Exhibit 4.1
SIDEWARE SYSTEMS INC.
STOCK OPTION PLAN (2001)
1. INTERPRETATION
1.1 Defined Terms - For the purposes of this Plan, the following
terms have the following meanings:
(a) "Affiliate" means a Parent Corporation or a Subsidiary
Corporation of a corporation;
(b) "Board" means the Board of Directors of the Company;
(c) "CDNX" means the Canadian Venture Exchange;
(d) "Committee" means a committee of the Board appointed in
accordance with this Plan, or if no such committee is appointed,
the Board itself;
(e) "Company" means Sideware Systems Inc.;
(f) "Date of Grant" means the date on which an Option is granted;
(g) "Disability" means a medically determinable physical or mental
impairment expected to result in death or to last for a
continuous period of not less than six months, and which causes
an individual to be unable to engage in any substantial gainful
activity;
(h) "Effective Date" means the effective date of this Plan, which is
December 6, 2000;
(i) "Fair Market Value" means:
(i) where the Shares are listed for trading on the CDNX only,
the minimum price at which options may be granted under CDNX
rules, regulations and policies; or
(ii) where the Shares are listed for trading on the TSE, whether
or not interlisted with any other stock exchange or an over
the counter market, the closing price of the Shares on the
TSE on the last trading day prior to the Date of Grant; or
(iii) where the Shares are listed for trading on a stock exchange
or over the counter market other than the CDNX or the TSE,
the value which is determined by the Committee in accordance
with the rules, regulations and policies, if any, of any such
stock exchange or over the counter market; or
(iv) where the Shares are not listed for trading on a stock
exchange or over the counter market, the value which is
determined by the Committee to be the fair value of the
Shares as of the day immediately prior to the Date of Grant,
taking into consideration all factors that the Committee
deems appropriate, including, without limitation, recent sale
and offer prices of the Shares in private transactions
negotiated at arm's length;
(j) "Guardian" means the guardian, if any, appointed for an Optionee;
(k) "Option" means an option to purchase Shares granted pursuant to
the terms of this Plan;
(l) "Option Agreement" means a written agreement between the Company
and an Optionee specifying the terms of the Option being granted
to the Optionee under the Plan;
(m) "Option Price" means the price at which a Share may be purchased
by an Optionee under an Option;
(n) "Optionee" means a person to whom an Option has been granted;
(o) "Parent Corporation" means any corporation in an unbroken chain
of corporations ending with the Company if, at the Date of Grant,
each corporation, other than the Company, owns stock possessing
50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain;
(p) "Plan" means this stock option plan of the Company;
(q) "Subsidiary Corporation" means any corporation in an unbroken
chain of corporations beginning with the Company if, at the Date
of Grant, each of the corporations, other than the last
corporation, owns stock possessing 50 percent or more of the
total combined voting power of all classes of stock in one of the
other corporations in such chain;
(r) "Shares" means common shares without par value in the capital of
the Company;
(s) "Term" means the period of time during which an Option is
exercisable; and
(t) "TSE" means the Toronto Stock Exchange.
2. STATEMENT OF PURPOSE
2.1 Principal Purposes - The principal purposes of the Plan are to:
(a) promote a proprietary interest in the Company among the
directors, officers, employees and consultants of the Company and
its Affiliates;
(b) retain and attract the qualified directors, officers, employees
and consultants the Company and its Affiliates require;
(c) provide a long-term incentive element in overall compensation;
and
(d) promote the long-term profitability of the Company and its
Affiliates.
3. ADMINISTRATION
3.1 Board or Committee - The Plan shall be administered by the Board
or, if the Board so designates, by a Committee. Once appointed, the
Committee shall continue to serve until otherwise directed by the
Board. From time to time, the Board may increase the size of the
Committee and appoint additional members, remove members (with or
without cause) and appoint new members in their place, fill vacancies
however caused, or remove all members of the Committee and thereafter
directly administer the Plan.
3.2 Quorum and Voting - A majority of the members of the Committee
shall constitute a quorum, and, subject to the limitations in this
Section 3.2, all actions of the Committee shall require the affirmative
vote of members who constitute a majority of such quorum. Members of
the Committee may vote on any matters affecting the administration of
the Plan or the grant of Options pursuant to the Plan, except that no
such member shall act upon the granting of an Option to himself (but
any such member may be counted in determining the existence of a quorum
at any meeting of the Committee during which action is taken with
respect to the granting of Options to him).
3.3 Powers of Committee - The Committee will have the power and
authority to do the following:
(a) administer the Plan in accordance with its express terms,
including the authority to grant Options;
(b) determine all questions arising in connection with the
administration, interpretation, and application of the Plan,
including all questions relating to the value of the Shares;
(c) correct any defect, supply any information, or reconcile any
inconsistency in the Plan in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purposes
of the Plan;
(d) prescribe, amend, and rescind rules and regulations relating to
the administration of the Plan;
(e) determine the duration and purposes of leaves of absence from
employment which may be granted to Optionees without constituting
a termination of employment for purposes of the Plan; and
(f) do the following with respect to the granting of Options:
(i) determine when Options shall be granted,
(ii) determine the employees, officers, directors, or consultants
of the Company and of its Affiliates to whom Options shall
be granted, based on the eligibility criteria set out in
this Plan,
(iii) determine the number of Shares subject to each Option,
(iv) determine the Option Price of each Option,
(v) determine the vesting schedule, if any, upon which the
exercise of an Option is contingent, including, without
limitation, discretion to:
(A) allow full and immediate vesting upon the grant of
such Option,
(B) permit partial vesting in stated percentage amounts
based on the length of the Term of such Option, or
(C) permit full vesting after a stated period of time has
passed from the Date of Grant;
(vi) determine the terms and provisions of the Option Agreement
to be entered into with any Optionee (which need not be
identical with the terms of any other Option Agreement),
(vii) amend the terms and provisions of Option Agreements,
provided the Committee obtains:
(A) the consent of the Optionee, and
(B) any required approval of any stock exchange on which
the Company is listed; and
make all other determinations necessary or advisable for
administration of the Plan. Notwithstanding paragraph (v), while
the Company is listed on the CDNX and is considered a Tier 2
company, vesting schedules for Options issued pursuant to this
Plan shall be, at a minimum, in accordance with CDNX policy,
unless upon application CDNX permits a more favourable vesting
schedule in any particular case.
3.4 Administration by Committee - The Committee's administration of
the Plan shall in all respects be consistent with the policies and
rules of any stock exchange and/or over the counter market on which the
Shares are listed. All determinations made by the Committee in good
faith on matters referred to in Section 3.3 shall be final, conclusive,
and binding upon the Company and the relevant Optionee.
4. SHARES SUBJECT TO THE PLAN
4.1 Number of Shares - Subject to adjustment as contemplated by
section 11, the number of Shares that may be issued pursuant to the
exercise of Options under the Plan shall not exceed 7,000,000 in the
aggregate. Any stock options of the Company outstanding immediately
prior to the Effective Date shall not be considered Options for any
purpose under the Plan.
4.2 Expiry of Option - Should an Option expire, terminate or cease to
be exercisable in accordance with the terms of the Plan without having
been exercised in full, then the Shares which were set aside for issue
pursuant to that Option but which were not issued shall become
available for issue pursuant to the Plan.
4.3 Limitations - Notwithstanding any other provision of the Plan, at
no time may the number of shares reserved for issuance pursuant to
stock options granted to any one person, whether granted pursuant to
the Plan or otherwise, exceed 5% of the issued and outstanding Shares
from time to time. Subject to the foregoing, there is no limitation on
the ability of the Company to grant options to its insiders and their
associates.
5. ELIGIBILITY
5.1 Eligibility - Options may be granted to any director, officer,
employee or consultant of the Company or of any of its Affiliates. An
Optionee shall not be precluded from being granted an Option solely
because such Optionee may previously have been granted an Option under
the Plan.
5.2 No Violation of Laws - No Option shall be granted to any Optionee
unless the Committee has determined that the grant of such Option and
the exercise thereof by the Optionee will not violate applicable
securities laws.
6. GRANTING OF OPTIONS
6.1 Grants of Options - The Committee may from time to time designate
directors, officers, employees or consultants of the Company or of its
Affiliates to whom Options to purchase Shares may be granted and the
number of Shares to be optioned to each, provided that the total number
of Shares to be optioned shall not exceed the number provided in
Section 4.1 of this Plan.
6.2 Option Agreement - Each Option granted under the Plan shall be
evidenced by an Option Agreement between the Company and the Optionee
in such form as shall be approved by the Committee, which Option
Agreement shall include the following terms:
(a) the number of Shares subject to purchase pursuant to such Option;
(b) the Date of Grant;
(c) the Term, including the provisions in Section 7 of this Plan;
(d) the Option Price, provided that the Option Price shall not be
less than the Fair Market Value of the Shares;
(e) any vesting schedule upon which the exercise of an Option is
contingent;
(f) a provision that the Option is not assignable or transferable;
and
(g) such other terms and conditions as the Committee deems advisable
and are consistent with this Plan.
7. OPTION TERM
7.1 Option Term - The Term of an Option, subject to the provisions of
the Plan requiring acceleration of rights of exercise, will be such
period as may be determined by the Committee but subject to the rules
of any stock exchange or other regulatory body having jurisdiction,
except that in no case shall the Term of any Option exceed ten years
from the Date of Grant. In addition, each Option Agreement shall
provide that:
(a) upon the death of the Optionee, the Option may be exercised by
the legal heirs or personal representatives of the Optionee until
the date determined by the Committee which shall not be more than
twelve months from the date of death;
(b) if the position of an Optionee as a director or officer of the
Company or of an Affiliate of the Company, or the employment of
an Optionee as an employee or consultant of the Company or of an
Affiliate of the Company, is terminated by the Company or its
Affiliate by reason of such Optionee's Disability, any Option
held by such Optionee that could have been exercised immediately
prior to such termination of service shall be exercisable by such
Optionee, or by his Guardian, for a period of 12 months following
the termination of service of such Optionee;
(c) if an Optionee who has ceased to be a director, officer, employee
or consultant of the Company or of an Affiliate of the Company by
reason of such Optionee's Disability dies within six months after
the termination of such employment, any Option held by such
Optionee that could have been exercised immediately prior to his
or her death shall pass to the legal heirs or personal
representatives of such Optionee, and shall be exercisable by
such person for a period of 12 months following the death of such
Optionee;
(d) if the Optionee shall no longer be a director, officer, employee
or consultant of the Company or of an Affiliate of the Company by
reason other than such Optionee's Disability, the Option shall
terminate on the expiry of the period, not in excess of 90 days,
prescribed by the Committee at the Date of Grant, following the
date that the Optionee ceases to be a director, officer, employee
or consultant of either the Company or an Affiliate of the
Company;
provided that nothing in the foregoing shall have the effect of
extending the Term of an Option beyond its original expiry date and
provided that the number of Shares that the Optionee (or his Guardian
or legal heirs or personal representatives) shall be entitled to
purchase until such date of termination shall be the number of Shares
which the Optionee was entitled to purchase on the date of death or the
date the Optionee ceased to be a director, officer, employee or
consultant of the Company or its Affiliate, as the case may be,
notwithstanding the fact that the Option may have vested thereafter
with respect to the purchase of additional shares.
7.2 Deemed Non-Interruption of Employment - Employment shall be
deemed to continue intact during any sick leave or other bona fide
leave of absence if the period of such leave does not exceed 90 days
or, if longer, for so long as the Optionee's right to reemployment with
the Company or an Affiliate of the Company is guaranteed either by
statute or by contract; but if the period of such leave exceeds 90 days
and the Optionee's reemployment is not so guaranteed, then his or her
employment shall be deemed to have terminated on the ninety-first day
of such leave.
7.3 Voluntary Termination - The Committee may, with the consent of an
Optionee, cancel any outstanding Option.
8. EXERCISE OF OPTION
8.1 Method of Exercise - An Option may be exercised from time to time
by delivery to the Company at its head office or such other place as
may be specified by the Company, of a written notice of exercise
specifying the number of Shares with respect to which the Option is
being exercised accompanied by payment in full of the purchase price of
the Shares then being purchased by way of certified cheque or bank
draft. In the event of the exercise of an Option by an Optionee's
legal heirs or personal representatives, such legal heirs or personal
representatives shall also deliver evidence satisfactory to the Company
that they are entitled to exercise the Option.
8.2 Issuance of Certificate - As soon as practicable after exercise
of an Option in accordance with Section 8.1, the Company shall issue a
certificate evidencing the Shares with respect to which the Option has
been exercised. Until the issuance of such certificate, no right to
vote or receive dividends or any other rights as a shareholder shall
exist with respect to such Shares, notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the certificate is issued.
9. RESTRICTIONS ON EXERCISE
9.1 Regulatory Compliance - The exercise of each Option granted under
the Plan shall be subject to the condition that if at any time the
Company shall determine in its sole discretion that it is necessary or
desirable to comply with any legal requirements or the requirement of
any stock exchange or other regulatory authority or to obtain any
approval or consent from any such stock exchange or other regulatory
authority as a condition of, or in connection with, such exercise or
the issue of Shares as a result thereof, then in any such event such
exercise shall not be effective unless such compliance shall have been
effected or such approval or consent obtained on conditions
satisfactory to the Company. The Company's inability to obtain
authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of
any liability with respect to the failure to issue or sell such Shares.
10. RESTRICTIONS ON TRANSFER
10.1 Non-assignability - No Option shall be assignable, negotiable or
otherwise transferable other than by will or the laws of descent and
distribution and shall, subject to the terms hereof, be exercisable
only by the Optionee to whom it is granted or such Optionee's legal
heirs or personal representatives.
11. ADJUSTMENTS
11.1 Alteration of Capital - In the event of any material change in
the outstanding common shares of the Company prior to complete exercise
of any Option by reason of any stock dividend, split, recapitalization,
amalgamation, merger, consolidation, combination or exchange of shares
or other similar corporate change, an equitable adjustment shall be
made in one or more of the maximum number or kind of shares issuable
under the Plan or subject to outstanding Options or the Option Price of
such shares. Any such adjustment shall be made in the sole discretion
of the Board, acting on recommendations made by the Committee, and
shall be conclusive and binding for all purposes of the Plan.
11.2 General Offer for Shares - Notwithstanding anything else herein
to the contrary, in the event an offer to purchase common shares of the
Company shall be made to the holders of common shares generally, unless
the Board determines that such offer will not result in any change in
control of the Company, or in the event of a sale of all or
substantially all of the assets of the Company or the sale, pursuant to
an agreement with the Company, of securities of the Company pursuant to
which the Company is or becomes a subsidiary of another corporation,
then unless provision is made by the acquiring corporation for the
assumption of each Option or the substitution of a substantially
equivalent option therefor, the Company shall give written notice
thereof to each Optionee holding Options under the Plan and such
Optionees shall be entitled to exercise all such Options in respect of
all Shares to which Options relate to the extent previously
unexercised, regardless of whether such Optionee would otherwise be
entitled to exercise such Options to such extent at that time, and the
Optionees shall be entitled to exercise such Options up to the closing
date of any of the aforementioned transactions, or such other date
determined by the Company provided that the Company has given thirty
(30) days written notice of such date to each Optionee. Any Options
not so exercised will immediately terminate.
11.3 No Fractions - No fractional Shares shall be issued upon the
exercise of an Option and accordingly, if as a result of any adjustment
set out above an Optionee would be entitled to a fractional Share, the
Optionee shall have the right to purchase only the adjusted number of
full Shares and no payment or other adjustment shall be made with
respect to the fractional Share so disregarded.
12. NO OBLIGATION TO RETAIN OPTIONEE
12.1 No Obligation to Retain Optionee - Nothing contained in this Plan
shall obligate the Company or an Affiliate of the Company to retain an
Optionee as an employee, officer, director, or consultant for any
period, nor shall this Plan interfere in any way with the right of the
Company or Affiliates of the Company to reduce such Optionee's
compensation.
13. CONDITIONS PRECEDENT
13.1 Approvals - The Plan is subject to the approval, if required, of
any stock exchange on which the Company's common shares are listed for
trading and is also subject to approval by the shareholders of the
Company. Any Options granted prior to such approvals shall be
conditional upon such approvals being given and no such Options may be
exercised unless such approvals, if required, are given.
14. EFFECTIVE DATE OF PLAN
14.1 Effective Date - The effective date of the Plan is December 6,
2000, subject to receipt of all regulatory approvals which the Company
requires in connection with the implementation of the Plan and subject
to approval of the Plan by the shareholders of the Company.
15. AMENDMENT AND TERMINATION
15.1 Amendment and Termination - The Board may at any time and from
time to time amend, suspend or terminate the Plan in whole or in part;
provided, however, that any such amendment will be subject to
regulatory approval and, other than as set out in Section 11, no such
amendment may increase the maximum number of Shares that may be
optioned under the Plan, materially modify the requirements as to
eligibility for participation in the Plan or change the manner of
determining the Option Price unless such amendment is approved by the
affirmative votes of the holders of a majority of the voting
securities of the Company present or represented and entitled to vote
at a meeting duly held in accordance with the applicable corporate laws
or by the written consent of the holders of a majority of the
securities of the Company entitled to vote; provided however, that the
Company may amend the terms of the Plan to comply with the requirements
of any applicable regulatory authority without obtaining the approval
of its shareholders. No such amendment, suspension or termination
shall adversely affect rights under any Options previously granted
without the consent of the Optionees to whom such Options were granted.
15.2 No Grant During Suspension of Plan - No Option may be granted
during any suspension or after termination of the Plan. Amendment,
suspension, or termination of the Plan shall not, without the consent
of the Optionee, alter or impair any rights or obligations under any
Option previously granted.
16. COMPLIANCE WITH LAWS
16.1 Transactions under the Plan are intended to comply with all
relevant provisions of law and the rules, regulations and policies of
any stock exchange or market upon which the Shares may be listed or
quoted. To the extent any provision of the Plan or action by the
Committee fails to so comply, the Committee may, to the extent
permitted by law, do any of the following as it deems advisable:
(a) treat such provision as null and void; or
(b) amend the terms of the Plan to comply with such applicable
laws, rules, regulations, or policies; or
(c) ensure that the administration of the Plan and the terms of
the individual option agreements comply with such applicable
laws, rules, regulations, and policies.
17. GOVERNING LAW
17.1 Law - The laws of the Province of British Columbia shall govern
the Plan and all rights and obligations hereunder shall be determined
in accordance with such laws.