Exhibit 10.3
PHOENIX INTERNATIONAL LIFE SCIENCES INC.
KEY EMPLOYEE SHARE OPTION PLAN
1. PURPOSE. The Phoenix International Life Sciences Inc. Key Employee
Share Option Plan (the "Plan") is intended to attract and retain highly
qualified directors and employees who will be motivated toward the success of
Phoenix International Life Sciences Inc. ("Phoenix") and to encourage share
ownership in Phoenix by such persons.
2. NUMBER OF COMMON SHARES TO BE OFFERED. The shares subject to the
options to be granted under this Plan shall be Common Shares of Phoenix ("Common
Shares"). The maximum number of Common Shares that may be issued under this Plan
shall not exceed 2,428,920 Common Shares. Upon the expiration, surrender or
termination, in whole or in part, of an unexercised option, the Common Shares
subject to such option shall be available for other options to be granted from
time to time under this Plan.
3. TERMS AND CONDITIONS OF OPTION
(a) EMPLOYEE ELIGIBLE TO RECEIVE OPTIONS. The individuals who shall be
eligible to receive options under this Plan shall be directors, senior
executives and key employees of Phoenix and its subsidiaries (the "Optionee") as
the Compensation Committee of the Board of Directors of Phoenix ("Committee")
from time to time shall determine. The maximum number of Common Shares that may
be optioned in favour of any single Optionee will not exceed 5% of the total
number of all of the outstanding Common Shares.
(b) OPTION PRICE. The price at which Common Shares may be purchased
under the Plan shall be the local currency equivalent on the date of grant of
the option (the "Grant Date") as determined by the Committee, provided however,
that such price may not be less than the average of the market price of the
Common Shares for the five-day period immediately preceding the Grant Date. For
the purpose hereof, "market price" shall mean:
(i) the average of the high and low prices of the Common Shares on
The Montreal Exchange and The Toronto Stock Exchange on a
trading day, and
(ii) if there was no trade for the Common Shares on one or both of
such exchanges on any particular relevant trading day, then
the market price will be the average of the bid and ask
quotations for the Common Shares on such relevant trading day
on such stock exchange.
(c) OPTION PERIOD. Each option for Common Shares granted under the Plan
(the "Option Shares") may be exercised at any time or from time to time as
follows:
(i) up to 4% of the Option Shares during the one year period
following the date which is 12 months after the date of grant
of such option,
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(ii) up to 16% of the Option Shares during the one year period
following the date which is 24 months after the date of grant
of such option,
(iii) up to 36% of the Option Shares during the one year period
following the date which is 36 months after the date of grant
of such option,
(iv) up to 64% of the Option Shares during the one year period
following the date which is 48 months after the date of grant
of such option, and
(v) up to 100% of the Option Shares following the date which is 60
months after the date of grant of such option.
On the date which occurs ten years following the date of grant of an option, the
option shall expire and terminate and be of no further force or effect
whatsoever.
(d) METHODS OF PAYMENT. The Optionee from time to time during the
option period may elect to purchase all or part of the Option Shares which the
Optionee is entitled to purchase by lump sum payment by delivering to Phoenix a
completed stock option purchase form. Such form shall specify the number of
Option Shares the Optionee desires to purchase and shall be accompanied by
payment in full of the purchase price for such Option Shares. Payment can be
made by cash, certified cheque, bank draft or money order payable to Phoenix.
(e) WITHHOLDING. No Option Shares shall be issued by Phoenix to an
Optionee until appropriate arrangements have been made for the payment of any
amounts which may be withheld or paid by Phoenix with respect thereto,
including, without limitation, withholding the transfer of a portion of the
shares of Phoenix's stock otherwise issuable in order to satisfy all or a
portion of the required withholdings or payments.
(f) TERMINATION OF EMPLOYMENT OF AN OPTIONEE. In the event that an
Optionee's employment with Phoenix or any subsidiary is terminated prior to the
date which is ten years following the date of grant of the Optionee's option for
any reason other than death, the Optionee's option may be exercised, at anytime
during the period which is no more than 60 days following the date the
Optionee's employment is terminated (but in no event after the date which is ten
years following the date of grant of such option), as to such of the Option
Shares in respect of which such option has not previously been exercised, but
only to the extent that the Optionee was entitled at his termination of
employment to purchase such Option Shares then exercisable pursuant to Section
3(c) above; provided, however, that in the event the employment of an Optionee
who has received an option under the Plan is terminated as set forth above, the
Compensation Committee of Phoenix may, in its own discretion, amend the terms of
any option to permit the Optionee to exercise such options as if such Optionee's
employment had not been terminated. For purposes of this Plan, the transfer of
an Optionee's employment to Phoenix or to any subsidiary of Phoenix shall not be
considered a termination of employment.
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(g) NON-EMPLOYEE DIRECTOR CEASING TO ACT AS DIRECTOR. In the event that
a non-employee director ceases to act as a director of Phoenix prior to the date
which is ten years following the date of grant of the director's options, such
non-employee director may exercise, at any time during the 180 days following
the announcement of the quarterly results next following the date such director
ceases to act as such and prior to the date which is ten years following the
date of grant of the director's options, any or all of his options then
exercisable pursuant to Section 3(c) above on the date he ceased to act as a
director and not previously exercised; those options which are not exercisable
pursuant to Section 3(c) above on or prior to the date such director ceases to
act as such shall terminate on such date.
(h) RIGHTS IN THE EVENT OF AN OPTIONEE'S DEATH. In the event of the
death of an Optionee while in the employment of Phoenix or any subsidiary on or
prior to the date which is ten years after the date of grant of the Optionee's
option, the portion of the Optionee's option which is not exercisable on the
date of such Optionee's death, if any, shall be accelerated so that the
Optionee's option may be exercised by the Optionee's legal personal
representative(s), at any time after the date of the Optionee's death up to and
including (but not after) a date which is 180 days following the date of the
Optionee's death (but in no event after the date which is ten years following
the date of grant of such option), as to any or all of the Option Shares in
respect of which such option was granted.
(i) NO EMPLOYMENT RIGHT. Nothing in this Plan shall confer upon the
Optionee the right to continue in the employ of Phoenix or interfere in any way
with the right of Phoenix to terminate the Optionee's employment at any time and
for any reason.
(j) NO SHAREHOLDER RIGHTS. An Optionee shall have no rights as a
shareholder with respect to any Option Shares covered by the Optionee's option
until the date of the valid issuance of such shares to the Optionee and only
after such shares are fully paid for. No adjustment will be made for dividends
or other distributions or rights for which the record date is prior to the date
of such issuance.
(k) TRANSFER AND ASSIGNMENT. The Optionee's rights with respect to
options granted under the Plan are not assignable or transferable by the
Optionee or subject to any other alienation, sale, hypothec or encumbrance by
such Optionee other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the U.S. Internal
Revenue Code. Therefore, the options are exercisable during the Optionee's
lifetime only by the Optionee. The obligations of each Optionee shall be binding
on his heirs, executors and administrators.
(l) COMPLIANCE WITH UNITED STATES SECURITIES AND OTHER LAWS. Option
Shares may be purchased only if Phoenix has obtained the necessary approvals to
sell its Common Shares to Optionees who are citizens of, or who are employed in,
the United States under applicable United States securities and other laws.
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4. ADJUSTMENTS. Upon the happening of any of the following events, an
Optionee's rights with respect to options granted under the Plan shall be
adjusted as hereinafter provided.
(a) In the event of any subdivision, redivision or change of the Common
Shares into a greater number of shares at any time, or in the case of the issue
of shares of Phoenix to the holders of its outstanding Common Shares by way of
stock dividend or stock dividends (other than an issue of shares to shareholders
pursuant to their exercise of options to receive dividends in the form of shares
of Phoenix in lieu of cash dividends declared payable in the ordinary course by
Phoenix on its Common Shares), the number of Common Shares deliverable by
Phoenix upon the exercise of an option shall be appropriately increased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, redivision or change.
(b) In the event of any consolidation or change of the Common Shares
into a lesser number of shares at any time, the number of Common Shares
deliverable by Phoenix upon the exercise of an option shall be appropriately
decreased proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such consolidation.
(c) In the event of any reclassification or reclassifications of the
Common Shares, an Optionee shall accept, at the time of purchase of Option
Shares, in lieu of the number of Common Shares in respect of which the option to
purchase is being exercised, the number of shares of Phoenix of the appropriate
class or classes as the Optionee would have been entitled as a result of such
reclassification or reclassifications had the option been exercised before such
reclassification or reclassifications.
(d) If Phoenix is to be amalgamated with or acquired by another entity
in a merger, a sale of all or substantially all of Phoenix's assets or otherwise
(an "Acquisition"), the Committee or the Board of Directors or any entity
assuming the obligations of Phoenix under the Plan (the "Successor Board")
shall, as to outstanding options, either (i) make appropriate provision for the
continuation of such options by substituting on an equitable basis for the
shares then subject to such options the consideration payable with respect to
the outstanding Common Shares in conjunction with the Acquisition; or (ii) upon
written notice to the Optionees, provide that all options must be exercised, to
the extent then exercisable, within a specified number of days of the date of
such notice, at the end of which period the options shall terminate; or (iii)
terminate all options in exchange for a cash payment equal to the excess of the
fair market value of the shares subject to such options (to the extent then
exercisable) over the exercise price thereof.
(e) In the event of the proposed dissolution or liquidation of Phoenix,
each option will terminate immediately prior to the consummation of such
proposed action or at such other time and subject to such other conditions as
shall be determined by the Committee.
(f) Except as expressly provided herein, no issuance by Phoenix of
shares of any class, or securities convertible into shares of any class, shall
affect, and no adjustment by reason thereof
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shall be made with respect to, the number or price of shares subject to options.
No adjustments shall be made for dividends paid in cash or in property other
than securities of Phoenix.
(g) No fractional shares shall be issued under the Plan and the
Optionee shall receive from Phoenix cash in lieu of such fractional shares.
(h) Upon the happening of any of the foregoing events described in
subparagraphs (a), (b), (c) or (d) above, the aggregate number of shares set
forth in paragraph 2 that are subject to options which previously have been or
subsequently may be granted under the Plan shall also be appropriately adjusted
to reflect the events described in such subparagraphs. The Committee or the
Successor Board shall determine the specific adjustments to be made under this
paragraph 4 and, subject to paragraph 5, its determination shall be conclusive.
5. ADMINISTRATION. This Plan shall be administered by the Compensation
Committee. Members of the Committee shall be appointed by the Board of Directors
of Phoenix and shall serve as such at the pleasure of the Board of Directors.
The Committee shall have full power and authority to designate those directors,
senior executive officers and key employees of Phoenix and its subsidiaries who
are to be granted options under this Plan, the number of options to be granted
and otherwise to interpret and construe the terms and conditions of the options
granted under this Plan. Any determination by the Committee shall be final and
conclusive unless otherwise determined by the Board of Directors of Phoenix, and
in any such event such determination of the Board of Directors shall be final
and conclusive. The day-to-day administration of this Plan may be delegated to
such officers and employees of Phoenix or of any subsidiary of Phoenix as the
Committee in its sole discretion shall determine.
6. AMENDMENT AND DISCONTINUANCE. The Board of Directors of Phoenix
shall have the right to amend, modify or terminate this Plan or any option
granted under this Plan at any time without notice; provided, however, that any
such amendment or modification of this Plan which increases the total number of
Common Shares which are to be offered under this Plan, as so amended or
modified, shall be approved by the shareholders of Phoenix. Any amendment or
modification of this Plan or of any option granted under this Plan, will be
subject to the prior approval of The Montreal Exchange, The Toronto Stock
Exchange and any regulatory body requiring similar approval.
7. QUEBEC STOCK SAVINGS PLAN. According to the current provisions of
the TAXATION ACT (Quebec) (the "Act"), Option Shares issued to an Optionee under
the Plan will qualify for inclusion in a Quebec Stock Savings Plan ("QSSP"),
subject to certain conditions set forth in the Act. An Optionee who is a Quebec
resident on the last day of a year will be entitled to deduct in the calculation
of his taxable income the adjusted cost of Option Shares purchased in the year
under the Plan and included in a QSSP no later than January 31 of the following
year. The adjusted cost will be determined in accordance with the rates of
deduction in effect at the time an option is exercised, based however on the
characteristics of Phoenix and of the Option Shares at the date of the
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exemption from filing a prospectus. The deduction allowed for an individual
regarding all shares included in a QSSP during a given taxation year, including
those purchased under the Plan, may not exceed 10% of his total income for the
year. IT IS POSSIBLE THAT UPON EXERCISE OF OPTIONS, THE OPTION SHARES THEN
ISSUED BY PHOENIX MAY NO LONGER BE ELIGIBLE FOR INCLUSION IN A QSSP BY REASON OF
AMENDMENTS WHICH MAY HAVE BEEN MADE TO THE ACT SUBSEQUENT TO THE DATE HEREOF.
ACCORDINGLY, THERE IS NO ASSURANCE THAT AT THE TIME OF EXERCISE OF OPTIONS, THE
OPTION SHARES WILL CONTINUE TO BE ELIGIBLE FOR INCLUSION IN A QSSP. OPTIONEES
WHO ARE RESIDENT IN QUEBEC SHOULD CONSULT WITH THEIR TAX ADVISORS WITH REGARD TO
QUESTIONS CONCERNING THE QSSP.
8. TERMINATION OF THE PLAN. The Plan shall remain effective until
terminated by the Board of Directors of Phoenix provided that the termination of
the Plan shall have no effect on outstanding options, which shall remain in
accordance with their terms and conditions and the terms and conditions of the
Plan.
9. NO CORPORATE ACTION RESTRICTION. Nothing contained in the Plan shall
be construed to prevent or preclude Phoenix from taking any corporate action
which is deemed by Phoenix to be appropriate or in its best interest, whether or
not such action would have an adverse effect on the Plan or any option award
made under the Plan. No Optionee, beneficiary or other person shall have any
claim against Phoenix as a result of such corporate action.
10. GOVERNING LAW. The Plan and the options granted under the Plan
shall be construed in accordance with and be governed by the laws of the
Province of Quebec and the laws of Canada applicable therein.
Dated this 24th day of October, 1994, amended to increase the total number of
Common Shares which are to be offered under this Plan on December 18, 1997.