EXHIBIT 4.1
STOCK OPTION PLAN AND OFFERING NOTICE AS
AMENDED AND RESTATED ON JANUARY 9, 2002
AXCAN PHARMA INC.
STOCK OPTION PLAN
AND
OFFERING NOTICE
AS AMENDED AND RESTATED ON JANUARY 9, 2002
1. PURPOSE OF THE PLAN
1.1 The purpose of this stock option plan (the "Plan") is to provide
directors, senior executives, Consultants and full-time employees of Axcan
Pharma Inc. ("Axcan") and its subsidiaries (Axcan and its subsidiaries, present
and future, being hereinafter referred to collectively as the "Corporations")
with a proprietary interest through the granting of options to purchase shares
of Axcan, subject to certain conditions as hereinafter set forth, for the
following purposes:
1.1.1 to increase the interest in the Corporations' welfare of those
directors, senior executives, Consultants and employees who share
primary responsibility for the management, growth and protection of the
business of the Corporations;
1.1.2 to furnish an incentive to such directors, senior executives,
Consultants and employees to continue their services or the
Corporations; and
1.1.3 to provide a means through which each of the Corporations may attract
able persons to enter its employment.
1.2 For the purposes of the Plan:
1.2.1 the term "Consultant" means any person or company engaged to provide
ongoing management or consulting services for the Corporations;
1.2.2 the term "Other Plans" means any stock option, stock option plan, stock
purchase plan or any other compensation or incentive mechanism
involving the issuance or potential issuance of shares to one or more
directors, senior executives, Consultants or full-time employees,
including a share purchase from treasury which is financially assisted
by any of the Corporations by way of a loan, guaranty or otherwise and
including without limitation Axcan's Share Purchase Plan adopted on
December 15, 1995 and Axcan's Stock Participation Plan adopted on
December 15, 1995;
1.2.3 the term "Outside Director" means a director of any of the Corporations
who is not an employee of any of the Corporations and a director who
has ceased to be an employee of any of the Corporations as at and from
the date of such termination; and
1.2.4 a "Subsidiary of Axcan" shall be any corporation (other than Axcan) in
an unbroken chain of corporations beginning with Axcan if, at the time
of the granting of the option hereunder, each of the corporations other
than the last corporation in the unbroken chain owns shares to which
are attached more than fifty percent (50%) of the aggregate voting
rights attached to all classes of shares in one of the other
corporations in such chain.
2. ADMINISTRATION OF THE PLAN
2.1 The Plan shall be administered by the Board of Directors of Axcan
(the "Board"). The Board may delegate the general administration of the Plan to
any committee of the Board, in which case, unless the context otherwise
requires, all references herein to the Board shall be deemed to be references to
such committee.
2.2 The Board may, from time to time, as it may deem expedient, adopt,
amend and rescind rules and regulations for carrying out the provisions and
purposes of the Plan. The interpretation, construction and application of the
Plan and any provisions thereof made by the Board, shall be final and binding on
all holders of options granted under the Plan and all persons eligible under the
provisions of the Plan to participate therein. No member of the Board shall be
liable for any action taken or for any determination made in good faith in the
administration, interpretation, construction or application of the Plan.
3. GRANTING OF OPTIONS
3.1 The Board may, from time to time, designate directors, senior
executives, Consultants and full-time employees of the Corporations to
whom options to purchase common shares in the share capital of Axcan
(the "Common Shares") may be granted and the number of Common Shares to
be optioned to each, provided that:
3.1.1 the total number of Common Shares to be optioned to any one individual
under the Plan, when combined with the number of Common Shares issued
or issuable to such individual under any of the Other Plans, shall not
exceed five percent (5%) of the total issued and outstanding Common
Shares as of the date of grant of the option;
3.1.2 the total number of Common Shares to be optioned under the Plan shall
not exceed the number provided in section 4.1 hereof;
3.1.3 the total number of Common Shares reserved for issuance to insiders
("Insiders" as defined in the Securities Act (Quebec)) and their
associates ("Associates" as defined in the Securities Act (Quebec))
under the Plan or any of the Other Plans shall not exceed ten percent
(10%) of the Common Shares outstanding on the date of reservation of
such Common Shares;
3.1.4 the total number of Common Shares issued to all Insiders and their
Associates under the Plan or Other Plans within a one-year period,
shall not exceed ten percent (10%) of the Common Shares outstanding on
the date of issuance of such Common Shares; and
3.1.5 the total number of Common Shares issued to any one Insider and his
Associates under the Plan or Other Plans within a one-year period shall
not exceed five percent (5%) of the Common Shares outstanding on the
date of issuance of such Common Shares.
For the purposes of subsections 3.1.3, 3.1.4 and 3.1.5: (i) an entitlement
granted prior to the optionee becoming an Insider or Associate of an Insider
shall be excluded in determining the number of shares issuable to Insiders and
their Associates and (ii) no person shall be considered an Insider solely by
virtue of being a director or senior executive of a Subsidiary of Axcan.
3.2 Provided they may be granted in accordance with the provisions of
section 3.1 above, options to Outside Directors to purchase Common Shares shall
be granted as follows:
3.2.1 A one-time option to purchase twenty thousand (20,000) Common Shares
shall be granted to an Outside Director on the day such Outside
Director is first elected or named to the Board; provided, however,
that if such day is not a business day, the grant shall be effective on
the first business day following such election or nomination ("Initial
Options").
3.2.2 On an annual basis, on the date of an Outside Director's election or
re-election pursuant to the shareholders meeting, an option to purchase
seven thousand five hundred (7,500) Common Shares shall be granted to
each such Outside Director ("Annual Options"). Annual Options will be
cancelled on any given year should an Outside Director fail in the
option of the Board acting fairly, to reasonably fulfil his duties as
an Outside Director, in such a case, the Annual Options granted to him
for such year shall be cancelled forthwith as if never granted.
3.3 Options may only be granted by Axcan pursuant to decisions of the
Board. No option shall be granted to any person who is not a director, senior
executive, Consultant or full-time employee of any of the Corporations. For
United States federal income tax purposes, options granted pursuant to the Plan
may be either Incentive Stock Options ("Incentive Stock Options") meeting the
requirements of Section 422 of the United States Internal Revenue Code of 1986,
as amended (the "U.S. Tax Code"), or non-statutory options which are not
intended to meet the requirements of U.S. Tax Code Section 422.
3.4 The granting of options hereunder and the obligation of Axcan to
deliver its Common Shares pursuant hereto shall be subject to Axcan obtaining
the approval of any competent authority which may be required in connection with
the granting of options hereunder or the authorization, issuance or sale of the
optioned shares and, if required, Axcan having effectively listed the optioned
shares on any stock exchange on which Common Shares may then be listed. Axcan
shall use its best efforts to obtain all approvals necessary to give effect to
this Plan.
4. SHARES SUBJECT TO THE PLAN
4.1 The maximum number of Common Shares which may be optioned under the
Plan, subject to the provisions of article 8 hereof, shall be 4,500,000 Common
Shares.
4.2 The Common Shares in respect of which options are not exercised
before their expiry shall be available for subsequent options to be granted
pursuant to the provisions hereof.
5. OPTION PRICE
5.1 The option price per share for Common Shares which are the subject
of any option shall be fixed by the Board when such option is granted. Except as
set forth in article 11, the option price for said shares shall be the reported
closing price for Common Shares on any stock exchange on which Common Shares may
then be listed on the last trading day before the day on which the option is
granted, provided that:
5.1.1 if no sale is reported on any such stock exchange on that day, the
reported closing price shall be deemed to be the mean of the highest
bid and asked quotations, if any, for such shares on any stock exchange
selected by the Board on which the Common Shares are listed on that
date;
5.1.2 if the Common Shares are listed on more than one stock exchange and the
closing price for such last trading day is not the same on all such
exchanges, the option price shall be the reported closing price on the
exchange having recorded the highest volume of Common Shares traded for
such day; and
5.1.3 prices and quotations expressed in Canadian or U.S. currency shall be
converted in the other currency based on the exchange rate prevailing
for the relevant trading day as published in the Wall Street Journal
(or failing its publication, in any national financial newspaper
published in Canada or the United States as may be selected by the
Board).
6. CONDITIONS GOVERNING OPTIONS
6.1 Options shall be evidenced by a stock option agreement or other
written instrument in such form not inconsistent with the Plan as the Board may
from time to time determine, provided that the substance of the following be
included or referenced therein:
6.1.1 Employment - The granting of an option to a director, senior executive,
Consultant or full-time employee shall not impose upon any of the
Corporations any obligation to retain the optionee in its employ or to
preserve the office of the optionee.
6.1.2 Option Term - The period during which an option is exercisable shall
not, subject to the provisions of the Plan, exceed ten (10) years from
the date the option is granted.
6.1.3 Exercise of Options - Prior to its expiration or earlier termination in
accordance with the Plan, each option shall be exercisable as to the
whole or any portion thereof at the time or times stipulated. The Board
may, at the time of granting a particular option, impose such
conditions as it shall determine in its sole discretion regarding the
time or times at which the option may be exercised in whole or in part.
6.1.4 Non-assignability of Options - Each option granted hereunder is
personal to the optionee and shall not be assignable or transferable by
the optionee, whether voluntarily or by operation of law, except by
will or by the laws of succession of the domicile of the deceased
optionee. No option granted hereunder shall be pledged, hypothecated,
charged, transferred, assigned or otherwise encumbered or disposed of
on pain of nullity, and, subject to the foregoing exception in the case
of death, each option granted hereunder may be exercised only by the
optionee.
6.1.5 Effect of Termination of Office or Employment or of Death
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6.1.5.1 Upon an optionee's full-time employment or consulting
services with the Corporations being terminated for cause
or upon an optionee ceasing to be a director or senior
executive of any of the Corporations by reason of his
being removed or becoming disqualified from being a
director or senior executive by law, any option or the
unexercised portion thereof granted to him shall terminate
forthwith.
6.1.5.2 Upon an optionee's full-time employment or consulting
services with the Corporations being terminated (except in
the case of transfer from one Corporation to another
Corporation contemplated herein) otherwise than by reason
of death or termination for cause, or upon an optionee
ceasing to be a director (other than an Outside Director)
or senior executive of any of the Corporations other than
by reason of death, removal or disqualification by law,
any option or unexercised portion thereof granted to such
optionee may be exercised by him only for that number of
Common Shares which he was entitled to acquire under the
option pursuant to subsection 6.1.3 hereinabove at the
time of such termination or cessation. Such option shall
only be exercisable within ninety (90) days after such
termination or cessation or prior to the expiration of the
term of the option, whichever occurs earlier. Any option
or unexercised portion thereof granted to an optionee who
is an Outside Director, and who ceases to hold his office
for reason other than death, removal or disqualification
by law, may be exercised within the time period and in
accordance with the other terms and conditions provided
for any such option.
6.1.5.3 If an optionee dies while employed on a full-time basis by
any of the Corporations or while serving as a director,
Consultant or senior executive of any of the Corporations,
any option or unexercised portion thereof granted to such
optionee may be exercised by a legatee or legatees of such
optionee under the optionee's last will or by his personal
representatives for that number of Common Shares which he
was entitled to acquire under the option pursuant to
subsection 6.1.3 hereinabove at the time of his demise.
Such option shall only be exercisable within twelve (12)
months after the optionee's death or prior to the
expiration of the term of the option, whichever occurs
earlier.
6.1.5.4 The Board may, subject to the prior approval of The
Toronto Stock Exchange, or other relevant regulatory
authorities, at any time and at its discretion, waive any
of the termination provisions contained in subsections
6.1.5.1, 6.1.5.2 and 6.1.5.3 hereof in respect of any
particular optionee.
6.1.6 Rights as a Stockholder - The optionee (or his personal representatives
or legatees) shall have no rights whatsoever as a shareholder in
respect of any shares covered by his option until the date of issuance
of a share certificate to him (or his personal representatives or
legatees) for such shares. Without in any way limiting the generality
of the foregoing, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such share
certificate is issued.
6.1.7 Method of Exercise - Subject to the provisions of the Plan, an option
granted under the Plan shall be exercisable (from time to time as
provided in subsection 6.1.3 hereinabove) by the optionee's (or his
personal representatives' or legatees') giving of notice in writing to
Axcan at its registered office, addressed to its Vice-President,
Finance, which notice shall specify the number of Common Shares in
respect of which the option is being exercised and shall be accompanied
by full payment, by cash or certified cheque, of the purchase price for
the number of shares specified. On the date of issue of the certificate
representing the shares purchased under the option, which shall not be
later than the tenth (10th) business day following the date of receipt
by the Vice-President, Finance of Axcan of the written notice herein
referred to, the optionee shall be considered as the registered holder
of such number of shares as the optionee (or his personal
representatives or legatees) shall have then paid for and as are
specified in such notice and Axcan shall cause the transfer agent and
registrar of Axcan to deliver to the optionee (or his personal
representatives or legatees), according to the latter's written
instructions, if any, a certificate in the name of the optionee
representing such shares. If required by the Board by notification to
the optionee at the time of granting of the option, it shall be a
condition of such exercise that the optionee shall represent that he is
purchasing the Common Shares in respect of which the option is being
exercised for investment only and not with a view of resale or
distribution.
7. USE OF PROCEEDS
7.1 The proceeds received by Axcan upon the exercise of options by
optionees shall be used to increase the working capital of Axcan and
for general corporate purposes.
8. ADJUSTMENT TO SHARES SUBJECT TO THE OPTION
8.1 In the event that the outstanding Common Shares of Axcan are
hereafter changed into or exchanged for a different number or kind of shares or
other securities of Axcan or of another Corporation, or in the event that there
is a reorganization, amalgamation, consolidation, reclassification, dividend
payable in capital stock or other change in the capital stock of Axcan, subject
to regulatory approval, the Board shall make such adjustments as it deems
appropriate in the number and kind of shares for the purchase of which options
may be granted under the Plan and such adjustments shall be final and binding.
9. AMENDMENT OR DISCONTINUANCE OF THE PLAN
9.1 The Board may amend, subject to the prior approval of The Toronto
Stock Exchange or other relevant regulatory authorities, or discontinue the Plan
or the terms of any options granted under the Plan at any time, provided,
however, that no such amendment may detrimentally alter any option previously
granted to an optionee under the Plan without the consent of the optionee,
except to the extent required by law.
9.2 Notwithstanding anything contained to the contrary in this Plan or
in any resolution of the Board in implementation thereof:
9.2.1 in the event Axcan proposes to amalgamate, merge or consolidate with
any other Corporation (other than with a wholly-owned Subsidiary of
Axcan) or to liquidate, dissolve or wind-up, or in the event an offer
to purchase the Common Shares or any part thereof shall be made to all
holders of Common Shares, Axcan
shall have the right, upon written notice thereof to each optionee
holding options under this Plan, to permit the exercise of all such
options within the thirty (30) day period next following the date of
such notice and to determine that upon the expiration of such thirty
(30) day period, all rights of optionees to such options or to exercise
same (to the extent not theretofore exercised) shall ipso facto
terminate and cease to have any further force or effect whatsoever;
9.2.2 the Board may, by resolution, advance the date on which any option may
be exercised, in the manner to be set forth in such resolution. The
Board shall not, in the event of any such advancement, be under any
obligation to advance the date upon which any option may be exercised
by any other optionee; and
9.2.3 the Board may, by resolution, but subject to applicable regulatory
provisions, decide that any of the provisions hereof concerning the
effect of termination of the optionee's full-time employment,
consulting services or cessation of the optionee's office as senior
executive or director shall not apply for any reason acceptable to the
Board.
10. OTHER MATERIAL INFORMATION
10.1 Reference is made to the most recently available proxy material,
annual information form, press releases, material change reports and annual
financial statements of Axcan as regards certain facts relating to Axcan which
may be material.
11. INCENTIVE STOCK OPTIONS
11.1 Options granted under the Plan which are intended to be Incentive
Stock Options may only be granted before the 10th anniversary of the Plan's
effective date (such anniversary being December 15, 2005) and only to persons
who are employees of the Corporations on the date of grant and shall be subject
to the following additional terms and conditions:
11.1.1 Dollar Limitation - To the extent that the aggregate fair market value
of Common Shares for which Incentive Stock Options are exercisable for
the first time by an employee during any calendar year (under all plans
of the Corporations, with fair market value being determined as of each
Incentive Stock Option's date of grant) exceeds U.S. $100,000, options
designated as Incentive Stock Options shall be treated as non-qualified
stock options for United States tax purposes, with later granted
options being treated as non-qualified stock options first; and
11.1.2 10% Stockholder - If any employee to whom an Incentive Stock Option is
to be granted under the Plan is at the time of the grant of such
Incentive Stock Option the owner of stock possessing more than 10% of
the total combined voting power of all classes of stock of the
Corporations, then the following special provisions shall be applicable
to the Incentive Stock Option granted to such individual: (i) the
purchase price per share of the Common Share subject to such Incentive
Stock Option shall not be less than 110% of the fair market value of
one share of Common Share at the time of grant; and (ii) the option
exercise period shall not exceed five years from the date of grant.
Except as modified by the preceding provisions of this article 11, all the
provisions of the Plan shall be applicable to Incentive Stock Options granted
hereunder.
12. EFFECTIVE DATE OF PLAN
12.1 This Plan was (i) originally adopted by the Board on December 15,
1995, (ii) amended by the Board on December 23, 1999 and ratified by the
Shareholders of Axcan on February 22, 2000, (iii) re-amended as of December 19,
2000 and ratified by the shareholders of Axcan on February 19, 2001, and (iv)
re-amended as of January 9, 2002 and ratified by the shareholders of Axcan on
February 21, 2002. Should changes be required in this Plan by any securities
commission or other governmental body of any province of Canada to which this
Plan has been submitted or by The Toronto Stock Exchange or any other exchange
on which the Common Shares may from time to time be listed, such changes shall
be made in this Plan as are necessary to conform with such requests and if
such changes are approved by the Board, this Plan, as amended, shall remain in
full force and effect in its amended form as of and from December 15, 1995.
Axcan may, in its discretion, qualify this Plan in additional jurisdictions
outside of Canada. However, unless and until Axcan decides to so qualify this
Plan, employees residing in such other jurisdictions are not eligible to
participate in this Plan.
By Order of the Board of Directors
February 22, 2002
SECRETARY CERTIFICATION
The undersigned certifies that the Stock Option Plan restated and amended is a
true copy of the Plan as adopted and restated on January 9, 2002, and has not
been amended or revoked.
April 24, 2002
/s/ Francois Painchaud
Francois Paichaud
Secretary