Document:

EXHIBIT 4.2  

OPTION AGREEMENT 

        OPTION
AGREEMENT dated this 29th day of June, 2005 between QSound Labs, Inc., a body
corporate, continued under the laws of the Province of Alberta, having its head office at
400 – 3115 12th Street NE, Calgary, AB T2E 7J2 (the “Company”)
and Stanley E. McDougall, 6520 Coach Hill Rd. S.W., Calgary, AB T3H 1A2 (the
“Optionee”); 

        WHEREAS
the Optionee is an outside director of the Company, and the Company has approved the grant
of incentive stock options to compensate outside directors for their services; 

        In
consideration of the premises and of the mutual covenants and agreements herein contained,
the parties hereby covenant and agree as follows: 

     1.    
          Grant of Option. Subject to shareholder approval, the Company hereby
          grants to the Optionee, outside of the 1998 Stock Option Plan, the
          irrevocable option to purchase common shares without par value in the capital of
          the Company, or any part thereof, as follows (“Option”): 

	  	
Number of shares:

Exercise price:  

Expiry Date:     

Vesting:         

	
10,000                                                                          

$3.57 US per share                                                              

June 28, 2010                                                                   

The Option shall vest in accordance with the following schedule, provided
however that no vesting may take place until shareholder approval for the Option
 

	  	
 	
July 29, 2005   

October 29, 2005

January 29, 2006

April 29, 2006  	
2500

2500

2500

2500 

     2.    
          Exercise of Option. Subject to section 4. hereof, the Optionee may
          exercise the Option at any time or from time to time by giving written notice to
          the Company substantially in the form attached hereto as Schedule “A”
          and delivering to the Company a certified cheque in an amount equal to the
          number of common shares in respect of which the Option is being exercised
          multiplied by the exercise price specified in section 1. hereof. 

     3.    
          Optionee’s Representation. The Optionee hereby confirms and
          represents that he is a director of the Company at the date hereof. 

     4.    
          Entitlement to Exercise Not withstanding any other provision hereof, the
          Optionee shall only be entitled to exercise the Option while a director of the
          Company, or during a period commencing on the date on which the Optionee ceases
          to be a director and ending on the earlier of 30 days thereafter and the Expiry
          Date, or on such later date as may be determined by the Board of Directors. 

     6.    
          Exercise by Personal Representative In the event of the Optionee’s
          death while a director of the Company, the personal representative of the
          Optionee shall be entitled to exercise the Option in whole or in part as to any
          shares not previously purchased hereunder by giving written notice to the
          Company and paying the purchase price to the Company during a period commencing
          on the date of death of the Optionee and ending on the earlier of one year
          thereafter and the Expiry Date, or on such later date as may be determined by
          the Board of Directors. 

     7.    
          Fully Paid Shares All common shares purchased by the Optionee hereunder
          shall be fully paid and non-assessable common shares. 

     8.    
          Adjustment The number of common shares subject to the Option shall be
          increased or decreased proportionately in the event of the subdivision or
          consolidation of common shares of the Company, and in any event a corresponding
          adjustment shall be made changing the number of shares deliverable upon the
          exercise of the Option 

without change in the total price
applicable to the unexercised portion of the option, but with a corresponding adjustment
in the price for each share covered by the Option. In case the Company is reorganized or
merged or consolidated or amalgamated with another corporation, appropriate provisions
shall be made for the continuance of the Option and to prevent its dilution or
enlargement. 

     9.    
          No Registration The Optionee understands that the common shares to be
          issued pursuant to the option may not be registered under the United States
          Securities Act of 1933 (the “Act”) in reliance upon an exemption from
          the registration requirements thereof pursuant to Section 4(2) of the Act. The
          Optionee agrees to execute and deliver any and all documents at the time of
          exercise of the Option as may be necessary to assure compliance with U.S.
          federal and state and Canadian provincial securities laws. The Optionee
          understands that the Company shall not be required to register any common shares
          acquired by the Optionee and that the Optionee may be required to hold such
          common shares indefinitely in the absence of registration or an exemption from
          registration under the United States federal or state securities laws. 

     10.    
          Legend The Optionee acknowledges that all common shares issued pursuant
          hereto may bear the following legends (which may be modified from time to time
          in such manner as the Company’s attorneys recommend): 

	  	
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED STATES FEDERAL OR
STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR
ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE
BOOKS OF THE CORPORATION, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE
UNITED STATES FEDERAL OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION
THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN
OPINION OF SECURITYHOLDER’S COUNSEL, ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION
OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.” 

     11.    
          Amendment If the approval of the Company’s shareholders to any
          amendment to this Agreement shall be required by the prevailing policies of the
          regulatory securities bodies having jurisdiction over the Company, then any
          amendment made to this Agreement shall be subject to the approval of the
          shareholders of the Company. 

     12.    
          Time of the Essence Time shall be essence hereof. 

        IN
WITNESS WHEREOF the parties hereto have executed there presents on the day and year
first above written. 

QSOUND LABS, INC. 

Per:  /s/ David Gallagher  

       ___________________________________

/s/ Stanley E. McDougall

______________________________________

OPTIONEE 

SCHEDULE A  

QSound Labs, Inc. 

400 – 3115 12th Street NE

Calgary, AB T2E 7J2 

Attention:   Secretary 

Dear Sirs: 

	  	Re:  	  	Exercise
of Stock Option 

        The
undersigned, being the holder of an option to purchase common shares of QSound Labs, Inc.
(the “Company”) does hereby elect to exercise such option to the extent of the
purchase of common shares at the exercise prices of $ per share and does hereby tender to
the Company the total purchase price of $  therefor. 

        The
undersigned acknowledges that if common shares issued pursuant hereto may not be
registered pursuant to applicable securities laws of the United States, any certificate
representing such shares will bear a legend in a form which may be approved by the
Company’s counsel and the undersigned consents to the imposition of any such legend. 

Yours truly, 

______________________________

OPTIONEE 

DATED this ____ day of __________________, 200_.EXHIBIT 4.3  

OPTION AGREEMENT 

        OPTION
AGREEMENT dated this 29th day of June, 2005 between QSound Labs, Inc., a body
corporate, continued under the laws of the Province of Alberta, having its head office at
400 – 3115 12th Street NE, Calgary, AB T2E 7J2 (the “Company”)
and D. Tony Stelliga, 201, 2900 Gordon Avenue, Santa Clara, CA 95051 (the
“Optionee”); 

        WHEREAS
the Optionee is an outside director of the Company, and the Company has approved the grant
of incentive stock options to compensate outside directors for their services; 

        In
consideration of the premises and of the mutual covenants and agreements herein contained,
the parties hereby covenant and agree as follows: 

     1.    
          Grant of Option. Subject to shareholder approval, the Company hereby
          grants to the Optionee, outside of the 1998 Stock Option Plan, the
          irrevocable option to purchase common shares without par value in the capital of
          the Company, or any part thereof, as follows (“Option”): 

	  	
Number of shares:

Exercise price:  

Expiry Date:     

Vesting:         

	
10,000                                                                          

$3.57 US per share                                                              

June 28, 2010                                                                   

The Option shall vest in accordance with the following schedule, provided
however that no vesting may take place until shareholder approval for the Option
 

	  	
 	
July 29, 2005   

October 29, 2005

January 29, 2006

April 29, 2006  	
2500

2500

2500

2500 

     2.    
          Exercise of Option. Subject to section 4. hereof, the Optionee may
          exercise the Option at any time or from time to time by giving written notice to
          the Company substantially in the form attached hereto as Schedule “A”
          and delivering to the Company a certified cheque in an amount equal to the
          number of common shares in respect of which the Option is being exercised
          multiplied by the exercise price specified in section 1. hereof. 

     3.    
          Optionee’s Representation. The Optionee hereby confirms and
          represents that he is a director of the Company at the date hereof. 

     4.    
          Entitlement to Exercise Not withstanding any other provision hereof, the
          Optionee shall only be entitled to exercise the Option while a director of the
          Company, or during a period commencing on the date on which the Optionee ceases
          to be a director and ending on the earlier of 30 days thereafter and the Expiry
          Date, or on such later date as may be determined by the Board of Directors. 

     6.    
          Exercise by Personal Representative In the event of the Optionee’s
          death while a director of the Company, the personal representative of the
          Optionee shall be entitled to exercise the Option in whole or in part as to any
          shares not previously purchased hereunder by giving written notice to the
          Company and paying the purchase price to the Company during a period commencing
          on the date of death of the Optionee and ending on the earlier of one year
          thereafter and the Expiry Date, or on such later date as may be determined by
          the Board of Directors. 

     7.    
          Fully Paid Shares All common shares purchased by the Optionee hereunder
          shall be fully paid and non-assessable common shares. 

     8.    
          Adjustment The number of common shares subject to the Option shall be
          increased or decreased proportionately in the event of the subdivision or
          consolidation of common shares of the Company, and in any event a corresponding
          adjustment shall be made changing the number of shares deliverable upon the
          exercise of the Option 

without change in the total price
applicable to the unexercised portion of the option, but with a corresponding adjustment
in the price for each share covered by the Option. In case the Company is reorganized or
merged or consolidated or amalgamated with another corporation, appropriate provisions
shall be made for the continuance of the Option and to prevent its dilution or
enlargement. 

     9.    
          No Registration The Optionee understands that the common shares to be
          issued pursuant to the option may not be registered under the United States
          Securities Act of 1933 (the “Act”) in reliance upon an exemption from
          the registration requirements thereof pursuant to Section 4(2) of the Act. The
          Optionee agrees to execute and deliver any and all documents at the time of
          exercise of the Option as may be necessary to assure compliance with U.S.
          federal and state and Canadian provincial securities laws. The Optionee
          understands that the Company shall not be required to register any common shares
          acquired by the Optionee and that the Optionee may be required to hold such
          common shares indefinitely in the absence of registration or an exemption from
          registration under the United States federal or state securities laws. 

     10.    
          Legend The Optionee acknowledges that all common shares issued pursuant
          hereto may bear the following legends (which may be modified from time to time
          in such manner as the Company’s attorneys recommend): 

	  	
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED STATES FEDERAL OR
STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR
ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE
BOOKS OF THE CORPORATION, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE
UNITED STATES FEDERAL OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION
THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN
OPINION OF SECURITYHOLDER’S COUNSEL, ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION
OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.” 

     11.    
          Amendment If the approval of the Company’s shareholders to any
          amendment to this Agreement shall be required by the prevailing policies of the
          regulatory securities bodies having jurisdiction over the Company, then any
          amendment made to this Agreement shall be subject to the approval of the
          shareholders of the Company. 

     12.    
          Time of the Essence Time shall be essence hereof. 

        IN
WITNESS WHEREOF the parties hereto have executed there presents on the day and year
first above written. 

QSOUND LABS, INC. 

Per:  /s/ David Gallagher  

       ___________________________________

/s/ D. Tony Stelliga

______________________________________

OPTIONEE 

SCHEDULE A  

QSound Labs, Inc. 

400 – 3115 12th Street NE

Calgary, AB T2E 7J2 

Attention:   Secretary 

Dear Sirs: 

	  	Re:  	  	Exercise
of Stock Option 

        The
undersigned, being the holder of an option to purchase common shares of QSound Labs, Inc.
(the “Company”) does hereby elect to exercise such option to the extent of the
purchase of common shares at the exercise prices of $ per share and does hereby tender to
the Company the total purchase price of $  therefor. 

        The
undersigned acknowledges that if common shares issued pursuant hereto may not be
registered pursuant to applicable securities laws of the United States, any certificate
representing such shares will bear a legend in a form which may be approved by the
Company’s counsel and the undersigned consents to the imposition of any such legend. 

Yours truly, 

______________________________

OPTIONEE 

DATED this ____ day of __________________, 200_.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]