SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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, Use of the Commission Only
(as permitted by Rule 14aB6(e)(2)) Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ~240.14aB11(c) or ~ 240.14aB12
WAVERIDER COMMUNICATIONS INC.
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(Name of Registrant as Specified in its Charter)
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(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)(4) 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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5) Total fee paid:
[ ] 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.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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WAVERIDER COMMUNICATIONS INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held July 7, 2000
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To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
WaveRider Communications Inc. (the "Company") to be held in the Princess Room of
the Westin Prince Hotel, 900 York Mills Road, Toronto, Ontario Canada M3B 3H2,
on Friday, July 7, 2000, at 3:00 p.m. The purpose of the Annual Meeting is to
consider and vote upon the following matters, as more fully described in the
accompanying Proxy Statement:
(1) To elect six members of the Board of Directors, each to serve until the
next annual meeting of shareholders or until his respective successor
has been duly elected and qualified.
(2) To ratify the extension of the Company's Employee Stock Option (1997)
Plan.
(3) To approve the Company's Employee Stock Option (2000) Plan.
(4) To approve the Company's Employee Stock Purchase (2000) Plan
(5) To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized number of shares of Common
Stock from 100,000,000 to 200,000,000.
(6) To consider such other matters as may properly come before the meeting.
The Board of Directors has fixed the close of business on May 17, 2000
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof.
YOUR VOTE IS IMPORTANT!
Please date, sign and return the accompanying proxy card promptly so
that we can be assured of having a quorum at the meeting and so that your shares
may be voted in accordance with your wishes. Doing so will assist the Company in
reducing the expenses of additional proxy solicitation.
Signing and returning the proxy card does not affect your right to vote
in person if you attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
D. Bruce Sinclair
President and Chief Executive Officer
DATED: May 30, 2000
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, TO ASSURE THAT
YOUR SHARES WILL BE REPRESENTED, PLEASE DATE, FILL IN, SIGN AND MAIL THE
ENCLOSED PROXY TO THE ADDRESS PROVIDED. YOUR PROXY WILL NOT BE USED IF YOU ARE
PRESENT AT THE ANNUAL MEETING AND DESIRE TO VOTE YOUR SHARES PERSONALLY.
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PROXY STATEMENT
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FOR ANNUAL MEETING OF SHAREHOLDERS
July 7, 2000
SOLICITATION OF PROXIES
This Proxy Statement is being furnished to the shareholders of
WaveRider Communications Inc., a Nevada corporation (the "Company"), in
connection with the solicitation by the Board of Directors of the Company of
proxies from holders of outstanding shares of the Company's Common Stock, $0.001
par value (the "Common Stock"), for use at the Annual Meeting of Shareholders of
the Company to be held to in the Princess Room of the Westin Prince Hotel, 900
York Mills Road, Toronto, Ontario Canada M3B 3H2, on Friday, July 7, 2000, at
3:00 p.m. and at any adjournment or postponement thereof (the "Annual Meeting").
This Proxy Statement, the Notice of Annual Meeting of Shareholders and the
accompanying form of proxy are first being mailed to shareholders of the Company
on or about May 30, 2000.
The Company will bear all costs and expenses relating to the
solicitation of proxies, including the costs of preparing, printing and mailing
to shareholders this Proxy Statement and accompanying material. In addition to
the solicitation of proxies by use of the mails, the directors, officers and
employees of the Company, without receiving additional compensation therefor,
may solicit proxies personally or by telephone or telegram. Arrangements will be
made with brokerage firms and other custodians, nominees and fiduciaries for the
forwarding of solicitation materials to the beneficial owners of the shares of
Common Stock held by such persons, and the Company will reimburse such brokerage
firms, custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection therewith.
VOTING
Record Date
The Board of Directors has fixed the close of business on May 17, 2000
as the record date (the "Record Date") for determination of shareholders
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
there were issued and outstanding __________ shares of Common Stock. The holders
of record of the shares of Common Stock on the Record Date entitled to be voted
at the Annual Meeting are entitled to cast one vote per share on each matter
submitted to a vote at the Annual Meeting.
Proxies
Shares of the Common Stock which are entitled to be voted at the Annual
Meeting and which are represented by properly executed proxies will be voted in
accordance with the instructions indicated on such proxies. If no instructions
are indicated, such shares will be voted FOR the election of each of the six
director nominees; FOR the extension of the Employee Stock Option (1997) Plan;
FOR the approval of the Employee Stock Option (2000) Plan; FOR the approval of
the Employee Stock Purchase (2000) Plan; FOR the approval of the increase in the
authorized capital of the Company; and in the discretion of the proxy holder as
to any other matters which may properly come before the Annual Meeting. A
shareholder who has executed and returned a proxy may revoke it at any time
prior to its exercise at the Annual Meeting by executing and returning a proxy
bearing a later date, by filing with the Secretary of the Company, at the
address set forth above, a written notice of revocation bearing a later date
than the proxy being revoked, or by voting the Common Stock covered thereby in
person at the Annual Meeting.
Vote Required
The presence of a majority of the issued and outstanding shares of
Common Stock entitled to vote, represented in person or by properly executed
proxy, is required for a quorum at the Annual Meeting. Abstentions and broker
non-votes, which are indications by a broker that it does not have discretionary
authority to vote on a particular matter, will be counted as "represented" for
the purpose of determining the presence or the absence of a quorum. Under Nevada
corporate law, once a quorum is established, shareholder approval with respect
to a particular proposal is generally obtained when the votes cast in favor of
the proposal exceed the votes cast against such proposal. Approval of an
amendment to the Company's Articles of Incorporation requires a vote in favor by
the majority of the total shares outstanding.
In the election of directors, shareholders will not be allowed to
cumulate their votes. The six nominees receiving the highest number of votes
will be elected. The ratification of any other matter presented for approval by
the shareholders will be approved, in accordance with Nevada law, if the votes
cast in favor of a matter exceed the votes cast opposing such matter.
Accordingly, abstentions and broker non-votes will not affect the outcome of the
election of directors, or any other matter presented for approval by the
shareholders.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
At the Annual Meeting, six directors will be elected to serve until the
next annual meeting of shareholders and until their successors are duly elected
and qualified. Each of the nominees for director identified below is currently a
director of the Company.
Shareholders do not have cumulative voting rights in the election of
directors (each shareholder is entitled to vote one vote for each share held for
each director). Unless authority is withheld, it is the intention of the persons
named in the enclosed form of proxy to vote "FOR" the election of each of the
persons identified as nominees for directors below. If the candidacy of any one
or more of such nominees should, for any reason, be withdrawn, the proxies will
be voted "FOR" such other person or persons, if any, as may be designated by the
Board of Directors. The Board has no reason to believe that any nominee herein
named will be unable or unwilling to serve.
Nominees for Election as Directors
The following sets forth information about each nominee for election as a
director:
Gerry Chastelet, 53, has been a director of the Company since April
1999. Mr. Chastelet is, since December 1998, the Chairman, President and Chief
Executive Officer of Digital Lightwave, Inc., a leading provider of fiber optic
network analysis equipment. From December 1995 to October 1998, he served as
President and Chief Executive Officer of Wandel and Goltermann Technologies,
Inc., a global supplier of communication test and measurement equipment. From
June 1993 to November 1995, he served as Vice President Sales, Marketing and
Service - Americas and Asia Pacific for Network Systems Corporation, a supplier
of channel-attached communications solutions for large mainframe computers. From
1989 to 1993, he was Vice President Sales, Marketing and Service for
Infotron/Gandalf Systems Corporation. Mr. Chastelet holds a degree in
Electronics Engineering from Devry Institute of Technology and is a graduate of
the University of Toronto Executive MBA program.
John E. Curry, 53, was appointed a director of the Company in October
1999. Mr. Curry is President of Karina Venture Inc., a company active in the
venture capital business. Prior to joining Karina in September 1999, Mr. Curry
was with Bedford Curry & Co., a Vancouver-based chartered accounting firm, which
he co-founded in 1983. He is a member of the British Columbia Institute of
Chartered Accountants.
Cameron A. Mingay, 48, has been a director of the Company since April
1999 and the Secretary of the Company since May 29, 1999. Mr. Mingay is a
partner at Cassels Brock & Blackwell LLP, Toronto, Ontario, Canada, one of the
Company's legal counsels. Prior to July 1999, Mr. Mingay was with Smith Lyons,
Toronto for a period of 20 years. He is currently on the board for Image
Processing Systems and Matachewan Consolidated Mines, Limited. He completed his
undergraduate degree at York University and his law degree at Queen's
University.
D. Bruce Sinclair, 49, has been a director and the President of the
Company since December 1997. Mr. Sinclair has been the Chief Executive Officer
of the Company since November 1997. Mr. Sinclair has a Masters of Business
Administration from the University of Toronto. He has worked in sales and
management with companies including IBM Canada, Northern Telecom and Harris
Systems Limited. From 1988 to 1991, Mr. Sinclair was with Dell Computer
Corporation, a computer manufacturing company, where he held the office of
President of its Canadian subsidiary. In 1991 he was appointed Vice-President,
Europe for Dell Computer Corporation and subsequently head of Dell in Europe, a
position he held until 1994. He resigned from Dell in 1995 and operated his own
independent consulting business until joining the Company.
Guthrie J. Stewart, 44, was appointed a director of the Company in
October 1999. Mr. Stewart is Executive Vice-President, Global Development for
the Teleglobe Group and Chairman and Chief Executive Officer of Teleglobe Media
Enterprises. Since 1992, he has held various executive positions within the
Teleglobe Group including President and Chief Executive Officer of Teleglobe
Canada Inc., Canada's international telecommunications carrier. Mr. Stewart is a
member of the Board of the Information Technology Association of Canada and a
past-Chairman of the Board of the Wireless Communications Association, Canada's
national industry association of wireless service providers.
Dennis R. Wing, 51, was appointed a director of the Company in November
1999. Mr. Wing is Director of International Operations for Fahnestock & Co.
Inc., an U.S. investment bank. Previously, he was founding partner and Board
Member of First Marathon Securities Inc. and was Director of International
Operations for 18 years. His other Board memberships are Cryptologic Inc.,
itemus Inc. and the University of Waterloo. He holds a Bachelor of Arts degree
in Economics from University of Waterloo.
Board and Committee Meetings; Legal Proceedings
During the year ended December 31, 1999, the Board of Directors held 6
meetings. Each member attended at least 75% of all board meetings during their
term as a Director in 1999.
During 1999, the Board established an Audit Committee and a
Compensation Committee. The Board does not have a nominating committee or any
committee that functions as a nominating committee.
The Audit Committee meets with the Company's independent auditors at
least annually to review the results of the annual audit and discuss the
financial statements, recommends to the Board the independent auditors to be
retained, and receives and considers the accountants' comments as to controls,
adequacy of staff and management performance and procedures in connection with
audit and financial controls. During fiscal 1999, the Audit Committee was
composed of three non-employee directors: Messrs. Curry, Stewart and Wing. It
met one time during such fiscal year.
The Compensation Committee makes recommendations concerning salaries
and incentive compensation, awards stock options to employees and consultants
under the Company's stock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board may
delegate. During fiscal 1999, the Compensation Committee was composed of two
non-employee directors: Messrs. Chastelet and Mingay. It met one time during
such fiscal year.
EXECUTIVE OFFICERS
In addition to D. Bruce Sinclair, certain information is furnished with
respect to the following executive officers of the Company:
Charles W. Brown, 44, has been Vice President, Marketing of the Company
since February, 1998. Mr. Brown has a Masters in Business Administration from
the University of Western Ontario. From 1994 until joining the Company, Mr.
Brown was Clearnet Communications' first Vice President and CIO. Prior to this
Mr. Brown has held numerous senior Sales and Marketing positions including Vice
President, Sales and Marketing for Trillium Communications (1993-1994) and
Director, Strategic Planning and Marketing for BCE Mobile (1990-1993).
James H. Chinnick, 53, Vice President, Engineering, was vice president
and general manager of Harris Corporation's Wireless Access Division in Calgary,
AB, from 1995 to 1998. Prior to this, Mr. Chinnick held several senior positions
with NovAtel (1988-1995), Northern Telecom (1985-1988), Foundation Electronic
Instruments (1980-1984) and the Communications Research Centre in Ottawa
(1971-1980). In addition to a B.Sc. Engineering (Physics) from Queens
University, he has an M.Sc. in Electrical Engineering (Communications) from
Queens University and a Diploma in Business Administration from the University
of Ottawa. He is a member of the Association of Professional Engineers,
Geologists and Geophysicists of Alberta (APEGGA).
T. Scott Worthington, 45, is Vice President and the Company's chief
financial officer. Mr. Worthington, a Chartered Accountant, has been with the
Company since January 1998. From 1988 to 1996, he worked at Dell Computer
Corporation, in Canada, where he held numerous positions including CFO of Dell's
Canadian subsidiary. Subsequent to leaving Dell, he was a financial and business
consultant until his joining the Company in 1998.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE SIX NOMINEES
FOR DIRECTORS
PROPOSAL NO. 2 - RATIFICATION OF THE EXTENSION TO
THE EMPLOYEE STOCK OPTION (1997) PLAN
The Board of Directors of the Corporation has approved a 10 year
extension to the Employee Stock Option (1997) Plan (the "1997 Plan") subject to
approval by the stockholders. Nasdaq may require stockholder approval of the
extension of the 1997 Plan. Approval for purposes of the Nasdaq rules will
require the affirmative vote of a majority of the shares of Common Stock present
or represented at the meeting and voting on the 1997 Plan. The full text of the
1997 Plan, as adopted by the Board of Directors, is set forth in EXHIBIT A to
this Proxy Statement.
A total of 2,809,770 shares of Common Stock are reserved for awards
already made under the 1997 Plan. The Company intends, subject to approval by
the stockholders of the extension of the 1997 Plan, to extend the expiry date of
the options awarded to current employees under the 1997 Plan for a period of 10
years. The Company does not intend to make any new awards under the 1997 Plan.
The purpose of the extension to the 1997 Plan, and the options awarded
under the 1997 Plan, is to enhance the Company's ability to retain persons of
experience and ability, and whose services are considered valuable, to encourage
the sense of proprietorship in such persons, and to stimulate the active
interest of such persons in the development and success of the Company and
affiliated companies. The Company believes that failure to extend the 1997 Plan,
and the options awarded under the 1997 Plan, would likely result in the
employees exercising all options available to them and selling all, or a
significant portion, of the resulting shares to pay the cost of exercise and the
resulting tax liabilities. This would result in a significant reduction in the
beneficial holdings by the executive officers and key employees, to the
perceived detriment of the Company.
The following table indicates the exercisable and unexercisable options
awarded and outstanding, under the 1997 Plan, to named executive officers and
all others, as a group, who are current employees of the Company as of April 28,
2000.
Number of Unexercised Options
-----------------------------
Name Exercisable Unexercisable
------------------- ------------ -------------
D. Bruce Sinclair 50,000 950,000
Charles Brown 389,600 0
James Chinnick 190,000 0
Scott Worthington 502,400 0
Mike Orloff 13,500 4,500
Others (21) 259,238 422,532
Under Generally Accepted Accounting Principles, the extension of the
options under the 1997 Plan will be treated as if they were new awards. As such,
any difference between the fair market value of the shares of Common Stock at
the time of the extension and the time of the original award will be recorded as
an expense to the Company. For exercisable options the expense would be
recognized immediately and for unexercisable options the expense would be
deferred and amortized over the period they become exercisable. At April 28,
2000, the total charge related to the extension, based on a closing stock price
of $6.00 per share, would have been $13,940,988. The actual expense recorded in
the income statement will depend on the actual closing stock price on the date
of the extension.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
EXTEND THE EMPLOYEE STOCK OPTION (1997) PLAN.
PROPOSAL NO. 3 - PROPOSED EMPLOYEE STOCK OPTION (2000) PLAN
The Board of Directors of the Corporation has adopted the Employee
Stock Option (2000) Plan (the "Stock Option Plan") subject to approval by the
stockholders. Under the United States Internal Revenue Code (the "Code"),
stockholder approval of the Stock Option Plan is necessary for stock options
relating to the shares issuable under the 2000 Plan to qualify as incentive
stock options under Section 422 of the Code ("Incentive Options"). In addition,
Nasdaq Rules require stockholder approval of the Stock Option Plan. Approval for
purposes of the Code and the Nasdaq Rules will require the affirmative vote of a
majority of the shares of Common Stock present or represented at the meeting and
voting on the Stock Option Plan. The full text of the Stock Option Plan as
adopted by the Board of Directors is set forth in EXHIBIT B to this Proxy
Statement.
A total of 6,000,000 shares of Common Stock are reserved for issuance
under the Stock Option Plan. The Stock Option Plan authorizes (i) the grant of
options to purchase Common Stock intended to qualify as Incentive Options, and
(ii) the grant of options that do not so qualify ("Nonqualified Options").
The Stock Option Plan shall terminate on the tenth anniversary of its
adoption unless earlier terminated by the Board of Directors.
The Company intends that the Stock Option Plan will be administered by
a committee, consisting of at least two Outside Directors, as defined in the
Stock Option Plan (the "Committee"). The Committee will select the individuals
to whom awards will be granted and determine the option exercise price and other
terms of each award, subject to the provisions of the Stock Option Plan.
Incentive Options may be granted under the Stock Option Plan to
employees and officers of the Company, including members of the Board of
Directors who are also employees. Nonqualified Options may be granted under the
Stock Option Plan to employees, officers, individuals providing services to the
Company and members of the Board of Directors, whether or not they are employees
of the Company.
No options may extend for more than ten years from the date of grant
(five years in the case of employees or officers holding 10% or more of the
total combined voting power of all classes of stock of the Company or any
subsidiary or parent (a "greater-than-ten-percent-stockholder")). The exercise
price for Incentive Options may not be less than the fair market value of the
Common Stock on the date of grant or, in the case of a greater-than-ten-percent
stockholder, no less than 110% of the fair market value. The aggregate fair
market value (determined at the time of grant) of shares issuable pursuant to
Incentive Options which first become exercisable by an employee or officer in
any calendar year may not exceed $100,000.
Nonqualified Options are non-transferable except with the written
consent of the Board, by will or by the laws of descent or distribution.
Incentive Options may only be transferred by will or by the laws of descent or
distribution. Options generally will cease to be exercisable (i) immediately if
the optionee is terminated for cause, (ii) sixty days after the optionee ceases
to be employed by the Company other than for cause, (iii) twelve months
following an optionee's death.
Payment of the exercise price for shares subject to options may be made
with cash, or, with the consent of the Committee, (i) with shares of Common
Stock, (ii) by reducing the number of Option Shares otherwise issuable by a
number of shares having a fair market value equal to the aggregate exercise
price, (iii) by personal recourse note, or (iv) by such other means as is
authorized by the Committee. Full payment for shares exercised must be made at
the time of exercise.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The grant of an Incentive Option or a Nonqualified Option would not
result in income for the grantee or in a deduction for the Company.
The exercise of a Nonqualified Option would result in ordinary income
for the grantee and a deduction for the Company measured by the difference
between the option price and the fair market value of the shares received at the
time of exercise. Income tax withholding would be required.
The exercise of an Incentive Option would not result in income for the
grantee if the grantee (i) does not dispose of the shares within two years after
the date of grant and one year after the transfer of shares upon exercise and
(ii) is an employee of the Company or a subsidiary of the Company from the date
of grant until three months before the exercise date. If these requirements are
met, the basis of the share upon later disposition would be the option price.
Any gain will be taxed to the employee as long-term capital gain and the Company
would not be entitled to a deduction. The excess of the market value on the
exercise date over the option price is an item of tax preference, potentially
subject to the alternative minimum tax.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
APPROVE THE EMPLOYEE STOCK OPTION (2000) PLAN.
PROPOSAL NO. 4 - APPROVAL OF EMPLOYEE STOCK PURCHASE (2000) PLAN.
The Board of Directors of the Corporation has adopted the Employee
Stock Purchase (2000) Plan (the "Stock Purchase Plan") subject to approval by
the stockholders. Under the United States Internal Revenue Code (the "Code"),
stockholder approval of the Stock Purchase Plan is necessary for the rights to
purchase Common Stock granted under the Stock Purchase Plan to qualify as
options issued under an "employee stock purchase plan" as that term is defined
in Section 423(b) of the Code. In addition, Nasdaq rules (the "Nasdaq Rules")
require stockholder approval of the Stock Option Plan. Approval for purposes of
the Code and the Nasdaq Rules will require the affirmative vote of a majority of
the shares of Common Stock present or represented at the meeting and voting on
the Stock Option Plan. The full text of the Stock Purchase Plan as adopted by
the Board of Directors is set forth in EXHIBIT C to this Proxy Statement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
APPROVE THE EMPLOYEE STOCK PURCHASE (2000) PLAN.
The following is a summary of certain essential features of the Stock
Purchase Plan:
The purpose of the Purchase Plan is to provide a means by which
employees of the Company (and any parent or subsidiary of the Company designated
by the Board of Directors to participate in the Purchase Plan) may be given an
opportunity to purchase shares of Common Stock of the Company through payroll
deductions, to assist the Company in retaining the services of its employees, to
secure and retain the services of new employees, and to provide incentives for
such persons to exert maximum efforts for the success of the Company.
The Purchase Plan is administered by the Board of Directors, which has
the final power to construe and interpret the Purchase Plan and the rights
granted under it. The Board has the power, subject to the provisions of the
Purchase Plan, to determine when and how rights to purchase shares of Common
Stock of the Company will be granted, the provisions of each offering of such
rights (which need not be identical), and whether the employee of any parent or
subsidiary of the Company will be eligible to participate in such plan.
The Purchase Plan is implemented by offerings of rights to all eligible
employees from time to time by the Board. For each offering, the Board may
determine the term and other provisions (which need not be identical), within
the limitations of the Purchase Plan. Such offerings may have a term of up to 27
months. Initially, the Board intends authorizing offerings of one year duration
which are divided into two shorter "purchase periods" of approximately six
months duration. In the future, the Board may authorize offerings with terms
different than those described here.
The Board may establish certain eligibility requirements for
participation under the offerings it authorizes. For example, the Board may
require that employees complete a period of service before they become eligible
to participate in an offering.
In addition, as required by the Code, no employee is eligible for the
grant of any rights under the Purchase Plan if, immediately after such grant,
the employee would own, directly or indirectly, stock possessing 5% or more of
the total combined voting power or value of all classes of stock of the Company
or of any parent or subsidiary of the Company (including any stock which such
employee may purchase under all outstanding rights and options), nor will any
employee be granted rights that would permit him to buy more than $25,000 worth
of shares of Common Stock (determined at the fair market value of the shares at
the time such rights are granted) under all employee stock purchase plans of the
Company in any calendar year.
Eligible employees become participants in the Purchase Plan by
delivering to the Company, prior to the date selected by the Board as the
offering date for an offering, an agreement authorizing payroll deductions of up
to 15% of such employees' base salary compensation during the offering.
The Board may authorize the purchase price per share at which shares of
Common Stock will be sold in an offering under the Purchase Plan. The purchase
price shall not be less than the lower of (a) 85% of the fair market value of a
share of Common Stock on the date of commencement of the offering and (b) 85% of
the fair market value of a share of Common Stock on the last day of the
offering.
The purchase price of the shares is accumulated by payroll deductions
over each offering that is authorized under the Purchase Plan. At any time
during the offering, a participant may reduce or terminate his or her payroll
deductions (See "Withdrawal" below). Under each offering, the Board may
establish the time or times at which participants may increase or decrease their
payroll deductions. All payroll deductions made for a participant are credited
to his or her account under the Purchase Plan and deposited with the general
funds of the Company. Unless authorized under an offering, participants may not
make any additional payments into such accounts.
By executing an agreement to participate in the Purchase Plan, the
employee is entitled to purchase shares of Common Stock under such plan. In
connection with offerings made under the Purchase Plan, the Board may specify a
maximum number of shares of Common Stock any employee may be granted the right
to purchase and the maximum aggregate number of shares of Common Stock which may
be purchased pursuant to such offering by all participants. If the aggregate
number of shares of Common Stock to be purchased upon exercise of rights granted
in the offering would exceed the maximum aggregate number, the Board would make
a pro rata allocation of shares of Common Stock available in a uniform and
equitable manner. Unless the employee's participation is discontinued, his right
to purchase shares of Common Stock is exercised automatically at the end of the
offering at the applicable price.
While each participant in the Purchase Plan is required to sign an
agreement authorizing payroll deductions, the participant may withdraw from a
given offering by delivering to the Company a notice of withdrawal from the
Purchase Plan. Such withdrawal may be elected at any time prior to the end of
the applicable offering.
Upon any withdrawal from an offering by the employee, the Company will
distribute to the employee his or her accumulated payroll deductions without
interest, less any accumulated deductions previously applied to the purchase of
stock on the employee's behalf during such offering, and such employee's
interest in the offering will be automatically terminated. The employee will not
be entitled to again participate in such offering. An employee's withdrawal from
an offering will not have any effect upon such employee's eligibility to
participate in subsequent offerings under the Purchase Plan.
Rights granted pursuant to any offering under the Purchase Plan
terminate immediately upon cessation of an employee's employment for any reason.
Upon any such termination, the Company will distribute to the employee all of
his or her accumulated payroll deductions, without interest.
Rights granted under the Purchase Plan are not transferable and may be
exercised only by the person to whom such rights are granted.
The Board may suspend or terminate the Purchase Plan at any time. The
Board may amend the Purchase Plan at any time. Any amendment of the Purchase
Plan must be approved by the stockholders within 12 months of its adoption by
the Board if the amendment would (a) increase the number of shares of Common
Stock reserved for issuance under the Purchase Plan or (b) modify the
requirements relating to eligibility for participation in the Purchase Plan.
Rights granted before amendment or termination of the Purchase Plan
will not be altered or impaired by any amendment or termination of such plan
without the consent of the person to whom such rights were granted.
In the event of a dissolution, liquidation or specified type of merger
of the Company, the surviving corporation either will assume the rights under
the Purchase Plan or substitute similar rights, or the exercise date of any
ongoing offering will be accelerated such that the outstanding rights may be
exercised immediately prior to, or concurrent with, any such event.
Subject to approval of this proposal, an aggregate of 3,000,000 shares
of Common Stock is authorized for issuance under the Purchase Plan. If rights
granted under the Purchase Plan expire, lapse or otherwise terminate without
being exercised, the Common Stock not purchased under such rights will again
become available for issuance under the Purchase Plan.
UNITED STATES FEDERAL INCOME TAX INFORMATION
Rights granted under the Purchase Plan are intended to qualify for
favorable federal income tax treatment associated with rights granted under an
employee stock purchase plan which qualifies under provisions of Section 423 of
the Code.
A participant will be taxed on amounts withheld for the purchase of
shares as if such amounts were actually received. Other than this, except as
described below with respect to possible FICA and FUTA liability, no income will
be taxable to a participant until disposition of the shares acquired, and the
method of taxation will depend upon the holding period of the purchased shares.
If the stock is disposed of more than two years after the beginning of
the offering and more than one year after the stock is transferred to the
participant, then the lesser of (a) the excess of the fair market value of the
stock at the time of such disposition over the exercise price and (b) the excess
of the fair market value of the stock as of the beginning of the offering over
the exercise price will be treated as ordinary income. Any further gain or any
loss will be taxed as a long-term capital gain or loss. Such capital gains
currently are generally subject to lower tax rates than ordinary income.
If the stock is sold or disposed of before the expiration of either of
the holding periods described above, then the excess of the fair market value of
the stock on the exercise date over the exercise price will be treated as
ordinary income at the time of such disposition. The balance of any gain will be
treated as capital gain. Even if the stock is later disposed of for less than
its fair market value on the exercise date, the same amount of ordinary income
will be attributed to the participant and a capital loss may be recognized equal
to the difference between the sales price and the fair market value of the stock
on such exercise date. Any capital gain or loss will be short-term or long-term
depending on whether the stock has been held for more than one year.
There are no federal income tax consequences to the Company by reason
of the grant or exercise of rights under the Purchase Plan. The Company is
entitled to a deduction to the extent amounts are taxed as ordinary income to a
participant (subject to the requirement of reasonableness and the satisfaction
of a tax reporting obligation).
PROPOSAL NO. 5 - APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Restated Certificate of Incorporation to increase the
authorized number of shares of Capital Stock from 105,000,000 shares to
205,000,000 shares of Capital Stock and to increase the Company's authorized
number of shares of Common Stock from 100,000,000 to 200,000,000.
The additional Common Stock to be authorized by adoption of the
amendment would have rights identical to the currently outstanding Common Stock
of the Company. Adoption of the proposed amendment and issuance of the Common
Stock would not affect the rights of current stockholders. If the amendment is
adopted, it will become effective upon filing of a Certificate of Amendment of
the Company's Restated Certificate of Incorporation with the Secretary of State
of the State of Nevada.
In addition to the 61,390,130 shares of Common Stock outstanding at
April 28, 2000, the Board has reserved an aggregate of approximately 14,090,722
shares of Common Stock for issuance upon (a) exercise of outstanding options
granted under the Company's stock option plans, and (b) exercise of outstanding
warrants.
Although, at present, the Board of Directors has no other plans to
issue the additional shares of Common Stock, it desires to have such shares
available to provide additional flexibility to use its capital stock for
business and financial purposes in the future. The additional shares of Common
Stock may be used, without further stockholder approval, for various purposes
including, without limitation, raising capital, providing equity incentives to
employees, officers or directors, establishing strategic relationships with
other companies and expanding the Company's business or product lines through
the acquisition of other businesses or products.
The additional shares of Capital Stock that would become available for
issuance if this Proposal were adopted could also be used by the Company to
oppose a hostile takeover attempt or delay or prevent changes in control or
management of the Company. For example, without further stockholder approval,
the Board of Directors could adopt a "poison pill" which would, under certain
circumstances related to an acquisition of shares not approved by the Board,
give certain holders the right to acquire additional shares of capital stock at
a low price, or the Board could strategically sell shares of Capital Stock in a
private transaction to persons or entities that would oppose a takeover or favor
the current Board. Although this Proposal to increase the authorized capital
stock has been prompted by business and financial considerations and not by the
threat of any hostile takeover attempt (nor is the Board currently aware of any
such attempts directed at the Company), nevertheless, stockholders should be
aware that approval of the Proposal could facilitate future efforts by the
Company to deter or prevent changes in control of the Company, including
transactions in which the stockholders might otherwise receive a premium for
their shares over then current market prices.
A copy of the Amendment to the Restated Certificate of Incorporation,
as approved by the Board of Directors, is attached to this Proxy Statement as
Appendix D. Stockholders are requested in this Proposal No. 5 to approve the
amendment to the Restated Certificate, as amended. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock, voting as a
single class, will be required to approve this amendment to the Company's
Restated Certificate of Incorporation. As a result, abstentions and broker
non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
OTHER MATTERS
Other Business
The Board of Directors does not know of any matter to be presented at
the Annual Meeting that is not listed in the Notice of Annual Meeting and
discussed above. If other matters should properly come before the Annual
Meeting, however, the proxy holders will vote in accordance with their best
judgment.
Proposals of Security Holders for 2000 Annual Meeting
Shareholders desiring to submit proposals for the Proxy Statement for
the 2000 Annual Meeting of Shareholders of the Company will be required to
submit them to Scott Worthington, Vice President and Chief Financial Officer of
the Company, at the Company's executive offices, 255 Consumers Road, Suite 500,
Toronto, Ontario, Canada M2J 1R4, in writing on or before December 31, 2000. Any
shareholder proposal must also be proper in form and substance, as determined in
accordance with the Exchange Act and the rules and regulations promulgated
thereunder.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table describes the compensation earned in fiscal 1999 by
the Chief Executive Officer of the Company and all executive officers and
employees who received compensation in excess of $100,000 in 1999. The directors
of the Company received $1,000 per meeting attended during the year and were
automatically awarded 50,000 options under the 1999 Incentive and Nonqualified
Stock Option Plan upon their election to the board of directors.
SUMMARY COMPENSATION TABLE 1999
Annual Compensation
Name and
Principal Position Year Salary Bonus Stock Options
- ------------------ ---- ------ ----- -------------
Bruce Sinclair 1999 204,730 134,617 100,000
President/CEO/Director 1998 182,002 Note 1
1997 10,500 1,000,000 Note 2
Charles Brown 1999 128,156 50,885 535,000
Vice President, Marketing 1998 101,112 39,045 465,000
James Chinnick 1999 87,748 76,732 630,000
Vice President, Engineering
Scott Worthington 1999 103,863 26,923 450,000
Vice President/CFO 1998 76,845 15,369 550,000
Mike Orloff 1999 62,110 68,574 36,000
Vice President, International
Other than noted above, no officer or employee of the company received
compensation in excess of $100,000 in any of the last 3 fiscal years.
(1) Mr. Sinclair's 1998 compensation was based on an annualized amount of Cdn.
$500,000 payable Cdn.$270,000 in cash salary with the balance payable in shares
out of the Employee Stock Compensation (1997) Plan subject to certain
performance criteria. Despite having achieved the bonus requirements, Mr.
Sinclair waived receipt of the $155,038 bonus in conjunction with an agreement
with other shareholders who returned 1,000,000 shares to the Company for
cancellation. This agreement allowed the Company to issue 1,495,000 options to
the other senior executives without significant further dilution for the
shareholders.
(2) The amount shown as salary above is the amount paid in cash for the period
Mr. Sinclair was with the Company in 1997. A total of 800,000 Series B Preferred
Shares were transferred to Mr. Sinclair by way of an additional incentive
together with the private option to purchase additional common shares of up to
1,000,000. Both the Series B Preferred shares and the private option to purchase
common shares were provided by existing shareholders and were not payable by or
otherwise a liability of the Company.
Option Grants in Last Fiscal Year
The following table summarizes option grants during 1999 to
the executive officers and employees named in the Summary Compensation Table
(the "Named Executive Officers")
Individual Grants
Percent of
Total
Number of Options Potential Realizable Value
Securities Granted to Exercise Market at Assumed Annual Rates
Underlying Employees or Base Price on of Stock Price Appreciation
Options in Fiscal Price Date of Expiration for Option Term
Granted Year ($/sh) Grant Date 0% 5% 10%
---------------------------------------------------------------------------------------
Bruce Sinclair 100,000 3.6% $0.91 $0.91 10/25/09 0 4,550 9,100
Charles Brown 535,000 19.4% $2.03 $2.03 4/8/09 0 54,303 108,605
James Chinnick 120,000 4.3% $2.50 $2.50 1/4/02 0 15,000 30,000
510,000 18.5% $2.03 $2.03 4/8/09 0 51,765 103,530
Scott Worthington 450,000 16.3% $2.03 $2.03 4/8/09 0 45,675 91,350
Mike Orloff 18,000 0.7% $2.50 $2.50 1/4/02 0 2,250 4,500
18,000 0.7% $2.00 $2.00 4/23/09 0 1,800 3,600
None of the Officers listed exercised any of their options in 1999.
Aggregated Option Exercises in Last Fiscal Year and Year End Option Values
The following table sets forth the aggregate value of unexercised options to
acquire shares of the Common Stock held by the Named Executive Officers on
December 31, 1999. None of the Named Executive Officers of the Company exercised
options during the year ended December 31, 1999.
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at FY-End at FY-End(1)
----------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------- ----------- ------------- -------------- -------------
D. Bruce Sinclair 55,000 1,045,000 $ 91,200 $1,732,800
Charles Brown 491,750 508,250 $ 417,335 $ 111,815
James Chinnick 215,500 514,500 $ 57,610 $ 106,590
Scott Worthington 572,500 427,500 $ 629,950 $ 94,050
Mike Orloff 14,400 21,600 $ 1,125 $ 3,375
(1) Calculated based on the difference between the exercise price and the price
of a share of Common Stock on December 31, 1999. The Closing sale price of the
Common Stock was $2.25 on December 31, 1999.
Employment Arrangements.
In November 1997, the Company entered into an employment agreement with Mr.
Sinclair, which provided for salary, bonus and option grants for the ensuing
year. In addition, under the agreement, in the event that the Company were to
terminate Mr. Sinclair's employment other than for cause (as defined in the
agreement) at any time, the Company would pay to Mr. Sinclair, for a period of
12 months, the base compensation, bonus and health benefits to which he was
entitled on the date of his termination. At a meeting of the Board of Directors,
on February 25, 2000, the guarantee period for Mr. Sinclair was increased from
12 months to 36 months.
In addition, the Company's employment arrangements with each of the
current executive officers, other than Mr. Sinclair, provide that in the event
that the Company were to terminate the executive's employment other than for
cause (as defined in the agreements) at any time, the Company would pay to the
executive, for a period of 12 months, the base compensation, bonus and health
benefits to which he was entitled on the date of his termination.
Director's Compensation
The Company's non-employee directors have been paid $1,000, plus
expenses, for each meeting of the Board of Directors attended in person.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 28, 2000, information with
respect to the Company's Common Stock owned beneficially by each director or
nominee for director, by the Chief Executive Officer of the Company, by all
officers and directors as a group and by each person known by the Company to be
a beneficial owner of more than 5% of the outstanding shares of Common Stock.
Except as otherwise indicated below, each person named has sole voting and
investment power with respect to the shares indicated.
Amount and Nature of Percentage
Name and Address of Beneficial Owners Beneficial Ownership (1) of Class(2)
- ----------------------------------------- ------------------------ -----------
Bruce Sinclair, Director, CEO, President 3,030,000(3) 4.85%
Cameron A. Mingay, Secretary/Director 137,500 0.22%
Gerry Chastelet, Director 150,000 0.24%
John Curry, Director 125,000 0.20%
Guthrie Stewart, Director 75,000 0.12%
Dennis Wing, Director 100,000 0.16%
Charles Brown, Vice-President 416,350 0.67%
Scott Worthington, Vice-President 524,900 0.85%
Jim Chinnick, Vice President 235,500 0.38%
All Directors and Executive Officers (9) 4,794,250 7.47%
(1) Includes shares subject to an Escrow Agreement, dated March 16, 1998,
as amended September 27, 1999. Includes employee stock options
exercisable within 60 days - See Table of Year End Option Values
(2) Based on 61,390,130 shares of Common Stock outstanding as of April 28,
2000.
(3) Includes shares beneficially owned through a purchase option agreement
with certain other shareholders of the Company that are exercisable
within 60 days.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive officers and
directors and certain beneficial owners of the Company's Common Stock to file
initial reports of ownership and reports of changes in ownership with the SEC.
These executive officers, directors and beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Due to delays in obtaining a Central Index Key (CIK) number from the SEC
the executive officers and one Director completed filing their March 2000
Form4's on April 12th instead of the required April 10th date. Based solely on a
review of the copies of such forms furnished to the Company and written
representations from the Company's executive officers and directors, the Company
is not aware of any other late filings.
PERFORMANCE MEASUREMENT COMPARISON(1)
The following table shows the total stockholder return of an investment
of $100 in cash on December 31, 1995 for (a) the Company's Common Stock, (b) the
Nasdaq Stock Market (U.S.) Index, and (b) the Nasdaq Telecommunications Index
("Nasdaq Telecommunications"). All values assume reinvestment of the full amount
of all dividends and are calculated as of December 31 of each year:
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
COMPARISON OF 4-YEAR CUMULATIVE TOTAL RETURN*
AMONG WAVERIDER COMMUNICATIONS INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ TELECOMMUNICATIONS INDEX
NASDAQ STOCK NASDAQ
WAVERIDER MARKET (U.S.) TELECOMMUNICATIONS
--------------------------------------------------------------
12/95 100 100 100
12/96 17 123 102
12/97 299 151 149
12/98 700 213 247
12/99 600 394 437
* $100 Invested on 12/31/94 in stock or index, including reinvestment of
dividends. Fiscal year ending December 31.
(1) The material in this section is not "soliciting material" is not deemed
"filed" with the SEC, and is not to be incorporated by reference into any filing
of the Company under the Securities Act or the Exchange Act, whether made before
or after the date hereof and irrespective of any general incorporation language
contained in such filing.
Additional Information
A copy of the Company's Annual Report for the year ended December 31,
1999 is attached to this Proxy Statement. The Company's 10-K Report and exhibits
to that Report will also be provided upon request and payment of copying
charges. Requests should be directed to Scott Worthington, WaveRider
Communications Inc., 255 Consumers Road, Suite 500, Toronto, Ontario, Canada M2J
1R4.
APPENDIX A
EMPLOYEE STOCK OPTION (1997) PLAN
WAVERIDER COMMUNICATIONS INC.
(AS AMENDED BY DIRECTORS' RESOLUTIONS DATED FEBRUARY 16TH, 1998
AND APRIL 11TH, 2000)
1. PURPOSE OF THE PLAN.
This Employee Stock Option (1997) Plan, (the "Plan") is intended to further
the growth and advance the best interests of WAVERIDER COMMUNICATIONS INC., (the
"Company"), and affiliated companies, by supporting and increasing the Company's
ability to attract and retain persons of experience and ability, and whose
services are considered valuable, to encourage the sense of proprietorship in
such persons, and to stimulate the active interest of such persons in the
development and success of the Company and affiliated companies. This plan
provides for the issuance of non-statutory stock options ("Option" or
"Options"), which are not intended to qualify as "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, (the "Code").
2. DEFINITIONS.
Whenever used in this plan, except where the context might clearly indicate
otherwise, the following terms shall have the meanings ascribed to them:
a) "Act" means the U.S. Securities Act of 1933, as amended.
b) "Affiliate" means any Parent or Subsidiary of the Company.
c) "Award" or "Grant" means any grant of an Option made under this Plan.
d) "Board" means the Board of Directors of the Company and where applicable
includes any Committee to whom any powers of the Board have been delegated
in accordance with this Plan.
e) "Code" means the Internal Revenue Code of 1986, as amended.
f) "Date of Grant" means the day the Board authorizes the grant of an Option
or such later date as may be specified by the Board as the date a
particular grant will become effective.
g) "Employee" means and includes the following persons: i) executive
officers, officers and directors, (including advisory and other special
directors), of the Company or an Affiliate; ii) full-time and part-time
employees of the Company or an Affiliate; iii) any person or entity
engaged by the Company or an Affiliate, as a consultant, advisor or agent;
and iv) a lawyer, law firm, accountant, accountant firm, or other
professional or professional firm, engaged by the Company or an Affiliate.
h) "Optionee" means an Employee to whom an Option has been granted.
i) "Parent" means any corporation owning 50% or more of the total combined
voting stock of all classes of the Company or another company qualifying
as a Parent within this definition.
j) "Participant" means an Employee to whom an award of Stock has been made.
k) "Plan Shares" means shares of Stock from time to time subject to this
Plan.
l) "Stock" means the Common shares of the Company, or in the event that the
outstanding Common shares are hereafter changed into or exchanged for
different shares or securities of the Company, such other shares or
securities.
m) "Subsidiary" means a company more than 50% of whose total combined capital
stock of all classes is held by the Company or another company qualifying
as a Subsidiary within this definition.
3. TERM.
This Plan shall be effective as of the 10th day of June, 1997, and no
Options shall be granted pursuant to this Plan after its expiration. This Plan
shall expire on the 11th day of April 2010, unless sooner terminated in
accordance with the terms herein, with the exception of any Options then
outstanding which shall remain in effect until they have expired or have been
exercised.
4. ADMINISTRATION OF THE PLAN.
This Plan shall be administered by the Board; provided however, that the Board
may delegate administration of the Plan to a committee composed of no fewer than
two (2) non-employee members of the Board, (the "Committee").
If administration is delegated to a Committee, that Committee shall have, in
connection with the administration of the Plan, the powers possessed by the
Board. The Board may abolish or change the Committee at any time and revest in
the Board the administration of the Plan.
A majority of the members of a Committee shall constitute a quorum. All
decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members of the Committee shall be fully
effective as if it had been made by a majority at a meeting duly held.
Subject to the terms herein, "Administration" shall include the full authority
and sole and absolute discretion to designate Plan participants, to determine
the provisions, restrictions, conditions and terms of the Options, (which need
not be identical as to number of shares covered by any Option, the method or
exercise as related to exercise in whole or in installments, or otherwise),
including the Option price, and to interpret the provisions and supervise the
administration of this Plan. Administration shall also include the authority to
provide that certain Options not vest (that is, become exercisable), until
expiration of a certain period after issuance or until other conditions are
satisfied, so long as not contrary to this Plan.
Each Option shall be evidenced by an agreement in writing containing the
provisions, terms and conditions of each such Option granted consistent with the
provisions of this Plan.
5. STOCK SUBJECT TO THE PLAN.
A total of 6,250,000 Plan Shares shall be subject to this Plan. The Plan
Shares shall consist of unissued shares of Common stock or previously issued
shares of Common stock reacquired and held by the Company or any Affiliate and
such number of Plan Shares shall be and are hereby reserved for such purpose.
Any Plan Shares which may remain unsold and which are not subject to outstanding
Options at the termination of this Plan shall cease to be reserved for the
purpose of this Plan, but until termination of this Plan, the Company shall at
all times reserve a sufficient number of shares to meet the requirements of this
Plan. Should any Option expire or be cancelled prior to its exercise in full,
the unexercised Plan Shares subject to such Option may again be subjected to an
Option under this Plan.
6. PERSONS ELIGIBLE TO PARTICIPATE.
Options under this Plan may be granted to Employees only. The Board, (or the
Committee, as the case may be), shall have the full power to designate from
among the eligible parties, those to whom Options may be granted. A person who
has been granted an Option hereunder may be granted and additional Option or
Options. Persons eligible under this Plan additionally may be granted one or
more options under any other compensatory or stock option plan or awarded shares
under any other benefit plan of the Company. No Option shall confer any right
upon the Optionee with respect to the continuation of his employment (or his
position as an officer, director, employee, agent or consultant), with the
Company or any Affiliate, and shall not interfere with the right of the Company
or any Affiliate to terminate such relationship(s) at any time in accordance
with law and any other agreements in force.
7. OPTION EXERCISE PRICE.
The purchase price of each Plan Share shall not be less than one hundred per
cent (100%), of the fair market value of a share of Common stock on the date the
Option is granted. The fair market value on a particular date shall be deemed to
be the average of either i) the highest and lowest prices at which shares of
Common stock were sold on the date of grant, if traded on a national securities
exchange, ii) the high and low sale prices reported on the date of grant if
traded on the Nasdaq Small Cap Market or National market System, or iii) the
high bid and low asked price, or if available, the closing high bid and low
asked price, on the date of grant, if quoted on the OTC Electronic Bulletin
Board. If no transactions in the Common stock occur on the date of grant, the
fair market value shall be determined as of the next earliest day for which
reports or quotations are available. If the Common stock is not then quoted on
any exchange or in any quotation medium at the time of grant, then the Board of
Directors (or Committee, as the case may be), will use its discretion in
selecting in good faith a value believed to represent the fair market value
based on factors then known to them. The cash proceeds for the sale of Plan
Shares are to be added to the general funds of the Company.
8. EXERCISE PERIOD; VESTING.
a) The Option exercise period shall be a term of not more than three (3) years
from the date of granting of each Option and shall automatically terminate: i)
30 days following termination of the Optionee's employment with the Company for
cause, defined as termination for reasons other than Layoff due to lack of work,
injury, illness, disability or due to economic reasons unrelated to the
Optionsee's job performance, or for a reason stated in subparagraph (b) below;
ii) Subject to subparagraph (c) below, at the expiration of a period to be
determined by the Board (or Committee as the case may be), at the time of grant,
which shall be not less than 30 days and not more than 365 days following the
date of termination of the Optionee's employment with the Company without cause
for any reason other than death, provided that if the Optionee dies within such
period, subclause iii) below shall apply; or iii) at the expiration of twelve
(12) months after the date of death of the Optionee.
b) "Employment with the Company" as used in this Plan shall include: i)
employment with, ii) or as to a consultant, advisor, or agent, engagement by,
or; iii) service as a director of the Company or any Affiliate, in any such
capacity, even if employment or engagement in another capacity ceases, and
Options granted under this Plan shall not be affected by an Employee's transfer
of employment within the Company or between it and any Affiliate or between any
Affiliates. An Optionee's employment shall not be deemed interrupted or
terminated by a bona fide leave of absence, such as sabbatical leave, military
or other services required by the Government, or sick leave.
c) The Board (or Committee, as the case may be), may determine at the time of
grant that the Option granted shall not vest immediately, but over a specified
time, in specified amounts per time period, or subject to other restrictions or
limitations. Unless otherwise set forth in the granting resolution, an Option
shall vest immediately upon grant. If employment ceases before an Option vests,
then vesting shall never take place and unvested Options shall then be lost
forever. Nothing contained in this Section shall be construed to extend the term
of any Option or to permit anyone to exercise an Option after the expiration of
its term, nor shall it be construed to increase the number of shares as to which
any Option is exercisable from the amount exercisable on the date of termination
of the Optionee's employment or relationship as a consultant, advisor, director
or officer.
9. EXERCISE OF OPTIONS.
a) The Board (or Committee as the case may be), in granting Options shall have
discretion to determine the terms upon which the Options shall be exercisable,
subject to applicable provisions of this Plan. Once available for purchase,
unpurchased Plan Shares shall remain subject to purchase until the Option
expires or terminates in accordance with the terms herein. Unless otherwise
stipulated in an Option, an Option may be exercised in whole or in part, one or
more times, but no Option may be exercised for a fractional share. Resulting
fractions shall be rounded up or down as appropriate.
b) Options may be exercised solely by the Optionee or a permitted transferee
during his lifetime or by a spouse or former spouse pursuant to a qualified
domestic relations order, or after his death (with respect to the number of
shares which the Optionee could have purchased at the time of death) by the
person or persons entitled thereto under the decedent's Will or the laws of
descent and distribution.
c) The purchase price of the Plan Shares to which an Option is exercised shall
be paid in full at the time of exercise and no Plan Shares shall be issued until
full payment is made therefor. Payment shall be made either i) in cash,
represented by a bank or cashier's check, certified check or money order, or
made by bank wire transfer; ii) by delivering shares of the Company's Common
stock which have been beneficially owned by the Optionee, the Optionee's spouse
or both of them for a period of at least six (6) months prior to the time of
exercise (the "Delivered Stock"), in a number equal to the number of Plan Shares
being purchased upon exercise of the Options; iii) a combination of cash and
delivered stock; iv) by delivery of shares of corporate stock which are freely
tradeable without restriction and which are part of a class of securities which
has been listed for trading on the NASDAQ system or a national securities
exchange, with an aggregate fair market value equal to or greater than the
exercise price of the Plan Shares being purchased under the Option, (the "Other
Shares"), or v) a combination of cash, Delivered Stock and Other Shares. An
Option shall be deemed exercised when written notice thereof, accompanied by the
appropriate payment in full, is received by the Company. No holder of an Option
shall be or have any of the rights and privileges of a shareholder of the
Company, in respect of any Plan Shares purchased upon exercise of an Option
unless and until certificates representing such shares have been issued by the
Company to him or her. The Board (or Committee as the case may be), shall have
absolute discretion whether to accept Other Shares offered and in valuing such
shares.
10. OPTIONS IN SUBSTITUTION FOR OTHER OPTIONS.
The Board, (or Committee, as the case may be), may in its sole discretion, at
any time during the term of this Plan, grant new Options to an Employee under
this Plan or any other stock option plan of the Company, on the conditions that
such Employee shall surrender for cancellation one or more outstanding Options
which represent the right to purchase, (after giving effect to any previous
partial exercise thereof), a number of shares, in relation to the number of
shares to be covered by the new conditional grant hereunder. No such new
conditional grant shall become exercisable in the absence of such Employee's
consent to the condition, surrender and cancellation, as appropriate. New
conditional Options shall be treated in all respects under this Plan as newly
granted Options. Options may be granted under this Plan from time to time in
substitution for similar rights held by Employees of other corporations who are
about to become Employees of the Company or an Affiliate as a result of a merger
or consolidation of the employing corporation with the Company or an Affiliate,
or the acquisition by the Company or an Affiliate of the assets of the employing
corporation, or the acquisition by the Company or an Affiliate, of stock of the
employing corporation as the result of which such other corporation becomes an
Affiliate.
11. ASSIGNABILITY.
Except with the express written consent of the Board, an Option for Plan
Shares may not be assigned nor otherwise transferred except by Will or by
operation of law, pursuant to a qualified domestic relations order (as defined
in Rule 16B-3 of the Securities and Exchange Commission, or any successor rule),
or pursuant to Title 1 of the Employee Retirement Income Security Act of 1974,
as amended (ERISA) or rules thereunder. No Option shall be pledged or
hypothecated in any manner, whether by operation of law or otherwise, and no
Options shall be subject to execution, attachment or similar process . Plan
Shares themselves may be assigned only after such shares have been awarded,
issued and delivered, and only in accordance with law and any transfer
restrictions imposed at the time of Option.
12. REORGANIZATIONS AND RECAPITALIZATIONS OF THE COMPANY.
a) The existence of this Plan and Options granted hereunder shall not affect
in any way the right or power of the Company or its shareholders to make or
authorize any and all adjustments, recapitalizations, reorganizations, or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company or any issue of bonds, debentures or other
indebtedness, or any preferred or prior preference stocks senior to or affecting
the Company's Common stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale, exchange or transfer of all or any part
of its assets or business, or any other corporate act or proceeding, whether of
a similar character or otherwise.
b) The Plan Shares in respect to which Options may be granted hereunder are
shares of Common stock currently constituted. If, and whenever, prior to
delivery by the Company of all of the Plan Shares which are subject to Options
granted hereunder, the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, a stock split, combination of shares
(reverse stock split), or recapitalization or other increase or reduction in the
number of shares of the Common stock outstanding without receiving compensation
therefore in money, services or property, and other than as a dividend, then the
number of Plan Shares with respect to which Options granted hereunder may
thereafter be exercised shall i) in the event of an increase in the number of
outstanding shares, be proportionately increased and the cash consideration
payable per share shall be proportionately reduced; and ii) in the event of a
reduction in the number of outstanding shares, be proportionately reduced and
the cash consideration payable per share shall be proportionately increased
c) If the Company is reorganized, merged, consolidated or party to a plan of
exchange with another company pursuant to which shareholders of the Company
receive any shares of stock or other securities, in exchange for the Common
stock, there shall be substituted for the Plan Shares subject to the unexercised
portions of outstanding Options, an appropriate number of shares of each class
of stock or other securities which were distributed to the shareholders of the
Company in respect of the Common stock in the case of a reorganization, merger,
consolidation or plan of exchange; provided however, that all outstanding
Options may be cancelled by the Company as of the effective date of a
reorganization, merger, consolidation, plan of exchange, or any dissolution or
liquidation of the Company, by giving notice to each Optionee or his personal
representative of its intention to do so and by permitting the purchase of all
the Plan Shares subject to such outstanding Options for a period of not less
than thirty (30) days during the sixty (60) days immediately preceeding such
effective date.
d) Except as expressly provided above, the Company's issuance of shares of
capital stock of any class, or securities convertible into shares of capital
stock of any class, as dividends or for cash, property, labor or services,
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into or exchangeable for shares of capital stock or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to the
number of Plan Shares subject to Options granted hereunder or the purchase price
of such shares.
13. PURCHASE FOR INVESTMENT.
Unless the Plan Shares covered by this Plan have been registered under the Act
prior to issuance, each person exercising an Option under this Plan may be
required by the Company to give a representation in writing that he is acquiring
such shares for his or her own account for investment and not with a view to or
for sale in connection with the distribution of any part thereof.
14. LAWS AND REGULATIONS.
This Plan and the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver Plan Shares under such Options,
shall be subject to all applicable laws, rules and regulations and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
15. WITHHOLDING OF TAXES.
If subject to withholding tax, the Company may be required to collect
withholding taxes upon the exercise of an Option. The Company may require, as a
condition to the exercise of an Option that the Optionee concurrently pay to the
Company the entire amount or a portion of any taxes which the Company is
required to withhold by reason of such exercise, in such amount as the Company
in its discretion may determine. In lieu of part or all of any such payment, the
Optionee may elect to have the Company withhold from the Plan Shares to be
issued hereunder, a sufficient number of shares to satisfy withholding
obligations.
16. RESERVATION OF SHARES.
The stock subject to this Plan, shall, at all times, consist of authorized but
unissued Common shares, or previously issued shares of Common stock reacquired
or held by the Company or an Affiliate, equal to the maximum number of shares
the Company may be required to issue under this Plan, and such number of Common
shares is hereby reserved for such purpose. The Board, (or Committee, as the
case may be), may decrease the number of shares subject to this Plan, but an
increase in such number may only occur as a consequence of a stock split or
other reorganization or recapitalization affecting all Common shares.
17. TERMINATION OF THE PLAN.
The Board may suspend or terminate this Plan at any time or from time to time,
but no such action shall adversely affect the rights of a person granted an
Option under this Plan prior to that date. Otherwise, this Plan shall terminate
on the earlier of the date previously specified herein, or the date when all the
Plan shares have been issued.
18. AMENDMENT OF THE PLAN.
The Board may amend or alter this Plan at any time in such respects as it
shall deem advisable in order to conform to any change in any other applicable
law, or in order to comply with the provisions of any rule or regulation of the
Securities and Exchange Commission required to exempt this Plan or any Options
granted hereunder from the operation of Section 16(b) of the Securities Exchange
Act of 19934, as amended, (the "Exchange Act"), or in any other respect not
inconsistent with Section 16(b) of the Exchange Act; provided that no amendment
or alteration shall be made which would impair the rights of any participant
under any Option theretofore granted, without his consent (unless made solely to
conform such Option to and necessary because of changes in the foregoing laws,
rules or regulations).
19. DELIVERY OF A COPY OF THE PLAN.
A copy of this Plan shall be delivered to every person to whom an Option is
granted.
20. LIABILITY.
No member of the Board of Directors, the Committee (where applicable), or any
other Committee of Directors, Officers, Employees, or agents of the Company or
any Affiliate, shall be personally liable for any action, omission or
determination made in good faith in connection with this Plan.
21. MISCELLANEOUS PROVISIONS.
The place of administration of this Plan shall be wherever the Company's
principal executive offices are located and the validity, construction,
interpretation and effect of this Plan and of its rules, regulations and rights
relating to it, shall be determined solely in accordance with the laws of the
State of Nevada. Without amending this Plan, the Board, (or Committee as the
case may be), may issue Plan Shares to employees who are foreign nationals or
employed outside the United States or both, on such terms and conditions
different from those specified in this Plan but consistent with the purpose of
this Plan, as it deems necessary and desirable to create equitable
opportunities, given the difference in tax laws in such other countries. All
expenses of administering this Plan and issuing Plan Shares shall be borne by
the Company.
By Signature below, the undersigned officers of the Company hereby certify
that the foregoing is a true and correct copy of the Employee Stock Option
(1997) Plan of the Company.
Originally dated: WAVERIDER COMMUNICATIONS INC.
June 10th, 1997.
By: /s/ Bruce Sinclair
----------------------
Amendments dated: Authorized Officer
February 16th, 1998
April 11, 2000
By: /s/ Cameron A. Mingay
----------------------
Secretary
*Amendment dated February 16th, 1998 increased the total number of Plan Shares
subject to this Plan from 5,000,000 to 6,250,000.
*Amendment dated April 11th, 2000 extended the expiry date of the plan from June
10, 1999 to April 11th, 2010.
APPENDIX B
WAVERIDER COMMUNICATIONS INC.
EMPLOYEE stock option (2000) plan
SECTION 1. Purpose of the Plan
1.1. This Employee Stock Option (2000) Plan, (the "Plan") is
intended to further the growth and advance the best interests of WAVERIDER
COMMUNICATIONS INC. (the "Company"), and affiliated companies, by supporting and
increasing the Company's ability to attract and retain persons of experience and
ability, and whose services are considered valuable, to encourage the sense of
proprietorship in such persons, and to stimulate the active interest of such
persons in the development and success of the Company and affiliated companies.
SECTION 2. Definitions
2.1. Whenever used in this plan, except where the context
might clearly indicate otherwise, the following terms shall have the meanings
ascribed to them:
1) "Act" means the U.S. Securities Act of 1933, as amended.
2) "Affiliate" means any Parent or Subsidiary of the Company.
3) "Award" or "Grant" means any grant of an Option made under this Plan.
4) "Board" means the Board of Directors of the Company and where
applicable includes any Committee to whom any powers of the Board have
been delegated in accordance with this Plan.
5) "Code" means the Internal Revenue Code of 1986, as amended.
6) "Date of Grant" means the day the Board authorizes the grant of an
Option or such later date as maybe specified by the Board as the date a
particular grant will become effective.
7) "Employee" means and includes the following persons:
(i) executive officers, officers and directors, (including
advisory and other special directors), of the Company or an
Affiliate;
(ii) full-time and part-time employees of the Company or an
Affiliate;
(iii) any person or entity engaged by the Company or an Affiliate,
as a consultant, advisor or agent; and,
(iv) a lawyer, law firm, accountant, accountant firm, or other
professional or professional firm, engaged by the Company or
an Affiliate.
8) "Incentive Option" means any Option designated and qualified as an
"incentive stock option" within the meaning of Section 422 of the Code.
The Company intends that Incentive Options will qualify as "incentive
stock options" within the meaning of Section 422 of the Code, and the
terms of this Plan shall be interpreted in accordance with this
intention; the Company makes no warranty, however, as the qualification
of any Option as an Incentive Option.
9) "Nonqualified Option" means any Option that is not an Incentive Option.
10) "Optionee" means an Employee to whom an Option has been granted.
11) "Outside Director" means any director who (i) is not an employee of the
Company or of any "affiliated group," as such term is defined in
Section 1504(a) of the Code, which includes the Company (an
"Affiliate"), (ii) is not a former employee of the Company or any
Affiliate who is receiving compensation for prior services (other than
benefits under a tax-qualified retirement plan) during the Company's or
any Affiliate's taxable year, (iii) has not been an officer of the
Company or any Affiliate and (iv) does not receive remuneration from
the Company or any Affiliate, either directly or indirectly, in any
capacity other than as a director. "Outside Director" shall be
determined in accordance with Section 162(m) of the Code and the
Treasury regulations issued thereunder.
12) "Parent" means any corporation owning 50% or more of the total combined
voting stock of all classes of the Company or another company
qualifying as a Parent within this definition.
13) "Participant" means an Employee to whom an award of Stock has been
made.
14) "Plan Shares" means shares of Stock from time to time subject to this
Plan.
15) "Subsidiary" means a company more than 50% of whose total combined
capital stock of all classes is held by the Company or another company
qualifying as a Subsidiary within this definition.
SECTION 3. Term
3.1. This Plan shall be effective as of the 25th day of
February, 2000, and no Options shall be granted pursuant to this Plan after its
expiration. This Plan shall expire on the 25th day of February, 2010, unless
sooner terminated in accordance with the terms herein, with the exception of any
Options then outstanding which shall remain in effect until they have expired or
have been exercised.
SECTION 4. Administrator of the Plan
4.1. This Plan shall be administered by the Board; however,
the Board intends to delegate the administration to a Stock Incentive Plan
Committee (the "Committee") consisting of all members of the Compensation
Committee of the Company who qualify as Outside Directors. The Committee shall
have at least two (2) members at all times. It is the intention of the Company
that the Plan shall be administered to comply with the provisions of Rule 16b-3
under the Securities Exchange Act of 1934 (the "Exchange Act"), but the
authority and validity of any act taken or not taken by the Committee shall not
be affected if any person administering the Plan is not a Non-Employee Director
as defined in the Rule. Except as specifically reserved to the Board under the
terms of the Plan, the Committee shall have full and final authority to operate,
manage and administer the Plan on behalf of the Company.
4.2. If the administration of this Plan is delegated to the
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers possessed by the Board. The Board may abolish or change the
Committee at any time and revest in the Board the administration of the Plan.
4.3. A majority of the members of the Committee shall
constitute a quorum. All decisions and selections made by the Committee pursuant
to this Plan's provisions shall be made by a majority of its members. Any
decision reduced to writing and signed by all of the members of the Committee
shall be fully effective as if it had been made by a majority at a meeting duly
held.
4.4. Subject to the terms herein, "Administration" shall
include the full authority and sole and absolute discretion to designate Plan
participants, to determine the provisions, restrictions, conditions and terms of
the Options, (which need not be identical as to number of shares covered by any
Option, the method or exercise as related to exercise in whole or in
installments, or otherwise), including the Option price, and to interpret the
provisions and supervise the administration of this Plan. Administration shall
also include the authority to provide that certain Options not vest (that is,
become exercisable), until expiration of a certain period after issuance or
until other conditions are satisfied, so long as not contrary to this Plan.
4.5. In no event may any Plan participant be granted Awards (including Stock
Appreciation Rights) with respect to more than a million (1,000,000) shares of
Stock in any calendar year. The number of shares of Stock relating to an Award
granted to a Plan participant in a calendar year that is subsequently forfeited,
canceled or otherwise terminated shall continue to count toward the foregoing
limitation in such calendar year. In addition, if the exercise price of an Award
is subsequently reduced, the transaction shall be deemed a cancellation of the
original Award and the grant of a new one so that both transactions shall count
toward the maximum shares issuable in the calendar year of each respective
transaction.
4.6. Each Option shall be evidenced by an agreement in writing containing the
provisions, terms and conditions of each such Option granted consistent with the
provisions of this Plan.
SECTION 5. Stock Subject to the Plan
5.1. A total of 6,000,000 Plan Shares shall be subject to this
Plan. The Plan Shares shall consist of unissued shares of Common stock or
previously issued shares of Common stock reacquired and held by the Company or
any Affiliate and such number of Plan Shares shall be and are hereby reserved
for such purpose. Any Plan Shares which may remain unsold and which are not
subject to outstanding Options at the termination of this Plan shall cease to be
reserved for the purpose of this Plan, but until termination of this Plan, the
Company shall at all times reserve a sufficient number of shares to meet the
requirements of this Plan. Should any Option expire or be cancelled prior to its
exercise in full, the unexercised Plan Shares subject to such Option may again
be subjected to an Option under this Plan.
SECTION 6. Persons Eligible to Participate
6.1 Grants of Incentive Stock Options shall be made only to
persons who are, on the effective date of the grant, employees of the Company or
any Subsidiary. The Board, (or the Committee, as the case may be), shall have
the full power to designate from among the eligible parties, those to whom
Options may be granted. A person who has been granted an Option hereunder may be
granted an additional Option or Options. Persons eligible under this Plan
additionally may be granted one or more options under any other compensatory or
stock option plan or awarded shares under any other benefit plan of the Company.
No Option shall confer any right upon the Optionee with respect to the
continuation of his employment (or his position as an officer, director,
employee, agent or consultant), with the Company or any Affiliate, and shall not
interfere with the right of the Company or any Affiliate to terminate such
relationship(s) at any time in accordance with law and any other agreements in
force.
6.2 Annual Limit on Incentive Stock Options. To the extent
required for "incentive stock option" treatment under Section 422 of the Code,
the aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which Incentive Stock Options granted under this Plan and
any other plan of the Company or its Subsidiaries become exercisable for the
first time by an optionee during any calendar year shall not exceed $100,000.
Notwithstanding the foregoing, to the extent that the aggregate Fair Market
Value (determined as of the time of grant) of the Stock with respect to which
Incentive Stock Options granted under this Plan and any other plan of the
Company or its Subsidiaries become exercisable for the first time by an optionee
during any calendar year exceeds $100,000 said excess shall be treated as a
Non-Qualified Stock Option.
SECTION 7. Option Exercise Price
7.1 The exercise price per share under each Option shall be
determined by the Board, (or the Committee, as the case may be), at the time the
Option is granted and shall not be less than the par value of the Common Stock
obtainable upon the exercise thereof; provided, however, that the exercise price
of any Incentive Option shall not, unless otherwise permitted by the Code, be
less than the fair market value of the Common Stock on the date the Option is
granted (110% of the fair market value in the case of a Greater-Than-Ten-Percent
Stockholder). For these purposes, the "fair market value" of the Common Stock
shall equal (a) the closing price per share on the date of grant of the Option
as reported by a nationally recognized stock exchange, (b) if the Common Stock
is not listed on such an exchange, as reported by the National Market System or
another automated quotation system of the National Association of Securities
Dealers, Inc., or (c) if the Common Stock is not quoted on any such system, the
fair market value as determined by the Committee.
SECTION 8. Exercise Period; Vesting
(a) The Option exercise period shall be a term of not more than
ten years from the date of granting of each Option and shall
automatically terminate:
(i) immediately following termination of the Optionee's
employment for cause; or
(ii) 60 days following termination of the Optionee's
employment with the Company, without cause, for any
reason other than death, provided that if the
Optionee dies within such period, subclause (ii)
below shall apply; or
(iii) at the expiration of 12 months after the date of
death of the Optionee.
(b) "Employment with the Company" as used in this Plan shall
include:
(i) employment with, or
(ii) as to a consultant, advisor, or agent, engagement by,
or;
(iii) service as a director of
the Company or any Affiliate, in any such capacity, even if employment or
engagement in another capacity ceases, and Options granted under this Plan shall
not be affected by an Employee's transfer of employment within the Company or
between it and any Affiliate or between any Affiliates. An Optionee's employment
shall not be deemed interrupted or terminated by a bona fide leave of absence,
such as sabbatical leave, military or other services required by the Government,
or sick leave.
(c) The Board (or Committee, as the case may be), may
determine at the time of grant that the Option granted shall not vest
immediately, but over a specified time, in specified amounts, per time period,
or subject to other restrictions or limitations. Unless otherwise set forth in
the granting resolution, an Option shall vest immediately upon grant. If
employment ceases before an option vests, then vesting shall never take place
and unvested Options shall then be lost forever. Nothing contained in this
Section shall be construed to extend the term of any Option or to permit anyone
to exercise an Option after the expiration of its term, nor shall it be
construed to increase the number of shares as to which any Option is exercisable
from the amount exercisable on the date of termination of the Optionee's
employment or relationship as a consultant, advisor, director or officer.
SECTION 9. Exercise of Options
9.1. (a) The Board (or Committee as the case may be), in
granting Options shall have discretion to determine the terms upon which the
Options shall be exercisable, subject to applicable provisions of this Plan.
Once available for purchase, unpurchased Plan Shares shall remain subject to
purchase until the Option expires or terminates in accordance with the terms
herein. Unless otherwise stipulated in an Option, an option may be exercised in
whole or in part, one or more times, but no Option may be exercised for a
fractional share. Resulting fractions shall be rounded up or down as
appropriate.
(b) Options may be exercised solely by the Optionee or a
permitted transferee during his lifetime or by a spouse or former spouse
pursuant to a qualified domestic relations order, or after his death (with
respect to the number of shares which the Optionee could have purchased at the
time of death) by the person or persons entitled thereto under the decedent's
Will or the laws of descent and distribution.
(c) The purchase price of the Plan Shares to which an Option
is exercised shall be paid in full at the time of exercise and no Plan Shares
shall be issued until full payment is made therefor. Payment shall be made
either
(i) in cash, represented by a bank or cashier's check,
certified check or money order, or made by bank wire
transfer;
(ii) by delivering shares of the Company's Common stock
which have been beneficially owned by the Optionee,
the Optionee's spouse or both of them for a period of
at least six months prior to the time of exercise
(the "Delivered Stock"), in a number equal to the
number of Plan Shares being purchased upon exercise
of the options;
(iii) a combination of cash and delivered stock;
(iv) by delivery of shares of corporate stock which are
freely tradeable without restriction and which are
part of a class of securities which has been listed
for trading on the NASDAQ system or a national
securities exchange, with an aggregate fair market
value equal to or greater than the exercise price of
the Plan Shares being purchased under the Option,
(the "Other Shares"), or v) a combination of cash,
Delivered Stock and Other Shares. An Option shall be
deemed exercised when written notice thereof,
accompanied by the appropriate payment in full, is
received by the Company. No holder of an Option shall
be or have any of the rights and privileges of a
shareholder of the Company, in respect of any Plan
Shares purchased upon exercise of an Option unless
and until certificates representing such shares have
been issued by the Company to him or her. The Board
(or Committee as the case may be), shall have
absolute discretion whether to accept Other Shares
offered and in valuing such shares.
SECTION 10. Options in Substitution for Other Options
10.1. The Board (or Committee, as the case may be), may in its
sole discretion, at any time during the term of this Plan, grant new Options to
an Employee under this Plan or any other stock option plan of the Company, on
the conditions that such Employee shall surrender for cancellation one or more
outstanding Options which represent the right to purchase (after giving effect
to any previous partial exercise thereof), a number of shares, in relation to
the number of shares to be covered by the new conditional grant hereunder. No
such new conditional grant shall become exercisable in the absence of such
Employee's consent to the condition, surrender and cancellation, as appropriate.
New conditional Options shall be treated in all respects under this Plan as
newly granted Options. Options may be granted under this Plan from time to time
in substitution for similar rights held by Employees of other corporations who
are about to become Employees of the Company or an Affiliate as a result of a
merger or consolidation of the employing corporation with the Company or an
Affiliate, or the acquisition by the Company or an Affiliate of the assets of
the employing corporation, or the acquisition by the Company or an Affiliate, of
stock of the employing corporation as the result of which such other corporation
becomes an Affiliate.
SECTION 11. Assignability
11.1. Except with the express written consent of the Board, a
Nonqualified Option for Plan Shares may not be assigned nor otherwise
transferred except by Will or by operation of law, pursuant to a qualified
domestic relations order (as defined in Rule 16B-3 of the Securities and
Exchange Commission, or any successor rule), or pursuant to Title 1 of the
Employee Retirement Income Security Act of 1974, as amended (ERISA) or rules
thereunder. Except with the express written consent of the Board, no Option
shall be pledged or hypothecated in any manner, whether by operation of law or
otherwise, and no Options shall be subject to execution, attachment or similar
process. Plan Shares themselves may be assigned only after such shares have been
awarded, issued and delivered, and only in accordance with law and any transfer
restrictions imposed at the time of Option.
SECTION 12. Reorganizations and Recapitalizations of the Company
12.1. (a) The existence of this Plan and Options granted
hereunder shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any and all adjustments, recapitalizations,
reorganizations, or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company or any issue of bonds,
debentures or other indebtedness, or any preferred or prior preference stocks
senior to or affecting the Company's Common stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale, exchange or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) The Plan Shares in respect to which Options may be granted
hereunder are shares of Common stock currently constituted. If, and whenever,
prior to delivery by the Company of all of the Plan Shares which are subject to
Options granted hereunder, the Company shall effect a subdivision or
consolidation of shares or other capital readjustment, a stock split,
combination of shares (reverse stock split), or recapitalization or other
increase or-reduction in the number of shares of the Common stock outstanding
without receiving compensation therefore in money, services or property, and
other than as a dividend, then the number of Plan Shares with respect to which
options granted hereunder may thereafter be exercised shall i) in the event of
an increase in the number of outstanding shares, be proportionately increased
and the cash consideration payable per share shall be proportionately reduced;
and ii) in the event of a reduction in the number of outstanding shares, be
proportionately reduced and the cash consideration payable per share shall be
proportionately increased.
(c) If the Company is reorganized, merged, consolidated or
party to a plan of exchange with another company pursuant to which shareholders
of the Company receive any shares of stock or other securities, in exchange for
the Common stock, there shall be substituted for the Plan Shares subject to the
unexercised portions of outstanding Options, an appropriate number of shares of
each class of stock or other securities which were distributed to the
shareholders of the Company in respect of the Common stock in the case of a
reorganization, merger, consolidation or plan of exchange; provided however,
that all outstanding Options may be cancelled by the Company as of the effective
date of a reorganization, merger, consolidation, plan of exchange, or any
dissolution or liquidation of the Company, by giving notice to each Optionee or
his personal representative of its intention to do so and by permitting the
purchase of all the Plan Shares subject to such outstanding options for a period
of not less than thirty (30) days during the sixty (60) days immediately
preceding such effective date.
(d) Except as expressly provided above, the Company's issuance
of shares of capital stock of any class, or securities convertible into shares
of capital stock of any class, as dividends or for cash, property, labor or
services, either upon direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into or exchangeable for shares of capital stock or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to the number of Plan Shares subject to Options granted hereunder
or the purchase price of such shares.
SECTION13. Purchase for Investment
13.1. Unless the Plan Shares covered by this Plan have been registered
under the Act prior to issuance, each person exercising an Option under this
Plan may be required by the Company to give a representation in writing that he
is acquiring shares for his or her own account for investment and not with a
view to or for sale in connection with the distribution of any part thereof.
SECTION 14. Laws and Regulations
14.1. This Plan and the granting and exercise of Options hereunder, and
the obligation of the Company to sell and deliver Plan Shares under such
Options, shall be subject to all applicable laws, rules and regulations and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
SECTION 15. Withholding of Taxes
15.1. If subject to withholding tax, the Company may be required to
collect withholding taxes upon the exercise of an Option. The Company may
require, as a condition to the exercise of an option that the Optionee
concurrently pay to the Company the entire amount or a portion of any taxes
which the Company is required to withhold by reason of such exercise, in such
amount as the Company in its discretion may determine. In lieu of part or all of
any such payment, the Optionee may elect to have the Company withhold from the
Plan Shares to be issued hereunder, a sufficient number of shares to satisfy
withholding obligations.
SECTION 16. Reservation of Shares
16.1. The stock subject to this Plan, shall, at all times,
consist of authorized but unissued Common shares, or previously issued shares of
Common stock reacquired or held by the Company or an Affiliate, equal to the
maximum number of shares the Company may be required to issue under this Plan,
and such number of Common shares is hereby reserved for such purpose. The Board,
(or Committee, as the case may be), may decrease the number of shares subject to
this Plan, but an increase in such number may only occur as a consequence of a
stock split or other reorganization or recapitalization affecting all Common
shares.
SECTION 17. Termination of the Plan
17.1. The Board may suspend or terminate this Plan at any time
or from time to time, but no such action shall adversely affect the rights of a
person granted an Option under this Plan prior to that date. Otherwise, this
Plan shall terminate on the earlier of the date previously specified herein, or
the date when all the Plan shares have been issued.
SECTION 18. Amendment of the Plan
18.1. The Board may amend or alter this Plan at any time in such
respects as it shall deem advisable in order to conform to any change in any
other applicable law, or in order to comply with the provisions of any rule or
regulation of the Securities and Exchange Commission required to exempt this
Plan or any Options granted hereunder from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act"), or in any
other respect not inconsistent with Section 16(b) of the Exchange Act; provided
that no amendment or alteration shall be made which would impair the rights of
any participant under any Option theretofore granted, without his consent
(unless made solely to conform such Option to and necessary because of changes
in the foregoing laws, rules or regulations).
SECTION 19. Delivery of a Copy of the Plan
19.1. A copy of this Plan shall be delivered to every person to whom an
Option is granted.
SECTION 20. Liability
20.1. No member of the Board of Directors, the Committee (where
applicable), or any other committee of Directors, Officers, Employees, or agents
of the Company or any Affiliate, shall be personally liable for any action,
omission or determination made in good faith in connection with this Plan.
SECTION 21. Miscellaneous Provisions
21.1. The place of administration of this Plan shall be wherever the
Company's principal executive offices are located and the validity,
construction, interpretation and effect of this Plan and of its rules,
regulations and rights relating to it, shall be determined solely in accordance
with the laws of the State of Nevada. Without amending this Plan, the Board, (or
Committee as the case may be), may issue Plan Shares to employees who are
foreign nationals or employed outside the United States or both, on such terms
and conditions different from those specified in this Plan but consistent with
the purpose of this Plan, as it deems necessary and desirable to create
equitable opportunities, given the difference in tax laws in such other
countries. All expenses of administering this Plan and issuing Plan Shares shall
be borne by the Company.
By signature below, the undersigned officers of the Company hereby certify that
the foregoing is a true and correct copy of the Employee Stock Option (2000)
Plan of the Company.
Dated: February 25, 2000. WAVERIDER COMMUNICATIONS INC.
By: /s/ D. Bruce Sinclair
-----------------------
Name: D. Bruce Sinclair
Director, President & CEO
By: /s/ Cameron A. Mingay
-----------------------
Name: Cameron A. Mingay
Secretary
APPENDIX C
WaveRider Communications Inc.
Employee Stock Purchase (2000) PLAN
Adopted *****, 2000
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which employees of
WaveRider Communications Inc., a Nevada corporation (the "Company"), and its
Affiliates, as defined in subparagraph 1(b), which are designated as provided in
subparagraph 2(b), may be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock shall be
granted and the provisions of each offering of such rights (which
need not be identical).
(ii) To designate from time to time which Affiliates of the Company
shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights granted under it,
and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan, in a
manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests
of the Company.
(c) The Board may delegate administration of the Plan to a Committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
Subject to the provisions of paragraph 12 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to rights granted under
the Plan shall not exceed in the aggregate three million (3,000,000) shares of
the Company's common stock (the "Common Stock"). If any right granted under the
Plan shall for any reason terminate without having been exercised, the Common
Stock not purchased under such right shall again become available for the Plan.
4. GRANT OF RIGHTS; OFFERING.
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. If an employee has more than one right outstanding under the Plan,
unless he or she otherwise indicates in agreements or notices delivered
hereunder: (1) each agreement or notice delivered by that employee will be
deemed to apply to all of his or her rights under the Plan, and (2) a right with
a lower exercise price (or an earlier-granted right, if two rights have
identical exercise prices), will be exercised to the fullest possible extent
before a right with a higher exercise price (or a later-granted right, if two
rights have identical exercise prices) will be exercised. The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
Offering or otherwise) the substance of the provisions contained in paragraphs 5
through 8, inclusive.
5. ELIGIBILITY.
(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee, no employee of the Company or any Affiliate shall be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee's
customary employment with the Company or such Affiliate is at least twenty (20)
hours per week and at least five (5) months per calendar year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an eligible
employee or occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that Offering. Such right shall have
the same characteristics as any rights originally granted under that Offering,
as described herein, except that:
(i) the date on which such right is granted shall be the "Offering
Date" of such right for all purposes, including determination of
the exercise price of such right;
(ii) the Offering Period for such right shall begin on its Offering Date
and end coincident with the end of such Offering; and,
(iii)the Board or the Committee may provide that if such person first
becomes an eligible employee within a specified period of time
before the end of the Offering, he or she will not receive any
right under that Offering.
(c) No employees shall be eligible for the grant of any rights under
the Plan if, immediately after any such rights are granted, such employee owns
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company or of any Affiliate. For purposes
of this subparagraph 5(d), the rules of Section 424(d) of the Code shall apply
in determining the stock ownership of any employee, and stock which such
employee may purchase under all outstanding rights and options shall be treated
as stock owned by such employee.
(d) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock of
the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at the
time such rights are granted) for each calendar year in which such rights are
outstanding at any time.
6. RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase the number
of shares of Common Stock of the Company purchasable with up to fifteen percent
(15%) of such employee's Earnings (as defined in Section 7(a)) during the period
which begins on the Offering Date (or such later date as the Board determines
for a particular Offering) and ends on the date stated in the Offering, which
date shall be no more than twenty-seven (27) months after the Offering Date (the
"Offering Period"). In connection with each Offering made under this Plan, the
Board or the Committee shall specify a maximum number of shares which may be
purchased by any employee as well as a maximum aggregate number of shares which
may be purchased by all eligible employees pursuant to such Offering. In
addition, in connection with each such Offering, the Board or the Committee may
specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Exercise Date (as defined in the Offering) under
the Offering. If the aggregate purchase of shares upon exercise of rights
granted under the Offering would exceed any such maximum aggregate number, the
Board or the Committee shall make a pro rata allocation of the shares available
in as nearly a uniform manner as shall be practicable and as it shall deem to be
equitable.
(b) The purchase price of stock acquired pursuant to rights granted under
the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or
(ii) an amount equal to eight-five percent (85%) of the fair market
value of the stock on the Exercise Date.
7. PARTICIPATION; WITHDRAWAL; TERMINATION.
(a) An eligible employee may become a participant in an Offering by
delivering an agreement to the Company within the time specified in the
Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to fifteen percent (15%) of such employee's
Earnings during the Offering Period. "Earnings" is defined as base salary or
wages and including amounts elected to be deferred by the employee (that would
otherwise have been paid) under the Company's 401(k) Plan, and may include or
exclude bonuses, commissions, overtime pay, incentive pay, profit sharing, other
remuneration paid directly to the employee, the cost of employee benefits paid
for by the Company or an Affiliate, education or tuition reimbursements, imputed
income arising under any group insurance or benefit program, traveling expenses,
business and moving expense reimbursements, income received in connection with
stock options, contributions made by the Company or an Affiliate under any
employee benefit plan, and similar items of compensation as determined by the
Board or Committee and as set forth in the Offering. The payroll deductions made
for each participant shall be credited to an account for such participant under
the Plan and shall be deposited with the general funds of the Company. At any
time during the Offering a participant may terminate his or her payroll
deductions. A participant may reduce, increase or begin such payroll deductions
after the beginning of any Offering Period only as provided for in the Offering.
A participant may not make any additional payments into his or her account
unless expressly provided for in the Offering.
(b) If a participant terminates his or her payroll deductions, such
participant may withdraw from the Offering by delivering to the Company a notice
of withdrawal in such form as the Company provides. Such withdrawal may be
elected at any time prior to the end of the Offering Period. Upon such
withdrawal from the Offering by a participant, the Company shall distribute to
such participant all of his or her accumulated payroll deductions (reduced to
the extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering without interest, and such participant's
interest in that Offering shall be automatically terminated. A participant's
withdrawal from an Offering will have no effect upon such participant's
eligibility to participate in any other Offerings under the Plan but such
participant will be required to deliver a new participation agreement in order
to participate in other Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company or an Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee), without interest.
(d) Rights granted under the Plan shall not be transferable, and shall
be exercisable only by the person to whom such rights are granted.
8. EXERCISE.
(a) On each exercise date, as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions (without any
increase for interest) will be applied to the purchase of whole shares of stock
of the Company, up to the maximum number of shares permitted pursuant to the
terms of the Plan and the applicable Offering, at the purchase price specified
in the Offering. No fractional shares shall be issued upon the exercise of
rights granted under the Plan. The amount, if any, of accumulated payroll
deductions remaining in each participant's account after the purchase of shares
which is less than the amount required to purchase one share of stock on the
final Exercise Date of an Offering shall be held in each such participant's
account for the purchase of shares under the next Offering under the Plan,
unless such participant withdraws from such next Offering, as provided in
subparagraph 7(b), or is no longer eligible to be granted rights under the Plan,
as provided in paragraph 5, in which case such amount shall be distributed to
such participant after such Exercise Date, without interest. The amount, if any,
of accumulated payroll deductions remaining in any participant's account after
the purchase of shares which is equal to the amount required to purchase whole
shares of stock on the final Exercise Date of an Offering shall be distributed
in full to such participant after such Exercise Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended. If,
on an Exercise Date of any Offering hereunder, the Plan is not so registered, no
rights granted under the Plan or any Offering shall be exercised and all payroll
deductions accumulated and not previously applied to the purchase of Common
Stock shall be distributed to the participants, without interest.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
11. RIGHTS AS A SHAREHOLDER.
A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until certificates representing such shares shall have
been issued.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Board shall make
appropriate adjustments in the maximum number of shares subject to the Plan and
the number of shares and price per share of stock subject to outstanding rights.
(b) In the event of: (1) a dissolution or liquidation of the Company; (2) a
merger or consolidation in which the Company is not the surviving corporation;
(3) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise; or (4) any other capital reorganization
in which more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged, then, as determined by the Board in its sole discretion, any
surviving corporation shall assume outstanding rights or substitute similar
rights for those under the Plan, such rights shall continue in full force and
effect, or such rights shall be exercised immediately prior to such event.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the shareholders of
the Company within 12 months before or after the adoption of the amendment,
where the amendment will:
(i) Increase the number of shares reserved for rights under the Plan;
or
(ii) Modify the provisions as to eligibility for participation in the
Plan or modify the Plan in any other way to the extent such modification
requires shareholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code.
It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide eligible employees
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to employee stock
purchase plans and/or to bring the Plan and/or rights granted under it into
compliance therewith.
(b) Rights and obligations under any rights granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom such rights were granted.
14. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. No rights
may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any rights granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom such rights were granted.
APPENDIX D
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
WAVERIDER COMMUNICATIONS INC.
WaveRider Communications Inc., a corporation organized under the laws
of the State of Nevada, DOES HEREBY CERTIFY:
A. The shareholders of this corporation have, at an annual general meeting of
shareholders held Friday July 7, 2000, duly adopted an amendment to the Articles
of Incorporation of the corporation, consisting of amendment to the first
paragraph of Article FIFTH , to among other things, increase the number of
authorized shares of common stock. The amendment thus adopted is as follows:
* * *
"FIFTH, The aggregate number of shares of capital stock of all classes which the
Corporation shall have authority to issue is TWO HUNDRED AND FIVE MILLION
(205,000,000), of which TWO HUNDRED MILLION (200,000,000) shares having a par
value of $0.001 per share shall be of a class designated "Common Stock" (or
"Common Shares") and FIVE MILLION (5,000,000) shares having a par value of
$0.001 per share shall be of a class designated "Preferred Stock" (or "Preferred
Shares"). All shares of the Corporation shall be issued for such consideration
or considerations as the Board of Directors may from time to time determine. The
designations, voting powers, preferences, optional or other special rights and
qualifications, limitations, or restrictions of the above classes of stock shall
be as follows:
* * *
B. Other than the foregoing change to Article FIFTH, there are no amendments to
the Articles of Incorporation.
C. The foregoing Certificate of Amendment was duly approved by affirmative vote
of the holders of a majority of the Corporation's 61,395,030 shares of capital
stock outstanding and entitled to vote on the proposed amendment, and therefore
sufficient for approval, all in accordance with the General Corporation Law of
Nevada and the existing Certificate of Incorporation and bylaws of the
Corporation.
D. This amendment was duly adopted in accordance with the provisions of Section
78.390 of the General Corporation Law of Nevada.
IN WITNESS WHEREOF, the said WaveRider Communications Inc.. has caused
this certificate to be signed by its president and its secretary this ____ day
of July, 2000
WAVERIDER COMMUNICATIONS INC.
By: _____________________________
D. Bruce Sinclair, President
-----------------------------
Cameron A. Mingay, Secretary
FORM OF PROXY
WAVERIDER COMMUNICATIONS INC.
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints T. Scott Worthington and Cameron A. Mingay, and
each of them, as proxies, with full power of substitution, and hereby authorizes
them to represent and vote, as designated below, all shares of the Common Stock
of WaveRider Communications Inc., a Nevada corporation (the "Company"), held of
record by the undersigned on May 17, 2000 at the Annual Meeting of Shareholders
(the "Annual Meeting") to be held in the Princess Room of the Westin Prince
Hotel, 900 York Mills Road, Toronto, Ontario Canada M3B 3H2, on Friday, July 7,
2000, at 3:00 p.m., local time, or at any adjournment or postponement thereof,
upon the matters set forth below, all in accordance with and as more fully
described in the accompanying Notice of Annual Meeting of Shareholders and Proxy
Statement, receipt of which is hereby acknowledged.
1. ELECTION OF DIRECTORS, each to serve until the next annual Meeting of
shareholders of the Company or until their respective successors all have been
duly elected and qualified.
[ ] FOR all nominees listed below (except as marked to the contrary).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
(INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.)
GERRY CHASTELET JOHN CURRY CAMERON MINGAY
BRUCE SINCLAIR GUTHERIE STEWART DENNIS WING
2. PROPOSAL TO APPROVE the extension of the Employee Stock Option (1997) Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO APPROVE the Employee Stock Option (2000) Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL TO APPROVE the Employee Stock Purchase (2000) Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. PROPOSAL TO APPROVE an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized number of shares of Common Stock from
100,000,000 to 200,000,000
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED ABOVE; FOR THE APPROVAL OF
THE EXTENSION TO THE EMPLOYEE STOCK OPTION (1997) PLAN; FOR THE APPROVAL OF THE
EMPLOYEE STOCK OPTION (2000) PLAN; FOR THE APPROVAL OF THE EMPLOYEE STOCK
PURCHASE (2000) PLAN; AND, FOR THE APPROVAL OF AN AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK FROM 100,000,000 TO 200,000,000.
Please complete, sign and date this proxy where indicated and return it promptly
to:
Mr. T. Scott Worthington
WaveRider Communications Inc.
255 Consumers Road, Suite 500, Toronto, Ontario Canada M2J 1R4
Date: _____________, 2000 Signature: ______________________________________
Signature (if held jointly):_____________________
Name (Print) ________________________________________________________________
Name (Print - if held jointly) ________________________________________________
Registered Address: ___________________________________________________________
___________________________________________________________
(Please sign above exactly as the shares are issued. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)