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:
[ ] Preliminary Proxy Statement
[ ] Confidential, Use of the Commission Only (as permitted by
Rule 14aB6(e)(2))Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ~240.14aB11(c) or ~ 240.14aB12
WAVERIDER COMMUNICATIONS INC.
------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------------------------------------------
(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 0B11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction: 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 0B11(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:
- ------------------------------------------------------------------------------
1
WAVERIDER COMMUNICATIONS INC.
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 28, 1999
----------------------------------------
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 British Columbia
Room of the Royal York Hotel, 100 Front Street, Toronto, Ontario Canada M5J 1E3,
on Friday, May 28, 1999, at 2:00 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 5 members of the Board of Directors, each to serve until the
next annual meeting of shareholders and until his respective successor
has been duly elected and qualified.
(2) To ratify the appointment of PricewaterhouseCoopers LLP as independent
public accountants of the Company for the year ending December 31,
1999.
(3) To approve the Company's 1999 Incentive and Nonqualified Stock Option Plan.
(4) To consider such other matters as may properly come before the meeting.
The Board of Directors has fixed the close of business on April 22,
1999 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
/s/ D. Bruce Sinclair
----------------------
D. Bruce Sinclair
President and Chief Executive Officer
DATED: April 26, 1999
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.
WAVERIDER COMMUNICATIONS INC.
235 Yorkland Blvd, Suite 1101
Toronto, Ontario, Canada, M2J 4Y8
2
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PROXY STATEMENT
---------------------
FOR ANNUAL MEETING OF SHAREHOLDERS
May 29, 1999
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 Friday, May 29, 1999, 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 April 22, 1999.
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 April 22,
1999 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 41,705,481 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 5
director nominees; FOR the ratification of the appointment by the Board of
PricewaterhouseCoopers LLP, as independent public accountants of the Company for
the year ending December 31, 1999; FOR the approval of the 1999 incentive and
nonqualified stock option plan; 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.
3
In the election of directors, shareholders will not be allowed to
cumulate their votes. The 5 nominees receiving the highest number of votes will
be elected. The ratification of the selection of an independent public
accountant and 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, the
ratification of the selection of the independent public accountants or any other
matter presented for approval by the shareholders.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
At the Annual Meeting, 5 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, 52, was appointed a director of the Company in April
1999. Mr. Chastelet is, since December 1998, the President, Chief Executive
Officer and a Director 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.
William E. Krebs, 52, has been a director of the Company since December
1997 and has been Secretary of the Company from that time until the 1999 Annual
General Meeting when he will resign as Secretary in favor of Mr. Cameron Mingay.
Mr. Krebs is a Chartered Accountant by profession and practiced as such until
1978. He is an Officer and Director of Acrex Ventures Ltd., serving in these
roles since January 1995. He formerly served as Director and President of
TelcoPlus Enterprises Ltd. and its wholly owned subsidiary, Intertec
Telecommunications Inc. until 1995. He further served as a Director and
President of CT&T Telecommunications Inc. until 1995. All of the companies named
were in the telecommunications field and none was an U.S. reporting company.
William H. Laird, 51, has been a director of the Company since December
1997. Mr. Laird is a contractor by occupation and has been President of W.H.
Laird Construction Ltd. since December 1974. He has also been a Director and
Secretary of Tech-Crete Processors Ltd. Since December 1982 and Piccadilly Place
Mall Inc. since November 1991. These companies are in the areas of
manufacturing, property and retail trade. He was a director of TelcoPlus
Enterprises Ltd. until 1994 and CT&T Telecommunications Inc. until 1995, both of
which companies were in the telecommunications field. None of the companies
named was an U.S. reporting company.
Cameron A. Mingay, 47, was appointed a director of the Company in April
1999 and upon election to the Board of Directors will become Secretary of the
Company. Mr. Mingay is a Partner at Smith Lyons practising in the areas of
securities, corporate commercial, hi-tech and natural resource law. Mr. Mingay
is on the Board of Directors for Image Processing Systems Inc. and Matachewan
Consolidated Mines, Limited. Mr. Mingay completed his undergraduate work at the
University of Wisconsin and York University and his law degree at Queen's
University.
4
D. Bruce Sinclair, 48, 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 is an experienced management
professional with 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.
Board and Committee Meetings; Legal Proceedings
During the year ended December 31, 1998, the Board of Directors held 7
meetings. Each member attended at least 75% of all board meetings.
The Board of Directors is directly responsible for determining and
approving the compensation of the Company's officers, reviewing matters
pertaining to the compensation of the Company's employees, and administering the
Employee Stock Option (1997) Plan (the "Option Plan") and Employee Stock
Compensation (1997) Plan (the "Stock Compensation Plan"). The Board is also
directly responsible for determining the adequacy of the Company's internal
accounting and financial controls, reviewing the auditor reports and
recommendations and interviewing and selecting the Company's independent public
accountants. The Board of Directors does not have Compensation, Audit or
Nominating Committees or any committees that perform similar functions.
EXECUTIVE OFFICERS
In addition to D. Bruce Sinclair and Cameron A. Mingay, certain
information is furnished with respect to the following executive officers of the
Company:
T. Scott Worthington, 44, is Vice President, Business and Finance of
the Company and the Company's chief financial officer. Mr. Worthington is a
Chartered Accountant. From 1988 to 1996, he worked at Dell Computer Corporation,
in Canada, where he held numerous positions including CFO of the Canadian
subsidiary. Subsequent to leaving Dell, he was a financial and business
consultant until his joining the Company in January 1998.
Charles W. Brown, 43, is 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, 52, 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).
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table describes the compensation earned in fiscal 1998 by
the Chief Executive Officer of the Company and the Vice President, Marketing. No
other executive officer received compensation in excess of $100,000 in 1998. The
two other directors of the Company received $30,333 each as directors of the
Company and a Company related to Mr. Krebs received compensation of $55,000 for
services rendered in support of two of the private placements made in 1998.
5
SUMMARY COMPENSATION TABLE 1998
Annual Compensation
Name and -------------------------
Principal Position Year Salary Bonus Stock Options
- ------------------ ------------------------- ------- -------------
Bruce Sinclair (1) 1998 182,002 155,038
Pres./CEO/Director 1997 10,500 1,000,000
Charles Brown 1998 101,112 39,045 465,000
Vice Pres., Marketing
(1) Mr. Sinclair's compensation for the fiscal year ended December 31, 1998 was
based on an annualized salary and bonus of Can.$500,000 payable Can.$270,000 in
cash for the year with the balance payable in shares out of the Employee Stock
Compensation (1997) Plan. The amount shown as salary above is the amount paid in
cash for the period. The bonus portion, Can. $230,000, was accrued and included
in accounts payable at December 31, 1998. In 1997, a total of 800,000 Series B
Preferred Shares were transferred to Mr. Sinclair by way of an additional
incentive together with the private option to purchase up to 1,000,000
additional common shares. Both the Series B Preferred shares and the private
option to purchase common shares were provided by existing shareholders and were
not payable by or otherwise a liability of the Company.
Option Grants in Last Fiscal Year
The following table summarizes option grants during 1998 to the
executive officers named in the Summary Compensation Table (the "Named Executive
Officers")
Individual Grants
---------------------------------------------------------------
Percent of
Total
Number of Options Potential Realizable Value
Securities Granted to Exercise Market at Assumed Annual Rates
Underlying Employees or Base Price on of Stock Price Appreciation
Options in Fiscal Price Date of Expiration for Option Term
Granted Year ($/sh) Grant Date 0% 5% 10%
----------- ----------- --------- --------- ---------- --- ------- -------
Charles Brown 240,000 8.5 1.07 1.07 2/16/01 0 12,840 25,680
225,000 8.0 1.68 1.68 8/28/01 0 18,900 37,800
Mr. Brown did not exercise any options during fiscal 1998.
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 Chief Executive Officer on December 31, 1998. The Chief Executive
Officer of the Company did not exercise options during the year ended December
31, 1998.
Number of Value of Unexercised
Unexercised Options In-the-Money Options at
at FY-End(#) FY-End($)(1)
------------------- -----------------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
------------------- -----------------------
D. Bruce Sinclair 0/1,000,000 $0/$2,060,000
(1) Calculated based on the difference between the exercise price and the price
of a share of the Company's Common Stock on December 31, 1998. The Closing sale
price of the Common Stock was $2.62 on December 31, 1998.
6
Director's Compensation
To date, the Company's non-employee directors have not been paid for
meetings of the Board of Directors attended in person or by telephone. During
the year ended December 31, 1998, William Krebs and William Laird were each paid
$30,333 for management and consulting services rendered to the Company.
Effective the election of the Board of Directors in 1999, the
non-employee directors will be paid $1,000 plus expenses for each meeting
attended during the year.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 22, 1999, 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 of
Name and Address of Beneficial Owners Beneficial Ownership (1) Class(2)
- ---------------------------------------------- ------------------------ -------------
Bruce Sinclair (3) 3,000,000 7.19%
32 Steeplechase Drive, Aurora, Ontario, Canada
William E. Krebs (4) 2,479,500 5.90%
300 Stewart Road, Salt Spring Island, BC Canada
William Laird (4) 1,588,500 3.78%
All Officers and Directors
as a Group (6 Persons) (5) 7,988,000 18.48%
__________________
(1) Includes shares subject to an Escrow Agreement, dated March 16, 1998.
(2) Based on 41,705,481 shares of Common Stock outstanding as of April 22, 1999.
(3) Includes shares beneficially owned through a purchase option agreement
with certain other shareholders of the Company that are exercisable
within 60 days. Does not including employee stock options not
exercisable within 60 days - See Table of Year end Option Values
(4) Includes options to acquire 300,000 shares of common stock presently
exercisable or exercisable within 60 days of the proxy date.
(5) Includes options to acquire 1,520,000 shares of common stock presently
exercisable or exercisable within 60 days of the proxy date.
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. 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 late filings.
7
PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
Ratification of the appointment by the Board of Directors of the
independent public accountants for the Company for the year ending December 31,
1999 is to be voted upon at the Annual Meeting. The Board of Directors
recommends shareholder ratification of the appointment of PricewaterhouseCoopers
LLP, whose appointment has been approved, subject to shareholder approval, by
the Board of Directors. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting to answer any questions
shareholders may have and will be given the opportunity to make a statement if
they desire to do so.
The affirmative vote of a majority of the votes cast on this proposal
shall constitute ratification of the appointment of PricewaterhouseCoopers LLP
The Board of Directors recommends a vote FOR the ratification of the
appointment of PricewaterhouseCoopers LLP as independent public accountants of
the Company for the year ending December 31, 1999.
PROPOSAL NO. 3 -- PROPOSED 1999 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
The Board of Directors of the Corporation has adopted the 1999
Incentive and Nonqualified Stock Option Plan (the "Stock Option Plan") subject
to approval by the stockholders. Under the Internal Revenue Code (the "Code"),
stockholder approval of the Stock Option Plan is necessary for stock options
relating to the shares issuable under the 1999 Plan to qualify as incentive
stock options under Section 422 of the Code ("Incentive Options"). 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 Option Plan as adopted by the Board of Directors is set forth in
EXHIBIT A to this Proxy Statement.
A total of three million (3,000,000) 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.
8
Options are non-transferable except by will or by the laws of descent
or distribution. Options generally may not be exercised (i) sixty days after the
optionee ceases to be employed by the Company, (ii) ninety days following an
optionee's retirement from the Company in good standing by reason of disability
or death, and (iii) one hundred and eighty days following an optionee's death or
permanent disability.
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 1999 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN.
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 T. Scott Worthington, Vice President, Finance and Administration
of the Company, at the Company's executive offices, 235 Yorkland Blvd., Suite
1101, Toronto, Ontario, Canada M2J 4Y8, in writing on or before December 31,
1999. 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.
Additional Information
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998 is attached to this Proxy Statement. The exhibits to that
Report will also be provided upon request and payment of copying charges.
Requests should be directed to T. Scott Worthington, WaveRider Communications
Inc., 235 Yorkland Blvd., Suite 1101, Toronto, Ontario, Canada M2J 4Y8.
9
APPENDIX A
WaveRider Communications Inc.
1999 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
SECTION 1. Purposes of Plan; Definitions
1.1. General Purposes. WaveRider Communications Inc., a Nevada corporation (the
"Company"), desires to afford certain executives, key employees and directors
of, and certain other individuals providing services to, the Company or its
subsidiary companies an opportunity to initiate or increase their proprietary
interests in the Company, and thus to create in such persons an increased
interest in and greater concern for the long-term welfare of the Company. The
Company, by granting under this 1999 Incentive and Nonqualified Stock Option
Plan (this "Plan") stock options to acquire shares of common stock of the
Company (an "Option"), seeks to retain the services of persons now holding key
positions with the Company and to secure the services of other persons capable
of filling key positions with the Company or its subsidiary companies.
1.2. Definitions. For purposes of this Plan, the following terms shall have
the indicated meanings:
"Board" means the Board of Directors of the Company.
"Cause" shall mean, with respect to any Option holder, a determination
by the Company (including the Board) or any WaveRider Company that the Holder's
employment or other relationship with the Company or such WaveRider Company
should be terminated as a result of (i) a material breach by the Option holder
of any agreement to which the Option holder and the Company (or such WaveRider
Company) are parties, (ii) any act (other than retirement) or omission to act by
the Option holder that may have a material and adverse effect on the business of
the Company, such WaveRider Company or any other WaveRider Company or on the
Option holder's ability to perform services for the Company or such WaveRider
Company, including, without limitation, the proven or admitted commission of any
crime (other than an ordinary traffic violation), or (iii) any material
misconduct or material neglect of duties by the Option holder in connection with
the business or affairs of the Company or such WaveRider Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor code thereto, together with related rules, regulations and
interpretations; and any reference herein to a particular Section of the Code
shall include any successor provision of the Code.
"Committee" has the meaning set forth in Section 2.1 hereof.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company, subject to adjustment pursuant to Section 8 hereof.
"Greater-Than-Ten-Percent Stockholder" means any individual who, at the
time he or she is granted an Option, owns or, as a result of the attribution
rules of Section 424(d) of the Code, is deemed to own more than ten percent of
the total combined voting power of all classes of stock of the Company or any
WaveRider Company.
"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.
"Nonqualified Option" means any Option that is not an Incentive Option.
"Non-Employee Director" means any director who is not also an employee
of the Company, its parent or any subsidiary.
10
"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.
"WaveRider Companies" means a parent corporation, if any, and each
subsidiary corporation of the Company, as those terms are defined in Section 424
of the Code.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor act thereto, together with related rules, regulations and
interpretations.
SECTION 2. Administration
2.1. Committee. This Plan shall be administered by a committee (the
"Committee") consisting of at least two Outside Directors. 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, and subject to Section 4.2 hereof, the Committee
shall have full and final authority to operate, manage and administer the Plan
on behalf of the Company. Any or all powers and functions of the Committee may
at any time and from time to time be exercised by the Board, and any reference
in this Plan to the Committee shall be deemed to refer to the Board to the
extent the Board is exercising any of the powers and functions of the Committee.
2.2. Powers of the Committee. Subject to the terms and conditions of
this Plan and except with respect to Options granted pursuant to Section 4.2,
the Committee shall have the power:
(a) to determine from time to time the individuals to whom Options
shall be granted and the terms, conditions, restrictions and provisions (which
need not be identical) of each of those Options, including, with respect to each
Option, the time at which the Option shall be granted, the number of shares of
Common Stock that shall be subject to the Option, the exercise price for each
share of Common Stock subject to the Option (which price shall be subject to the
requirements of Section 6.3), the period during which the Option shall be
exercisable (whether in whole or in part) and the time or times when each Option
shall become exercisable;
(b) to modify or amend, in its sole discretion, conditionally or
unconditionally, any outstanding Option granted under this Plan, including a
reduction of the exercise price, an acceleration of the vesting schedule, or an
extension of the expiration date;
(c) to accelerate, in its sole discretion, an Option holder's right to
exercise his or her Option in whole or in part, conditionally or
unconditionally, at any time, including upon consummation of the initial public
offering of Common Stock;
(d) generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the Company with
respect to this Plan;
(e) the power to delegate to other persons the responsibility for
performing ministerial acts in furtherance of the Plan's purpose;
(f) the power to engage the services of persons or organizations in
furtherance of the Plan's purpose, including but not limited to banks, insurance
companies, brokerage firms and consultants; and
(g) to construe and interpret this Plan and Options granted hereunder
and to establish, amend, and revoke rules and regulations for the
interpretation, management and administration of this Plan. In this connection,
the Committee may supply any omission, reconcile any inconsistency, or correct
any other defect in this Plan or in any Option agreement in the manner and to
the extent it shall deem necessary or expedient to make this Plan fully
effective.
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All decisions and determinations by the Committee in the exercise of the
foregoing powers shall be final and binding upon the Company and Option holders.
No member or former member of the Committee or the Board shall be liable for any
action or determination made in good faith with respect to this Plan or any
Option.
2.3. Appointment and Proceedings of Committee. The Board may from time
to time appoint members of the Committee in substitution for or in addition to
members previously appointed, and subject to Section 2.1 hereof, may fill
vacancies, however caused, in the Committee. The Committee shall select one of
its members as its chairman and shall hold its meetings at such times and places
as it shall deem advisable. A majority of its members shall constitute a quorum,
and all actions of the Committee shall require the affirmative vote of a
majority of its members. Any action may be taken by a written instrument signed
by all of the members, and any action so taken shall be as fully effective as if
it had been taken by a vote of a majority of the members at a meeting duly
called and held.
SECTION 3. Stock
3.1. Stock to be Issued. The stock subject to Options granted under
this Plan may be shares of authorized and issued Common Stock, shares of Common
Stock held in treasury or both, at the discretion of the Company. The total
number of shares of Common Stock that may be issued pursuant to Options granted
under the Plan shall not exceed 3,000,000 in the aggregate; provided, however,
that the class and aggregate number of shares subject to Options shall be
subject to adjustment as provided in Section 8 hereof.
3.2. Termination of Option. If any Option granted under this Plan
expires or otherwise terminates without having been exercised in whole or in
part, the shares of Common Stock previously subject to the unexercised portion
of that Option may be the subject of new Options under this Plan.
3.3. No Fractional Shares. In no event shall any Option be exercisable
for a fraction of a share of Common Stock.
SECTION 4. Eligibility
4.1. Individuals Eligible. Incentive Options may be granted only to
officers and other employees of the Company and WaveRider Companies, including
members of the Board who are also employees of the Company or any WaveRider
Company. Nonqualified Options may be granted to officers or other employees of
the Company or any WaveRider Company, including members of the Board or the
board of directors of any WaveRider Company, and to consultants and other
individuals who render services to the Company or any WaveRider Company
regardless of whether they are employees. Nonqualified Options may be granted to
Non- Employee Directors only as provided in Section 4.2 hereof.
4.2. Non-Discretionary Option Grants to Non-Employee Directors. Any
other provision of this Plan to the contrary notwithstanding, Non-Employee
Directors shall not be eligible to receive Options under the Plan except
pursuant to this Section 4.2. Each Non-Employee Director who is elected by the
stockholders of the Company to the Board initially on or subsequent to the date
on which this Plan is approved by stockholders pursuant to Section 13 shall
automatically be granted, upon such election, a Nonqualified Option to purchase
50,000 shares of Common Stock. Each Non-Employee Director who is reelected by
the stockholder of the Company to the Board on or subsequent to said date of
stockholder approval of this Plan still automatically be granted, upon each such
reelection, a Nonqualified Option to purchase 50,000 shares of Common Stock.
Options shall be granted pursuant to this Section 4.2 only to persons who are
serving as Non-Employee Directors on the Grant Date. Any share grant referred to
in this Section shall be subject to adjustment in accordance with Section 8
hereof. The purchase price per share of the Common Stock under each Option
granted pursuant to this Section 4.2 shall be equal to the fair market value of
the Common Stock, determined in accordance with Section 6.3 hereof, on the date
the Option is granted. Each such Option shall expire on the tenth anniversary of
the date of grant.
4.3. Greater-Than-Ten-Percent Stockholders. Except as may otherwise be
permitted by the Code or other applicable law or regulation, no Incentive Option
shall be granted to a Greater-Than-Ten-Percent Stockholder unless (a) the
exercise price per share under the Incentive Option is not less than 110% of the
fair market value of the Common Stock at the time at which the Incentive Option
is granted and (ii) the Incentive Option is not exercisable to any extent after
the fifth anniversary of the date on which the Incentive Option is granted.
12
4.4. Maximum Aggregate Fair Market Value. The aggregate fair market
value (determined at the time the Incentive Option is granted) of the Common
Stock with respect to which Incentive Options are exercisable for the first time
by any Option holder during any calendar year under this Plan and any other
plans of the Company or WaveRider Companies for the issuance of incentive stock
options (within the meaning of Section 422 of the Code) shall not exceed
$100,000 or such greater amount as may from time to time be permitted with
respect to incentive stock options by the Code or any other applicable law or
regulation. To the extent any Option exceeds the foregoing limitation, it shall
be deemed a Nonqualified Option.
4.5. Limitation on Grants. In no event may any individual be granted Options
with respect to more than 1,000,000 shares of Common Stock in any calendar year.
The number of shares of Common Stock relating to an Option grant in a calendar
year that is subsequently forfeited, cancelled or otherwise terminated shall
continue to count toward the foregoing limitation in such calendar year. In
addition, if the exercise price of an Option is subsequently reduced, the
transaction shall be deemed a cancellation of the original Option 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.
SECTION 5. Termination of Employment or Death of Option Holder
5.1. Termination of Employment. Except as otherwise expressly provided
herein, an Option shall terminate on the earliest of:
(a) the date of expiration thereof;
(b) the date of cancellation thereof pursuant to Section 8.3(c);
(c) sixty days after the date on which the Option holder's employment
with, or directorship or other services to, the Company and all WaveRider
Companies are terminated other than for Cause; provided, however, that if,
before the date of expiration of the Option, the Option holder shall be retired
in good standing from the employ of the Company for reasons of age under the
then established rules of the Company, the Option shall terminate on the earlier
of such date of expiration or 90 days after the date of such retirement. In the
event of such retirement, the Option holder shall have the right prior to the
termination of such Option to exercise the Option to the extent to which the
Option holder was entitled to exercise such Option immediately prior to such
retirement; and
(d) the date on which the Option holder's employment with, or
directorship or other services to, the Company and all WaveRider Companies is
terminated voluntarily by the Option holder or by the Company or a WaveRider
Company for Cause;
provided, however, that Nonqualified Options need not, unless the Committee
determines otherwise, be subject to the provisions set forth in clauses (c) and
(d) above nor to Section 5.2 below. Whether authorized leave of absence, or
absence on military or government service, shall constitute termination of an
employment relationship between the Company and the Option holder shall be
determined by the Committee at the commencement thereof, and the Committee shall
promptly notify the Option holder of such determination. Options shall not be
affected by any Option holder's change of employment within the Company and any
WaveRider Companies or change in the identity of the Company or WaveRider
Company to whom directorship or other services are provided, so long as the
Option holder continues to be an employee of, or to provide such services to,
the Company or any WaveRider Company.
5.2. Death or Permanent Disability of Option Holder. In the event of
the death or permanent and total disability of an Option holder prior to
termination of the Option holder's services to the Company and prior to the date
of expiration of such Option, such Option shall terminate on the earliest of its
date of expiration, its date of cancellation pursuant to Section 8.3(c), and the
date that is 180 days after the date of such death or disability. After the
death of the Option holder, his or her executors, administrators or any
individual or individuals to whom the Option may be transferred by will or by
the laws of descent and distribution, shall have the right, at any time prior to
the date of such termination, to exercise the Option to the extent the Option
holder was entitled to exercise the Option immediately prior to his or her
death. "Permanent and total disability" for these purposes shall be determined
in accordance with Section 22(e)(3) of the Code and the rules, regulations and
interpretations issued thereunder.
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SECTION 6. Terms of Option Agreements
Each Option shall be evidenced by an agreement (an "Option Agreement")
in writing that shall contain such terms, conditions, restrictions and other
provisions as the Committee shall from time to time deem appropriate. Any
additional provisions shall not, however, be inconsistent with any other term or
condition of this Plan and shall not cause any Incentive Option to fail to
qualify as an incentive stock option within the meaning of Section 422 of the
Code. Option agreements need not be identical, but each Option agreement shall,
by appropriate language, include the substance of the following provisions:
6.1. Expiration of Option. Subject to Section 4.2 hereof,
notwithstanding any other provision of this Plan or of the Option agreement,
such Option shall expire on the date specified in the Option agreement, which
date shall not, in the case of an Incentive Option, be later than the tenth
anniversary (the fifth anniversary in the case of a Greater-Than-Ten-Percent
Stockholder) of the date on which the Option was granted, or as specified in
Section 5 hereof.
6.2. Exercise. Subject to Section 4.2 hereof, each Option may be
exercised so long as it is valid and outstanding, from time to time in part or
as a whole, subject to any limitations with respect to the number of shares for
which the Option may be exercised at a particular time and to such other
conditions as the Committee in its discretion may specify upon granting the
Option.
6.3. Exercise Price. Subject to Section 4.2 hereof, the exercise price
per share under each Option shall be determined by the Committee 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.
6.4. Transferability of Options and Option Shares. No Option shall be
transferable by its holder or by operation of law, otherwise than by will or
under the laws of descent and distribution and shall not be subject to
execution, attachment or similar process. Each Option shall, during the Option
holder's lifetime, be exercisable only by the Option holder. The Committee may
in its discretion provide upon the grant of any Option that the shares of Common
Stock purchasable upon exercise of such Option shall be subject to such
restrictions on transferability as the Committee may determine. Upon any attempt
to transfer any Option under the Plan or any right or privilege conferred
hereby, contrary to the provisions of the Plan, or (if the Committee shall so
determine) upon any levy or any attachment or similar process upon the rights
and privileges conferred hereby, such Option shall thereupon terminate and
become null and void.
6.5. Rights of Option Holders. No Option holder or other person shall,
by virtue of the granting of an Option, be deemed for any purpose to be the
owner of any shares of Common Stock subject to such Option or to be entitled to
the rights or privileges of a holder of such shares unless and until the Option
shall have been exercised pursuant to the terms thereof with respect to such
shares and the Company shall have issued and delivered the shares to the Option
holder.
6.6. Repurchase Right. The Committee may in its discretion provide upon
the grant of any Option that the Company shall have an option to repurchase,
upon terms and conditions determined by the Committee, all or any number of
shares purchased upon exercise of such Option. The repurchase price per share
payable by the Company shall be such amount or be determined by such formula as
is fixed by the Committee at the time of grant of the Option for the shares
subject to repurchase. In the event the Committee grants an Option subject to
such a repurchase option, then so long as the shares purchased upon exercise of
that Option remain subject to the repurchase option, each certificate
representing those shares shall bear a legend satisfactory to counsel for the
Company referring to the Company's repurchase option.
14
6.7. "Lockup" Agreement. The Committee may in its discretion specify
upon granting an Option that the Option holder shall agree for a period of time
(not to exceed 180 days) from the effective date of any registration of
securities of the Company (upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities), not to sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any shares issued pursuant to the exercise of such Option, without
the prior written consent of the Company or such underwriters, as the case may
be.
SECTION 7. Method of Exercise; Payment of Exercise Price
7.1. Method of Exercise. Any Option may be exercised by the Option
holder by delivering to the Company, on any business day prior to the
termination of the Option, a written notice specifying the number of shares of
Common Stock the Option holder then desires to purchase and the address to which
the certificates for such shares are to be mailed, accompanied by payment of the
exercise price for such shares.
7.2. Payment of Exercise Price. Payment for the shares of Common Stock
purchased upon exercise of an Option shall be made by:
(a) cash in an amount, or a check, bank draft or postal or express
money order payable in an amount, equal to the aggregate exercise price of the
shares being purchased;
(b) with the consent of the Committee, shares of Common Stock having
a fair market value (as defined for purposes of Section 6.3 hereof) equal to
such aggregate exercise price;
(c) with the consent of the Committee, by reducing the number of
Option shares otherwise issuable to the Option holder upon exercise of the
Option by a number of shares having a fair market value (as defined for purposes
of Section 6.3 hereof) equal to such aggregate exercise price;
(d) with the consent of the Committee, a personal recourse note
issued by the Option holder to the Company in a principal amount equal to such
aggregate exercise price and with such other terms, including interest rate and
maturity, as the Committee may determine in its discretion; provided, however,
that the interest rate borne by such note shall not be less than the lowest
applicable federal rate, as defined in Section 1274(d) of the Code;
(e) with the consent of the Committee, such other consideration that
is acceptable to the Committee and that has a fair market value, as determined
by the Committee, equal to such aggregate exercise price, including any
broker-directed cashless exercise/resale procedure adopted by the Committee; or
(f) with the consent of the Committee, any combination of the
foregoing.
As promptly as practicable after receipt of notice and payment pursuant to
Section 7.1 hereof and any documents required pursuant to Sections 9.2 and 9.3
hereof, the Company shall deliver to the Option holder a certificate registered
in the name of the Option holder and representing the number of shares with
respect to which such Option has been so exercised; provided, however, that if
any law or regulation or order of the Securities and Exchange Commission or any
other body having jurisdiction in the premises shall require the Company or the
Option holder to take any action in connection with the shares then being
purchased, the date for the delivery of the certificates for such shares shall
be extended for the period necessary to take and complete such action. Delivery
by the Company of the certificate for such shares shall be deemed effected for
all purposes when the Company or a stock transfer agent of the Company shall
have deposited such certificate in the United States mail, addressed to the
Option holder, at the address specified in the notice delivered pursuant to
Section 7.1 hereof.
15
SECTION 8. Changes in Company's Capital Structure
8.1. Rights of Company. The existence of outstanding Options shall not
affect in any way the right or power of the Company or its stockholders to enter
into, make or authorize, without limitation, (a) any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, (b) any merger or consolidation of the Company, (c)
any issue of Common Stock or of bonds, debentures, preferred or prior preference
stock or other capital stock ahead of or affecting the Common Stock or the
rights thereof, (d) a dissolution or liquidation of the Company, (e) any sale or
transfer of all or any part of the assets or business of the Company, or (f) any
other corporate act or proceeding, whether of a similar character or otherwise.
8.2. Recapitalization, Stock Splits and Dividends. If the Company shall
effect any subdivision or consolidation of shares of its stock or other capital
readjustment, the payment of a stock dividend, or any other increase or
reduction of the number of shares of its stock outstanding, in any such case
without receiving compensation therefor in money, services or property, then
(a) the number, class and price per share of stock subject to each
outstanding Option shall be appropriately adjusted in such a manner as to
entitle an Option holder to receive upon exercise of an Option, for the same
aggregate cash consideration, the same total number and class of shares as he or
she would have received as a result of the event requiring the adjustment had
the Option holder exercised the Option in full immediately prior to such event,
and
(b) the number and class of shares with respect to which Options may
be granted under this Plan shall be adjusted by substituting for the total
number of shares of Common Stock then reserved for issuance under this Plan that
number and class of shares of stock that the owner of an equal number of
outstanding shares of Common Stock would own as the result of the event
requiring the adjustment.
8.3. Mergers, Sales, etc. If the Company shall be a party to a
reorganization or merger with one or more other corporations (whether or not the
Company is the surviving or resulting corporation), shall consolidate with or
into one or more other corporations, shall be liquidated, or shall sell or
otherwise dispose of substantially all of its assets to another corporation
(each a "Transaction"), then:
(a) subject to the provisions of clauses (b) and (c) below, after the
effective date of the Transaction, each holder of an outstanding Option shall be
entitled, upon exercise of such Option and at no additional cost, to receive
shares of Common Stock or, if applicable, shares of such other stock or other
securities, cash or property as the holders of shares of Common Stock received
pursuant to the terms of the Transaction;
(b) the Committee may accelerate the time for exercise of all
outstanding Options to a date prior to the effective date of the Transaction, as
specified by the Committee; or
(c) all outstanding Options may be canceled by the Committee as of
the effective date of the Transaction, provided that (i) notice of such
cancellation shall have been given to each Option holder and (ii) each Option
holder shall have the right to exercise such Option to the extent that the same
is then exercisable or, if the Committee shall have accelerated the time for
exercise of all outstanding Options, in full during the thirty-day period
preceding the effective date of the Transaction.
8.4. Adjustments to Common Stock Subject to Options. Except as
hereinbefore expressly provided, the issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or property, or for 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 such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock then subject to
outstanding Options.
8.5. Miscellaneous. Adjustments under this Section 8 shall be
determined by the Committee, and such determinations shall be conclusive. The
Committee shall have the discretion and power in any such event to determine and
to make effective provision for acceleration of the time or times at which any
Option or portion thereof shall become exercisable. No fractional shares of
Common Stock shall be issued under this Plan on account of any adjustment
specified above.
16
SECTION 9. General Restrictions
9.1. Granting of Options. No Option may be granted under this Plan
after the tenth anniversary of the effective date hereof.
9.2. Investment Representations. The Company may require any individual
to whom an Option is granted, as a condition of exercising such Option, to give
written assurances in substance and form satisfactory to the Company to the
effect that such individual is acquiring the Common Stock subject to the Option
for his or her own account for investment and not with a view to the resale or
distribution thereof, and to such other effects as the Company deems necessary
or advisable in order to comply with the Securities Act and applicable state
securities laws.
9.3. Compliance with Securities Laws. The Company shall not be required
to sell or issue any shares under any Option if the sale or issuance of such
shares would constitute a violation by the Option holder or the Company of any
provision of any law or regulation of any governmental authority, including the
Securities Act. In addition, the Company shall not be required to sell or issue
shares upon the exercise of any Option unless the Committee has received
evidence satisfactory to it that the holder of such Option will not transfer
such shares except pursuant to a registration statement in effect under the
Securities Act or unless an opinion of counsel satisfactory to the Company has
been received by the Company to the effect that such registration is not
required. Any determination in this connection by the Committee shall be final,
binding and conclusive. In the event the shares issuable on exercise of an
Option are not registered under the Securities Act, the Company may imprint upon
any certificate representing shares so issued the following legend or any other
legend that counsel for the Company considers necessary or advisable to comply
with the Securities Act and applicable state securities laws:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws
of any state and may not be sold or transferred except upon such
registration or upon receipt by the issuer of an opinion of counsel
satisfactory to the issuer, in form and substance satisfactory to the
issuer, that registration is not required for such sale or transfer."
The Company may, but shall not be obligated to, register the shares of stock
covered by any Options pursuant to the Securities Act. In the event such shares
are so registered, the Company may remove any legend on certificates
representing such shares. The Company shall not be obligated to take any
affirmative action in order to cause the exercise of an Option or the issuance
of shares pursuant thereto to comply with any law or regulation of any
governmental authority.
9.4. Other Certificate Legends. The Company may endorse such other
legends upon the certificates for shares of Common Stock issued upon exercise of
an Option and may issue such "stop transfer" instructions to the transfer agent
for the Common Stock as the Committee may, in its discretion, determine to be
necessary or appropriate (a) to implement the provisions of this Plan and such
Option with respect to such shares and (b) to permit the Company to determine
the occurrence of a disqualifying disposition (as defined in Section 421(b) of
the Code) of shares issued upon exercise of Incentive Options.
9.5. Employment Obligation. The granting of any Option shall not impose
upon the Company or any WaveRider Company any obligation to employ or continue
to employ any Option holder. The right of the Company and each WaveRider Company
to terminate the employment of any officer or other employee thereof shall not
be diminished or affected by reason of the fact that an Option has been granted
to such officer or other employee.
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SECTION 10. Withholding Taxes
10.1. Rights of Company. The Company may require an employee exercising
a Nonqualified Option, or disposing of shares of Common Stock acquired pursuant
to the exercise of an Incentive Option in a disqualifying disposition (as
defined in Section 421(b) of the Code), to reimburse the Company or WaveRider
Company that employs such employee for any taxes required by any government to
be withheld or otherwise deducted and paid by such employer corporation in
respect of the issuance or disposition of such shares. In lieu thereof, the
employer corporation shall have the right to withhold the amount of such taxes
from any other sums due or to become due from such corporation to the employee
upon such terms and conditions as the Committee may prescribe. The employer
corporation may, in its discretion, hold the stock certificate to which such
employee is otherwise entitled upon the exercise of an Option as security for
the payment of any such withholding tax liability, until cash sufficient to pay
that liability has been received or accumulated.
10.2. Payment in Shares. An employee may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from shares of Common Stock to be issued pursuant to the
exercise of a Nonqualified Option a number of shares with an aggregate fair
market value (as defined in Section 6.3 hereof determined as of the date the
withholding is effected) that would satisfy the withholding amount due with
respect to such exercise, or (ii) transferring to the Company shares of Common
Stock owned by the employee with an aggregate fair market value (as defined in
Section 6.3 hereof determined as of the date the withholding is effected) that
would satisfy the withholding amount due.
10.3. Notice of Disqualifying Disposition. Each holder of an Incentive
Option shall agree to notify the Company in writing immediately after making a
disqualifying disposition (as defined in Section 421(b) of the Code) of any
Common Stock purchased upon exercise of the Incentive Option.
SECTION 11. Amendment or Termination of Plan
11.1. Amendment. The Board may terminate the Plan and may amend the
Plan at any time, and from time to time, subject to the limitation that, except
as provided in Section 8 hereof, no amendment shall be effective unless approved
by the stockholders of the Company in accordance with applicable law and
regulations, at an annual or special meeting held within 12 months before or
after the date of adoption of such amendment, in any instance in which such
amendment would: (i) increase the number of shares of Common Stock that may be
issued under, or as to which Options may be granted pursuant to, the Plan; or
(ii) change in substance the provisions of Section 4 hereof relating to
eligibility to participate in the Plan. Without limiting the generality of the
foregoing, the Board is expressly authorized to amend the Plan, at any time and
from time to time, to confirm it to the provisions of Rule 16b-3 (or successor
rule) under the Exchange Act, as that Rule may be amended from time to time.
Except as provided in Section 8 hereof, the rights and obligations
under any Option granted before amendment of this Plan or any unexercised
portion of such Option shall not be adversely affected by amendment of this Plan
or such Option without the consent of the holder of such Option.
11.2. Termination. This Plan shall terminate as of the tenth
anniversary of its effective date. The Board may terminate this Plan at any
earlier time for any or no reason. No Option may be granted after the Plan has
been terminated. No Option granted while this Plan is in effect shall be altered
or impaired by termination of this Plan, except upon the consent of the holder
of such Option. The power of the Committee to construe and interpret this Plan
and the Options granted prior to the termination of this Plan shall continue
after such termination.
SECTION 12. Nonexclusivity of Plan
Neither the adoption of this Plan by the Board nor the submission of
this Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including the granting of stock options
otherwise than under this Plan, and such arrangements may be either applicable
generally or only in specific cases.
18
The Committee's determinations under the Plan need not be uniform and
may be made by it selectively among persons who receive, or are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee shall
be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non- uniform and selective Plan agreements, as
to (i) the persons to receive awards under the Plan, (ii) the terms and
provisions of awards under the Plan, (iii) the exercise by the Committee of its
discretion in respect of the exercise of options pursuant to the terms of the
Plan, and (iv) the treatment of leaves of absence pursuant to Section 5.1
hereof.
SECTION 13. Effective Date
This Plan shall become effective upon its adoption by the Board,
provided that the stockholders of the Company shall have approved this Plan
within twelve months prior to or following the adoption of this Plan by the
Board. Subject to the foregoing, Options may be granted under the Plan at any
time subsequent to its effective date; provided, however, that (a) no such
Option shall be exercised or exercisable unless the stockholders of the Company
shall have approved the Plan within twelve months prior to or following the
adoption of this Plan by the Board, and (b) all Options issued prior to the date
of such stockholders' approval shall contain a reference to such condition.
SECTION 14. Provisions of General Application
14.1. Severability. The invalidity or unenforceability of any provision
of this Plan shall not affect the validity or enforceability of any other
provision of this Plan, each of which shall remain in full force and effect.
14.2. Construction. The headings in this Plan are included for
convenience only and shall not in any way effect the meaning or interpretation
of this Plan. Any term defined in the singular shall include the plural, and
vice versa. The words "herein," "hereof" and "hereunder" refer to this Plan as a
whole and not to any particular part of this Plan. The word "including" as used
herein shall not be construed so as to exclude any other thing not referred to
or described.
14.3. Further Assurances. The Company and any holder of an Option shall
from time to time execute and deliver any and all further instruments, documents
and agreements and do such other and further acts and things as may be required
or useful to carry out the intent and purpose of this Plan and such Option and
to assure to the Company and such Option holder the benefits contemplated by
this Plan; provided, however, that neither the Company nor any Option holder
shall in any event be required to take any action inconsistent with the
provisions of this Plan.
14.4. Governing Law. This Plan and each Option shall be governed by the
laws of the State of Nevada.
* * * * *
19
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 William E. Krebs, 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 April 22, 1999 at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held in the British Columbia Room of
the Royal York Hotel, 100 Front Street, Toronto, Ontario Canada M5J 1E3, on
Friday, May 28, 1999, at 2:00 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 WILLIAM E. KREBS WILLIAM H. LAIRD
CAMERON A MINGAY D. BRUCE SINCLAIR
2. PROPOSAL TO RATIFY the appointment of PricewaterhouseCoopers LLP as the
independent public accountants of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO APPROVE the 1999 Incentive and Nonqualified Stock Option Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. 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
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY; AND, FOR THE APPROVAL OF THE 1999 INCENTIVE AND
NONQUALIFIED STOCK OPTION PLAN.
Please complete, sign and date this proxy where indicated and
return it promptly to:
Mr. T. Scott Worthington
WaveRider Communications Inc.
235 Yorkland Blvd., Suite 1101
Toronto, Ontario Canada M2J 4Y8
Date: _____________, 1999 Signature: _____________________________
Name (Print) ______________________________________________________
Signature (if held jointly):_________________________________________
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.)