Sample Stock Option Agreement

EXHIBIT 10.12


Date of Grant: _______________


STOCK OPTION AGREEMENT


THIS AGREEMENT is made by and between Dragon Pharmaceutical, Inc., a Florida corporation (the "Company") and ______________("Optionee"), as of _____________, 2001.


In consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:


1. Grant of Option. The Company hereby grants to Optionee, in the manner and subject to the conditions hereinafter provided, the right, privilege and option to purchase (the "Option") an aggregate of ________________ shares of the Company's Common Stock, no par value, (the "Shares"). This Option is specifically conditioned on compliance with the terms and conditions set forth herein.


2. Term of Option. Subject to the terms, conditions, and restrictions set forth herein, the term of this Option shall be five (5) years from the date of grant (the "Expiration Date"). Any portion of this Option not exercised prior to the Expiration Date shall thereupon become null and void.


3. Exercise of Option.


3.1. Vesting of Option. This Option shall become exercisable as follows:


(i) options to acquire ___________ shares of Common Stock shall vest
immediately upon the execution of this Agreement; and


(ii) options to acquire ___________ shares of Common Stock shall vest
upon the Company share price closing at a price of ____________ or greater
for five (5) consecutive days.


Each of the foregoing dates shall be referred to as a "Vesting Date" for that portion of this Option vested on such date ("Vested Portion"). In the event of a "Change in Control" all outstanding Options shall fully vest immediately upon the Company's public announcement of such change.


For the purposes of this Section 3.1, a "change of control" shall mean an event involving one transaction or a related series of transactions in which (i) the Company issued securities equal to [33%] or more of the issued and outstanding capital stock of the Company to any individual, firm, partnership or other entity, including a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934; (ii) the Company issued securities equal to [33%] or more of the issued and outstanding capital stock of the Company in connection with a merger, consolidation or other business combination; (iii) the


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Company is acquired in a merger or other business combination transaction in which the Company is not the surviving corporation; or (iv) 50% or more of the Company's consolidated assets or earning power are sold or transferred.


All or any portion of the shares underlying a Vested Portion of this Option may be purchased during the term of this Option, but not as to less than ________ shares (unless the remaining shares then constituting the Vested Portion of this Option is less than ___________ shares) at any time.


3.2. Manner of Exercise. The Vested Portion of this Option may be exercised from time to time, in whole or in part, by presentation of a Request to Exercise Form, substantially in the form attached hereto, to the Company at its principal office, which Form must be duly executed by Optionee and accompanied by payment (by check or certified check) to the Company, in the aggregate amount of the Exercise Price (as defined below), multiplied by the number of Shares the Optionee is purchasing at such time, subject to reduction for withholding for tax obligations as provided in Section 13, if any.


Upon receipt and acceptance by the Company of such Form accompanied by the payment specified, the Optionee shall be deemed to be the record owner of the Shares purchased, notwithstanding that the stock transfer books of the Company may then be closed or that certificates representing the Shares purchased under this Option may not then be actually delivered to the Optionee.


3.3. Exercise Price. The exercise price (the "Exercise Price") payable upon exercise of this Option shall be Cdn _________ per Share.


4. Exercise After Certain Events.


4.1. Termination of Employment, Directorship or Consultant Relationship. If for any reason other than permanent and total disability (as defined below) or death an Optionee ceases to be employed by, be a director of, or be a consultant to the Company, Options held at the date of such termination (to the extent then exercisable) may be exercised, in whole or in part, at any time within 30 days after the date of such termination or such lesser period specified in the Option Agreement (but in no event after the expiration date of the Option).


4.2. Permanent Disability and Death. If an Optionee becomes permanently and totally disabled or dies while employed by the Company, or while acting as an officer, director or consultant of the Company, Options then held (to the extent then exercisable) may be exercised by the Optionee, the Optionee's personal representative, or by the person to whom the Option is transferred by will or the laws of descent and distribution, in whole or in part, at any time within 30 days after the disability or death (but in no event after the expiration date of the Option).


5. Restrictions on Transfer of Option. This Option is not transferable by Optionee other than by will or the laws of descent and distribution and is exercisable only by the Optionee during his lifetime except as provided in Section 4.2. above. The Option and the Shares underlying the Option shall not be available for the debts or obligations of the Optionee, nor shall it be subject to disposition by transfer, alienation, pledge, or other means of disposition, whether voluntary or involuntary or by operation of law through judgment, levy, attachment, garnishment, or other legal proceeding (including bankruptcy).


6. Adjustment for Changes in Capitalization. The existence of this Option shall not affect the Company's right ...