Exhibit 4.1
YORK MEDICAL INC.
1996 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
1.1 The purpose of the Plan is to attract, retain and motivate persons of
training, experience and leadership as key service providers to the Corporation
and its Subsidiaries, including their directors, officers and employees, and to
advance the interests of the Corporation by providing such persons with the
opportunity, through share options, to acquire an increased proprietary interest
in the Corporation.
2. DEFINED TERMS
Where used herein, the following terms shall have the following
meanings, respectively:
2.1 "BOARD" means the board of directors of the Corporation or, if established
and duly authorized to act, the Executive Committee of the board of directors of
the Corporation;
2.2 "COMMITTEE" shall have the meaning attributed thereto in Section 3.1 hereof;
2.3 "CORPORATION" means York Medical Inc. and includes any successor corporation
thereof;
2.4 "ELIGIBLE PERSON" Means:
(i) any Insider, director, officer or employee of the Corporation
or any Subsidiary, or any other Service Provider (an "ELIGIBLE
INDIVIDUAL"); or
(ii) a corporation controlled by an Eligible Individual, the issued
and outstanding voting shares of which are, and will continue
to be, beneficially owned, directly or indirectly, by such
Eligible Individual and/or the spouse, children and/or
grandchildren of such Eligible Individual (an "EMPLOYEE
CORPORATION");
2.5 "INSIDER" means any insider, as such term is defined in Subsection 1(1) of
the Securities Act (Ontario), of the Corporation, other than a person who falls
within that definition solely by virtue of being a director or senior officer of
a Subsidiary, and includes any associate, as such term is defined in Subsection
(1) of the Securities Act (Ontario), of any such insider;
2.6 "MARKET PLACE" at any date in respect of the Shares means the closing sale
price of such Shares on The Toronto Stock Exchange (or, if such Shares are not
then listed and posted for trading on The Toronto Stock Exchange, on such stock
exchange in Canada on which such Shares are listed and posted for trading as may
be selected for such purpose by the Committee) on the trading day immediately
preceding such date. In the event that such Shares did not trade on such trading
day, the Market Place shall be the average of the bid and ask prices in respect
of such Shares at the close of trading on such trading day. In the event that
such Shares are not listed and posted for trading on any stock exchange, the
Market Price shall be the fair market value of such Shares as determined by the
Committee in its sole discretion;
2.7 "OPTION" means an option to purchase Shares granted to an Eligible Person
under the Plan;
2.8 "OPTION PRICE" means the price per Share at which Shares may be purchased
under an Option, as the same may be adjusted from time to time in accordance
with Article 8 hereof;
2.9 "OPTIONED SHARES" means the Shares issuable pursuant to an exercise of
Options;
2.10 "OPTIONEE" means an Eligible Person to whom an Option has been granted and
who continues to hold such Option;
2.11 "PLAN" means the York Medical Inc. 1996 Stock Option Plan, as the same may
be further amended or varied from time to time;
2.12 "SERVICE PROVIDER" means any person or company engaged as an independent
contractor or otherwise to provide ongoing management or consulting services for
the Corporation or for any entity controlled by the Corporation;
2.13 "SHARES" means the Common Shares of the Corporation or, in the event of an
adjustment contemplated by Article 8 hereof, such other shares or securities to
which an Optionee may be entitled upon the exercise of an Option as a result of
such adjustment; and
2.14 "SUBSIDIARY" means any corporation which is a subsidiary, as such term is
defined in Subsection 1(2) of the Business Corporations Act (Ontario), of the
Corporation.
3. ADMINISTRATION OF THE PLAN
3.1 The Plan shall be administered by the compensation committee (the
"COMMITTEE") of the Board.
3.2 The Committee shall have the power, where consistent with the general
purpose and intent of the Plan and subject to the specific provisions of the
Plan:
(a) to establish policies and to adopt rules and regulations for
carrying out the purposes, provisions and administration of
the Plan;
(b) to interpret and construe the Plan and to determine all
questions arising out of the Plan or any Option, and any such
interpretation, construction or determination made by the
Committee shall be final, binding and conclusive for all
purposes;
(c) to determine the number of Shares covered by each Option;
(d) to determine the Option Price of each Option;
(e) to determine the time or times when Options will be granted
and exercisable;
(f) to determine if the Shares which are issuable on the exercise
of an Option will be subject to any restrictions upon the
exercise of such Option; and
(g) to prescribe the form of the instruments relating to the
grant, exercise and other terms of Options.
3.3 Subject as hereinafter provided in this Section 3.3, no member of the
Committee shall, during the currency of his or her membership on the Committee,
be entitled to participate in the Plan. A member of the Committee may be
entitled to participate in the Plan only if an Option is granted, and the terms
and provisions thereof determined, by the Board without such member of the
Committee participating in any many whatsoever in the granting of an Option to,
or the determinations made with respect to, such member of the Committee or to
such Option; and the Board shall, with respect to such member of the Committee,
be vested with all power and authority otherwise granted to the Committee
pursuant to the Plan and the term "Committee" as used herein shall mean the
Board for such purposes.
3.4 The Committee may, in its discretion, require as conditions to the grant or
exercise of any Option that the Optionee shall have:
(a) represented, warranted and agreed in form and substance
satisfactory to the Corporation that he or she is acquiring
and will acquire such Option and the Shares to be issued upon
the exercise thereof or, as the case may be, is acquiring such
Shares, for his or her own account, for investment and not
with a view to or in connection with any distribution, that he
or she has had access to such information as is necessary to
enable him or her to evaluate the merits and risks of such
investment and that he or she is able to bear the economic
risk of holding such Shares for an indefinite period;
(b) agreed to restrictions on transfer in form and substance
satisfactory to the Corporation and to an endorsement on any
option agreement on certificate representing the Shares making
appropriate reference to such restrictions; and
(c) agreed to indemnify the Corporation in connection with the
foregoing.
3.5 Any Option granted under the Plan shall be subject to the requirement that,
if at any time counsel to the Corporation shall determine that the listing,
registration or qualification of the Shares subject to such Option upon any
securities exchange or under any law or regulation of any jurisdiction, or the
consent or approval of any securities exchange or any governmental or regulatory
body, is necessary as a condition of, or in connection with, the grant or
exercise of such Option or the issuance or purchase of Shares thereunder, such
Option may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Committee. Nothing herein shall be
deemed to require the Corporation to apply for or to obtain such listing,
registration, qualification, consent or approval.
4. SHARES SUBJECT TO THE PLAN
4.1 Options may be granted in respect of authorized and unissued Shares,
provided that the aggregate number of Shares reserved for issuance upon the
exercise of all Options granted under the Plan, subject to any adjustment of
such number pursuant to the provisions of Article 8 hereof, together with any
Shares reserved for issuance under any options for services or employee stock
purchase or stock option plans or any other plans, shall not exceed 1,500,000
(based on a subdivision of the Corporation's Common Shares on a 6.7 for one
basis) or such greater number of Shares as may be determined by the Board and
approved, if required, by the shareholders of the Corporation and by any
relevant stock exchange or other regulatory authority. Optioned Shares in
respect of which Options are not exercised shall be available for subsequent
Options. No fractional Shares may be purchased or issued under the Plan.
5. ELIGIBILITY; GRANT; TERMS OF OPTIONS
5.1 Options may be granted to any Eligible Person in accordance with Section 5.2
hereof.
5.2 Options may be granted by the Corporation pursuant to the recommendations of
the Committee from time to time provided and to the extent that such decisions
are approved by the Board.
5.3 Subject as herein and otherwise specifically provided in this Article 5, the
number of Shares subject to each Option, the Option Price of each Option, the
expiration date of each Option, the extent to which each Option is exercisable
from time to time during the term of the Option and other terms and conditions
relating to each such Option shall be determined by the Committee.
5.4 In the event that no specific determination is made by the Committee with
respect to any of the following matters, each Option shall, subject to any other
specific provisions of the Plan, contain the following terms and conditions:
(a) the period during which an Option shall be exercisable shall
be 10 years from the date the Option is granted to the
Optionee; and
(b) the Optionee may exercise the Option for not more than 20% of
the Shares covered by the Option during each 12 month period
following the first anniversary of the date of the grant of
the Option; provided, however, that if the number of Shares
purchased pursuant to exercises of the Option during any such
12 month period is less than 20% of the Shares covered by the
Option, the Optionee shall have the right, at any time or from
time to time during the remainder of the term of the Option,
to purchase such number of Shares subject to the Option which
were purchasable, but not purchased by him or her, during such
12 month period.
5.5 Subject to any adjustments pursuant to the provisions of Article 8 hereof,
the Option Price of any Option shall be in no circumstances be lower than the
Market Price on the date of which the grant of the Option is approved by the
Committee. Notwithstanding the foregoing, in the event that the Shares are not
listed on any stock exchange on the date on which the grant of an Option is
approved by the Committee, the Option Price for such Option shall be determined
by the Committee. If, as and when any Shares have been duly purchased and paid
for under the terms of an Option, such Shares shall be conclusively deemed
allotted and issued as fully paid non-assessable Shares at the price paid
therefor.
5.6 No Options shall be granted to any Optionee if the total number of Shares
issuable to such Optionee under this Plan, together with any Shares reserved for
issuance to such Optionee under options for services or any other stock option
plans, would exceed 5% of the issued and outstanding Shares.
5.7 An Option is personal to the Optionee and non-assignable (whether by
operation of law or otherwise), except as provided for herein. Upon any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of an Option
contrary to the provisions of the Plan, or upon the levy of any attachment or
similar process upon an Option, the Option shall, at the election of the
Corporation, cease and terminate and be of no further force or effect
whatsoever.
5.8 No Options shall be granted to an Optionee if such grant could result, at
any time, in:
(a) the number of Shares reserved for issuance pursuant to Options
or other stock options granted to Insiders exceeding 10% of
the issued and outstanding Shares;
(b) the issuance to Insiders, within a one-year period, of a
number of Shares exceeding 10% of the issued and outstanding
Shares; or
(c) the issuance to any one Insider and such Insider's associates,
within a one-year period, of a number of Shares exceeding 5%
of the issued and outstanding Shares.
For the purposes of this Section 5.9, the phrase "issued and outstanding Shares"
excludes any Shares issued pursuant to the Plan or other stock options, stock
option plans, employee stock purchase plans or other compensation or incentive
mechanisms, over a preceding one-year period and "associate" means any person
associated with such Insider.
6. TERMINATION OF EMPLOYMENT; DEATH
6.1 Subject to Sections 6.2 and 6.3 hereof and to any express resolution passed
by the committee with respect to an Option, an Option and all rights to purchase
Shares pursuant thereto shall expire and terminate immediately upon the Optionee
who holds such Option ceasing to be an Eligible Person.
6.2 If, before the expiry of an Option in accordance with the terms thereof, an
Optionee shall cease to be an Eligible Person (an "EVENT OF TERMINATION") for
any reason other than his or her resignation or the termination for "cause" of
his or her employment with the Corporation or any Subsidiary, or his or her
resignation or failure to be re-elected as a director of the Corporation or any
Subsidiary, then the Optionee may:
(a) exercise the Option to the extent that he or she was entitled
to do so at the time of such Event of Termination, at any time
up to and including, but not after, a date three (3) months
following the date of such Event of Termination, or prior to
the close of business on the expiration date of the Option,
whichever is earlier; and
(b) with the prior written consent of the Board or the Committee,
which consent may be withheld in the Corporation's sole
discretion, exercise a further Option at any time up to and
including, but not after, a date three (3) months following
the date of such Event of Termination, or prior to the close
of business on the expiration date of the Option, whichever is
earlier, to purchase all or any of the Optioned Shares as the
Board or the Committee may designate but not exceeding the
number of Optioned Shares the Optionee would have otherwise
been entitled to purchase pursuant to the Option had the
Optionee's status as an Eligible Person been maintained for
the term of the Option.
6.3 If an Optionee dies before the expiry of an Option in accordance with the
terms thereof, the Optionee's legal representative(s) may, subject to the terms
of the Option and the Plan:
(a) exercise the Option to the extent that the Optionee was
entitled to do so at the date of his or her death at any time
up to and including, but not after, a date one year following
the date of death of the Optionee, or prior to the close of
business on the expiration date of the Option, whichever is
earlier; and
(b) with the prior written consent of the Board or the Committee,
exercise at any time up to and including, but not after, a
date one year following the date of death of the Optionee, a
further Option to purchase all or any of the Optioned Shares
as the Board or the Committee may designate but not exceeding
the number of Optioned Shares the Optionee would have
otherwise been entitled to purchase had the Optionee survived.
6.4 For greater certainty, Options shall not be affected by any change of
employment of the Optionee or by the Optionee ceasing to be a director of the
Corporation provided that the Optionee continues to be an Eligible Person.
6.5 For the purposes of this Article 6, a determination by the Corporation that
an Optionee was discharged for "cause" shall be binding on the Optionee;
provided, however, that such determination shall not be conclusive of the
Optionee's potential entitlement to damages for the loss of the right to
exercise an Option in the event that a court of competent jurisdiction
ultimately determines that the discharge was without "cause".
6.6 If the Optionee is an Employee Corporation, the references to the Optionee
in this Article 6 shall be deemed to refer to the Eligible Individual associated
with the Employee Corporation.
7. EXERCISE OF OPTIONS
7.1 Subject to the provisions of the Plan, an Option may be exercised from time
to time by delivery to the Corporation at its registered office of a written
notice of exercise addressed to the Secretary of the Corporation specifying the
number of Shares with respect to which the Option is being exercised and
accompanied by payment in full, by cash or cheque, of the Option Price of the
Shares then being purchased. Certificates for such Shares shall be issued and
delivered to the Optionee within a reasonable time following the receipt of such
notice and payment.
7.2 Notwithstanding any of the provisions contained in the Plan or in any
Option, the Corporation's obligation to issue Shares to an Optionee pursuant to
the exercise of any Option shall be subject to:
(a) completion of such registration or other qualification of such
Shares or obtaining approval of such governmental or
regulatory authority as the Corporation shall determine to be
necessary or advisable in connection with the authorization,
issuance or sale thereof;
(b) the administration of such Shares to listing on any stock
exchange on which the Shares may then be listed;
(c) the receipt from the Optionee of such representations,
warranties, agreements and undertakings, as the Corporation
determines to be necessary or advisable in order to safeguard
against the violation of the securities laws of any
jurisdiction; and
(d) the satisfaction of any conditions on exercise prescribed
pursuant to Section 3.4 hereof.
In this connection the Corporation shall, to the extent necessary, take all
commercially reasonable steps to obtain such approvals, registrations, and
qualifications as may be necessary for the issuance of such Shares in compliance
with applicable securities laws and for the listing of such Shares on any stock
exchange on which the Share are then listed.
7.3 Options shall be evidenced by a share option agreement, instrument or
certificate in such form not inconsistent with this Plan as the Committee may
from time to time determine as provided for under Subsection 3.2(g), provided
that the substance of Article 5 be included therein.
8. CERTAIN ADJUSTMENTS
8.1 In the event of any subdivision or redivision of the Shares into a greater
number of Shares at any time after the grant of an Option to any Optionee and
prior to the expiration of the term of such Option, the Corporation shall
deliver to such Optionee at the time of any subsequent exercise of his or her
Option in accordance with the terms hereof, in lieu of the number of shares to
which he or she was theretofore entitled upon such exercise, but for the same
aggregate consideration payable therefor, such number of Shares as such Optionee
would have held as a result of such subdivision or redivision if, on the record
date thereof, the Optionee had been the registered holder of the number of
Shares to which he or she was theretofore entitled upon such exercise.
8.2 In the event of any consolidation of the Shares into a lesser number of
Shares at any time after the grant of an Option to any Optionee and prior to the
expiration of the term of such Option, the Corporation shall deliver to such
Optionee at the time of any subsequent exercise of his or her Option in
accordance with the terms hereof, in lieu of the number of Shares to which he or
she was theretofore entitled upon such exercise, but for the same aggregate
consideration payable therefor, such number of Shares as such Optionee would
have held as a result of such consolidation if, on the record date thereof, the
Optionee had been the registered holder of the number of Shares to which he or
she was theretofore entitled upon such exercise.
8.3 If at any time after the grant of any Option to an Optionee and prior to the
expiration of the term of such Option, the Shares shall be reclassified,
reorganized or otherwise changed, otherwise than as specified in Sections 8.1
and 8.2 or, subject to the provisions of Subsection 9.2(a) hereof, the
Corporation shall consolidate, merge or amalgamate with or into another
corporation (the corporation resulting or continuing from such consolidation,
merger or amalgamation being herein called the "SUCCESSOR CORPORATION") or, the
Corporation shall pay a stock dividend (other than any dividends in the ordinary
course), the Optionee shall be entitled to receive upon the subsequent exercise
of his or her Option in accordance with the terms hereof and shall accept in
lieu of the number of Shares to which he or she was theretofore entitled upon
such exercise but for the same aggregate consideration payable therefor, the
aggregate the number of shares of the appropriate class and/or other securities
of the Corporation or the Successor Corporation (as the case may be) that the
Optionee would have been entitled to receive as a result of such
reclassification, reorganization or other change or, subject to provisions of
Subsection 9.2(a) hereof, as a result of such consolidation, merger,
amalgamation, or stock dividend, if on the record date of such reclassification,
reorganization, other change or stock dividend, or the record date of such
consolidation, merger or amalgamation or dividend payment, as the case may be,
he or she had been the registered holder of the number of Shares to which he or
she was theretofore entitled upon such exercise.
8.4 In the event the Corporation should declare and pay a special cash dividend
or other distribution out of the ordinary course, a special dividend in specie
on the Shares, or a stock dividend other than in the ordinary course, the Option
Price of all Options outstanding on the record date of such dividend or other
distribution shall be reduced by an amount equal to the cash payment or other
distribution or the fair market value of the dividend in specie or stock
dividend or other distribution, as determined by the Committee in its sole
discretion.
9. AMENDMENT OR DISCONTINUANCE OF THE PLAN
9.1 The Board may amend or discontinue the Plan at any time, provided, however,
that no such amendment may materially and adversely affect any Option previously
granted to an Optionee without the consent of the Optionee, except to the extent
required by law. Any such amendment shall, if required, be subject to the prior
approval of, or acceptance by, any stock exchange on which the Shares are listed
and posted for trading.
9.2 Notwithstanding anything contained to the contrary in this Plan or in any
resolution of the Board in implementation thereof:
(a) in the event the Corporation proposes to amalgamate, merge or
consolidate with any other corporation (other than a
wholly-owned Subsidiary) or to liquidate, dissolve or wind-up,
or in the event an offer to purchase or repurchase the Shares
of the Corporation or any part thereof shall be made to all or
substantially all holders of Shares of the Corporation, the
Corporation shall have the right, upon written notice thereof
to each Optionee holding Options under the Plan, to permit the
exercise of all such Options within the 20 day period next
following the date of such notice and to determine that upon
the expiration of such 20 day period, all rights of the
Optionees to such Options or to exercise same (to the extent
not theretofore exercised) shall ipso facto terminate and
cease to have further force or effect whatsoever;
(b) in the event of the sale by the corporation of all or
substantially all of the assets of the Corporation as an
entirety or substantially as an entirety so that the
Corporation shall cease to operate as an active business, any
outstanding Option may be exercised as to all or any part of
the Optioned Shares in respect of which the Optionee would
have been entitled to exercise the Option in accordance with
the provisions of the Plan at the date of completion of any
such sale at any time up to and including, but not after the
earlier of: (i) the close of business on that date which is
thirty (30) days following the date of completion of such
sale; and (ii) the close of business on the expiration date of
the Option; but the Optionee shall not be entitled to exercise
the Option with respect to any other Optioned Shares;
(c) subject to the rules of any relevant stock exchange or other
regulatory authority, the Board may, by resolution, advance
the date on which any Option may be exercised or extend the
expiration date of any Option. The Board shall not, in the
event of any such advancement or extension, be under any
obligation to advance or extend the date on or by which
Options may be exercised by any other Optionee; and
(d) the Board may, by resolution, but subject to applicable
regulatory requirements, decide that any of the provisions
hereof concerning the effect of termination of the Optionee's
employment shall not apply to any Optionee for any reason
acceptable to the Board.
Notwithstanding the provisions of this Article 9, should changes be required to
the Plan by any securities commission, stock exchange or other governmental or
regulatory body of any jurisdiction to which the Plan or the Corporation now is
or hereafter becomes subject, such changes shall be made to the Plan as are
necessary to conform with such requirements and, if such changes are approved by
the Board, the Plan, as amended, shall be filed with the records of the
Corporation and shall remain in full force and effect in its amended form as of
and from the date of its adoption by the Board.
10. MISCELLANEOUS PROVISIONS
10.1 An Optionee shall not have any rights as a shareholder of the Corporation
with respect to any of the Shares covered by such Option until the date of
issuance of a certificate for Shares upon the exercise of such Option, in full
or in part, and then only with respect to the Shares represented by such
certificate or certificates. Without in any way limiting the generality o 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.
10.2 Nothing in the Plan or any Option shall confer upon an Optionee any right
to continue or be re-elected as a director of the Corporation or any right to
continue in the employ of the Corporation or any Subsidiary, or affect in any
way the right of the Corporation or any Subsidiary to terminate his or her
employment at any time; nor shall anything in the Plan or any Option be deemed
or construed to constitute an agreement, or an expression of intent, on the part
of the Corporation or any Subsidiary to extend the employment of any Optionee
beyond the time which he or she would be normally be retired pursuant to the
provisions of any present or future retirement plan of the Corporation or any
Subsidiary or any present or future retirement policy of the Corporation or any
Subsidiary, or beyond the time at which he or she would otherwise be retired
pursuant to the provisions of any contract of employment with the Corporation or
any Subsidiary.
10.3 Notwithstanding Section 5.8 hereof, Options may be transferred or assigned
between an Eligible Individual and the related Employee Corporation provided the
assignor delivers notice to the Corporation prior to the assignment.
10.4 The Plan and all matters to which reference is made herein shall be
governed by and interpreted in accordance with the laws of the Province of
Ontario and the laws of Canada applicable therein.
11. SHAREHOLDER AND REGULATORY APPROVAL
11.1 The Plan shall be subject to ratification by the shareholders of the
Corporation to be effected by a resolution passed at a meeting of the
shareholders of the Corporation, and to acceptance by The Toronto Stock Exchange
and any other relevant regulatory authority. Any Options granted prior to such
ratification and acceptance shall be conditional upon such ratification and
acceptance being given and no such Options may be exercised unless and until
such ratification and acceptance are given.
YM BIOSCIENCES INC.
RESOLUTIONS OF DIRECTORS
EXCERPTED from the Minutes of the annual and special meeting of the
shareholders of YM BIOSCIENCES INC., held at the offices of Heenan
Blaikie LLP, 200 Bay Street, Royal Bank Plaza, South Tower, Suite 2600,
Toronto, Ontario M5J 2J4 on November 26, 2003 at 4:30 p.m. (Toronto
time).
*****
AMENDMENT TO THE EMPLOYEE STOCK OPTION PLAN
The Chairman next put before the meeting a resolution of the Corporation
authorizing an amendment to the employee stock option plan to reserve a total of
2,750,000 Common Shares representing then 16% of the number of Common Shares
issued and outstanding.
Upon motion duly made, seconded and unanimously carried, it was resolved that:
A resolution in the form set out as Exhibit "B" to the management information
circular of the Corporation dated October 28, 2003 with respect to the above
described matter be and is hereby adopted by the shareholders of the Corporation
and its content confirmed and approved.