[DRAFT AND SUBJECT TO SHAREHOLDER APPROVAL]
HEMOSOL INC.
AMENDED AND RESTATED
STOCK OPTION PLAN
(as of April -, 2004)
ARTICLE I
PURPOSE OF PLAN
1.1 The purpose of the Plan is to assist directors, officers,
members of any scientific advisory board (a "Scientific Advisory Board") and key
employees of and Consultants to the Corporation and its Subsidiaries to
participate in the growth and development of the Corporation and its
Subsidiaries by providing such persons with the opportunity, through share
options, to acquire an increased proprietary interest in the Corporation.
ARTICLE II
DEFINED TERMS
2.1 Where used herein the following terms shall have the following
meanings, respectively:
(a) Board" means the board of directors of the Corporation or, if
established and duly authorized to act, the Executive
Committee of the board of directors of the Corporation;
(b) "Business Day" means any day, other than a Saturday or a
Sunday, on which The Toronto Stock Exchange is open for
trading;
(c) "Compensation Committee" shall have the meaning attributed
thereto in Article III hereof;
(d) "Consultant" means any person or company engaged to provide
ongoing consulting services to the Corporation or any of its
Subsidiaries who is not also an insider (as defined in section
627 of the Toronto Stock Exchange Company Manual) of the
Corporation or any of its Subsidiaries;
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(e) "Corporation" means Hemosol Inc. and includes any division
thereof, any successor corporation thereto and any division of
any such successor;
(f) "Eligible Person" means any director, officer, member of a
Scientific Advisory Board or full-time employee of or
Consultant to the Corporation or of any Subsidiary;
(g) "Market Price" at any date in respect of Shares shall be the
closing price of such Shares on The Toronto Stock Exchange
(or, if such Shares are not then listed and posted for trading
on The Toronto Stock Exchange, on such stock exchange in
Canada on which such Shares are listed and posted for trading
as may be selected for such purpose by the Compensation
Committee) on the last Business Day preceding the date on
which the Option is granted or, in the event the Option is
granted after the close of trading on a Business Day, the
closing price on the applicable stock exchange on such
Business Day. In the event that such Shares did not trade on
the Business Day, the Market Price shall be the average of the
bid and ask prices in respect of such Shares at the close of
trading on such date. In the event that such Shares are not
listed and posted for trading on any stock exchange, the
Market Price in respect thereof shall be the fair market value
of such Shares as determined by the Compensation Committee in
its sole discretion;
(h) "Option" means an option to purchase Shares granted under the
Plan;
(i) "Option Price" means the price per Share at which Shares may
be purchased under the Option, as the same may be adjusted
from time to time in accordance with Article VIII hereof;
(j) "Optionee" means a person to whom an Option has been granted;
(k) "Outstanding Issue" means the number of Shares outstanding on
a non-diluted basis;
(l) "Plan" means the Hemosol Inc. Stock Option Plan, as embodied
herein, as the same may be amended, varied or restated from
time to time;
(m) "Scientific Advisory Board" means any scientific advisory
board of the Corporation or any Subsidiary;
(n) "Shares" means the common shares of the Corporation, or, in
the event of an adjustment contemplated by Article VIII
hereof, such other shares or securities to which an Optionee
may be entitled upon the exercise of an Option as a result of
such adjustment; and
(o) "Subsidiary" means any corporation which is a subsidiary (as
such term is defined in the Business Corporations Act
(Ontario)) of the Corporation and includes any division
thereof.
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ARTICLE III
ADMINISTRATION OF THE PLAN
3.1 The Plan shall be administered by the compensation committee
(the "Compensation Committee") appointed by the Board and consisting of not less
than three members of the Board. The members of the Compensation Committee shall
serve at the pleasure of the Board and vacancies occurring in the Compensation
Committee shall be filled by the Board.
3.2 The Compensation Committee shall select one of its members as
its Chairman and shall hold its meetings at such time and place as it shall deem
advisable. A majority of the members of the Compensation Committee shall
constitute a quorum and all actions of the Compensation Committee shall be taken
by a majority of the members present at any meeting. Any action of the
Compensation Committee may be taken by an instrument or instruments in writing
signed by all the members of the Compensation Committee entitled to vote on the
action, and any action so taken shall be as effective as if it had been passed
by a majority of the votes cast by the members of the Compensation Committee
present at a meeting of such members duly called and held.
3.3 The Compensation Committee shall have the power, where
consistent with the general purpose and intent of the Plan and subject to the
specific provisions of the Plan:
(a) to establish policies and to adopt rules and regulations for
carrying out the purposes, provisions and administration of
the Plan;
(b) to interpret and construe the Plan and to determine all
questions arising out of the Plan and any Option granted
pursuant to the Plan, and any such interpretation,
construction or determination made by the Compensation
Committee shall be final, binding and conclusive for all
purposes;
(c) to determine to which Eligible Persons Options will be granted
and to make recommendations to the Board with respect to the
granting of Options;
(d) to determine the number of Shares covered by each Option;
(e) to determine the time or times when Options will be granted
and exercisable;
(f) to determine if the Shares which are subject to an Option will
be subject to any restrictions upon the exercise of such
Option; and
(g) to prescribe the form of the instruments relating to the
grant, exercise and other terms of Options.
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3.4 No member of the Compensation Committee shall, during the
currency of his membership on the Compensation Committee, be entitled to vote on
any resolution to approve his participation.
ARTICLE IV
SHARES SUBJECT TO PLAN
4.1 Options may be granted in respect of authorized and unissued
Shares provided that the maximum number of Shares that may be issued upon the
exercise of Options granted pursuant to the Plan shall be 5,499,298. The Shares
in respect of which Options are not exercised shall be available for subsequent
Options under the Plan. No fractional Shares may be purchased or issued under
the Plan.
ARTICLE V
ELIGIBILITY, GRANT AND TERMS OF OPTIONS
5.1 Options may be granted to directors, officers, members of any
Scientific Advisory Board or full-time employees of or Consultants to the
Corporation or any Subsidiary of the Corporation.
5.2 Options may be granted by the Corporation pursuant to
recommendations of the Compensation Committee provided and to the extent that
such recommendations are approved by the Board.
5.3 Subject as herein and otherwise specifically provided in this
Article V, the number of Shares subject to each Option, the expiration date of
each Option, the extent to which each Option is exercisable from time to time
during the term of the Option and other terms and conditions relating to each
such Option shall be determined by the Compensation Committee; provided,
however, that if no specific determination is made by the Compensation Committee
with respect to any of the following matters, each Option shall, subject to any
other specific provisions of the Plan, contain the following terms and
conditions:
(a) the period during which an Option shall be exercisable shall
be five years from the date the Option is granted to the
Optionee; and
(b) the Optionee may take up and pay for not more than 33 1/3% of
the Shares covered by the Option during each 12 month period
following the first anniversary of the date of the grant of
the Option; provided, however, that if the number of Shares
taken up under the Option during any such 12 month period is
less than 33 1/3% of the Shares covered by the Option, the
Optionee shall have the right, at any time or from time to
time during the remainder of the term of the Option, to
purchase such number of Shares subject to the Option which
were purchasable, but not purchased by him, during such 12
month period.
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5.4 The Option Price on Shares which are the subject of any Option
shall be determined by the Board at the time of the grant of the Options
provided that in no circumstances shall the Option Price be lower than the
Market Price of the Shares.
5.5 In no event may the term of an Option exceed ten years from
the date of the grant of the Option.
5.6 The total number of Shares to be optioned to any Optionee
under this Plan together with any Shares reserved for issuance under options for
services and employee share purchase plans or any other plans to such Optionee
shall not exceed 5% of the issued and outstanding Shares at the date of the
grant of the Option.
5.7 An Option is personal to the Optionee and is non-assignable.
ARTICLE VI
TERMINATION OF EMPLOYMENT; DEATH
6.1 Subject to Article VI (b) hereof and to any express resolution
passed by the Compensation Committee with respect to an Option, an Option, and
all rights to purchase Shares pursuant thereto, shall expire and terminate
immediately upon the Optionee ceasing to be a director, officer, member of a
Scientific Advisory Board or full-time employee of or Consultant to the
Corporation or any Subsidiary of the Corporation.
6.2 If, before the expiry of an Option in accordance with the
terms thereof, the employment of the Optionee by the Corporation or by any
Subsidiary of the Corporation shall terminate for any reason whatsoever other
than termination by the Corporation for cause, but including termination by
reason of the death of the Optionee, such Option may, subject to the terms
thereof and any other terms of the Plan, be exercised, if the Optionee is
deceased, by the legal personal representative(s) of the estate of the Optionee
during the first six months following the death of the Optionee, or if he is
alive, by the Optionee, at any time within six months of the date of termination
of the employment of the Optionee (but in either case prior to the expiry of the
Option in accordance with the terms thereof), but only to the extent that the
Optionee was entitled to exercise such Option at the date of the termination of
his employment.
6.3 Options shall not be affected by any change of employment of
the Optionee or by the Optionee ceasing to be a director, officer or member of a
Scientific Advisory Board or a Consultant where the Optionee continues to be
employed on a full-time basis by, or continues to be a director, officer or
member of any other Scientific Advisory Board of or a Consultant to, the
Corporation or any Subsidiary of the Corporation.
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ARTICLE VII
EXERCISE OF OPTIONS
7.1 Subject to the provisions of the Plan, an Option may be
exercised from time to time by delivery to the Corporation at its registered
office of a written notice of exercise addressed to the Secretary of the
Corporation specifying the number of Shares with respect to which the Option is
being exercised and accompanied by payment in full of the Option Price of the
Shares to be purchased. Certificates for such Shares shall be issued and
delivered to the Optionee within a reasonable time following the receipt of such
notice and payment.
7.2 Notwithstanding any of the provisions contained in the Plan or
in any Option, the Corporation's obligation to issue Shares to an Optionee
pursuant to the exercise of an Option shall be subject to:
(a) completion of such registration or other qualification of such
Shares or obtaining approval of such governmental authority as
the Corporation shall determine to be necessary or advisable
in connection with the authorization, issuance or sale
thereof;
(b) the admission of such Shares to listing on any stock exchange
on which the Shares may then be listed; and
(c) the receipt from the Optionee of such representations,
agreements and undertakings, including as to future dealings
in such Shares, as the Corporation or its counsel determines
to be necessary or advisable in order to safeguard against the
violation of the securities laws of any jurisdiction.
In this connection the Corporation shall, to the extent necessary, take all
reasonable steps to obtain such approvals, registrations and qualifications as
may be necessary for the issuance of such Shares in compliance with applicable
securities laws and for the listing of such Shares on any stock exchange on
which the Shares are then listed.
ARTICLE VIII
CERTAIN ADJUSTMENTS
8.1 Appropriate adjustments in the number of Shares subject to the
Plan, and as regards Options granted or to be granted, in the number of Shares
optioned and in the Option Price, shall be made by the Board to give effect to
adjustments in the number of Shares of the Corporation resulting from
subdivisions, consolidations or reclassifications of the Shares of the
Corporation, the payment of share dividends by the Corporation (other than
dividends in the ordinary course) or other relevant changes in the capital stock
of the Corporation. The Board's determination of such adjustments shall be
final, binding and conclusive for all purposes.
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ARTICLE IX
AMENDMENT OR DISCONTINUANCE OF PLAN
9.1 Subject to the obtaining of any required regulatory approvals,
the Board may amend or discontinue the Plan at any time; provided, however, that
no such amendment may, without the consent of the Optionee, alter or impair any
Option previously granted to an Optionee under the Plan.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 The holder of an Option shall not have any rights as a
shareholder of the Corporation with respect to any of the Shares covered by such
Option until such holder shall have exercised such Option in accordance with the
terms of the Plan (including tendering payment in full of the Option Price of
the Shares in respect of which the Option is being exercised) and the
Corporation shall have issued such Shares to the Optionee in accordance with the
terms of the Plan in those circumstances.
10.2 Nothing in the Plan or any Option shall confer upon any
Optionee any right to continue in the employ of the Corporation or any
Subsidiary of the Corporation or affect in any way the right of the Corporation
or any such Subsidiary to terminate his employment at any time; nor shall
anything in the Plan or any Option be deemed or construed to constitute an
agreement, or an expression of intent, on the part of the Corporation or any
such Subsidiary to extend the employment of any Optionee beyond the time which
he would normally be retired pursuant to the provisions of any present or future
retirement plan of the Corporation or any Subsidiary or any present or future
retirement policy of the Corporation or any Subsidiary, or beyond the time at
which he would otherwise be retired pursuant to the provisions of any contract
of employment with the Corporation or any Subsidiary.
10.3 (a) In the event the Corporation proposes to amalgamate
(other than an amalgamation with a subsidiary), merge or consolidate with any
other corporation or to liquidate, dissolve or wind-up, the Corporation shall
give written notice thereof to each Optionee and permit each Optionee to
exercise his Options within the 45-day period next following the giving of such
notice failing which all rights of the Optionee with respect to his Options or
to exercise the same shall terminate and cease to have any further force or
effect whatsoever.
(b) If, at any particular time, an Option is otherwise exercisable
as to part only of the Shares to which the Option relates or is not exercisable
at all because of a vesting period and in the event that a Public Take-over Bid
(as hereinafter defined) is made, the holder of the Option may at any time
thereafter exercise the Option with respect to all the Shares to which the
Option relates. For purposes of this Article X (c) (b), "Public Take-over Bid"
means any of the following:
(i) a take-over bid, as that term is defined in Section
23.01 of the General By-law of The Toronto Stock
Exchange, made for the Shares of the
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Corporation through the facilities of The Toronto
Stock Exchange or a take-over bid for the Shares of
the Corporation made through the facilities of any
other stock exchange in Canada under the governing
rules and regulations of such stock exchange; and
(ii) a bid for the Shares of the Corporation in respect of
which a take-over bid circular is prepared and
delivered to shareholders of the Corporation pursuant
to the provisions of the securities legislation of
any Province of Canada.
10.4 Any dispute or disagreement which shall arise under or as a
result of, or in any way related to, the interpretation, construction on
application of this Plan shall be determined by the Board. Any such
determination shall be final, binding and conclusive for all purposes.
10.5 Upon the exercise of an Option, the Optionee shall make
arrangements satisfactory to the Corporation regarding payment of any federal,
provincial or local taxes of any kind required by law to be withheld with
respect to the exercise of the Option. In addition, the Corporation shall, to
the extent permitted by law, have the right to deduct from any payment of any
kind due to the Optionee any federal, provincial or local taxes of any kind
required by law to be withheld with respect to the exercise of the Option.
10.6 References herein to any gender include all genders.
ARTICLE XI
SHAREHOLDER AND REGULATORY APPROVAL
11.1 The Plan and the exercise of the Options granted under the
Plan shall be subject to the condition that if at any time the Corporation shall
determine in its sole discretion that it is necessary or desirable to comply
with any legal requirements or the requirements of any stock exchange or other
regulatory authority or to obtain any approval or consent from any such stock
exchange or other regulatory authority as a condition of, or in connection with,
the Plan or the exercise of the Options granted under the Plan or the issue of
Shares as a result thereof, then in any such event any Options granted prior to
such approval and acceptance shall be conditional upon such compliance having
been effected or such approval or consent having been given and
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no such Options may be exercised unless and until such compliance is effected or
until such approval or consent is given on conditions satisfactory to the
Corporation in its sole discretion.
IN WITNESS WHEREOF, Hemosol Inc. has executed this amended and
restated Plan as of the - day of April, 2004.
HEMOSOL INC.
by_________________________________
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