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Exhibit 10.9
JUNE , 1999
DELANO TECHNOLOGY CORPORATION
STOCK OPTION PLAN
1. PURPOSE
The purpose of this Stock Option Plan (the "PLAN") is to provide a means whereby
DELANO TECHNOLOGY CORPORATION (the "COMPANY") may, through the grant of options
to purchase common shares of the Company ("COMMON SHARES") to its executives,
employees, directors and others (including consultants to the extent permitted
by the Ontario Securities Act) who have contributed to the development of the
Company, motivate such individuals to exert their best efforts on behalf of the
Company and to allow them to directly benefit from the Company's growth,
development and financial success.
2. INTERPRETATION
(a) The following terms as used in the Plan shall have the respective
meanings set forth below unless the context otherwise requires:
"BOARD" means the board of directors of the Company or any committee of such
board of directors to which such board of directors may delegate the
responsibility of administering the Plan;
"BUSINESS DAY" means any day other than Saturday, Sunday or a statutory holiday
in the Province of Ontario;
"CHANGE OF CONTROL" of the Company, means the acquisition of Control of the
Company by any person (but specifically excludes the loss of control which
occurs at law upon a public offering where the shareholders prior to the public
offering have less than 50% of the voting control plus one vote, subsequent to
the public offering);
"CONTROL", of the Company or of another corporation, means ownership of shares
to which are attached greater than 50% of the votes that may be cast to elect
directors of such corporation;
"OPTION" means an option to purchase Common Shares granted pursuant to the
terms of the Plan;
"OPTIONED SHARES" means, in respect of an Option, the total number of Common
Shares which an Optionee may purchase pursuant to that Option;
"OPTIONEE" means an individual to whom an Option has been granted; and
"SHAREHOLDERS' AGREEMENT" means the shareholders' agreement dated July 16, 1998
among the Company and its shareholders, as it may be amended from time to time.
(b) As used in the Plan, words importing the singular number only shall
include the plural and vice versa and words importing gender shall include both
genders, unless the context clearly requires otherwise.
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3. SHARES AVAILABLE UNDER PLAN
Options may be granted by the Company in accordance with the terms of the Plan
to Optionees to purchase such number of Common Shares as the Board may determine
from time to time, in accordance with and subject to the provisions of the
Shareholders' Agreement.
4. ADMINISTRATION
(a) The Plan shall be administered under the supervision of the Board
and in accordance with the Shareholders' Agreement.
(b) The Board shall have the power to:
(i) determine and designate from time to time those
Optionees who shall be eligible to participate in the
Plan and to whom Options are to be granted, and the
number and type of Options to be granted to each such
Optionee; and
(ii) determine the time or times when, and the manner in
which, each Option shall be exercisable and the
duration of the exercise period,
provided the initial grant of Options made in conjunction with the approval of
the Plan by the Board shall be in accordance with the provisions of the Plan set
forth herein.
(c) An Optionee may, if such Optionee is otherwise eligible, be granted
an additional option or options under this Plan or any other share option or
purchase plan of the Company if the Board so determines.
(d) The Board may interpret the Plan and prescribe, amend or rescind
any rules and regulations necessary or appropriate for the administration of the
Plan, and shall make such other determinations and take such other action in
connection with the administration of the Plan as it deems necessary or
advisable. Each Optionee shall be given notice not less than 14 days prior to
the effective date of any interpretation or determination formally made by the
Board. Any such interpretation or determination so made shall be final, binding
and conclusive.
5. TERMS AND CONDITIONS
Each Option granted under the Plan shall be evidenced by an option
agreement (the "OPTION AGREEMENT"), in the form set out as Exhibit 1 or in such
other form as may be approved by the Board, which, subject to paragraph 4(b),
shall be subject to the following express terms and conditions and to such other
terms and conditions as set out in the Option Agreement as the Board may deem
appropriate:
(a) Exercise Period. Subject to paragraph 5(e), Options shall become
exercisable in accordance with the vesting periods set out in paragraph 5(d) and
shall expire on the expiry date set out in the Option Agreement (the "EXPIRY
DATE") which shall be no later than five (5) years after their date of issuance
(unless the Board has specifically resolved otherwise for one or more optionees,
in which case the Expiry date shall be no later than ten (10) years after
issuance), subject to the date of termination of the Plan under paragraph 8(a).
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(b) Exercise Price. Subject to adjustment in accordance with paragraph
5(h), the purchase price of each Common Share subject to an Option (the
"EXERCISE PRICE") shall be equal to the exercise price set out in the Option
Agreement.
(c) Payment of Exercise Price. The Exercise Price of any Common Share
in respect of which an Option is exercised shall be paid in cash or by certified
cheque payable to the Company at the time of exercise.
(d) Vesting Periods. Subject to paragraph 5(e) or to any contrary
resolution of the Board:
(i) an Option shall not be exercisable prior to the end
of the first anniversary of the date of issuance, at
which time and thereafter (prior to the Expiry Date)
the Option may be exercised to acquire up to an
aggregate of 25% of the total number of Optioned
Shares; and
(ii) every quarter thereafter, for the next twelve
quarters, the Option may be exercised to acquire up
to an additional 6.25% per quarter of the total
number of Optioned Shares; and
(ii) as of the fourth anniversary of the date of issuance
and thereafter (prior to the Expiry Date), an Option
may be exercised to acquire up to an aggregate of
100% of the total number of Optioned Shares.
(e) Changes of Control. Upon the Company entering into an agreement
relating to a transaction which, if completed, would result in a Change of
Control:
(i) NOTICE - the Company shall give written notice of the
proposed Change of Control to the Optionees, together
with a description of the effect of such Change of
Control on outstanding Options, not less than 10
Business Days prior to the closing of the transaction
contemplated by such agreement.
(ii) EARLY VESTING - at its election, the Board may
accelerate the vesting of any or all outstanding
Options of any or all Optionees to provide that,
notwithstanding paragraph 5(d), for all Options
governed by the applicable Board resolution
accelerating vesting, all outstanding Options shall
be fully vested and conditionally exercisable upon
the occurrence of the Change of Control contemplated
by such agreement. If the Board elects to accelerate
the vesting of the Options, to the extent that such
Options are not exercised within 10 Business Days
after the Optionees are given the notice contemplated
by paragraph 5(e)(i), such Options shall terminate
and expire upon the occurrence of the proposed Change
of Control. If, for any reason, the Change of Control
does not occur within the time period contemplated by
such agreement, the acceleration of the vesting of
the Options shall be retracted and vesting shall
instead proceed in the manner provided in paragraph
5(d).
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(iii) ADJUSTMENT TO THE TERMS OF THE OPTIONS - to the
extent that the Change of Control would also result
in a capital reorganization, arrangement,
amalgamation or reclassification of the share capital
of the Company and the Board does not accelerate the
vesting of Options pursuant to paragraph 5(e)(ii),
the Company shall make adequate provisions to ensure
that, upon completion of the proposed Change of
Control, the number and kind of shares subject to
outstanding Options and/or the Exercise Price per
share of Options shall be appropriately adjusted in
such manner as the Board considers equitable to
prevent substantial dilution or enlargement of the
rights granted to Optionees.
(f) Non-transferability. No Option shall be transferable or assignable
other than by will or by the laws of succession. During the lifetime of the
Optionee, an Option shall be exercisable only by such Optionee and for such
Optionee's sole beneficial interest.
(g) Conformity to Securities Laws.
(i) Each Option shall be subject to the requirement that,
if at any time the Board shall determine, in its sole
discretion, that the registration, qualification or
other approval of, or in connection with, the Plan or
the Common Shares covered by the Plan is necessary or
desirable under any applicable law, then such Option
may not be exercised, in whole or in part, unless and
until such registration, qualification or approval
shall have been obtained free of any condition not
acceptable to the Board. The Company will exercise
reasonable efforts to obtain such registration,
qualification or approval. The Optionees shall, to
the extent applicable, cooperate with the Company in
relation to such registration, qualification or other
approval and shall have no claim or cause of action
against the Company, or any of its officers or
directors, as a result of any failure by the Company
to obtain or to take any steps to obtain any such
registration, qualification or approval.
(ii) The granting of Options and the issuance of Common
Shares under the Plan shall be carried out in
compliance with applicable law and with regulations
of governmental authorities and applicable stock
exchanges.
(h) Adjustments in Event of Change in Common Shares. In the event of
any change in the issued Common Shares by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split, combination or
exchange of shares, or any similar change affecting the issued Common Shares,
the number and kind of shares which after such change may be optioned and sold
under the Plan, the number and kind of shares subject to outstanding Options
and/or the Exercise Price per share of Options shall be appropriately adjusted
consistent with such change in such manner as the Board deems equitable to
prevent substantial dilution or enlargement of the rights granted to, or
available for, participants in the Plan.
(i) No Rights as Shareholder. No Optionee shall have any rights as a
shareholder with respect to any Common Shares subject to an Option granted to
such Optionee prior to the Optionee's exercise of such Option.
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(j) Share Certificates. The Company shall issue to the Optionee the
number of Common Shares that such Optionee elects to purchase within 15 days
from the date the Company receives notice of such exercise in the form required
pursuant to the Plan and the Option Agreement. The Company shall be required to
issue Common Shares pursuant to this paragraph only upon the Optionee first
exercising the Optionee's Option to purchase Common Shares in accordance with
the Plan and after the Company has received payment of the Exercise Price for
each Common Share to be issued in the manner required by the Plan.
(k) Termination of Employment. Neither the Plan nor any Option shall
confer upon any Optionee any right with respect to continuance of employment or
engagement with or continuance as a director or officer of the Company, or
interfere in any way with the right of the Company to terminate any Optionee's
employment at any time in accordance with applicable law. If an Optionee is an
employee of the Company at the date an Option is granted, to the extent that
such Optionee's Options have vested but have not been exercised on the date the
Optionee ceases to be an employee of the Company for any reason (other than in
accordance with paragraph 5(l)), the Expiry Date of such Optionee's Options
shall be changed to the date which is 30 Business Days after the date of
termination of employment. The date of termination of an Optionee's employment
for the purposes of this paragraph shall be the date so determined by the
Company, acting reasonably, in its sole discretion.
(l) Death of Optionee. If an Optionee shall die, all vested Options of
such Optionee to the extent still outstanding, may immediately be exercised by
the person or persons to whom such Optionee's rights under the Options pass by
will or applicable law, or if no such person has such right, by such Optionee's
executors or administrators at any time, or from time to time, up to the earlier
of the applicable Expiry Date or the first anniversary of death.
(m) Execution of Shareholders' Agreement. It shall be a condition of
the exercise of an Option by an Optionee that if required by the Board, the
Optionee shall execute and be a party to the Shareholders' Agreement effective
as at the date of the issue of the Common Shares to the Optionee.
6. PROCEEDS FROM SALES OF SHARES
Any cash proceeds from the sale of Common Shares issued upon exercise
of the Options shall be added to the general funds of the Company and shall
thereafter be used from time to time for such corporate purposes as the Board
may determine.
7. ASSIGNMENT OR ALIENATION
Except as specifically provided under the Plan, or unless otherwise
required by applicable law, no rights or interests of a participant under the
Plan shall be given as security or assigned or alienated by any participant nor
shall any portion of any Common Shares reserved for issuance under the Plan be
subject to attachment, charge, anticipation, execution, garnishment,
sequestration or other seizure under any legal or other process. Any transaction
purporting to effect such a prohibited result is void.
8. TERMINATION OR AMENDMENT OF PLAN
(a) Termination. The Plan will terminate and, for greater certainty,
all unexercised Options shall terminate and expire, on the earliest of:
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(i) July 31, 2008; and
(ii) in the event that the Board accelerates the vesting
of all Options pursuant to paragraph 5(e)(ii), upon
the occurrence of a Change of Control of the Company;
unless renewed for such further period and upon such terms and conditions as the
Board may determine. No Options will be granted after the effective date of
termination of the Plan.
(b) Amendment. Subject to the Shareholders' Agreement, notwithstanding
paragraph 8(a) and without the consent of any other party, the Board may
interpret, amend or terminate the Plan at any time if:
(i) such interpretation, amendment or termination is
required by applicable laws or by the rules of any
regulatory authority to whose jurisdiction the
Company is subject or in order to obtain the listing
of any securities of the Company on any stock
exchange; or
(ii) in the opinion of the Board, the rights of the
Optionees are not materially prejudiced by any such
interpretation, amendment or termination.
9. MISCELLANEOUS
(a) Covenants. The Company represents and warrants in respect of each
Common Share that is issued pursuant to this Plan, effective the date of such
issue, that:
(i) it is duly incorporated, organized and subsisting
under the laws of the Province of Ontario;
(ii) it has all the necessary corporate power, authority
and capacity to issue and sell such Common Share and
that the issue and sale of such Common Share has been
duly authorized by all necessary corporate action on
the part of the Company; and
(iii) the issue and sale of such Common Share will not
conflict with or result in the breach of any
provision of the constating documents, by-laws or
resolutions of the Company or of any material
agreement or order to which the Company is a party or
by which it is bound or of any agreement to which it
is a party governing the relationship among any of
its shareholders.
(b) Severability. If any provision of the Plan is ever held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining parts or provisions of the Plan and the Plan shall be construed,
administered and enforced as if such illegal or invalid provision had never been
included in the Plan.
(c) Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable in Ontario.
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(d) Headings. The division of the Plan into paragraphs and clauses and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of the Plan.
(e) Notice. Any notice required or permitted to be given pursuant to
the terms of the Plan shall be given by delivery or registered mail to the
address of the recipient shown in the records of the Company, or to the Company
at its registered office, to the attention of the President, and shall be deemed
to have been received when delivered or on the third day of uninterrupted postal
service after mailing, as the case may be. Any inadvertent failure by the
Company to give notice to any Optionee or Optionees pursuant to the Plan shall
not invalidate any action proposed to be taken by the Company in connection with
such notice.
10. EFFECTIVE DATE
This Plan was approved by the Board of Directors on March 5, 1999 and
shall come into effect on the date hereof.
DATED as at MARCH 5, 1999.
DELANO TECHNOLOGY CORPORATION
By: _______________________________________
Title: President & CEO ____________________
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EXHIBIT 1
DELANO TECHNOLOGY CORPORATION
STOCK OPTION PLAN
STOCK OPTION AGREEMENT
OPTIONEE - [NAME]
OPTIONED SHARES - [NUMBER] Common Shares
EXERCISE PRICE - [ O ]
EXPIRY DATE - [DATE]
WHEREAS by resolution of the Board of Directors dated o , DELANO
TECHNOLOGY CORPORATION (the "Company") has granted to the undersigned (the
"Optionee") an option (the "Option") to purchase that number of common shares in
the capital of the Company set out above ("Optioned Shares") at a price per
share equal to the Exercise Price specified above.
NOW THEREFORE it is agreed as follows:
1. The Option is in all respects subject to and governed by the terms and
conditions of the Stock Option Plan of the Company (the "Plan"), all of which
terms and conditions are incorporated into and form a part of this Agreement.
2. Subject to the terms of the Plan, and subject as otherwise provided in this
Agreement, this Option is exercisable in whole or in part at any time and from
time to time.
3. The Optionee shall, without limiting the generality of the Plan, be entitled
to exercise this Option by executing and delivering to the Company an Option
Exercise Letter substantially in the form attached to this Agreement.
4. This Agreement shall be binding upon and enure to the benefit of the Company,
its successors and assigns and the Optionee and the legal representative of his
or her estate and any person who acquires the Optionee's rights in respect of
any Options by will or by the law of succession.
5. This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable in Ontario.
6. The Optionee agrees to bound by the Shareholders Agreement (as defined in the
Plan).
The Company hereby acknowledges the Optionee's acceptance of the terms
of this Agreement and the Option.
DATED this day of ,
DELANO TECHNOLOGY CORP.
By: __________________________________
Signature of Witness Signature of Optionee
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DELANO TECHNOLOGY CORPORATION
STOCK OPTION PLAN
OPTION EXERCISE LETTER
Date: __________________________________
To: DELANO TECHNOLOGY CORPORATION
Re: Stock Option Plan (the "Plan")
Dear Sirs:
1. On __________, there was granted to me under the Plan by agreement (the
"Option Agreement") an Option to purchase __________ Common Shares of DELANO
TECHNOLOGY CORPORATION at the price of $___________ per share. I duly accepted
the grant of such Option in accordance with the terms of the Plan.
2. On this day of ______________, _____, I hereby exercise the Option granted
to me as set forth below. The number of Common Shares of DELANO TECHNOLOGY
CORPORATION which I elect to purchase at this time is ___________ shares.
3. I enclose my certified cheque payable to DELANO TECHNOLOGY CORPORATION in the
amount of $ __________________ as payment in full for such shares.
4. I agree to sign and be bound by the Shareholder's Agreement (as defined in
the Option Plan).
Yours very truly,
Signature of Optionee
Name of Optionee