised)
DATE: ________________________________
- --------------------------------------------------------------------------------
I hereby give notice of my election to purchase the above-described Securities
pursuant to exercise of options granted under the GENETRONICS BIOMEDICAL LTD.
1997 Stock Option Plan. In connection with the purchase of the above-listed
Securities, I, the Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933 ("Securities Act").
(b) I understand that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission ("SEC"), the statutory basis
for such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase
<PAGE> 7
or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. I understand that the
Company is under no obligation to register the Securities. In addition, I
understand that the certificate evidencing the Securities will be imprinted with
a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Purchaser satisfactory to the Company or a no-action letter is received from
the Securities and Exchange Commission.
(d) I am aware of the provisions of Rule 144(1)1 promulgated under
the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, if applicable, including, among other
things: the availability of certain public information about the Company; the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold; the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934) and
the amount of Securities being sold during any three month period not exceeding
the specified limitations stated therein.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, I would be precluded from selling the Securities under Rule 144 even
if the one-year minimum holding period has been satisfied.
(f) I further understand that in the event all of the requirements of
Rule 144 are not satisfied, registration under the Securities Act or compliance
with a registration exemption will be required; and that, notwithstanding the
fact that Rule 144 is not exclusive, the Staff of the SEC has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
(g) I further agree (i) to provide such additional documents as the
Company may require pursuant to the terms of the 1997 Stock Option Plan, (ii) to
provide for the payment by me to the Company (in the manner designated by the
Company) of the Company's tax withholding obligation, if any, relating to the
exercise of this incentive stock
- --------
(1) may not be applicable due to Company's reliance on Regulation S Rule 903/904
exemption for foreign issuer.
<PAGE> 8
option, and (iii) to notify the Company in writing of any disposition of the
Securities within fifteen (15) days after the date of such disposition that
occurs within two (2) years after the date of grant of this incentive stock
option or within one (1) year after such Securities are issued upon exercise of
this incentive stock option.
(h) I further agree that, if required by the Company (or a representative
of the underwriters) in connection with the first underwritten registration of
the offering of any securities of the Company under the Securities Act, I will
not to sell, dispose of, transfer, make any short sale of, grant any option for
the purchase of, or enter into any hedging or similar transaction with the same
economic effect as a sale, any of the Securities or other securities of the
Company held by me, for a period of time specified by the underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of a
registration statement of the Company filed under the Securities Act. I further
agree to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) which are consistent with the
foregoing or which are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to these Securities until the end of such period.
(i) I further understand that if the Plan has not been approved by
the Company's shareholders, this Option is not exercisable until such approval
has been obtained.
Signature of Purchaser:
- --------------------------------- --------------------------
Name here Date:
<PAGE> 9
THIS OPTION AGREEMENT AND ANY SECURITY TO BE ISSUED THEREUNDER IS SUBJECT TO A
HOLD PERIOD AND MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL
______________________, __________ EXCEPT AS PERMITTED BY THE SECURITIES ACT
(BRITISH COLUMBIA) AND REGULATIONS MADE UNDER THE ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OF THE UNITED STATES OF AMERICA (THE "ACT")
OR THE SECURITIES LAWS OF ANY STATE ("STATE") OF THE UNITED STATES OF AMERICA
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR DISTRIBUTED, DIRECTLY
OR INDIRECTLY, TO A U.S. PERSON (AS DEFINED IN REGULATION S ADOPTED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT) OR WITHIN THE UNITED STATES
UNLESS SUCH SHARES ARE (I) REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES ACT (A "STATE ACT"), OR (II) EXEMPT FROM REGISTRATION UNDER THE ACT
AND ANY APPLICABLE STATE ACT AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
TO SUCH EFFECT REASONABLY SATISFACTORY TO IT, OR (III) SOLD IN ACCORDANCE WITH
REGULATIONS S OR (IV) SOLD PURSUANT TO RULE 144 OF THE ACT.
NON-ISO
GENETRONICS BIOMEDICAL LTD.
NONSTATUTORY STOCK OPTION AGREEMENT
Genetronics Biomedical Ltd. (the "Company") has granted to ________________
__________________________(the "Optionee"), an option to purchase a total of
______________________________ (___________________) shares of Common Stock, at
the price set out herein, and, except as otherwise specifically provided herein,
in all respects subject to the terms, definitions and provisions of the 1997
Stock Option Plan (the "Plan") adopted by the Company which is incorporated
herein by reference. Terms defined in the Plan shall have the same defined
meanings herein.
1. NATURE OF THE OPTION. This Option is granted in connection with and in
furtherance of the Company's compensatory benefit plan for employees (including
officers), directors and consultants and is intended to: (i) comply with the
provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act, (ii) satisfy the requirements of Section 25102(o) of
the California Corporate Securities Law of 1968, as amended, and (iii) not
qualify as an "incentive stock option" within the meaning of Section 422 of the
Code.
2. EXERCISE PRICE. The exercise price is $________________ (US$) for each
share of Common Stock.
3. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the provisions of the Plan as follows:
3.1 RIGHT TO EXERCISE.
(a) Subject to subsection 3.1(b) below, this Option shall be
exercisable cumulatively as follows:
(i) immediately, as to ____________________(_____________)
of the Shares subject to the Option;
<PAGE> 10
(ii) as to a further ___________________________
(_____________) of the Shares subject to the Option, or any portion thereof,
during the period commencing _____________________ (________________) from the
Date of Grant and ending on the Expiry Date;
(iii) as to a further _____________________
(________________) of the Shares subject to the Option, or any portion thereof,
during the period commencing _____________________ (________________) from the
Date of Grant and ending on the Expiry Date;
(iv) as to a further _____________________
(________________) of the Shares subject to the Option, or any portion thereof,
during the period commencing _____________________ (________________) from the
Date of Grant and ending on the Expiry Date;
(v) as to _____________________ (________________) or
the balance of the Shares subject to the Option, or any portion thereof, during
the period commencing _____________________ (________________) from the Date of
Grant and ending on the Expiry Date; provided that, if on the Date of Grant of
this Option the Plan has not been approved by the Company's shareholders, this
Option shall not be exercisable until such approval has been obtained.
(b) This Option may not be exercised for a fraction of a share.
(c) In the event of the Optionee's death, disability, or
termination of service with the Company, the exercisability of this Option is
governed by the provisions of the Plan.
(d) By exercising this Option the Optionee agrees that the
Company (or a representative of the underwriters) may, in connection with the
first underwritten registration of the offering of any securities of the Company
under the Securities Act, require that the Optionee not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale,
any Shares or other securities of the Company held by the Optionee, for a period
of time specified by the underwriter(s) (not to exceed one hundred eighty (180)
days) following the effective date of a registration statement of the Company
filed under the Securities Act. The Optionee further agrees to execute and
deliver such other agreements as may be reasonably requested by the Company
and/or the underwriter(s) which are consistent with the foregoing or which are
necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to the
Optionee's Stock until the end of such period.
3.2 REORGANIZATION. In the event of a reorganization as defined in
this Section 3.2 in which the Company is not the surviving or acquiring company,
or in which the Company is or becomes a wholly-owned subsidiary of another
company on or after the effective date of the reorganization, then unless
provision is made by the acquiring corporation for the assumption of each Option
granted under this Plan, or the substitution of an option therefor, such that no
"modification" of any such Option occurs under Section 424 of the Code, the
Option granted under this agreement shall become exercisable in full upon the
Committee giving the Optionee the notice provided for in
<PAGE> 11
subparagraph 11.3 of the Plan, notwithstanding the cumulative schedule set forth
in subsection 3.1(b) above, and such Option shall terminate upon the
consummation of such reorganization. The term "reorganization" as used in this
subsection 3.2 shall mean any statutory merger, statutory consolidation, sale of
all or substantially all of the assets of the Company, or sale, pursuant to an
agreement with the Company, of securities of the Company pursuant to which the
Company is or becomes a wholly-owned subsidiary of another corporation after the
effective date of the reorganization.
3.3 METHOD OF EXERCISE. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the Optionee's investment intent with
respect to such shares of Common Stock as may be required by the Company
pursuant to the provisions of the Plan. Such written notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the
Company. The written notice shall be accompanied by payment of the exercise
price as provided in Section 5 below.
No Shares will be issued pursuant to the exercise of this Option unless
such issuance and such exercise shall comply with all relevant provisions of
law, including all tax withholding laws, and the requirements of any stock
exchange upon which the Shares may then be listed.
4. OPTIONEE'S REPRESENTATIONS. If the Optionee is a resident or citizen
of the United States of America, then in the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised, the
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company the Optionee's Investment Representation
Statement in such form as may be required in the opinion of the Company's legal
counsel to comply with applicable state and federal securities laws.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by way of
cheque, in Canadian funds, made payable to the Company in an amount equal to the
full purchase price of the number of Shares specified in the notice of exercise.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would violate any applicable federal or state
securities or other law or regulation, or the rules, regulations or listing
requirements of any stock exchange upon which the shares are listed or included.
7. RESIDENTS OF THE UNITED STATES. If the Optionee is a resident or
citizen of the United States of America at the time of the exercise of the
Option, the certificate(s) representing the Shares may be endorsed with the
following or a similar legend: "The shares represented by this Certificate have
not been registered under the Securities Act of 1933, as amended, of the United
States of America (the "Act") or the securities laws of any state ("State") of
the United States of America and may not be sold, transferred, pledged,
hypothecated or distributed, directly or
<PAGE> 12
indirectly, to a U.S. person (as defined in Regulation S adopted by the U.S.
Securities and Exchange Commission under the Act) or within the United States of
America unless such shares are (i) registered under the Act and any applicable
State securities act (a "State Act"), or (ii) exempt from registration under the
Act and any applicable State Act and the Company has received an opinion of
counsel to such effect reasonably satisfactory to it, or (iii) sold in
accordance with Regulation S."
8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent or distribution, and may
be exercised during the lifetime of the Optionee only by the Optionee or by the
Optionee's Guardian, if any, as provided in the Plan. The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
9. TERM OF OPTION. This Option is for a term of _____________________
(________________) YEARS, expiring on , (the "Expiry Date").
10. TAXATION UPON EXERCISE OF OPTION. The Optionee understands that, if
the Optionee is subject to the Code, then pursuant to certain provisions of the
Code and upon exercise of this Option, the Optionee must recognize income for
tax purposes in an amount equal to the excess of the then fair market value of
the Shares over the exercise price. If this is the case, the Company will
withhold tax from Optionee's current compensation with respect to such income.
If the Optionee's current compensation is insufficient to satisfy the
withholding tax liability, the Company may require the Optionee to make a cash
payment to cover such liability as a condition of exercise of this Option.
11. NOT EMPLOYMENT AGREEMENT. This agreement is not an employment
agreement, and nothing contained in this agreement shall obligate the Company or
an Affiliate of the Company to retain an Optionee as an employee, officer,
director, or consultant for any period, nor shall this agreement interfere in
any way with the right of the Company or Affiliates of the Company to reduce the
Optionee's compensation.
DATE OF GRANT:
-----------------------
GENETRONICS BIOMEDICAL LTD.
By:
-----------------------------------
Lois J. Crandell, President & CEO
<PAGE> 13
Optionee acknowledges receipt of a copy of the Plan, a copy of which is annexed
hereto; represents that Optionee is familiar with the terms and provisions of
the Plan; and hereby accepts this Option subject to all of the terms and
provisions of the Plan. Optionee further acknowledges that if the Plan has not
been approved by the Company's shareholders on the date of grant of this Option,
this Option is not exercisable until such approval has been obtained.
OPTIONEE:
Date Signed:
- ----------------------------------- -------------------------
Name Here
Name Here
- -----------------------------------
Print Name
- -----------------------------------
- -----------------------------------
Address
<PAGE> 14
EXHIBIT A
STOCK OPTION EXERCISE NOTICE AND
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: Name Here
COMPANY: GENETRONICS BIOMEDICAL LTD.
SECURITY: COMMON STOCK
AMOUNT: ____________________
(amount to be exercised)
DATE: ____________________
(date of exercise)
I hereby give notice of my election to purchase the above-described Securities
pursuant to exercise of options granted under the GENETRONICS BIOMEDICAL LTD.
1997 Stock Option Plan. In connection with the purchase of the above-listed
Securities, I, the Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial condition,
and have acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities. I am purchasing these
Securities for my own account for investment purposes only and not with a view
to, or for the resale in connection with, any "distribution" thereof for
purposes of the Securities Act of 1933 ("Securities Act").
(b) I understand that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment intent
as expressed herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission ("SEC"), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future.
(c) I further understand that the Securities must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from registration is otherwise available. I understand that the Company is under
no obligation to register the Securities. In addition, I understand that the
certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required
<PAGE> 15
in the opinion of counsel for the Purchaser satisfactory to the Company or a
no-action letter is received from the Securities and Exchange Commission.
(d) I am aware of the provisions of Rule 144 may not be applicable due to
Company"s reliance on Regulation S Rule 903/904 exemption for foreign issues,
promulgated under the Securities Act, which, in substance, permits limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer thereof (or from an affiliate of such issuer), in a non-public
offering subject to the satisfaction of certain conditions, if applicable,
including, among other things: the availability of certain public information
about the Company; the resale occurring not less than one year after the party
has purchased and paid for the securities to be sold; the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934) and the amount of Securities being sold during any three
month period not exceeding the specified limitations stated therein.
(e) I further understand that at the time I wish to sell the Securities
there may be no public market upon which to make such a sale, and that, even if
such a public market then exists, the Company may not be satisfying the current
public information requirements of Rule 144, and that, in such event, I would be
precluded from selling the Securities under Rule 144 even if the one-year
minimum holding period has been satisfied.
(f) I further understand that in the event all of the requirements of Rule
144 are not satisfied, registration under the Securities Act or compliance with
a registration exemption will be required; and that, notwithstanding the fact
that Rule 144 is not exclusive, the Staff of the SEC has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
(g) I further agree (i) to provide such additional documents as the
Company may require pursuant to the terms of the 1997 Stock Option Plan, and
(ii) to provide for the payment by me to the Company (in the manner designated
by the Company) of the Company's tax withholding obligation, if any, relating to
the exercise of this stock option.
(h) I further agree that, if required by the Company (or a representative
of the underwriters) in connection with the first underwritten registration of
the offering of any securities of the Company under the Securities Act, I will
not to sell, dispose of, transfer, make any short sale of, grant any option for
the purchase of, or enter into any hedging or similar transaction with the same
economic effect as a sale, any of the Securities or other securities of the
Company held by me, for a period of time specified by the underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of a
registration statement of the Company filed under the Securities Act. I further
agree to execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) which are consistent with the
foregoing or which are
<PAGE> 16
necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to
these Securities until the end of such period.
(i) I further understand that if the Plan has not been approved by the
Company's shareholders, this Option is not exercisable until such approval has
been obtained.
Signature of Purchaser:
Date Signed:
- -------------------------------------- -------------------------
Name Here
<PAGE> 1
EXHIBIT 99.5
THE SECURITIES REFERENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OF THE UNITED STATES OF AMERICA (THE "ACT")
OR THE SECURITIES LAWS PLEDGED, HYPOTHECATED OR DISTRIBUTED, DIRECTLY OR
INDIRECTLY, TO A U.S. PERSON (AS DEFINED IN REGULATION S ADOPTED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT) OR WITHIN THE UNITED STATES
UNLESS SUCH SHARES ARE (I) REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES ACT (A "STATE ACT"), OR (II) EXEMPT FROM REGISTRATION UNDER THE ACT
AND ANY APPLICABLE STATE ACT AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
TO SUCH EFFECT REASONABLY SATISFACTORY TO IT, OR (III) SOLD IN ACCORDANCE WITH
REGULATION S AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO SUCH EFFECT
REASONABLY SATISFACTORY TO IT.
THIS STOCK OPTION AGREEMENT is made as of the __day of _______, ____
BETWEEN:
GENETRONICS BIOMEDICAL LTD., a body corporate having its office at
210-580 Hornby Street, Vancouver, B.C., V6C 3B6
(the "Company")
AND:
__________, Businessman, of ____________________________________________
(the "Optionee")
WITNESSES THAT WHEREAS:
A. The Optionee is an employee of the Company;
B. The Company wishes to grant the Optionee an option to purchase
certain shares in the capital of the Company to provide incentive to the
Optionee in acting in such capacity;
NOW THEREFORE, in consideration of the recitals, the following
agreements, the payment of $1 made by each party to the other, and other good
and valuable consideration, the receipt and sufficiency of which is acknowledged
by each party, the parties agree as follows:
1. DEFINED TERMS.
In this Agreement, the term "Share" or "Shares" means one or more post
consolidation common shares without par value in the capital of the Company.
1.
<PAGE> 2
2. GRANT OF OPTION.
The Company hereby grants to the Optionee an option (the "Option") to
purchase all or any portion of ______ fully paid Shares of the Company (the
"Optioned Shares") from the treasury at a price per Optioned Share equal to the
price of the proposed Statement of Material Facts offering of Shares,
exercisable on or before the close of business on the date that is five years
from the date (the "Expiry Date") that the reverse takeover of Consolidated
United Safety Technology Inc. is closed. Subject to paragraph 12 of this
Agreement, immediately following the Expiry Date, the Option will expire and
this Agreement will terminate and be of no further force or effect whatsoever.
3. NOTICE OF EXERCISE.
(a) The Option may be exercised in whole or in part by the Optionee or
his legal personal representatives from time to time during the period prior to
the Expiry Date, at any time after the date that the reverse takeover among the
Company and Genetronics, Inc. is closed. To exercise the Option, the Optionee
shall tender a notice in writing at the head office of the Company specifying
the number of Optioned Shares being purchased, together with a certified cheque
in favour of the Company in an amount equal to the full purchase price of the
number of Optioned Shares so specified.
4. COVENANTS.
The Company hereby covenants that it will reserve in its treasury
sufficient Shares to permit the issuance and allotment of the Optioned Shares to
the Optionee in the event the Option or any part thereof is exercised.
5. DELIVERY OF SHARE CERTIFICATE.
Upon the exercise of the Option in accordance with section 3, the
Company will cause the Montreal Trust Company of Canada to deliver to the
Optionee within seven days a certificate in the name of the Optionee
representing in the aggregate such number of Optioned Shares as the optionee
shall have then paid for.
6. NO OBLIGATION TO PURCHASE.
This is an option agreement only and nothing contained in or done
pursuant to this Agreement will obligate the Optionee to purchase and/or pay for
any Optioned Shares except those Optioned Shares in respect of which the
Optionee shall have exercised his Option in the manner provided.
7. NO RIGHTS AS SHAREHOLDER.
The Optionee will have no rights whatsoever as a shareholder in respect
of any of the Optioned Shares (including any right to receive dividends or other
distributions therefrom or
2.
<PAGE> 3
thereon) other than in respect of Optioned shares in respect of which the
Optionee shall have exercised his Option and which the Optionee shall have
actually taken up and paid for.
8. RESIDENTS OF THE UNITED STATES.
If the Optionee is a resident or citizen of the United States of America
at the time of the exercise of the Option, the certificate(s) representing the
Optioned Shares may be endorsed with the following or a similar legend. "The
shares represented by this Certificate have not been registered under the
Securities Act of 1933, as amended, of the United States of America (the "Act")
or the securities laws of any state ("State") of the United States of America
and may not be sold, transferred, pledged, hypothecated or distributed, directly
or indirectly, to a U.S. person (as defined in Regulation S adopted by the U.S.
Securities and Exchange Commission under the Act) or within the United States
unless such shares are (i) registered under the Act and any applicable State
securities act (a "State Act"), or (ii) exempt from registration under the Act
and any applicable State Act and the Company has received an opinion of counsel
to such effect reasonably satisfactory to it, or (iii) sold in accordance with
Regulation S."
9. CHANGES IN SHARE CAPITAL.
In the event of any subdivision, redivision, or change in the share
capital of the Company at any time before the Expiry Date into a greater number
of shares, the Company shall deliver at the time of any exercise thereafter of
the Option such additional number of shares as would have resulted from such
subdivision, redivision or change if such exercise of the Option had been made
before the date of such subdivision, redivision or change.
In the event of any consolidation or change in the share capital of the
Company at any time before the Expiry Date into a lesser number of shares, the
number of shares deliverable by the Company on any exercise thereafter of the
Option shall be reduced to such number of shares as would have resulted from
such consolidation or change if such exercise of the Option had been made before
the date of such consolidation or change.
10. APPROVALS REQUIRED.
The provisions of this Agreement and the exercise of the rights
hereinbefore granted to the Optionee are subject to the approval of the
Vancouver Stock Exchange.
11. REPRESENTATION AND WARRANTY.
The Optionee represents and warrants that he has not been induced to
purchase the Option by expectation of employment or continued employment.
12. TERMINATION.
Notwithstanding any other provision of this Agreement, in the event of:
(a) the death of the Optionee on or prior to the Expiry Date, the legal
heirs or personal representatives of the Optionee will have one year from the
date of such death or the close of business on the Expiry Date, whichever is
earlier, in which to purchase those Optioned
3.
<PAGE> 4
Shares which the Optionee was entitled to purchase under the terms of this
Agreement at the time of death; and
(b) the Optionee ceasing to be an employee of the Company prior to the
Expiry Date by reason other than the death of the Optionee, the Option will
expire 30 days following the day upon which the Optionee so ceased to be an
employee, and this Agreement will be of no further force or effect whatsoever.
13. AMENDMENTS.
Any amendments to this Agreement will be in writing duly executed by the
parties hereto and will be subject to the approval of the Vancouver Stock
Exchange and the shareholders of the Company.
14. ASSIGNMENT.
The Option will not be assignable or transferable by the Optionee
otherwise than by will or the law of intestacy and the Option may be exercised
during the lifetime of the Optionee only by the Optionee.
15. TIME OF THE ESSENCE.
Time is of the essence of this Agreement and will be calculated in
accordance with the provisions of the Interpretation Act (British Columbia).
16. GOVERNING LAW.
This Agreement will be governed by, construed and enforced in accordance
with the laws of the Province of British Columbia.
17. ENUREMENT.
This Agreement will enure to the benefit of and be binding upon the
Company, its successors and assigns, and the Optionee, and his legal personal
representatives to the extent provided in paragraph 12 hereof.
18. COUNTERPART.
This Agreement may be executed in counterpart and such counterparts
together shall constitute one and the same instrument and notwithstanding the
date of execution shall be deemed to bear the date as set out on the first page
of this Agreement.
4.
<PAGE> 5
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year set out on the first page of this Agreement.
GENETRONICS BIOMEDICAL LTD/
Per:_______________________________
Authorized Signatory
SIGNED, SEALED and DELIVERED
by __________ in the presence of:
___________________________________ ___________________________________
Optionee
5.
