SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
STOCKGROUP.COM HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies: 2)
Aggregate number of securities to which transaction applies: 3) Per
unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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4) Date Filed:
Preliminary Proxy Materials
STOCKGROUP.COM HOLDINGS, INC.
500 - 750 West Pender Street
Vancouver, B.C. V6C 2T7 Canada
August 16, 2001
Dear Stockholder:
It is our pleasure to invite you to the Annual Meeting of Stockholders of
Stockgroup.com Holdings, Inc. to be held on September 20, 2001 at the Quality
Inn, 100 East Kellogg Road, Bellingham, Washington, USA from 9:00am - 10:00am
Pacific Time.
Whether or not you plan to attend, and regardless of the number of shares you
own, it is important that your shares be represented at the meeting. I strongly
urge you to sign, date and return your proxy promptly in the enclosed envelope.
We sincerely hope you will be able to join us at the meeting. The officers and
directors of the Company look forward to seeing you at that time.
Sincerely,
Marcus A. New
Chairman of the Board,
Chief Executive Officer
Preliminary Proxy Materials
STOCKGROUP.COM HOLDINGS, INC.
500 - 750 West Pender Street
Vancouver, B.C. V6C 2T7 Canada
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
(September 20, 2001)
The Annual Meeting of Stockholders of Stockgroup.com Holdings, Inc. (the
"Company") will be held on September 20, 2001 at the Quality Inn, 100 East
Kellogg Road, Bellingham, Washington, USA from 9:00am - 10:00am Pacific Time,
for the following purposes:
1. To elect Directors of the Company for the ensuing year;
2. To reaffirm the appointment of Ernst & Young LLP as independent
accountants for the Company;
3. To approve the 2001 Stock Option Plan;
4. To increase the authorized share capital of the Company from
50,000,000 Common shares to 75,000,000 Common Shares;
5. To change the name of the Company from Stockgroup.com Holdings, Inc.
to Stockgroup Information Systems, Inc.; and
6. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on August 9, 2001 as the
record date for the determination of stockholders entitled to notice and to vote
at the meeting and any adjournments thereof.
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE SIGN AND DATE THE ENCLOSED
PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
J. LINDSAY P. MOYLE, CGA
Secretary
July 25, 2001
Preliminary Proxy Materials
STOCKGROUP.COM HOLDINGS, INC.
500 - 750 West Pender Street
Vancouver, B.C. V6C 2T7 Canada
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
(September 20, 2001)
GENERAL INFORMATION
The accompanying proxy is solicited by and on behalf of the Board of Directors
of Stockgroup.com Holdings, Inc. (the "Company") to be used at the Annual
Meeting of Stockholders to be held on September 20, 2001 at the Quality Inn, 100
East Kellogg Road, Bellingham, Washington, USA from 9:00am - 10:00am Pacific
Time, and any adjournments thereof.
When the enclosed proxy is properly executed and returned, the shares of Common
Stock of the Company, no par value per share (the "Common Stock"), it represents
will be voted at the meeting in accordance with any directions noted thereon
and, if no direction is indicated, the shares it represents will be voted: (i)
FOR the election of the nominees for Directors set forth below; (ii) FOR the
ratification of the appointment of Ernst & Young LLP as independent accountants
for the Company; (iii) FOR the approval of the 2001 Stock Option Plan; (iv) FOR
the increase in authorized capital of the Company from 50,000,000 Common Shares
to 75,000,000 Common shares; (v) FOR the change in the Company's name from
Stockgroup.com Holdings, Inc. to Stockgroup Information Systems, Inc.; and (vi)
in the discretion of the holders of the proxy with respect to any other business
that may properly come before the meeting. Any stockholder signing and
delivering a proxy may revoke it at any time before it is voted by delivering to
the Secretary of the Company a written revocation or a duly executed proxy
bearing a date later than the date of the proxy being revoked. Any stockholder
attending the meeting in person may withdraw his or her proxy and vote his or
her shares.
The cost of this solicitation of proxies will be borne by the Company.
Solicitations will be made only by mail; provided, however, that officers and
regular employees of the Company may solicit proxies personally or by telephone
or telegram. Such persons will not be specially compensated for such services.
The Company may reimburse brokers, banks, custodians, nominees and fiduciaries
holding stock in their names or in the names of their nominees for their
reasonable charges and expenses in forwarding proxies and proxy material to the
beneficial owners of such stock.
The approximate mailing date of this Proxy Statement and the accompanying proxy
is August 16, 2001.
VOTING RIGHTS
Only stockholders of record at the close of business on August 9, 2001 will be
entitled to vote at the Annual Meeting of Stockholders. On that date, there were
10,091,755 shares of Common Stock outstanding, the holders of which are entitled
to one vote per share on each matter to come before the meeting. Voting rights
with respect to the election of Directors are non-cumulative. A majority of the
outstanding shares entitled to vote at the Annual Meeting of the Stockholders
will constitute a quorum at the meeting and abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business.
Directors are elected by plurality vote. The ratification of the appointment of
Ernst & Young LLP, the approval of the 2001 Stock Option Plan, the approval of
the increase in authorized capital of the Company from 50,000,000 Common Shares
to 75,000,000 Common shares, and the approval of the change in the Company's
name from Stockgroup.com Holdings, Inc. to Stockgroup Information Systems, Inc.
will require the affirmative vote of a majority of the Common Stock voting on
the proposals. Abstentions and broker non-votes will not be counted in the
election of directors or in determining whether such ratifications have been
given.
NO DISSENTERS' RIGHTS
Under applicable provisions of the Colorado Corporations Code, shareholders are
not entitled to dissenters' rights or appraisal rights with respect to the
matter to be considered and voted upon at the Annual Meeting of Stockholders
PRINCIPAL STOCKHOLDERS
The following table sets forth as of July 25, 2001 the beneficial ownership of
Common Stock of each person known to the Company who owns more than 5% of the
issued and outstanding Common Stock. Unless otherwise indicated in the table,
the business address of each person listed below is c/o Stockgroup.com,
Holdings, Inc., 500 - 750 W. Pender Street, Vancouver, British Columbia, Canada
V6C 2T7.
Amount and Nature Percent of
Name of Beneficial Owner of Beneficial Ownership Class
- ------------------------ ----------------------- ----------
Marcus New 2,963,500(1)(2)(7) 29.37%
Yvonne New 2,666,500(1)(4) 26.42%
Craig Faulkner 879,000(1)(3)(7) 8.71%
518464 B.C. Ltd. 2,245,000(1)(5) 22.25%
569358 B.C. Ltd. 665,000(1)(6) 6.59%
(1) Pursuant to a Share Exchange and Share Purchase Agreement dated March 11,
1999 (the "SEA") by and among the Company, formerly called I-Tech Holdings
Group, Inc., 579818 B.C. Ltd., a British Columbia,
Canada corporation wholly-owned by the Company (the "Subsidiary"), Stock
Research Group, Inc., a British Columbia, Canada corporation ("Stock
Group") and all of the shareholders of Stock Group, being nine persons
(collectively, the "Stock Group Shareholders"), the Company acquired (the
"Acquisition") all of the issued and outstanding common shares of Stock
Group from the Stock Group Shareholders in consideration of the issuance by
(i) the Subsidiary to the Stock Group Shareholders, on a pro-rata basis, of
3,900,000 Class A Exchangeable Shares (the "Exchangeable Shares") and (ii)
by the Company issuing to Stocktrans, Inc., located at 7 East Lancaster
Avenue, Ardmore, PA 19003, as trustee for the Stock Group Shareholders (the
"Trustee") 3,900,000 shares of Common Stock to be held under the terms of
an Exchange and Voting Agreement dated March 11, 1999 (the "Trust
Agreement") by and among the Company, the Trustee, the Subsidiary and the
Stock Group Shareholders. The Exchangeable Shares may be converted, at the
option of the holder into an equal number of the Company's Common Stock
held by the Trustee. Pending any such conversion, each holder of the
Exchangeable Shares may direct the Trustee to vote an equivalent number of
Company's Common Stock. The Trustee has no discretion as to voting or
disposition of the Company's Common Stock. As a result of these
transactions, each of the Stock Group Shareholders has the right to vote,
(or to direct the Trustee to vote on behalf of such Stock Group
Shareholder) a number of the Company's Common Stock equal to the number of
Exchangeable Shares held of record by such Stock Group Shareholder. In the
aggregate, the Company's Common Stock issued to the Trustee represent
approximately 38.65% of the Corporation's issued and outstanding shares of
Common Stock. The Trust created by the SEA shall continue until the
earliest to occur of the following events: (a) no outstanding Exchangeable
Non-Voting Shares are held by any Stock Group Shareholder; (b) each of the
Subsidiary and the Company acts in writing to terminate the Trust and such
termination is approved by the holders of the Exchangeable Non-Voting
Shares in accordance with section 27.10 of the SEA; and (c) December 31,
2098.
(2) Of this amount, 47.93% (or 1,372,500 shares) are owned by Yvonne New, Mr.
New's wife. Mr. Marcus New owns directly 171,500 Exchangeable Shares and
his wife, Yvonne New, owns directly 250,000 Exchangeable Shares. They both
indirectly, through 518464 B.C. Ltd., a British Columbia company owned by
Mr. New as to 50% and Yvonne New as to 50%, own 2,245,000 Exchangeable
Shares. Accordingly, Marcus and Yvonne New have the right to direct the
vote of 2,666,500 of the Company's Common Stock (approximately 26.51% of
the Company's issued and outstanding Common Stock). In addition, of this
amount, 70,000 shares are held in a trust for which Mr. New is a beneficial
owner. This trust is a non-voting trust. Mr. New also owns 2,000 shares of
common stock which were purchased in the open market. These holdings in
combination with the 2,666,500 Exchangeable shares and the 225,000 vested
options described in note 7 below bring Mr. New's beneficial ownership of
shares of the Corporation to a total of 2,963,500 shares or approximately
29.37% of the Corporation's issued and outstanding common stock.
(3) Of this amount, Mr. Craig Faulkner owns directly 169,000 Exchangeable
Shares and indirectly, through 569358 B.C. Ltd., a British Columbia company
owned by Mr. Faulkner, 665,000 Exchangeable shares. Accordingly, including
the 45,000 vested options described in note 7 below, Mr. Faulkner has the
right to direct the vote of 879,000 of the Company's Common Stock which
represent approximately 8.71% of the Company's issued and outstanding
Common Stock.
(4) Yvonne New is Marcus New's wife. Mrs. New owns 250,000 shares directly and
2,245,000 shares indirectly through her 50% ownership of 518464 B.C. Ltd.
(5) 518464 B.C. Ltd. is a private company owned 50% by Marcus New and 50% by
Yvonne New, his wife.
(6) 569358 B.C. Ltd. is a private company wholly-owned by Craig Faulkner.
(7) Mr. New and Mr. Faulkner have been granted options to purchase 325,000 and
195,000 shares respectively of the Company's common stock at $2.50US per
share. The options have a 5 year term. These options were granted by the
Company as of March 11, 1999 in replacement of options (in equal number and
on the same terms and conditions as options granted by the Company's
wholly-owned subsidiary as at January 1, 1999 (the "date of grant")).
Twenty (20%) percent of the options granted by the Company will commence to
vest (and thereafter be exercisable) on each anniversary of the date of
grant. On April 30, 2001, Mr. New was granted further options to purchase
100,000 shares of common stock at an exercise price of $0.31 per share,
with a five year term and full vesting on April 30, 2001. To date 200,000
of Mr. New's options and 150,000 of Mr. Faulkner's options have been
cancelled and the balance of 225,000 of Mr. New's options and 45,000 of Mr.
Faulkner's options have vested.
DIRECTORS
PROPOSAL 1. ELECTION OF DIRECTORS
At the Annual Meeting of Stockholders, all five members of the Board of
Directors are to be elected. In the absence of instructions to the contrary, the
shares of Common Stock represented by a proxy delivered to the Board of
Directors will be voted FOR the five nominees named below. All of the nominees
named below are presently serving as Directors of the Company. All of the
nominees are anticipated to be available for election and able to serve.
However, if any such nominee should decline or become unable to serve as a
Director for any reason, votes will be cast instead for a substitute nominee
designated by the Board of Directors or, if none is so designated, will be cast
according to the judgment in such matters of the person or persons voting the
proxy.
The tables below and the paragraphs that follow present certain information
concerning nominees for Director and the executive officers of the Company. Each
elected Director will serve until the next Annual Meeting of Stockholders and
until his or her successor has been elected and qualified. Officers are elected
by and serve at the discretion of the Board of Directors.
Executive Shares of Common Stock
Officer/ Beneficially Owned as
Positions Director of July 25, Percent
Name Age with Company Since 2001 of Class
- ----------------------- -- ------------------------- -------- --------- -----
Nominees for Directors:
Marcus A. New 30 Chairman of the Board, 3/11/99* 2,963,500(1)(2) 29.37%
Chief Executive Officer,
Director
Craig D. Faulkner 31 Chief Technology Officer, 3/11/99* 879,000(1)(3) 8.71%
Director
Leslie A. Landes 55 President, Chief 6/15/99* 213,280(5) 2.11%
Operating Officer,
Director
Lee deBoer 49 Director 10/7/99 20,000(6) 0.20%
David Caddey 51 Director 6/15/99 80,000(1)(4) 0.79%
Executive Officers who
are not Directors:
J. Lindsay P. Moyle 36 Chief Financial Officer, 5/23/00 Nil(7) 0.00%
Secretary and Treasurer
All Directors and
executive officers as
a group 4,155,780 41.18%
* Prior to the acquisition that took place on March 11, 1999, such executive
served as a member of the management team of Stock Research Group, Inc.
(1) Pursuant to a Share Exchange and Share Purchase Agreement dated March 11,
1999 (the "SEA") by and among the Company, formerly called I-Tech Holdings
Group, Inc., 579818 B.C. Ltd., a British Columbia, Canada corporation
wholly-owned by the Company (the "Subsidiary"), Stock Research Group, Inc.,
a British Columbia, Canada corporation ("Stock Group") and all of the
shareholders of Stock Group, being nine persons (collectively, the "Stock
Group Shareholders"), the Company acquired (the "Acquisition") all of the
issued and outstanding common shares of Stock Group from the Stock Group
Shareholders in consideration of the issuance by (i) the Subsidiary to the
Stock Group Shareholders, on a pro-rata basis, of 3,900,000 Class A
Exchangeable Shares (the "Exchangeable Shares") and (ii) by the Company
issuing to Stocktrans, Inc., located at 7 East Lancaster Avenue, Ardmore,
PA 19003, as trustee for the Stock Group Shareholders (the "Trustee")
3,900,000 shares of Common Stock to be held under the terms of an Exchange
and Voting Agreement dated March 11, 1999 (the "Trust Agreement") by and
among the Company, the Trustee, the Subsidiary and the Stock Group
Shareholders. The Exchangeable Shares may be converted, at the option of
the holder into an equal number of the Company's Common Stock held by the
Trustee. Pending any such conversion, each holder of the Exchangeable
Shares may direct the Trustee to vote an equivalent number of Company's
Common Stock. The Trustee has no discretion as to voting or disposition of
the Company's Common Stock. As a result of these transactions, each of the
Stock Group Shareholders has the right to vote, (or to direct the Trustee
to vote on behalf of such Stock Group Shareholder) a number of the
Company's Common Stock equal to the number of Exchangeable Shares held of
record by such Stock Group Shareholder. In the aggregate, the Company's
Common Stock issued to the Trustee represent approximately 38.65% of the
Corporation's issued and outstanding shares of Common Stock. The Trust
created by the SEA shall continue until the earliest to occur of the
following events: (a) no outstanding Exchangeable Non-Voting Shares are
held by any Stock Group Shareholder; (b) each of the Subsidiary and the
Company acts in writing to terminate the Trust and such termination is
approved by the holders of the Exchangeable Non-Voting Shares in accordance
with section 27.10 of the SEA; and (c) December 31, 2098.
(2) Of the amount shown for Marcus New, 47.93% (or 1,372,500 shares) of the
exchangeable shares are owned by Yvonne New, Mr. New's wife. Mr. Marcus New
owns directly 171,500 Exchangeable shares and his wife, Yvonne New, owns
directly 250,000 exchangeable shares. They both indirectly, through 518464
B.C. Ltd., a British Columbia company owned by Mr. New as to 50% and his
wife Yvonne New as to 50%, 2,245,000 exchangeable shares. Accordingly,
Marcus and Yvonne New beneficially own 2,666,500 exchangeable shares of
common stock, which represent approximately 26.42% of issued and
outstanding common stock. In addition to this amount, 70,000 shares are
held in trust for the benefit of Mr. New. This trust is a non-voting trust.
Mr. New also owns 2,000 shares of common stock which were purchased in the
open market. Mr. New was also granted options to purchase 325,000 shares of
common stock at an exercise price of $2.50 per share. The initial vesting
of 65,000 options took place on March 11, 2000. Vesting of a second 65,000
options took place on March 11, 2001. On April 30, 2001, Mr. New was
granted further options to purchase 100,000 shares of common stock at an
exercise price of $0.31 per share, with a five year term and full vesting
on April 30, 2001. On July 16, 2001, 200,000 of Mr New's options granted on
March 11, 1999 were cancelled. In combination with Mr. New's 2,666,500
exchangeable shares, 2,000 shares of common stock, and 70,000 shares of
common stock held in trust, these 225,000 optioned shares, which are
exercisable, create a beneficial ownership position in the company of
2,963,500 shares representing approximately 29.37% of issued and
outstanding common stock.
(3) Of the amount shown for Craig Faulkner, Mr. Faulkner owns directly 169,000
exchangeable shares and indirectly, through 569358 B.C. Ltd., a British
Columbia company owned by Mr. Faulkner, 665,000 exchangeable shares. Mr.
Faulkner has also been granted options to acquire 195,000 shares of common
stock at an exercise price of $2.50 per share. Mr. Faulkner was granted
these options on March 11, 1999. The options have a five-year term and vest
20% per year. The initial vesting of 39,000 options took place on March 11,
2000. Vesting of a second 39,000 options took place on March 11, 2001. On
July 16, 2001, 200,000 of Mr New's options granted on March 11, 1999 were
cancelled. In combination with his direct and indirect holdings of 834,000
exchangeable shares, Mr. Faulkner beneficially owns 879,000 shares
representing approximately 8.71% of issued and outstanding common stock.
(4) Of the amount shown for Mr. Caddy, 50% (or 30,000 shares) are owned by Ms.
Donna Caddey, Mr. Caddey's wife. Mr. David Caddey and his wife, Donna
Caddey, each own directly 20,000 exchangeable shares. In addition, 20,000
shares of common stock are owned jointly by David and Donna Caddey.
Accordingly, Mr. and Ms. Caddey beneficially owns 60,000 shares of common
stock which represents approximately 0.60% of issued and outstanding common
stock. Mr. Caddey has been granted options to purchase 20,000 shares of
common stock at an exercise price of $2.50 per share. Mr. Caddey was
granted these options on March 11, 1999. The options have a six-year term
and full vesting of the 20,000 options took place on March 11, 2000 and the
beneficial ownership calculation here includes 20,000 shares of common
stock underlying these options. On November 8, 2000, Mr. Caddey was granted
further options to purchase 50,000 shares of common stock at an exercise
price of $1.00 per share, with a five-year term and full vesting on
November 8,
2001. In combination with his direct and indirect holdings of 40,000
exchangeable shares and direct and indirect holdings of 20,000 shares of
common stock, Mr. Caddey beneficially owns 80,000 shares representing
approximately 0.79% of issued and outstanding common stock.
(5) Mr. Leslie Landes has been granted options to purchase 692,000 shares of
common stock at a price of $0.01 per share as to 105,000 shares and $0.94
per shares as to the balance. Mr. Landes was granted these options on March
11, 1999. The options may be exercised, to the extent vested, only after
August 1, 2000. As at August 1, 1999, 106,640 of the options had vested. As
at August 1, 2000, a further 106,640 of the options had vested. 53,800 of
Mr. Landes' options to purchase shares at a price of $0.94 were cancelled
on April 2, 2001. As at June 19, 2001, Mr. Landes' options provide him with
beneficial ownership of 213,280 of issued and outstanding common stock.
(6) Mr. Louis deBoer II, has been granted options to purchase 20,000 shares of
common stock at an exercise price of $2.75 per share. Mr. deBoer was
granted these options on October 7, 1999. The options have a six-year term
and full vesting of the 20,000 options occurred on October 7, 2000. On
November 8, 2000, Mr. deBoer was granted further options to purchase 50,000
shares of common stock at an exercise price of $1.00 per share, with a five
year term and full vesting on November 8, 2001. As at June 19, 2001, Mr.
deBoer's options provide him with beneficial ownership of 20,000 shares of
common stock, representing 0.20% of issued and outstanding common stock.
(7) Mr. Moyle was granted options to acquire 25,000 shares at an exercise price
of $1.56. These options were granted to Mr. Moyle on August 23, 2000, have
a six-year term and vest as to 20% per year starting August 23, 2001. On
April 30, 2001, Mr. Moyle was granted further options to purchase 25,000
shares of common stock at an exercise price of $0.31 per share, with a five
year term and full vesting on October 30, 2001. As at June 19, 2001, Mr.
Moyle's vested options are nil.
Business Experience of Nominees and Executive Officers
Marcus New has been Chairman of the Board and Chief Executive Officer of the
Company since March 11, 1999. He has also served as the Chairman of the Board,
Chief Executive Officer and Director of Stockgroup.com Media, Inc. and
Stockgroup.com, Ltd., the Company's wholly-owned Canadian and U.S. operating
Subsidiaries since 1995. Mr. New also serves as Director, President & Secretary
of 579818 B.C. Ltd., a wholly owned subsidiaries of the Company. Mr. New is the
founder, Chairman and CEO of Stockgroup.com Media, Inc. (formerly Stock Research
Group, Inc.) a British Columbia, Canada corporation incorporated on May 4, 1995.
Mr New has been an invited guest speaker to the New York Society of Security
Analysts where his speech was transmitted on NBC's Private Financial Network. He
has also appeared on national media broadcasts including CNBC, Bloomberg Radio,
CNNfn, and Investors On Line. Mr. New is also a director of IRI Inc., the "for
profit" company for the Investor Research Institute headquartered in New York.
Marcus New is also a director of Iwave.com (CDN-OTC: IWAV), an information
database and retrieval company.
Craig Faulkner has been Chief Technology Officer and Director of the Company
since March 11, 1999. He has also served as Director, Vice President Operations
and Chief Technology Officer of Stockgroup.com Media, Inc. and Stockgroup.com,
Ltd., the Company's wholly-owned operating subsidiaries since 1995. Mr. Faulkner
has also served as Director and Secretary of Stockgroup.com (Bahamas) Ltd. and
Stockgroup.com International, Inc., both of which are wholly-owned subsidiaries
of the Company since 1999. Mr. Faulkner has been a computer programmer for over
15 years and is one of the founding partners of Stockgroup.com Media, Inc.
(formerly Stock Research Group, Inc.) He brings extensive technical skills to
the Company and is responsible for the implementation and development of the
product side of the business.
Leslie Landes has been the Chief Operating Officer of the Company since March
11, 1999. Since June 15, 1999 he has also served as Director and President, as
well as President and Chief Operating Officer of Stockgroup.com Media, Inc. and
as Director, President and Chief Operating Officer of Stockgroup.com, Ltd., the
Company's wholly-owned operating subsidiaries. Mr. Landes previously directed
Landes Enterprises Limited from 1992 to 1999, a privately held interim
turnaround management consulting company that advised and counseled clients in
several industries including telecommunications and technology on issues ranging
from mergers and acquisitions to international marketing campaigns. Prior to
founding Landes Enterprises, Mr. Landes spent 13 years as a senior executive
with the Jim Pattison Group, Canada's third largest private company with sales
in excess of $3 billion and over 13,000 employees. Mr. Landes served as
President of the Jim Pattison Sign Group, Outdoor Group, and The Communications
Group, which included the Company's manufacturing and leasing business. He
ultimately served as President of Jim Pattison Industries Ltd. and Senior VP of
the Jim Pattison Group where he successfully initiated and completed the
acquisition of strategically important companies in a number of diverse
industries. Most notably, under Mr. Landes' presidency, the Sign Group was built
into the largest electronic sign company in the world. Leslie Landes is also a
director of TIR Systems Ltd. (CDNX: TIY).
David N.Caddey, B.Sc., M.Sc., is, and has been since 1990, Vice President and
General Manager of MacDonald Dettwiler and Assoc. (TSE: MDA), a leading Canadian
space and information technology company. Mr. Caddey received a Bachelor of
Science degree from the Royal Military College in 1971 and a Master of Science
Degree from the Royal Military College in 1976.
For over five years, Lee deBoer has been Principal and President of
MediaFutures, Inc., a strategic consultancy with clients in New Media and
Cable/Broadcast. Mr. deBoer is former CEO of New Century Network, an online
company formed by a consortium of the nine leading US newspaper companies, and
past Executive Vice President, President of HBO International. While at HBO Mr.
deBoer was responsible for overseeing HBO's programming operations units as well
as its diversification and expansion efforts.
Lindsay Moyle, CGA, joined the Company in May 2000. Prior to joining
Stockgroup.com, Mr. Moyle was the CFO of NTS Computer Systems from 1995 to 2000,
where he was involved in the IPO and financing activities for the company. He
also contributed to the company's graduation to the Toronto Stock Exchange and
he played a significant role in the development of overseas subsidiaries. Mr.
Moyle is a Certified General Accountant and is currently a Director of the
Tri-Cities/Ridge-Meadows chapter of the British Columbia CGA Association.
Lindsay Moyle is also currently on a one year leave from the Executive Masters
of Business Administration program at Simon Fraser University in Vancouver, BC.
Meetings of the Board of Directors and Committees
During 2000 the Company's Board of Directors did not have a standing nominating
committee or committee performing similar functions. Currently the Company
maintains standing audit and compensation committees.
During the year ended December 31, 2000, the Company's Board of Directors did
not hold any meetings.
Executive Compensation
The following summary compensation table sets forth individual compensation
information for the Chief Executive Officer and each of the Company's executive
officers whose aggregate compensation exceeded $100,000 during each of the years
ended December 31, 1998, 1999 and 2000 for services rendered to I-Tech Holdings
Group, Inc.
.
Summary Compensation Table (I-Tech Holdings Group, Inc.)
All Other
Name and Principal Position Year Salary Bonus Compensation
- --------------------------- ---- ------- -------- ------------
Gerald H. Trumbule 1998 $ 0 $ 0 $ 0
Chief Executive Officer, 1999 $ 0 $ 0 $ 0
President and Director 2000 $ 0 $ 0 $ 0
The following summary compensation table sets forth individual compensation
information for the Chief Executive Officer and each of the Company's executive
officers whose aggregate compensation exceeded $100,000 during each of the years
ended December 31, 1998, 1999 and 2000 pertaining to services rendered to
Stockgroup.com Holdings, Inc.
Summary Compensation Table (Stockgroup.com Holdings, Inc.)
All Other
Name and Principal Position Year Salary Bonus Compensation
- --------------------------- ---- -------- ------- ------------
Marcus New 1998 $ 40,192 $ 0 $ 0
Chief Executive Officer, 1999 $111,073 $ 0 $ 0
Chairman and Director 2000 $147,460 $ 0 $ 0
Leslie Landes 1998 $ 38,781 $ 0 $ 0
President & Chief Operating Officer 1999 $122,654 $ 0 $ 0
2000 $145,668 $ 0 $ 0
The following tables present certain additional information concerning stock
options granted to or exercised by executive officers during 2000 for services
rendered to I-Tech Holdings Group, Inc.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Number of Securities % of Total Options / SARs Exercise or Expiration
Underlying Options/SARs Granted to Employees in year Base price Date
Granted at December 31, 2000 ended December 31, 2000 per share ----
---------------------------- ----------------------- ---------
Name Exercisable Unexerciseable
---- ----------- --------------
Gerald Trumbule 0 0 0 0 0
The following tables present certain additional information concerning stock
options granted to or exercised by executive officers during 2000 for services
rendered to Stockgroup.com Holdings, Inc.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Number of Securities % of Total
Underlying Options/SARs Options/SARs
Granted at December 31, 2000 Granted to Employees Exercise or
---------------------------- in year ended Base price Expiration
Name Exercisable Unexerciseable December 31, 2000 per share Date
- ---- ----------- -------------- ----------------- --------- ----
Marcus New 65,000 260,000 0.00% US$2.50 3/11/06
Leslie Landes 0 105,000 0.00% US$0.01 8/1/05
106,640 534,160 0.00% US$0.94 8/1/05
Directors' Compensation
The Company did not have any standard arrangements pursuant to which the
Directors were compensated for services provided as a director.
Employment Contracts and Termination of Employment and Change-In-Control
Arrangements.
The company signed an employment contract with Leslie Landes on August 4, 1998.
This contract extends for five years and includes various termination and
renewal clauses. The company can terminate the contract without cause upon
thirty days written notice and payment of one year's salary.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company and its directors and officers were in compliance with all ownership
reporting requirements for the 2000 fiscal year.
ACCOUNTANTS
PROPOSAL 2. SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends the ratification by the stockholders of the
appointment by the Board of Directors of Ernst & Young LLP as the Company's
independent accountants for the fiscal year ending December 31, 2001. In the
absence of instructions to the contrary, the shares of Common Stock represented
by a proxy delivered to the Board of Directors will be voted FOR the
ratification of the appointment of Ernst & Young LLP. Fees for the last annual
audit and quarterly reviews for the last fiscal year were $62,408 and all other
fees were $39,485, including audit related services of $25,607 and nonaudit
services of $13,877. Audit related services
generally include fees for pension and statutory audits, business acquisitions,
accounting consultations, internal audit and SEC registration statements.
The following table displays the aggregate fees billed to Stockgroup for the
fiscal year ended December 31, 2000, by Stockgroup's principal accounting firm,
Ernst & Young LLP.
================================================================================
Audit Fees $ 62,408
- -------------------------------------------------------------------------------
Financial Information Systems Design and Implementation Fees $ 0
- -------------------------------------------------------------------------------
All Other Fees $ 39,485
- -------------------------------------------------------------------------------
Total of All Fees $ 101,893
================================================================================
Representatives of Ernst & Young and/or Dale Matheson Carr-Hilton and/or Kish,
Leake & Associates, PC are not expected to be present at the Annual Meeting.
Background on Changes in the Company's Certifying Accountant
As part of the acquisition of Stock Research Group, Inc., on March 16, 1999, the
Board of Directors of the Company approved the retention of the firm of Dale
Matheson Carr-Hilton, who had been the previous principal independent accountant
for Stock Research Group, Inc., as principal independent accountant to perform
the examination of its financial statements as of December 31, 1999, and for the
year then ended, effective with the resignation of Kish, Leake & Associates,
P.C., the former independent accountant, which occurred on March 16, 1999. Kish,
Leake & Associates, P.C. had been principal independent accountant, having
performed audit services for the two most recent fiscal years ended December 31,
1998 and 1997, and had expressed unqualified opinions on such financial
statements. In connection with those audits and through March 16, 1999, there
were no disagreements between the Company and Kish, Leake & Associates, P.C. on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement, if not resolved
to the satisfaction of Kish, Leake & Associates, P.C., would have caused them to
make reference in their reports to the subject matter of the disagreements.
The Company requested Kish, Leake & Associates, P.C. to furnish it with a letter
addressed to the Securities and Exchange Commission (SEC) stating whether such
firm agrees with the statements made above and, if not, stating the respects in
which they do not agree. Such letter is on file with the SEC.
In the months following the Stock Research Group acquisition, as the result of
growth and expansion, the Company determined it required the services of an
international accounting firm and replaced its former certifying accountant,
Dale Matheson Carr-Hilton, effective July 8, 1999. The accountant's reports on
the financial statements of the Company for the past three years were
unqualified. The decision to change accountants was part of the Company's
overall
strategic plan and was approved by the board of directors.
During the three most recent fiscal years ended December 31, 2000, 1999, 1998
and through to July 25, 2001, there were no disagreements between the Company
and Dale Matheson, Carr-Hilton on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of Dale Matheson, Carr-Hilton
would have caused them to make reference to the subject matter of the
disagreements. The Company requested Dale Matheson, Carr-Hilton to furnish it
with a letter addressed to the SEC stating whether such firm agrees with the
statements made above and, if not, stating the respects in which they do not
agree. Such letter is on file with the SEC.
STOCK OPTION PLAN
PROPOSAL 3. APPROVAL OF THE 2001 STOCK OPTION PLAN
A copy of the proposed 2001 Stock Option Plan is included with these Proxy
Materials, and is hereby incorporated by reference. The 2001 Stock Option Plan
will allow the Company to issue up to 1,000,000 options to purchase Class A
Common Shares of the Company at various prices. The 2001 Stock Option Plan
provides for the issuance of options to employees, officers and directors of the
Company, as well as outsiders of the company at the discretion of the Board of
Directors. Awards of options under the 2001 Stock Option plan are at the
discretion of the Board of Directors. As of the date of this filing, no such
awards have been made, and it is not possible to determine who will receive
benefits under this plan or who would have received benefits under this plan in
the last completed fiscal year if the plan had been in effect. Under the 1999
Plan, 1,999,139 of the 2,000,000 allowed options have been issued, of which
453,439 have been exercised and the balance of 1,546,561 are outstanding at
prices ranging between $0.010 and $4.437. Under the 2000 Plan, 500,000 of the
500,000 allowed options have been issued, of which 200,000 have been exercised
and the remaining 300,000 are outstanding at a price of $0.31. At present,
612,380 of the options under both of these plans have vested and are exercisable
at prices ranging between $0.31 and $4.437, while the balance of 1,233,320
remain unvested and unexercisable. As of July 25, 2001, Class A Common Shares of
the Company closed at a price of $0.24 per share.
A summary of the key features of the 2001 Plan appears below. This summary is
qualified by and made subject to the specific provisions of the 2001 Plan.
ADMINISTRATION
The 2001 Plan is to be administered by the Board of Directors or its designated
plan administrator(s). The Board is authorized to interpret the 2001 Plan;
determine the terms and conditions of each option including any restrictions to
be imposed upon transfer of shares purchased pursuant to the options; establish
and amend the rules for its administration; determine which key employees will
be granted options; determine the number of shares and type of options to be
granted to each eligible employee; and prescribe the form of all stock option
agreements.
ELIGIBILITY
Consistent with the Plan's purposes, Options may be granted only to such
Directors, Officers, Employees, Consultants and Advisors of the Company as
determined by the Board or the Committee or a Designated Officer. Subject to the
terms of the Plan, a Director, Officer, Employee, Consultant or Advisor who has
been granted an Option may, if he or she is otherwise eligible, be granted an
additional Option.
TYPES OF AWARDS AND CONSIDERATION RECEIVED
To provide a flexible and competitive program, the 2001 Plan permits awards
non-qualified stock options or restricted shares. The Company will not receive
consideration for the granting of options under this plan, except to the extent
that options or shares are granted in return for services as permitted by the
2001 Plan. The awards are not transferable except by will, by the laws of
descent and distribution, or pursuant to a qualified domestic relations order.
RESERVATION OF SHARES
The 2001 Plan provides for the granting of options for an aggregate of 1,000,000
shares of Class A Common Stock. Authorized but unissued shares and treasury
shares may be made available for issuance under the 2001 Plan. In the event of
changes affecting Stockgroup's common stock such as the payment of a stock
dividend, the declaration of a stock split, combination of shares,
recapitalization, merger, consolidation, or other corporate reorganization in
which Stockgroup is the surviving company, the Board shall make adjustments to
awards and shares under the 2001 Plan.
TERMS OF OPTIONS
OPTION PRICE - The purchase price of shares subject to any option must be at
least 100% of the fair market value of the shares on the date of grant. Fair
market value is defined in the 2001 Plan as the value of the Shares determined
by the Board or the Committee or a Designated Officer in such manner as it may
deem equitable for Plan purposes but, no less than is required by applicable
laws or regulations; provided, however, that where there is a public market for
the Shares, the Fair Market Value per share shall be the average of the high and
low trading prices of the Shares on the Date of Grant, as reported in the Wall
Street Journal (or, if not so reported, as otherwise reported by the National
Association of Securities Dealers Automated Quotation System - Small Cap or
National Markets or the National Association of Security Dealers Over the
Counter Bulletin Board). Upon exercise, the option price is to be paid in full
in cash or by check, or by surrender of a number of shares of common stock
having a fair market value equal to the option price, or a combination of both.
EXERCISE OF OPTIONS - The maximum term of any stock option is 10 years from the
date the option is granted. No incentive stock option may be granted after
December 31, 2011. In the event of a dissolution or liquidation of Stockgroup or
a merger, consolidation, sale of all or
substantially all of its assets, or other corporate reorganization in which
Stockgroup is not the surviving corporation or, if so provided by the Board with
respect to a particular option in the event of a Change of Control, all options
previously granted and still outstanding, regardless of their terms, will become
exercisable.
If the employment of an optionee terminates due to his/her death or disability,
all of the optionee's outstanding vested options must be exercised within six
months or the stated period of the option, whichever is shorter. Notwithstanding
the foregoing, if the optionee of an incentive stock option retires or
voluntarily terminates his/her employment, his/her outstanding vested incentive
stock options must be exercised within three months or within the stated period
of the option, whichever is shorter. If an optionee's employment terminates for
any reason other than voluntary termination, retirement, death or disability,
all of the optionee's outstanding options, unless otherwise provided in an
employment agreement, shall become null and void. In any event, no option may be
exercised after termination of employment for any reason if it has not vested as
at the date of termination of employment.
AMENDMENT
The Board of Directors may amend, alter, suspend or discontinue the 2001 Plan.
However, any such amendment or termination of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Board or the Committee or a Designated Officer,
which agreement must be in writing and signed by the Optionee and the Company.
FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS - The grantee of an incentive stock option will not be
deemed to receive any taxable income upon the grant or exercise of an option,
and any gain realized upon the disposition of shares acquired pursuant to an
option will be treated as capital gain. However, in order for such capital gain
treatment to be applicable, the shares acquired upon exercise of the option
ordinarily must not be disposed of within two years after the date of grant or
within one year of the date of exercise, and the option must be exercised prior
to or within a specified period after a grantee's termination of employment. No
gain or loss will be recognized by Stockgroup either upon the grant or upon the
exercise of a qualifying incentive stock option. The difference between the
option exercise price and the fair market value of the shares on the option
exercise date of an incentive stock option will be treated as an item of tax
preference in the year of exercise for purposes of the alternative minimum tax.
If shares acquired pursuant to an incentive stock option are disposed of before
the holding periods described above expire, then the excess of the fair market
value (but not in excess of the sales proceeds) of such shares on the option
exercise date over the option price will be treated as ordinary income to the
grantee in the year in which such disposition occurs and Stockgroup will be
entitled to a commensurate income tax deduction. Any difference between the
sales proceeds and the fair market value of the shares on the option exercise
date will be treated as capital gain
or loss.
RESTRICTED SHARES - The grantee of restricted shares will not be deemed to
receive any taxable income upon the grant of the shares. When a restricted share
is issued, the grant price will be an allowable income tax deduction to
Stockgroup. When a restricted share is sold, the excess of the fair market value
of the shares on the sale date over the grant price will be a capital gain to
the grantee.
The full text of the 2001 Plan is attached.
INCREASE IN AUTHORIZED CAPITAL
PROPOSAL 4. APPROVAL OF INCREASE IN AUTHORIZED SHARE CAPITAL
The Company's currently authorized maximum number of Class A Common shares
outstanding is 50,000,000. As of the date of this filing, 10,091,755 of these
shares have been issued and are outstanding. In addition, 19,319,198 have been
reserved for issuance pursuant to various options, warrants, and convertible
notes and debentures as outlined in the table below. The increase in authorized
share capital would allow the Company to issue up to 75,000,000 Class A Common
shares. The increase in share capital is being undertaken pursuant to a
commitment to our transfer agent StockTrans, made by the Company as part of a
transaction undertaken in March 1999, as disclosed in an SC 13D filing on March
23, 1999. The Company does not foresee any potential negative effect of this
increase.
Reserved for issuance
- --------------------------------------------------------------------------------
1999 Stock Option Plan 1,546,561
2000 Stock Option Plan 300,000
March 31, 2000 Convertible Notes and Warrants 15,850,877
January 19, 2001 Convertible Debentures and Warrants 1,521,760
Other Warrants outstanding 100,000
- --------------------------------------------------------------------------------
Total shares reserved for issuance 19,319,198
================================================================================
CHANGE IN COMPANY NAME
PROPOSAL 5. APPROVAL OF CHANGE IN COMPANY NAME
The Company believes it is in the best interests of the shareholders to change
the Company's name to reflect the current business emphasis and outlook, and
therefore recommends changing the corporate name from "Stockgroup.com Holdings,
Inc." to "Stockgroup Information Systems, Inc."
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINEES
FOR 2001 ANNUAL MEETING
It is contemplated that the Company's 2001 Annual Meeting of Stockholders will
be held on or about September 19th, 2002. Stockholders of the Company who intend
to submit proposals or submit nominees for the election of Directors at the next
Annual Meeting of Stockholders must submit such proposals to the Company not
earlier than May 1st, 2002 nor later than June 30th, 2002. Stockholder proposals
should be submitted to Stockgroup.com Holdings, Inc., 500-750 West Pender
Street, Vancouver, BC, Canada V6C 2T7, Attention: Lindsay Moyle, CGA -
Secretary.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 2000, including
financial statements, is being mailed together with this Proxy Statement to the
Company's stockholders of record at the close of business on August 9, 2001.
This Annual Report includes the Company's 10-KSB as filed with the SEC.
OTHER BUSINESS
The Board of Directors does not know of any other business to be presented to
the meeting and does not intend to bring any other matters before the meeting.
However, if any other matters properly come before the meeting or any
adjournments thereof, it is intended that the persons named in the accompanying
proxy will vote thereon according to their best judgment in the interests of the
Company.
By Order of the Board of Directors
Lindsay Moyle, CGA
Secretary
July 25, 2001
STOCKHOLDERS ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN
THE ENCLOSED SELF-ADDRESSED ENVELOPE. YOUR PROMPT RESPONSE WILL BE HELPFUL, AND
YOUR COOPERATION WILL BE APPRECIATED.
STOCKGROUP.COM HOLDINGS, INC.
500-750 West Pender Street
Vancouver, B.C. V6C 2T7 Canada
PROXY
Solicited by the Board of Directors
for the Annual Meeting of Stockholders on
September 20, 2001
THE UNDERSIGNED HEREBY CONSTITUTES AND APPOINTS MARCUS NEW, CRAIG FAULKNER AND
LESLIE LANDES, AND EACH OF THEM, HIS OR HER TRUE AND LAWFUL AGENTS AND PROXIES
WITH FULL POWER OF SUBSTITUTION IN EACH, TO REPRESENT THE UNDERSIGNED AT THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, SEPTEMBER 20, 2001, AND
AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF, ON ALL MATTERS COMING BEFORE SAID
MEETING.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR (IN FAVOR OF) PROPOSALS 1, 2, 3, 4 and 5 AND IN THE DISCRETION OF THE
BOARD FOR ANY OTHER BUSINESS. EACH OF THE PROPOSALS LISTED BELOW HAVE BEEN
PROPOSED BY THE BOARD OF DIRECTORS, AND ARE NOT RELATED OR CONDITIONED UPON EACH
OTHER OR ANY OTHER MATTERS EXCEPT AS DISCLOSED HEREIN.
The Board of Directors recommends a vote FOR each of the proposals below.
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed (except / / WITHHOLD AUTHORITY to
as marked to the contrary below) vote for all nominees listed below
Marcus New, Craig Faulkner, Leslie Landes, Lee deBoer, David Caddey.
(INSTRUCTION: To withhold authority to vote for my individual nominee, strike a
line through the nominee's name in the list above.)
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
ACCOUNTANTS
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO APPROVE THE 2001 STOCK OPTION PLAN
/ / FOR / / AGAINST / / ABSTAIN
PROXY
Solicited by the Board of Directors
for the Annual Meeting of Stockholders on
September 20, 2001
4. PROPOSAL TO INCREASE THE AUTHORIZED SHARE CAPITAL OF THE COMPANY FROM
50,000,000 to 75,000,000
/ / FOR / / AGAINST / / ABSTAIN
5. PROPOSAL TO APPROVE THE CHANGE IN COMPANY NAME FROM "STOCKGROUP.COM HOLDINGS,
INC." TO "STOCKGROUP INFORMATION SYSTEMS, INC."
/ / FOR / / AGAINST / / ABSTAIN
6. IN THEIR DISCRETION, THE BOARD IS AUTHORIZED TO VOTE UPON ANY OTHER BUSINESS
THAT MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.
/ / FOR / / AGAINST / / ABSTAIN
PLEASE CLEARLY PRINT YOUR NAME AND SIGN EXACTLY AS YOUR NAME HAS BEEN PRINTED ON
THIS PROXY. IF SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. IF SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, OR GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A COMPANY, PLEASE SIGN IN FULL CORPORATE NAME BY THE PRESIDENT OR
OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AN AUTHORIZED PERSON.
PLEASE RETURN TO THE MEETING CHAIR WHEN COMPLETED.
- ------------------------- ----------------------------------------------
Signature Print name of registered shareholder
- -------------------------
Date of Proxy
- ------------------------- ----------------------------------------------
Signature if held jointly Number of registered shares at August 9, 2001
TO OUR SHAREHOLDERS,
The year 2000 was an exciting but challenging time for your company. Your
management team determined mid way through the year that the Internet
advertising model could not sustain our business in the short term. The
management team took some aggressive actions to cut costs related to our
financial community, Smallcapcenter.com, and refocus the company back to its
more traditional core business units. We recognized that the technology software
system that we had spent years building for smallcapcenter could be utilized to
private label our financial software tools and applications to other
corporations on an outsourced basis. By expanding the features and functionality
of the software system, we put the company in the position to be able to offer
these products by the end of the year.
Our new Financial Tools and Content products have experienced encouraging early
success, with a broad appeal and several fortune 500 customers such as
PriceWaterhouseCoopers, US Navy, vFinance, Sony Electronics and Conseco. In
addition, we continued to improve our products in 2001, developing more
financial tools and content as well as new services for public companies such as
our IntegratIR shareholder disclosure and communications product. The IntegratIR
provides an outsourced software solution to publicly traded companies that keeps
the disclosure information such as press releases, quotes, charts, SEC filings,
management bios and more, current on their web sites. The nature of our
financial software system and IntegratIR products is that revenue is earned
through 12-month contracts that automatically renew, and give us monthly
reoccurring revenue. We expect this line of revenue will continue to grow and
will be a significant contributor to the company's goal of achieving
profitability through regular reliable cash flow.
The downturn in the economy that began in 2000 and continues into 2001 has
presented challenges for Stockgroup. We have responded to these challenges by
developing and maintaining a competitive cost structure, and by refining our
focus to ensure our products remain competitive and relevant in the changing
marketplace. The financial software content management market is growing at an
incredible rate. We are confident that our investments in the development of
financial software systems, and our status as the low cost producer, will allow
us to capture a growing segment of that market.
Stockgroup has become a lean team of dedicated professionals, without whom our
continuing successes would not be possible. I thank every employee for his or
her hard work and dedication in the past year, and our customers, suppliers, and
shareholders for their support. In the coming year, we will continue to
aggressively pursue increased revenues and profitability by maintaining our
competitive cost structure while continuing to leverage our core competencies
through product innovation and a clear focus on the needs of our customers.
Sincerely,
Marcus New
Chairman and Chief Executive Officer
August 6, 2001
STOCKGROUP.COM HOLDINGS, INC.
2001 STOCK OPTION PLAN
1. Purposes of the Plan.
The purposes of this Plan are to (i) attract and retain the best available
personnel for positions of responsibility within Stockgroup.com Holdings, Inc.
(the "Company"), (ii) provide additional incentives to Employees, Directors and
Consultants of the Company, (iii) provide Employees, Directors, and Consultants
of the Company with an opportunity to acquire a proprietary interest in the
Company to encourage their continued provision of services to the Company, and
to provide such persons with incentives and rewards for superior performance
more directly linked to the profitability of the Company's business and
increases in shareholder value, and (iv) generally to promote the success of the
Company's business and the interests of the Company and all of its stockholders,
through the grant of options to purchase Shares.
Incentive benefits granted hereunder are Non-qualified Stock Options or
Restricted Shares, as those terms are hereinafter defined. The Options granted
shall be reflected in the terms of a written Incentive Agreement. No Option
granted hereunder shall be effective until both the Company and the Participant
execute an Incentive Agreement with respect to such Option.
2. Definitions
As used herein, the following definitions shall apply:
2.1 "Board" shall mean the Board of Directors of the Company.
2.2 "Change of Control" means a change in ownership or control of the Company
effected through any of the following transactions:
(a) the direct or indirect acquisition by any person or related group of
persons (other than by the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer made
directly to the Company's shareholders, or other transaction, in each case which
the Board does not recommend such shareholders to accept; or
(b) a change in the composition of the Board over a period of 24
consecutive months or less such that a majority of the Board members (rounded up
to the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (i) have been
Board members continuously since the beginning of such period or (ii) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board; or
(c) a Corporate Transaction as defined below.
2.3 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder.
2.4 "Committee" shall mean the Committee appointed by the Board in accordance
with Section 4.1 of the Plan, if one is appointed.
2.5 "Company" shall mean Stockgroup.com Holdings, Inc. a Colorado corporation,
and shall include any parent or subsidiary corporation of the Company.
2.6 "Consultants" and "Advisors" shall include any third party (and/or employees
or principals thereof) retained or engaged by the Company to provide ongoing
consulting services to the Company pursuant to a written contract, including any
consulting company wholly owned by such person; provided that such consultant:
(a) possess technical, business, management, or legal expertise of value to the
Company or an affiliate; (b) spends a significant amount of time and attention
on the business and affairs of the Company; and (c) has a relationship with the
Company or an affiliate that enables the individual to have knowledge concerning
the business and affairs of the Company.
2.7 "Corporate Transaction" means any of the following shareholder-approved
transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;
(b) the sale, transfer or other disposition of all or substantially all of
the assets of the Company in complete liquidation or dissolution of the Company;
or
(c) any reverse merger in which the Company is the surviving entity but in
which securities possessing more than 50% of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
merger.
2.8 "Date of Grant" means the date specified by the Board or the Committee or a
Designated Officer on which a grant of Options shall become effective.
2.9 "Designated Officer" shall mean an Officer designated under section 4.2 (b)
herein.
2.10 "Director" shall mean a member of the Board.
2.11 "Effective Date" shall have the meaning ascribed thereto in Section 6.
2.12 "Employee" shall mean any employee or Officer of the Company. For purposes
of Section 7 hereof, the term "Employee" shall also include Directors,
Consultants and Advisors.
2.13 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
2.14 "Fair Market Value" shall mean, with respect to the date a given Option is
granted or exercised, the value of the Shares determined by the Board or the
Committee or a Designated Officer in such manner as it may deem equitable for
Plan purposes but, no less than is required by applicable laws or regulations;
provided, however, that where there is a public market for the Shares, the Fair
Market Value per share shall be the average of the high and low trading prices
of the Shares on the Date of Grant, as reported in the Wall Street Journal (or,
if not so reported, as otherwise reported by the National Association of
Securities Dealers Automated Quotation System - Small Cap or National Markets or
the National Association of Security Dealers Over the Counter Bulletin Board).
2.15 "Incentive Agreement" shall mean the written agreement between the Company
and the Participant relating to Options or Restricted Shares granted under the
Plan.
2.16 "Officer" shall mean any officer of the Company.
2.17 "Non-qualified Stock Option" means an Option that is not intended to
qualify as a Tax-Qualified Option (as defined in the Code).
2.18 "Option" means the right to purchase Shares from the Company upon the
exercise of a Non-qualified Stock Option granted pursuant to Section 7 of this
Plan.
2.19 "Option Price" means the purchase price payable upon the exercise of an
Option.
2.20 "Optioned Stock" shall mean the Shares subject to an Option.
2.21 "Option Term" shall have the meaning ascribed to it in Section 7.3.
2.22 "Optionee" shall mean an Employee, Director, Consultant or Advisor of the
Company who has been granted one or more Options.
2.23 "Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
2.24 "Participant" means a person who is selected by the Board or the Committee
or a Designated Officer to receive benefits under this Plan and (i) is at that
time an Employee, Officer, Director, or a Consultant or Advisor, to the Company,
or (ii) has agreed to commence serving in any such capacity.
2.25 "Plan" shall mean this 2001 Stock Option Plan, as amended from time to time
in accordance with the terms hereof.
2.26 "Restricted Shares" means Common Shares granted or sold pursuant to section
8 of this Plan as to which neither the substantial risk of forfeiture nor the
restrictions on transfer referred to
in Section 8.9 hereof has expired.
2.27 "Rule 16b-3" means Rule 16b-3, as promulgated and amended from time to time
by the Securities and Exchange Commission under the Exchange Act, or any
successor rule to the same effect.
2.28 "Shares" shall mean (i) shares of the Common Stock, no par value, of the
Company described in the Company's Articles of Incorporation, as amended, and
(ii) any security into which Common Shares may be converted by reason of any
transaction or event of the type referred to in Section 8 of this Plan, in each
case as the same may be adjusted pursuant to Section 8 of this Plan.
2.29 "Subsidiary" shall mean a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
2.30 "Tax Date" shall mean the date an Optionee is required to pay the Company
an amount with respect to tax withholding obligations in connection with the
exercise of an Option.
2.31 "Termination Date" shall have the meaning ascribed thereto in Section 12.
3. Shares Subject to the Plan.
Subject to the provisions of Section 9 of the Plan, the maximum aggregate number
of Shares which may be optioned and sold or otherwise awarded under the Plan is
One Million (1,000,000) Shares. Any Shares available for grants and awards at
the end of any calendar year shall be carried over and shall be available for
grants and awards in the subsequent calendar year.
For the purposes of this Section 3:
3.1 Upon expiration or cancellation of any award granted under this Plan, any
Shares that were covered by such award shall again be available for issuance or
transfer hereunder.
3.2 Shares covered by any award granted under this Plan shall be deemed to have
been issued, and shall cease to be available for future issuance in respect of
any other award granted hereunder, at the earlier of the time when they are
actually issued or the time when dividends or dividend equivalents are paid
thereon.
4. Administration of the Plan.
4.1 Procedure.
(a) The Board shall administer the Plan; provided, however, that the Board
may appoint a Committee consisting solely of two (2) or more "Non-Employee
Directors" to administer the Plan on behalf of the Board, in accordance with
Rule 16b-3.
(b) 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 thereof, remove members (with or without cause), appoint new
members in substitution therefor, and fill vacancies however caused; provided,
however, that at no time may any person serve on the Committee if that person's
membership would cause the committee not to satisfy the requirements of Rule
16b-3.
(c) A majority of the Committee shall constitute a quorum, and the acts of
the members of the Committee who are present at any meeting thereof at which a
quorum is present, or acts unanimously approved by the members of the Committee
in writing, shall be the acts of the Committee.
(d) Any reference herein to the Board shall, where appropriate, encompass a
Committee appointed to administer the Plan in accordance with this Section 4.
4.2 Power of the Board or the Committee or a Designated Officer
(a) Subject to the provisions of the Plan, the Board shall have the
authority, in its discretion: (i) to grant Options to Participants; (ii) to
determine, upon review of relevant information and in accordance with Section
2.13 of the Plan, the Fair Market Value of the Shares; (iii) to determine the
Option Price per share of Options to be granted, which Option Price shall be
determined in accordance with Section 7.4 of the Plan; (iv) to determine the
number of Shares to be represented by each Option; (v) to determine the
Participants to whom, and the time or times at which, Options shall be granted;
(vi) to interpret the Plan; (vii) to prescribe, amend and rescind rules and
regulations relating to the Plan; (viii) to determine the terms and provisions
of each Option granted (which need not be identical) and, with the consent of
the Optionee thereof, modify or amend such Option; (ix) to accelerate or defer
(with the consent of the Optionee) the exercise date of any Option; (x) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Board; (xi) to
accept or reject the election made by an Optionee pursuant to Section 7.5 of the
Plan; (xii) to impose such additional conditions, as it deems advisable, as to
the vesting and exercise of any Options granted pursuant to the Plan, including,
but not limited to performance criteria, and (xiii) to make all other
determinations deemed necessary or advisable for the administration of the Plan.
(b) The Board or a Committee may delegate to an Officer of the Company the
authority to make decisions pursuant to this Plan, provided that no such
delegation may be made that would cause any award or other transaction under the
Plan to cease to be exempt from Section 16(b) of the Exchange Act. A Committee
may authorize any one or more of its members or any Officer of the Company to
execute and deliver documents on behalf of the Committee.
4.3 Effect of Board or Committee or Designated Officer Decisions. All decisions
and determinations and the interpretation and construction by the Board or the
Committee or a Designated Officer of any provision of this Plan or any
agreement, notification or document evidencing the grant of Options and any
determination by the Board or the Committee or a Designated Officer pursuant to
any provision of this Plan or any such agreement, notification or document,
shall be final, binding and conclusive with respect to all Participants and/or
Optionees and any other holders of any Option granted under the Plan. No member
of the Board or the Committee or a Designated Officer shall be liable for any
such action taken or determination made
in good faith.
5. Eligibility.
Consistent with the Plan's purposes, Options may be granted only to such
Directors, Officers, Employees, Consultants and Advisors of the Company as
determined by the Board or the Committee or a Designated Officer. Subject to the
terms of the Plan, a Director, Officer, Employee, Consultant or Advisor who has
been granted an Option may, if he or she is otherwise eligible, be granted an
additional Option.
6. Board Approval; Effective Date.
The Plan shall take effect on September 20, 2001 (the "Effective Date"), the
date on which the Board approved the Plan. No Option may be granted after the
Termination Date as hereinafter defined.
7. Options.
The Board or the Committee or a Designated Officer may from time to time
authorize grants to Participants of Options to purchase Shares upon such terms
and conditions as the Board or the Committee or a Designated Officer may
determine in accordance with the following provisions:
7.1 Options to be Granted; Terms.
(a) Options granted pursuant to this Section 7 would be Non-qualified Stock
Options. The Board or the Committee or a Designated Officer shall determine the
specific terms of Options.
(b) Each grant shall specify the period or periods of continuous
employment, or continuous engagement of the consulting or advisory services, of
the Optionee by the Company or any Subsidiary, or such other conditions as the
Board or the Committee or a Designated Officer may provide, that are necessary
before the Options or installments thereof shall become exercisable.
(c) Any grant of an Option may provide for the payment to the Optionee of
dividends equivalent thereon in cash or Shares on a current, deferred or
contingent basis, or the Board or the Committee or a Designated Officer may
provide that any dividend equivalents shall be credited against the Option
Price.
(d) The granting of Options to Consultants who directly or indirectly
beneficially own 10% or more of the Company's issued and outstanding Shares or
who is an affiliate of such person must be approved by the requisite vote of the
disinterested shareholders in accordance with applicable securities regulatory
requirements.
7.2 Number of Shares Subject to Options. Each grant shall specify the number of
Shares to which it pertains. Successive grants may be made to the same Optionee
regardless of whether any Options previously granted to the Optionee remain
unexercised.
7.3 Term of Option; Earlier Termination. Subject to the further provisions of
this Section 7, unless otherwise provided in the Incentive Agreement, the term
(the "Option Term") of each Option shall be six (6) years from the Date of
Grant, provided that no grant shall be effective until the Company and the
Participant have executed and delivered an Incentive Agreement.
7.4 Exercise Price. Each grant shall specify an Option Price per Share for the
Shares to be issued pursuant to exercise of an Option, which shall be determined
by the Board or the Committee or a Designated Officer, and, in the case of
options granted to consultants, shall be no less than the Fair Market Value per
share on the Date of Grant.
7.5 Payment for Shares. The Option Price of an exercised Option and any taxes
attributable to the delivery of Shares under the Plan or portion thereof, shall
be paid as follows:
(a) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of United States currency
or check or other cash equivalent acceptable to the Company, (ii)
non-forfeitable, unrestricted Shares, which are already owned by the Optionee
and have a value at the time of exercise that is equal to the Option Price,
(iii) any other legal consideration that the Board or the Committee or a
Designated Officer may deem appropriate, including without limitation any form
of consideration authorized pursuant to this Section 7 on such basis as the
Board or the Committee or a Designated Officer may determine in accordance with
this Plan, and (iv) any combination of the foregoing. The Board (or the
Committee or a Designated Officer) in its sole discretion may permit a so-called
"cashless exercise" of an Option.
In the event of a cashless exercise of an Option the Company shall issue the
Optionee holder the number of Shares determined as follows:
X = Y (A-B)/A where:
X = the number of Shares to be issued to the Optionee.
Y = the number of Shares with respect to which the Option is being
exercised.
A = the average of the closing sale prices of the Shares for the five
(5) Trading Days immediately prior to (but not including) the Date of
Exercise, or in the absence thereof, the Fair Market Value on the Date
of Exercise.
B = the Option Price.
(b) Any grant may allow for deferred payment of the Option Price through a
sale and remittance procedure by which an Optionee shall provide concurrent
irrevocable written instructions to (i) a Company-designated brokerage firm to
effect the immediate sale of the purchased Shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate Option Price payable for the purchased Shares, and (ii) the
Company to deliver the certificates for the purchased Shares directly to such
brokerage firm to complete the sale transaction.
(c) The Board or the Committee or a Designated Officer shall determine
acceptable methods for tendering Shares as payment upon exercise of an Option
and may impose such limitations and prohibitions on the use of Shares to
exercise an Option as it deems appropriate.
7.6 Rights as a Stockholder. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of an Option. No adjustment
will be made for a dividend or the right thereto for which the record date is
prior to the date the stock certificate is issued, except as provided in Section
8 of the Plan.
7.7 Loans or Installment Payments; Bonuses.
(a) The Board or the Committee or a Designated Officer may, in its
discretion, assist any Optionee in the exercise of one or more awards under the
Plan, including the satisfaction of any federal, provincial, local and foreign
income and employment tax obligations arising therefrom, by (i) authorizing the
extension of a loan from the Company to such Optionee; or (ii) permitting the
Optionee to pay the Option Price for the purchased Shares in installments; or
(iii) a guaranty by the Company of a loan obtained by the Participant from a
third party; or (iv) granting a cash bonus to the Optionee to enable the
Optionee to pay federal, state, local and foreign income and employment tax
obligations arising from an award.
(b) Any loan or installment method of payment (including the interest rate
and terms of repayment) shall be upon such terms as the Board or the Committee
or a Designated Officer specifies in the applicable Incentive Agreement or
otherwise deems appropriate under the circumstances. Loans or installment
payments may be authorized with or without security or collateral. However, the
maximum credit available to the Optionee may not exceed the Option Price of the
acquired Shares (less the par value of such Shares) plus any federal, state and
local income and employment tax liability incurred by the Optionee in connection
with the acquisition of such Shares. The amount of any bonus shall be determined
by the Board or the Committee or a Designated Officer in its sole discretion
under the circumstances.
(c) The Board or the Committee or a Designated Officer may, in its sole
discretion, determine that one or more loans extended under this Section 7.7
shall be subject to forgiveness by the Company in whole or in part upon such
terms and conditions as the Board or the Committee or a Designated Officer may
deem appropriate; provided, however, that the Board or the Committee or a
Designated Officer shall not forgive that portion of any loan owed to cover the
par value of the Shares.
(d) Any Shares purchased and paid for as provided in this Section 7.7 must
be held by a trustee duly appointed by the Company until such time as the Shares
have been paid for in full.
7.8 Exercise of Option.
(a) Procedure for Exercise.
(i) Any Option granted hereunder shall be exercisable at such times
and under such conditions as determined by the Board or the Committee or a
Designated Officer, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of
the Plan. Unless otherwise determined by the Board or the Committee or a
Designated Officer at the time of grant, an Option may be exercised in
whole or in part.
(ii) An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment
for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board or
the Committee or a Designated Officer, consist of any consideration and
method of payment allowable under Section 7.5 of the Plan.
(iii) Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares
as to which the Option is exercised.
(b) Termination of Status as an Employee. Unless otherwise provided in an
Incentive Agreement, if an Employee's employment by the Company is terminated,
except if such termination is voluntary or occurs due to retirement with the
consent of the Board or the Committee or a Designated Officer or due to death or
disability, then the Option, to the extent not exercised, shall terminate on the
date on which the Employee receives notice that the Employee's employment by the
Company is terminated. If an Employee's termination is voluntary or occurs due
to retirement with the consent of the Board or the Committee or a Designated
Officer, then the Employee may after the date such Employee ceases to be an
employee of the Company, exercise his or her Option at any time within three (3)
months after the date he or she ceases to be an Employee of the Company, but
only to the extent that he was entitled to exercise it on the date of such
termination. To the extent that the Employee was not entitled to exercise the
Option at the date of such termination, or if the Employee does not exercise
such Option (which he was entitled to exercise) within the time specified
herein, the Option shall terminate.
(c) Disability. Unless otherwise provided in the Incentive Agreement,
notwithstanding the provisions of Section 7.8(b) above, in the event an Employee
is unable to continue his or her employment with the Company as a result of his
or her permanent and total disability (as defined in Section 22(e)(3) of the
Code), the Employee may exercise his Option at any time within six (6) months
after the date of termination, but only to the extent the Employee was entitled
to exercise it at the date of such termination. To the extent that the Employee
was not entitled to exercise the Option at the date of termination, or if the
Employee does not exercise such Option (which he was entitled to exercise)
within the time specified herein, the Option shall terminate.
(d) Death. Unless otherwise provided in the Incentive Agreement, if an
Optionee dies during the term of the Option and is at the time of his death an
Employee, the Option may be exercised at any time within six (6) months
following the date of death by the Optionee's executor or other legal
representative or by a person who acquired the right to exercise the Option by
bequest or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option on the
date of death, or if the Optionee's estate, or person who acquired the right to
exercise the Option by bequest or inheritance, does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.
7.9 Option Re-issuance. The Board or the Committee or a Designated Officer shall
have the authority to effect, at any time and from time to time, with the
consent of the affected Optionee, the cancellation of any or all outstanding
Options under this Section 7 and grant in substitution new Options under the
Plan covering the same or a different number of Shares but with an Option Price
which, in the case of options granted to consultants, shall be not less than the
Fair Market Value per share on the new Date of Grant.
7.10 Incentive Agreement. Each grant of an Option or Restricted Share award
shall be evidenced by an Incentive Agreement, which shall be executed on behalf
of the Company by any Officer thereof and delivered to and accepted by the
Optionee and shall contain such terms and provisions as the Board or the
Committee or a Designated Officer may determine consistent with this Plan.
8. Restricted Shares.
Restricted Shares are shares of Common Stock which are sold or transferred by
the Company to a Participant at a price which may be below their Fair Market
Value, or for no payment, but subject to restrictions on their sale or other
transfer by the Participant. The transfer of Restricted Shares and the transfer
and sale of Restricted Shares shall be subject to the following terms and
conditions:
8.1 Number of Shares. The number of Restricted Shares to be transferred or sold
by the Company to a Participant shall be determined by the Board or Committee or
a Designated Officer, if any.
8.2 Sale Price. The Board or the Committee or a Designated Officer shall
determine the prices, if any, at which Restricted Shares shall be sold to
Participant, which may vary from time to time and among Participants, and which
may be below the Fair Market Value of such shares of Common Stock on the date of
sale.
8.3 Restrictions. All Restricted Shares transferred or sold hereunder shall be
subject to such restrictions as the Board or the Committee or a Designated
Officer may determine, including, without limitation, any or all of the
following:
(a) a prohibition against the sale, transfer, pledge or other encumbrance
of the Restricted Shares, such prohibition to lapse at such time or times as the
Board or the Committee or a Designated Officer shall determine (whether in
annual or more frequent installments, at the time of the death, disability or
retirement of the holder of such Restricted Shares, or otherwise);
(b) a requirement that the holder of Restricted Shares forfeit or resell
back to the Company, at his cost, all or a part of such Restricted Shares in the
event of termination of his employment during any period in which such
Restricted Shares are subject to restrictions; and
(c) a prohibition against employment of the holder of such Restricted
Shares by any competitor of the Company or a subsidiary of the Company, or
against such holder's dissemination of any secret or confidential information
belonging to the Company or a subsidiary of the Company.
8.4 Escrow. In order to enforce the restrictions imposed by the Board or the
Committee or a Designated Officer pursuant to Section 8.3 above, the Participant
receiving Restricted Shares shall enter into an agreement with the Company
setting forth the conditions of the grant. Restricted Shares shall be registered
in the name of the Participant and deposited, together with a stock power
endorsed in blank, with the Company.
8.5 End of Restrictions. Subject to Section 8.3, at the end of any time period
during which the Restricted Shares are subject to forfeiture and restrictions on
transfer, such Restricted Shares will be delivered, free of all restrictions, to
the Participant or to the Participant's legal representative, beneficiary or
heir.
8.6 Stockholder. Subject to the terms and conditions of the Plan, each
Participant receiving Restricted Shares shall have all the rights of a
stockholder with respect to such shares of stock during any period which such
shares are subject to forfeiture and restrictions on transfer, including,
without limitation, the right to vote such shares. Dividends paid in cash or
property other than Common Stock with respect to the Restricted Shares shall be
paid to the Participant currently.
8.7 Ownership of Restricted Shares. Each grant or sale shall constitute an
immediate transfer of the ownership of the Restricted Shares to the Participant
in consideration of the performance of services, entitling such Participant to
dividend, voting and other ownership rights, subject to the "substantial risk of
forfeiture" and restrictions on transfer referred to hereinafter.
8.8 Additional Consideration. Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by the
Participant that is less than the Fair Market Value per share on the Date of
Grant.
8.9 Substantial Risk of Forfeiture.
(a) Each grant or sale shall provide that the Restricted Shares covered
thereby shall be subject to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code for a period to be determined by the Board or
the Committee or a Designated Officer on the Date of Grant.
(b) Each grant or sale shall provide that, during the period for which
substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Board or the Committee or a Designated Officer on the
Date or Grant. Such restrictions may include without limitation rights of
repurchase or first refusal in the Company or provisions subjecting the
Restricted Shares to a continuing substantial risk of forfeiture in the hands of
any transferee.
8.10 Dividends. Any grant or sale may require that any or all dividends or other
distributions
paid on the Restricted Shares during the period of such restrictions be
automatically sequestered and reinvested on an immediate or deferred basis in
additional Common Shares, which may be subject to the same restrictions as the
underlying award or such other restrictions as the Board of the Committee or a
Designated Officer may determine.
9 Adjustments Upon Changes in Capitalization or Merger.
Subject to any required action by the stockholders of the Company, the number of
Shares covered by each outstanding Option, and the number of Shares which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as Shares covered by each such outstanding
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Shares, or any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board or
the Committee or a Designated Officer, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof, shall be made with respect to the number of Shares subject to
an Option or the Option Price thereof.
In the event of the proposed dissolution or liquidation of the Company, all
Options will terminate immediately prior to the consummation of such proposed
action unless otherwise provided by the Board. The Board may, in the exercise of
its sole discretion in such instances, declare that any Option shall terminate
as of a date fixed by the Board and give each holder the right to exercise his
or her Option as to all or any part thereof, including Shares as to which the
Option would not otherwise be exercisable. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, the Option shall be assumed or an
equivalent Option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
that the holder shall have the right to exercise the Option as to all of the
Shares, including Shares as to which the Option would not otherwise be
exercisable. If the Board makes an Option exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
the holder that the Option shall be fully exercisable for a period of sixty (60)
days from the date of such notice (but not later than the expiration of the term
of the Option), and the Option will terminate upon the expiration of such
period.
10. Transferability.
Except to the extent otherwise expressly provided in the Plan, the right to
acquire Shares or other assets under the Plan may not be assigned, encumbered or
otherwise transferred by an Optionee and any attempt by an Optionee to do so
will be null and void. No Option granted under this Plan may
be transferred by an Optionee except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, as amended,
or the rules thereunder or equivalent laws of the Optionees jurisdiction of
residence. Options granted under this Plan may not be exercised during a
Participant's lifetime except by the Optionee or, in the event of the Optionee's
legal incapacity, by his or her guardian or legal representative acting in a
fiduciary capacity on behalf of the Participant under applicable law and court
supervision.
11. Time of Granting of Options.
The Date of Grant of an Option shall, for all purposes, be the date on which the
Board or the Committee or a Designated Officer makes the determination granting
such Option. Notice of the determination shall be given to each Participant to
whom an Option is so granted within a reasonable time after the date of such
grant.
12. Amendment and Termination of the Plan.
12.1 The Board may amend Plan from time to time in such respects as the Board
may deem advisable or otherwise terminate the Plan.
12.2 Any such amendment or termination of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Board or the Committee or a Designated Officer,
which agreement must be in writing and signed by the Optionee and the Company.
12.3 Notwithstanding the foregoing, this Plan shall terminate upon the earlier
of (i) December 31, 2011 or such earlier date as the Board shall determine, or
(ii) the date on which all awards available for issuance in the last year of the
Plan shall have been issued and fully exercised (the "Termination Date"). Upon
termination of the Plan, no further Options may be granted pursuant to the Plan,
but all Options granted prior thereto and still outstanding on such date shall
thereafter continue to have force and effect in accordance with the provisions
of the Incentive Agreements evidencing such Options.
13. Withholding Taxes.
The Company is authorized to withhold income taxes as required under applicable
laws or regulations. To the extent that the Company is required to withhold
federal, state, local or foreign taxes in connection with any payment made or
benefit realized by an Optionee or other person under this Plan, and the amounts
available to the Company for the withholding are insufficient, it shall be a
condition to the receipt of any such payment or the realization of any such
benefit that the Optionee or such other person make arrangements satisfactory to
the Company for payment of the balance of any taxes required to be withheld. At
the discretion of the Board or the Committee or a Designated Officer, any such
arrangements may without limitation include relinquishment of a portion of any
such payment or benefit or the surrender of outstanding Shares. The Company and
any Optionee or such other person may also make similar arrangements with
respect to the payment
of any taxes with respect to which withholding is not required.
14. Corporate Transaction or Change of Control.
The Board or the Committee or a Designated Officer shall have the right in its
sole discretion to include with respect to any award granted to an Optionee
hereunder provisions accelerating the benefits of the award in the event of a
Corporate Transaction or Change of Control, which acceleration rights may be
granted in connection with an award pursuant to the agreement evidencing the
same or at any time after an award has been granted to an Optionee.
15. Miscellaneous Provisions.
15.1 Plan Expense. Any expenses of administering this Plan shall be borne by the
Company.
15.2 Construction of Plan. The place of administration of the Plan shall be in
Vancouver, British Columbia or such other cities as the Board of Directors may
designate, and the validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined in accordance with the laws of the Province of British
Columbia and the laws of Canada applicable therein without regard to conflict of
law principles and, where applicable, in accordance with the Code.
15.3 Other Compensation. The Board or the Committee or a Designated Officer may
condition the grant of any award or combination of awards authorized under this
Plan on the surrender or deferral by the Participant of his or her right to
receive a cash bonus or other compensation otherwise payable by the Company or a
Subsidiary to the Participant.
15.4 Continuation of Employment or Services. This Plan shall not confer upon any
Participant any right with respect to continuance of employment or other service
with the Company or any Subsidiary and shall not interfere in any way with any
right that the Company or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time. Nothing contained in the
Plan shall prevent the Company or any Subsidiary from adopting other or
additional compensation arrangements for its Employees.
15.5 Certain Terminations of Employment or Consulting Services, Hardship and
Approved Leaves of Absence. Notwithstanding any other provision of this Plan to
the contrary, in the event of termination of employment or consulting services
by reason of death, disability, normal retirement, early retirement with the
consent of the Company, termination of employment or consulting services to
enter public or military service with the consent of the Company or leave of
absence approved by the Company, or in the event of hardship or other special
circumstances, of an Optionee who holds an Option that is not immediately and
fully exercisable, the Board or the Committee or a Designated Officer may take
any action that it deems to be equitable under the circumstances or in the best
interest of the Company, including without limitation waiving or modifying any
limitation or requirement with respect to any award under this Plan.
15.6 Binding Effect. The provisions of the Plan and the applicable Incentive
Agreements shall inure to the benefit of, and be binding upon, the Company and
its successors or assigns, and the
Participants, their legal representatives, their heirs or legacies and their
permitted assignees.
15.7 Exchange Act Compliance. With respect to persons subject to Section 16 of
the Exchange Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To
the extent any provisions of the Plan or action by the Board or the Committee or
a Designated Officer fails to so comply, they shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Board or the Committee
or a Designated Officer.
15.8 Conditions upon Issuance of Shares.
(a) Shares shall not be issued pursuant to the exercise of an Option unless
the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, the British Columbia
Securities Act, applicable securities application in an other jurisdiction, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
(b) As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased or otherwise acquired only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company such a representation is required
by any of the aforementioned relevant provisions of law.
(c) Inability of the Company 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 Share hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
15.9 Fractional Shares. The Company shall not be required to issue any
fractional Shares pursuant to this Plan. The Board or the Committee or a
Designated Officer may provide for the elimination of fractions or for the
settlement thereof in cash.
15.10 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.
15.11 Indemnification. In addition to such other rights of indemnification as
they may have as members of the Board, the members of the Board and of the
Committee and any Designated Officer shall be indemnified by the Company against
all costs and expenses reasonably incurred by them in connection with any
action, suit or proceeding to which they or any of them may be party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except a judgment based upon a finding of bad faith; provided
that upon the institution
of any such action, suit or proceeding a Board member or Committee member or a
Designated Officer shall, in writing, give the Company notice thereof and an
opportunity, at its own expense, to handle and defend the same before such Board
member or Committee member or a Designated Officer undertakes to handle and
defend it on his own behalf.
15.12 Gender. For purposes of this Plan, words used in the masculine gender
shall include the feminine and neuter, and the singular shall include the plural
and vice versa, as appropriate.
15.13 Use of Proceeds. Any cash proceeds received by the Company from the sale
of Shares under the Plan shall be used for general corporate purposes.
15.14 Regulatory Approvals.
(a) The implementation of the Plan, the granting of any awards under the
Plan and the issuance of any Shares shall be subject to the Company's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the awards granted under it and the Shares
issued pursuant to it.
(b) No Shares or other assets shall be issued or delivered under this Plan
unless and until there shall have been compliance with all applicable
requirements of federal, provincial and applicable foreign securities laws,
15.15 Other Tax Matters. Reference herein to the Code and any described tax
consequences related to the Plan or the granting or exercise of an award
hereunder pertain only to those persons (including the Company) subject to the
tax laws of the United States of America and Canada or any state, province or
territory thereof.