DEEP WELL OIL & GAS, INC. NON-QUALIFIED STOCK OPTION AGREEMENT
EXHIBIT
10.9
This
NON-QUALIFIED
STOCK OPTION AGREEMENT
(the
“Agreement”)
is
made this 20 day of September, 2007, by and between Deep
Well Oil & Gas, Inc.,
a
Nevada corporation (the “Corporation”)
and
R.N.
Dell Energy Ltd.,
an
Alberta Company (“Optionee”).
Whereas
the Optionee has entered in to a consulting services agreement with a subsidiary
of the Corporation effective September 20, 2007 (“Consulting
Agreement”)
1. Amendment
to Existing Agreement
This
Agreement shall replace clause 4(b) in the Consulting Agreement and amend it
accordingly.
2. Grant
of Option
The
Corporation hereby grants Optionee the option (the “Option”)
to
purchase all or any part of an aggregate of 240,000 shares (the “Shares”)
of
Common Stock of the Corporation at the exercise price of $0.47 USD per share
according to the terms and conditions set forth in this Agreement and in the
Deep Well Oil & Gas, Inc. November 28, 2005 Stock Option Plan (the
“Plan”).
The
Option will not be treated as an incentive stock option within the meaning
of
Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
The
Option is issued under the Plan and is subject to its terms and conditions.
A
copy of the Plan will be furnished upon request of Optionee.
The
Option shall terminate at the close of business five years from the date hereof
(the “Option Termination Date”).
3. Vesting
of Option Rights; Transferability
(A) This
Option shall be exercisable, in whole or in part, according to the following
vesting schedule:
(i) 20,000
Shares
per month commencing on October
31,
2007,
subject
to Optionee’s continuing to provide services to the Corporation or any
Subsidiary as an employee, director or consultant, as the case may be,
provided
that the Optionee continues to provide services on such vesting date.
.
(B) During
the lifetime of the consulting contract with the Optionee, the Option shall
be
exercisable only by Optionee and shall not be assignable or transferable by
Optionee.
4. Exercise
of Option after Death or Termination of Services or Employment
Except
as
otherwise determined by the Board:
(A) In
the
event that an Optionee ceases to provide services to the Corporation as a result
of termination for cause (as such term is defined in clause 22.3 of the
Consulting Agreement), each of the Options held by the Optionee shall cease
to
be exercisable after the date of termination of services as a consultant.
(B) In
the
event that an Optionee ceases to provide services to the Corporation for any
reason other than termination for cause, any vested Option held by Optionee
may
continue to be exercised by the Optionee to and until the earlier
of:
(i) the
applicable expiration of the Option Period in respect of such Option;
and
(ii) the
period after the date on which Optionee ceases to provide services to the
Corporation that is permitted by the applicable laws, policies, rules and
regulations of any stock exchange upon which the Underlying Shares are then
listed, posted and/or quoted for trading;
(C) Notwithstanding
the above, in no case may the Option be exercised to any extent by anyone after
the Option Termination Date.
5. Method
of Exercise of Option
Subject
to the foregoing, the Option may be exercised in whole or in part from time
to
time by serving written notice of exercise on the Corporation at its principal
office within the Option period. The notice shall state the number of Shares
as
to which the Option is being exercised and shall be accompanied by payment
of
the exercise price. Payment of the exercise price shall be made;
(A) in
cash
(including bank check, personal check or money order payable to the
Corporation),
(B) with
the
approval of the Corporation (which may be given in its sole discretion), by
delivering to the Corporation for cancellation shares of the Corporation’s
Common Stock already owned by Optionee having a Fair Market Value (as defined
in
the Plan) equal to the full exercise price of the Shares being
acquired,
(C) with
the
approval of the Corporation (which may be given in its sole discretion), by
electing to have the Corporation retain from the number of Shares to be issued
to the Optionee upon the exercise of such Option Shares having a Fair Market
Value on the date of exercise equal to the aggregate exercise price payable
upon
exercise of such Option;
(D) through
a
special sale and remittance procedure pursuant to which Optionee (or any other
person or persons permitted to exercise the option) shall concurrently provide
irrevocable instructions
(i) to
a
Corporation designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable income
and
employment taxes required to be withheld by the Corporation by reason of such
exercise and
(ii) to
the
Corporation to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale; or
(E) by
any
combination of the methods of payment described above.
6. Securities
Law Matters.
(A) Restricted
Securities.
The
Optionee understands and acknowledges that neither the Option nor the Shares
have been registered under the United States Securities Act of 1933, as amended
(the “Securities Act”), that the Option has been issued to it in reliance on an
exemption from the registration requirements of the Securities Act, and that
the
Option and the Shares are, or will be, as applicable, “restricted securities” as
defined in Rule 144 under the Securities Act.
(B) Accredited
Investor.
The
Optionee represents that it is an “accredited investor” within the meaning of
Rule 501(a) under the Securities Act.
(C) Restrictions
on Exercise.
The
Optionee understands and acknowledges that the Option may be exercised only
pursuant to an exemption from the registration requirements of the Securities
Act and applicable state securities laws, and that at the time of any proposed
exercise, the Corporation may require an opinion of counsel or other evidence
satisfactory to it to the effect that the Shares may be issued pursuant to
such
exercise without registration under the Securities Act or applicable state
securities laws.
(D) Resale
Restrictions.
The
Optionee understands and acknowledges that notwithstanding anything to the
contrary contained in this Agreement, the Option and the Shares may be offered,
sold, pledged or otherwise transferred only
(i) to
the
Corporation;
(ii) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act and in compliance with applicable Canadian local laws and
regulations; or
(iii)
within
the United States, in a transaction that does not require registration under
the
Securities Act or any applicable state securities laws. In connection with
any
proposed sale, pledge or other transfer of the Option or the Shares, the
Corporation may require an opinion of counsel or other evidence satisfactory
to
it to the effect that the proposed sale, pledge or other transfer may be
effected without registration under the Securities Act or applicable state
securities laws.
(E) Legend.
The
Optionee understands and acknowledges that upon the original issuance of the
Shares, as applicable, and until such time as the same is no longer required
under applicable requirements of the Securities Act or state securities laws,
the certificates representing the Shares, and all certificates issued in
exchange therefor or in substitution thereof, shall bear a legend with respect
to the transfer restrictions set forth above.
7. Miscellaneous
(A) Plan
Provisions Control.
In the
event that any provision of the Agreement conflicts with or is inconsistent
in
any respect with the terms of the Plan, the terms of the Plan shall
control.
(B) No
Rights of Stockholders.
Neither
Optionee, Optionee’s legal representative nor a permissible assignee of this
Option shall have any of the rights and privileges of a stockholder of the
Corporation with respect to the Shares, unless and until such Shares have been
issued in the name of Optionee, Optionee’s legal representative or permissible
assignee, as applicable.
(C) No
Right to Employment.
The
grant of the Option shall not be construed as giving Optionee the right to
be
retained in the employ of, or as giving a director of the Corporation or a
Subsidiary (as defined in the Plan) the right to continue as a director of
the
Corporation or a Subsidiary, nor will it affect in any way the right of the
Corporation or a Subsidiary to terminate such employment or position at any
time, with or without cause. In addition, the Corporation or Subsidiary may
at
any time dismiss Optionee from employment, or terminate the term of a director
of the Corporation or a Subsidiary, free from any liability or any claim under
the Plan or the Agreement. Nothing
in the Agreement shall confer on any person any legal or equitable right against
the Corporation or any Subsidiary, directly or indirectly, or give rise to
any
cause of action at law or in equity against the Corporation or a Subsidiary.
The
Option granted hereunder shall not form any part of the wages or salary of
Optionee for purposes of severance pay or termination indemnities, irrespective
of the reason for termination of employment. Under no circumstances shall any
person ceasing to be an employee of the Corporation or any Subsidiary be
entitled to any compensation for any loss of any right or benefit under the
Agreement or Plan which such optionee might otherwise have enjoyed but for
termination of employment, whether such compensation is claimed by way of
damages for wrongful or unfair dismissal, breach of contract or otherwise.
By
participating in the Plan, Optionee shall be deemed to have accepted all the
conditions of the Plan and the Agreement and the terms and conditions of any
rules and regulations adopted by the Committee and shall be fully bound
thereby.
(D) Governing
Law.
The
validity, construction and effect of the Plan and the Agreement, and any rules
and regulations relating to the Plan and the Agreement, shall be determined
in
accordance with the internal laws, and not the law of conflicts, of the State
of
Nevada.
(E) Severability.
If any
provision of the Agreement is or becomes or is deemed to be invalid, illegal
or
unenforceable in any jurisdiction or would disqualify the Agreement under any
law deemed applicable by the Committee (as defined in the Plan), such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the purpose or intent of the Plan or the
Agreement, such provision shall be stricken as to such jurisdiction or the
Agreement, and the remainder of the Agreement shall remain in full force and
effect.
(F) No
Trust or Fund Created.
Neither
the Plan nor the Agreement shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Corporation
or
any Subsidiary and Optionee or any other person.
(G) Headings.
Headings are given to the Sections and subsections of the Agreement solely
as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Agreement
or any provision thereof.
(H) Conditions
Precedent to Issuance of Shares;
Repurchase Rights.
Shares
shall not be issued pursuant to the exercise of the Option unless such exercise
and the issuance and delivery of the applicable Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation,
the
Securities Act of 1933, as amended, the Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder, the requirements of any applicable
Stock Exchange or the Nasdaq National Market and the corporate laws of the
state
of Nevada. As a condition to the exercise of the purchase price relating to
the
Option, the Corporation may require that the person exercising or paying the
purchase price represent and warrant that the Shares are being purchased only
for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Corporation, such a representation
and warranty is required by law.
(I) Withholding.
In
order to comply with all applicable federal, state or provincial income tax
laws
or regulations, the Corporation may take such action as it deems appropriate
to
assure that all applicable federal, state or provincial payroll, withholding,
income or other taxes are withheld or collected from Optionee.
(J) Adjustment
to Number of Shares and Exercise Price.
Subject
to approval if necessary of any relevant stock exchange, the Board will adjust
the number of Shares subject to an Option, and the exercise price per Share
payable upon exercise of an Option, upon the occurrence of any stock dividend,
stock split, reverse stock split, combination of shares, reclassification of
shares, recapitalization or other similar corporate transaction with respect
to
the Shares. Notwithstanding the preceding sentence to the contrary, no such
adjustment will be made upon the conversion of any debt instrument, share of
preferred stock or other convertible security of the Corporation into
Shares.
(K) Review
of Plan.
Optionee acknowledges receipt of a copy of the Plan and represents that he
or
she is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain
the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan or this Option.
(L) Change
of Address.
Optionee further agrees to notify the Corporation upon any change in the
residence address indicated below.
IN
WITNESS WHEREOF,
the
Corporation and Optionee have executed this Agreement as of the date set forth
in the first paragraph.
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By:
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Name:
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Title:
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OPTIONEE
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Name:.
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Address:
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