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EXHIBIT 10.2
NOVATEC INC.
ALEXANDER S. DAWSON
CHIP APPLICATION TECHNOLOGIES LIMITED
SHARE OPTION DEED
IN RESPECT OF SHARES IN NOVATEC INC.
CORRS CHAMBERS WESTGARTH
Lawyers
Level 32, Governor Phillip Tower
1 Farrer Place
SYDNEY NSW 2000
AUSTRALIA
Tel: (02) 9210 6500
Fax: (02) 9210 6611
DX: 133 Sydney
Ref: MGL
CHIP5050-3333456
S/816606/10
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CONTENTS
1 INTERPRETATION 122
2 GRANT OF OPTIONS 124
3 RIGHT TO EXERCISE OPTIONS 125
4 MANNER OF EXERCISE OF OPTIONS 125
5 ADJUSTMENTS 126
6 AMENDMENT OF C.A.T. OPTIONS 127
7 CONSOLIDATION OF C.A.T. OPTIONS 127
8 US SECURITIES LAW 127
9 NOTICES 128
10 MISCELLANEOUS 129
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THIS DEED is made on 2 September 1999
BETWEEN NOVATEC INC., (ARBN 089 327 882) a company incorporated in the
State of Delaware, United States of America, whose Australian
registered office is located at Level 15, The Ernst & Young
Building, 321 Kent Street, Sydney, NSW, 2000, Australia , (
"NOVATEC INC.")
AND ALEXANDER S. DAWSON of 52 St Marks Road, Randwick, NSW, 2031,
Australia
(the "GRANTEE")]/
AND CHIP APPLICATION TECHNOLOGIES LIMITED (ACN 057 883 333) of
Level 5, Cabcharge House, 152-162 Riley Street, East Sydney,
NSW, Australia ("C.A.T.")
RECITALS
NovaTec Inc. has agreed to grant the Grantee options over unissued shares in the
capital of the company on and subject to the terms of this document.
IT IS AGREED
1 INTERPRETATION
1.1 DEFINITIONS
In this document:
"BUSINESS DAYS" means a day on which banks are open for business in
Sydney, Australia and Delaware, United States of America, excluding
a Saturday, Sunday or public holiday.
"C.A.T. OPTION RULES" means the terms and conditions that apply to
the C.A.T. Options as set out in Part 10.3 of the C.A.T. prospectus
dated 15 May 1997 in respect of the offer of 3,333,333 ordinary
shares at an issue price of 30 cents per share.
"C.A.T. OPTIONS" means the Number of options in C.A.T. with an
expiry date of 30 June 2000 registered in the name of the Grantor
and exercisable at AUD 75 cents each, subject to adjustment in
accordance with CLAUSE 7.
"CLOSE OF REGISTERS" means 5:00pm (Sydney, Australia time) or in the
case of proper SCH transfers, such time as permitted by SCH, on the
date 5 Business Days after the date on which an office copy of the
order of the Court to approve the Schemes of Arrangement is lodged
with the Australian Stock Exchange Limited.
"CONSOLIDATION" has the meaning given in CLAUSE 7.
"COURT" means the Supreme Court of New South Wales or such other
court from whom approval is sought by CAT for the Schemes of
Arrangement under the Corporations Law.
"DEED OF ACCESSION" means the deed substantially in the form of
SCHEDULE 3.
"EQUIVALENT C.A.T. OPTIONS" has the meaning given to it in CLAUSE
4.1(b).
"EXERCISE PERIOD" means the period commencing at 9.00am (Sydney,
Australia time) on 1 July 2000 and ending at 5.00pm (Sydney,
Australia time) on 30 July 2000.]
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"EXERCISE PRICE" means, subject to any adjustment required to be
made to the exercise price of the NovaTec Options under the terms of
this document.
"NASDAQ" means The Nasdaq SmallCap Market.
"NOVATEC OPTIONS" has the meaning given to it in CLAUSE 2.1.
"OPERATIVE DATE" means the date of this document.
"NUMBER" means:164,838
"SCHEMES OF ARRANGEMENT" means the schemes of arrangement between
C.A.T. and its shareholders and optionholders, so described in the
Information Memorandum shortly to be issued by C.A.T. to its
members, in the form in which they are implemented with approval of
the Court.
"SCH" means the securities clearing house.
"SECURITIES ACT" means the US Securities Act of 1933.
"SHARES" means fully paid shares of common stock of NovaTec Inc.
"SHARES SCHEME OF ARRANGEMENT" means the scheme of arrangement
between C.A.T. and its shareholders, so described in the Information
Memorandum shortly to be issued by C.A.T. to its members, in the
form in which it is implemented with approval of the Court.
1.2 CONSTRUCTION
Unless expressed to the contrary:
(a) words importing:
(i) the singular include the plural and vice versa; and
(ii) any gender includes the other genders;
(b) if a word or phrase is defined cognate words and phrases have
corresponding definitions;
(c) a reference to:
(i) a person includes a firm, unincorporated association,
corporation and a government or statutory body or
authority;
(ii) a person includes its legal personal representatives,
successors and assigns;
(iii)a statute, ordinance, code or other law includes
regulations and other statutory instruments under it and
consolidations, amendments, re-enactments or replacements
of any of them;
(iv) a right includes a benefit, remedy, discretion,
authority or power;
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(v) an obligation includes a warranty or representation and
a reference to a failure to observe or perform an
obligation includes a breach of warranty or
representation; and
(vi) "AUD" means the lawful currency of Australia.
2 GRANT OF OPTIONS
2.1 GRANT
NovaTec Inc. grants to the Grantee the Number of options to subscribe for
the Number of Shares exercisable at AUD 75 cents each (THE "NOVATEC
OPTIONS").
2.2 NO ISSUE PRICE
No amount is payable by the Grantee on issue of the NovaTec Options.
2.3 CERTIFICATE
On or shortly after the Operative Date, NovaTec Inc. shall deliver a
certificate to the Grantee in respect of the NovaTec Options. Such
certificate shall contain the restrictive legend set forth in CLAUSE 8(c)
and the following additional legend:
"Immediately prior to the Close of Registers (as defined in the
Share Option Deed in respect of Shares in NovaTec Inc. between
NovaTec Inc., [ ] and Chip Application Technologies Limited dated 2
September 1999), these options will (without further act or
authority) be consolidated on a one-for-ten basis. Where that
consolidation yields a number of options which is not a whole
number, then the number of consolidated options shall be rounded-up
to the nearest whole number."
2.4 PERSONAL
The NovaTec Options are personal to the Grantee and as such may not be
transferred to any other person without the prior written consent of
NovaTec Inc. (which consent shall not be unreasonably withheld) and then
only in accordance with the by laws of NovaTec Inc., and on condition that
the transferee executes a Deed of Accession agreeing to be bound by the
terms of this document.
3 RIGHT TO EXERCISE OPTIONS
3.1 RESTRICTIONS ON EXERCISE
The Grantee may not exercise any of the NovaTec Options unless at the time
of exercise all of the following conditions have been fulfilled:
(a) the Schemes of Arrangement have been implemented;
(b) exactly the same number of C.A.T. Options as the number of
NovaTec Options it is proposed will be exercised have expired
unexercised in accordance with the terms of the C.A.T. Option
Rules (the "EQUIVALENT C.A.T. OPTIONS"); and
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(c) the exercise price of each NovaTec Option that it is proposed
will be exercised is the same as the exercise price for each
Equivalent C.A.T. Option (not taking into account any
adjustment which is made to the exercise price of the
Equivalent C.A.T. Options pursuant to the C.A.T. Option Rules
or any adjustment made under the terms of this document to the
Exercise Price of the NovaTec Options that it is proposed will
be exercised).
3.2 EXERCISE PERIOD
The NovaTec Options may only be exercised during the Exercise Period. Any
NovaTec Option that is not exercised by the expiry of the Exercise Period
will automatically expire.
4 MANNER OF EXERCISE OF OPTIONS
4.1 EXERCISE
(a) NovaTec Options may be exercised by written notice to the Secretary
of NovaTec Inc. The exercise notice must specify the number of
shares required to be issued, which number must be a multiple of
1000 (and, following the Consolidation, which number must be a
multiple of 100) if only part of the total NovaTec Options are
exercised, or if the total number of NovaTec Options held is less
than 1000 (or, following the Consolidation, if the total number of
NovaTec Options held is less than 100), then the total of all
NovaTec Options held must be exercised. NovaTec Options will be
deemed to have been exercised on the date that the application is
lodged with the Secretary of NovaTec Inc.
(b) The exercise of less than all of the NovaTec Options will not
prevent the Grantee from exercising the whole or any part of
the balance of the Grantee's entitlement under his remaining
NovaTec Options.
(c) On exercise of the NovaTec Options the Grantee must surrender
the relevant NovaTec Option certificate(s), duly endorsed,
accompanied by a bank cheque to the order of C.A.T Inc., in an
amount equal to the aggregate Exercise Price for the Shares as
to which the NovaTec Options are being exercised.
4.2 ISSUANCE OF SHARES
Within 10 days of receipt of the application for the exercise of the
NovaTec Options and payment by the Grantee of the Exercise Price, NovaTec
Inc. must issue to the Grantee the number of Shares specified in the
application.
5 ADJUSTMENTS
5.1 PARTICIPATION IN STOCK DIVIDENDS AND REPURCHASES
(a) If NovaTec Inc. makes a stock dividend of shares or other
securities convertible into Shares pro rata to holders of
Shares (other than by way of dividend reinvestment pursuant to
any shareholder election), the Grantee will be entitled to
participate in such stock dividend, upon exercise of all or
part of the NovaTec Options on or before the record date for
that stock dividend, on the same basis as the holders of
Shares.
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(b) If NovaTec Inc. makes an offer to purchase Shares pro rata to
the holders of Shares, the Grantee will be entitled to
participate in such offer, upon exercise of all or part of the
NovaTec Options on or before the record date for that offer,
on the same basis as the holders of Shares.
(c) NovaTec Inc. must notify the Grantee at least 12 Business Days
before the record date for determining entitlements to an
offer referred to in CLAUSE 5.1(a) or CLAUSE 5.1(b) of:
(i) the proposed terms of the issue of the offer; and
(ii) the right to exercise his NovaTec Options under CLAUSE
5.1(a) or CLAUSE 5.1(b) (as the case may be).
5.2 ADJUSTMENT FOR STOCK DIVIDENDS
If NovaTec Inc. makes a stock dividend of Shares pro rata to holders of
Shares (other than by way of dividend reinvestment pursuant to any
shareholder election), and the Grantee does not participate as provided in
CLAUSE 5.1, then the number of Shares issued on exercise of each NovaTec
Option will include the number of dividend shares that would have been
issued to the Grantee if the NovaTec Option had been exercised prior to
the books closing date for the stock dividend. No change will be made to
the exercise date.
5.3 RECONSTRUCTION
In the event of a reconstruction (including stock split, consolidation,
sub-division, reduction or reclassification) of the issued Shares, the
number of NovaTec Options or the Exercise Price of NovaTec Options or both
shall be reconstructed (as appropriate) in a manner which would not result
in any benefits being conferred in the Grantee which are not conferred on
shareholders of the Grantee (subject to the provisions with respect to
rounding of entitlements as sanctioned by the meeting of shareholders
approving the reconstruction of capital) but in all respects the terms for
the exercise of NovaTec Options shall remain unchanged.
6 AMENDMENT OF C.A.T. OPTIONS
(a) Subject to paragraph (b) below, if the C.A.T. Option Rules or the
terms of the C.A.T. Options are amended such that the amendment
materially affects the rights attaching to the C.A.T. Options, the
terms of this document that relate to the Options shall be deemed to
have been amended to reflect the change to the C.A.T. Option Rules
or the C.A.T. Options.
(b) If any amendment to the C.A.T. Option Rules or the terms of the
C.A.T. Options is inconsistent or conflicts with the existing terms
of this document, the terms of this document shall not be deemed to
have been amended.
7 CONSOLIDATION OF C.A.T. OPTIONS
The parties agree that immediately prior to the Close of Registers, the C.A.T.
Options (without further act or authority) will be consolidated on a one-for-ten
basis ("CONSOLIDATION"). Where the Consolidation yields a number of C.A.T.
Options which is not a whole number, then the number of consolidated C.A.T.
Options shall be rounded-up to the nearest whole number.
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8 US SECURITIES LAW
(a) The Grantee hereby certifies that he is not a US person and is not
acquiring the NovaTec Options (or the Shares upon exercise of the
NovaTec Options) for the account or benefit of a US person.
(b) The Grantee agrees to:
(i) resell the Shares issued upon exercise of the NovaTec Options
only in accordance with the registration or exemption
provisions of the Securities Act or in compliance with
Regulation S under that Act; and
(ii) not engage in hedging transactions with regard to Shares
unless in compliance with the Securities Act.
(c) The Grantee acknowledges that each certificate representing the
NovaTec Options shall contain the following restrictive legend:
"These options and the underlying shares of common stock have
not been registered under the US Securities Act of 1933. The
options may not be exercised by or on behalf of any US person
except in a transaction registered under the Act or an
exemption from registration under that Act."
9 NOTICES
9.1 GENERAL
A notice, demand, certification or other communication relating to this
document must be given in English language and may be given by an agent of
the sender.
(a) is to be given in writing and in the English language; and
(b) may be given by an agent of the sender.
9.2 METHOD OF SERVICE
In addition to any lawful means a communication may be given by:
(a) being personally served on a party;
(b) being left at the party's current address for service;
(c) being sent to the party's current address for service by
pre-paid ordinary mail or if the address is outside Australia,
by pre-paid air mail; or
(d) facsimile to the party's current number for service.
9.3 PARTICULARS OF SERVICE
(a) The particulars for service are initially:
(i) in the case of NovaTec Inc.:
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at the address hereinbefore mentioned
Fax: (02) 9248 5205
Attention: The Company's Australian Agent: Fellstar
Nominees (N.S.W.) Pty Limited
(ii) in the case of the Grantee:
at the address hereinbefore mentioned
(iii)in the case of C.A.T.:
at the address hereinbefore mentioned
Fax: (02) 9332 1285
Attention: Company Secretary
(b) Each party may from time to time change its particulars for
service by notice to each other party.
9.4 SERVICE
If a communication is given by:
(a) post, it will be deemed received if posted within Australia to
an Australian address three Business Days after posting and in
any other case seven Business Days after posting;
(b) facsimile, and the sender's facsimile machine produces a
transmission confirmation report indicating that the facsimile
was sent to the addressee's facsimile, the report will be
prima facie evidence that the facsimile was received by the
addressee at the time indicated on that report.
10 MISCELLANEOUS
10.1 STAMP DUTY
(a) The Grantee shall, as between the parties, be liable for and
duly pay all stamp duty (including any fine or penalty except
where it arises from default by the other party) on or
relating to this document and any document executed under it.
(b) If a party other than the Grantee pays any stamp duty
(including any fine or penalty) on or relating to this
document or any document executed under it, the Grantee shall
pay that amount to that party upon demand.
10.2 LEGAL COSTS
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Subject to any express provision in this document to the contrary, each
party shall bear its own legal and other costs and expenses relating
directly or indirectly to the preparation of, and performance of its
obligations under, this document.
10.3 AMENDMENT
Unless this document is deemed to have been amended under CLAUSE 6, it may
only be varied or replaced by a document duly executed by the parties.
10.4 WAIVER AND EXERCISE OF RIGHTS
(a) A single or partial exercise or waiver of a right relating to
this document will not prevent any other exercise of that
right or the exercise of any other right.
(b) A party will not be liable for any loss, cost or expense of
any other party caused or contributed to by the waiver,
exercise, attempted exercise, failure to exercise or delay in
the exercise of a right.
10.5 FURTHER ASSURANCE
Each party shall promptly execute all documents and do all things that any
other party from time to time reasonably requires of it to effect, perfect
or complete the provisions of this document and any transaction
contemplated by it.
10.6 GOVERNING LAW AND JURISDICTION
(a) This document is governed by and is to be construed in
accordance with the laws in force in New South Wales.
(b) Each party irrevocably and unconditionally submits to the
non-exclusive jurisdiction of the courts of New South Wales
and any courts which have jurisdiction to hear appeals from
any of those courts and waives any right to object to any
proceedings being brought in those courts.
10.7 COUNTERPARTS
This document may consist of a number of counterparts and if so the
counterparts taken together constitute one and the same instrument.
EXECUTION
Executed as a deed.