EX-4.1
CERTICOM CORP.
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to encourage directors, officers and
employees of Certicom Corp. (the "Corporation") or any of its subsidiaries and
other persons:
(a) to promote the interests, growth and development of the Corporation by
providing them with the opportunity through share options to acquire a
proprietary interest in the Corporation;
(b) to recognize the contribution of such directors, officers, employees
and other persons; and
(c) to encourage such directors, officers, employees and other persons to
acquire Common Shares of the Corporation.
2. DEFINITIONS
In this Plan:
(a) "Associate" has the meaning assigned by the Securities Act (Ontario),
as amended from time to time;
(b) "Board of Directors" means the board of directors of the Corporation;
(c) "Committee" means a committee appointed by the Board of Directors and
consisting of not less than three members of the Board of Directors to
administer the Plan. All references in the Plan to the Committee means
the Board of Directors if no Committee has been appointed;
(d) "Common Shares" means the Common Shares of the Corporation or, in the
event of an adjustment contemplated in Section 9 hereof, such other
securities to which an Eligible Person may be entitled upon the
exercise of an Option as a result of such adjustment;
(e) "Date of Grant" means the date an Eligible Person is granted an
Option;
(f) "Director" means a person occupying the position of director on the
Board of Directors;
(g) "Eligible Persons" means any Director or Employee or any other person
or corporation approved by the Committee;
(h) "Employee" means an employee of the Corporation or its subsidiaries;
(i) "Exchange" means The Toronto Stock Exchange or, if the Common Shares
are not then listed and posted for trading on The Toronto Stock
Exchange, on such stock exchange on which such shares are listed and
posted for trading as may be selected for such purpose by the
Committee;
(j) "Exercise Date" means the date the Corporation receives from the
Eligible Person a completed Stock Option Purchase Form with payment
for the Option Shares being purchased;
(k) "Insider" means:
(i) an insider of the Corporation as defined by the Securities Act
(Ontario) as amended from time to time, other than a person who
falls within such definition solely by virtue of being a director
or senior officer of a subsidiary of the Corporation; and
(ii) an Associate of any person who is an Insider by virtue of clause
(i) of this definition;
(l) "Market Price" per Common Share at any date shall be the closing price
of the Common Shares on the Exchange (or, if the Common Shares are not
then listed and posted for trading on the Exchange, on such stock
exchange on which such shares are listed and posted for trading as may
be selected for such purpose by the Committee) on the trading day
immediately preceding the Date of Grant. In the event that the Common
Shares are not listed and posted for trading on any stock exchange,
the Market Price shall be determined by the Committee in its sole
discretion;
(m) "Option" means the right granted by the Corporation pursuant to the
Plan to purchase Common Shares;
(n) "Option Period" means the period set forth in Section 6 during which
an Eligible Person may purchase Option Shares;
(o) "Option Price" means the price per share at which an Eligible Person
may purchase Option Shares";
(p) "Option Shares" means the Common Shares of the Corporation which an
Eligible Person is entitled to purchase pursuant to an Option;
(q) "Outstanding Issue" means the number of Common Shares that are
outstanding immediately prior to any issuance of Options under the
Plan or any issuance of Option Shares, as the case may be, excluding
Option Shares issued pursuant to the Plan and all other plans or stock
option agreements to which the Corporation may be a party during the
preceding one year period;
(r) "Participants" means Eligible Persons to whom Options are granted
pursuant to the Plan and which remain unexercised; and
2
(s) "Plan" means this Certicom Corp. 1997 Stock Option Plan.
3. ADMINISTRATION
(a) The Plan shall be administered by the Committee. The members of the
Committee shall serve at the pleasure of the Board and vacancies
occurring in the Committee shall be filled by the Board.
(b) A majority of the members of the Committee shall constitute a quorum
and all actions of the Committee shall be taken by a majority of the
members present at any meeting. Any action of the Committee may be
taken by an instrument or instruments in writing signed by all the
members of the Committee, and any actions so taken shall be as
effective as if it had been passed by a majority of the votes cast by
the members of the Committee present at a meeting of such members
duly called and held.
(c) The 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:
(i) to establish policies and to adopt rules and regulations for
carrying out the purposes, provisions and administration of the
Plan;
(ii) 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 termination made by the Committee shall be
final, binding and conclusive for all purposes;
(iii) to determine to which Eligible Persons Options are to be
granted and to grant Options;
(iv) to determine the number of Common Shares covered by each
Option;
(v) to determine the Option Price;
(vi) to determine the time or times when Options will be granted and
exercisable;
(vii) to determine if the Common Shares that are subject to an Option
will be subject to any restrictions upon the exercise of such
Option; and
(viii) to prescribe the form of the instruments relating to the grant,
exercise and other terms of Option Shares.
3
4. NUMBER OF OPTION SHARES
The aggregate number of Option Shares which may be issued hereunder
shall not exceed 3,000,000. Option Shares in respect of which Options are not
exercised prior to expiry in accordance with the terms of the Plan shall be
available for subsequent grants of Options under the Plan. The following
restrictions shall also apply to the Plan and to all other plans or stock
option agreements to which the Company may be a party:
(i) no Participant together with such Participant's Associates
shall be issued, within any one year period, a number of
Option Shares which exceeds 5% of the Outstanding Issue;
(ii) the number of Option Shares reserved for issuance pursuant to
Options to any one Participant shall not exceed 5% of the
Outstanding Issue; and
5. PRICE FOR OPTION SHARES
The Committee shall advise each Participant designated to participate in
the Plan of the number of Option Shares such Participant is entitled to
purchase and the Option Price at which the Option Shares may be purchased and
the Option Period. The Option Price at which the Option Shares may be
purchased under the Plan shall be fixed by the Committee based upon the
Market Price of the Common Shares at the Date of the Grant.
6. VESTING
(a) The limitation period or periods and the vesting period or periods
during which Options or a portion thereof vests and may be exercised
by the Participant shall be determined by the Committee and be
consistent with the provisions of the Plan provided, however, the
limitation period or periods for exercise and the vesting period or
periods may not exceed 10 years from the date of the granting of
Options.
(b) If no specific determination is made by the 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:
(i) the period during which an Option shall be exercisable shall be
5 years from the date the Option is granted to the Eligible
Person; and
4
(ii) the Participant may not take up and pay for any of the Common
Shares covered by the Option until the expiry of a 12-month
period following the date of the grant of the Option, and
thereafter, the Participant shall be entitled to take up and
pay for not more than 25% of the Common Shares covered by the
Option immediately following the expiry of such 12-month period
following the date of the grant of the Option, and a further
2.083333% of the Shares covered by the Option following the
expiry of each one-month period following the expiry of such
12-month period from the date of the grant of the Option;
provided, however, the Participant 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 Common Shares subject to
the Option that were purchasable, but not purchased by him,
during any period.
7. PAYMENT
The Participant from time to time at any time during the Option Period,
may elect to purchase all or a portion of the Option Shares available for
purchase during the relevant Option Period by lump sum payment by delivering
to the Corporation at its registered office, a notice in writing which shall
specify the number of Option Shares the Participant desires to purchase and
shall be accompanied by payment in full of the purchase price for such Option
Shares. Payment can be made by cash, certified cheque, bank draft, money
order or the equivalent payable to the order of Certicom Corp.
8. CERTIFICATES
(a) Each Option granted hereunder shall be evidenced by a certificate,
substantially in the form of Schedule "A", issued by the Corporation
to each Participant specifying the number of Option Shares, the
Option Price and the Option Period.
(b) Upon exercise of an Option and payment in full of the purchase price
the Corporation shall cause to be delivered to the Participant within
a reasonable period of time a certificate or certificates in the name
of the Participant representing the number of Option Shares the
Participant has purchased.
9. ADJUSTMENT IN COMMON SHARES
(a) The number of Common Shares subject to the Plan, the number of
Common Shares available under Options granted and the Option Price
shall be adjusted automatically from time to time to reflect
adjustments in the number of Common Shares arising as a result of
subdivisions, stock dividends, consolidations or reclassifications
of the Common Shares or other relevant changes in the authorized or
issued capital of the Corporation. No fractional Common Shares may be
purchased or issued hereunder. If a Participant is entitled to
purchase a fraction of a Common Share pursuant to an Option, such
entitlement shall be rounded down to the nearest whole number.
(b) In the case of a proposed merger or amalgamation of the Corporation
with one or more other corporations, the making of a take-over bid
(as defined in the Securities Act (Ontario)) for any of the
outstanding Common Shares, the sale or distribution of all or
substantially all of the Corporation's assets or a proposed corporate
arrangement or reorganization, the Board of Directors may, in its
absolute discretion, determine the
5
manner in which all unexercised Options granted under the Plan shall
be treated including, notwithstanding Section 16 hereof, changing the
Option Period.
10. TERMINATION
(a) Subject to the provisions of Section 10(d) hereof, in the event that
an Employee's employment with the Corporation or any of its
subsidiaries is terminated during the Option Period or a Director
shall cease to be a Director for any reason other than death or
cause, the Participant may elect to purchase all or a portion of the
remaining Option Shares that have vested at the time such employment
is terminated or of ceasing to be a Director at any time during the
90-day period following the date of termination of employment or
ceasing to be a director (but in no event, after the expiration of
the Option Period). For the purposes of the Plan, the transfer of the
Employee's employment to the Corporation or to any subsidiary of the
Corporation shall not be considered a termination of employment and
the Employee's rights under the Option shall be the same as if such
transfer had not occurred.
(b) Subject to the provisions of Section 10(d) hereof, in the event of
the termination of the relationship of a Participant with the
Corporation or any of its subsidiaries for cause prior to the expiry
of all outstanding Options granted to such Participant, all such
Options shall terminate forthwith without further notice to the
Participant.
(c) Subject to the provisions of Section 10(d) hereof, in the event the
Participant dies during the Option Period, the Participant's legal
representative will be permitted to exercise any previously
unexercised portion of an Option granted under the Plan prior to the
Participant's death and take delivery of all Option Shares previously
purchased but not delivered, at any time during the 180 day period
following the death of the Participant (but in no event after the
expiration of the Option Period).
(d) At any time before or after the relevant period set forth in
Sections 10(a), (b) or (c), the Committee may extend such period as
it applies to any former Participant, to a date which shall not be
later than the expiration of the Option Period.
11. TRANSFER AND ASSIGNMENT
The Participant's rights under Options granted under the Plan are not
assignable or transferable by the Participant or subject to any other
alienation, sale, pledge or encumbrance by such Participant during the
Participant's lifetime and therefore the Options are exercisable during the
Participant's lifetime only by the Participant. The obligations of each
Participant shall be binding on his or her heirs, executors and
administrators.
12. EMPLOYMENT AND BOARD POSITION NON-CONTRACTUAL
The granting of an Option to a Participant under the Plan does not
confer upon the Participant any right to continue in the employment of the
Corporation or any subsidiary of the Corporation or on the Board of
Directors, as the case may be, nor does it interfere in any way with the
right of the Participant or the Corporation to terminate the Participant's
employment at any time or shareholders right to elect directors.
6
13. RIGHTS AS SHAREHOLDERS
The Participant shall not have any rights as a shareholder with respect
to Option Shares until full payment has been made to the Corporation and a
share certificate or share certificates have been duly issued.
14. NOTICES
All written notices to be given by the Participant to the Corporation
may be delivered personally or by registered mail, postage prepaid, addressed
as follows:
Certicom Corp.
200 Matheson Blvd.
Suite 103
Mississauga, Ontario
L5R 3L7
Attention: Secretary
Any notice given by the Participant pursuant to the terms of the Option
shall not be effective until actually received by the Corporation at the
above address. Any notice to be given to the Participant shall be
sufficiently given if delivered personally or by postage prepaid mail to the
last address of the Participant on the records of the Corporation and shall
be effective seven days after mailing.
15. CORPORATE ACTION
Nothing contained in the Plan or in the Option shall be construed so as
to prevent the Corporation or any subsidiary of the Corporation from taking
corporate action which is deemed by the Corporation or the subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan.
16. AMENDMENTS
The Board of Directors shall have the right, in its sole discretion, to
alter, amend or discontinue the Plan from time to time and at any time. No
such amendment or discontinuation, however, may, without the consent of the
Participant, alter or impair his rights or increase his obligations under the
Plan. Any amendment to the Plan will require the prior approval of the
Exchange and may require the approval of the Corporation's shareholders.
17. TERMINATION OF PLAN
Except as otherwise provided herein, options may be granted only within
the ten-year period from the date the Plan has been adopted by the Board of
Directors of the Corporation.
18. GOVERNING LAW
The Plan is established under the laws of the Province of Ontario and
the rights of all parties and the construction and effect of each provision
of the Plan shall be according to the laws of the Province of Ontario and the
laws of Canada applicable therein.
7
19. GOVERNMENT REGULATIONS
The Corporation's obligation to issue and deliver Common Shares under
any Option is subject to:
(a) the satisfaction of all requirements under applicable securities law
in respect thereof and obtaining all regulatory approvals as the
Corporation shall determine to be necessary or advisable in
connection with the authorization, issuance or sale thereof;
(b) the admission of such Common Shares to listing on any stock exchange
on which Common Shares may then be listed; and
(c) the receipt from the Participant of such representations, agreements
and undertakings as to future dealings in such Common Shares as the
Corporation determines to be necessary or advisable in order to
safeguard against the violation of the securities law of any
jurisdiction.
In this connection, the Corporation shall take all reasonable steps to
obtain such approvals and registrations as may be necessary for the issuance
of such Common Shares in compliance with applicable securities law and for
the listing of such Common Shares on any stock exchange on which such Common
Shares are then listed.
20. APPROVALS
(a) The Plan shall be subject to acceptance by the Exchange and
compliance with all conditions imposed by the Exchange. Any Options
granted prior to such acceptance shall be conditional upon such
acceptance being given and any conditions complied with and no such
Options may be exercised unless such acceptance is given and such
conditions are complied with.
(b) The Plan shall also be subject to the approval of the shareholders of
the Corporation. Any Options granted prior to such approval shall be
conditional upon such approval being given and no such Options may be
exercised unless and until such approval is given.
8
SCHEDULE "A" TO 1997 STOCK OPTION PLAN
CERTIFICATE
Date of Grant: -
Certificate No.: -
This Certificate is issued to - (the "Participant") pursuant to the 1997
Stock Option Plan of Certicom Corp. (the "Plan").
This Certificate evidences an option to purchase - Common Shares of Certicom
Corp. for the Option Price of $- per Optioned Share. The Option evidenced
hereby expires on -. The rights, privileges and obligations of the
Participant under this Option are subject to the provisions of the Plan.
CERTICOM CORP.
By: _____________________________________
Name:
Title:
9