Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement of a Foreign Private Issuer — Form F-1 Filing Table of Contents
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1: F-1/A Pre-Effective Amendment to Registration Statement HTML 896K
of a Foreign Private Issuer
2: EX-3.1 Articles of Incorporation/Organization or By-Laws HTML 20K
3: EX-3.2 Articles of Incorporation/Organization or By-Laws HTML 97K
4: EX-10.1 Material Contract HTML 174K
12: EX-10.10 Material Contract HTML 55K
13: EX-10.11 Material Contract HTML 80K
14: EX-10.15 Material Contract HTML 77K
5: EX-10.2 Material Contract HTML 121K
6: EX-10.3 Material Contract HTML 110K
7: EX-10.5 Material Contract HTML 58K
8: EX-10.6 Material Contract HTML 62K
9: EX-10.7 Material Contract HTML 48K
10: EX-10.8 Material Contract HTML 36K
11: EX-10.9 Material Contract HTML 73K
1.1 This Stock Option Plan has been established by the Company to provide long-term incentives to
attract, motivate and retain certain key employees, directors and officers of, and consultants
providing services to, the Company.
2. DEFINITIONS
2.1 In this Plan, the following terms have the following meanings:
“Affiliate”has the meaning ascribed to that term in the Securities Act (Ontario);
“Associate”has the meaning ascribed to that term in the Securities Act (Ontario);
“Applicable Law”means any applicable provision of law, domestic or foreign, including, without
limitation, applicable securities legislation, together with all regulations, rules, policy
statements, rulings, notices, orders or other instruments promulgated thereunder and Stock Exchange
Rules;
“ATS”means ATS Automation Tooling Systems Inc.;
“Board”means the board of directors of the Company;
“Business Day”means any day other than a Saturday, a Sunday or a statutory holiday observed in the
Province of Ontario;
“Committee”means a committee, if any, created by the Board to exercise authority under the Plan
pursuant to the provisions contained herein;
“Company”means Photowatt Technologies Inc., its Affiliates and their respective successors and
assigns, and any reference in the Plan to action by the Company means action by or under the
authority of the Board or the Committee or any person that has been designated for that purpose by
the Board or Committee in accordance with Section 10.4;
“Consultant”means a person providing on-going services to the Company excluding, for greater
certainty, a director of the Company;
“Continuous Service”means that the provision of services to the Company in any capacity of
employee, director, officer or Consultant is not interrupted or terminated, whether by resignation,
removal, discharge, termination of engagement or otherwise. In the case of an employee whose
employment is terminated by the Company, Continuous Service shall be terminated on the date of
notice of termination is given to the employee. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers between locations of
the Company or among the Company and any of its Affiliates or any successor, in any capacity of
employee, director, officer or Consultant, or (iii) any change in status as long as the individual
remains in the service of the Company or an Affiliate in any capacity of employee, director,
officer or Consultant (except as otherwise provided in a written agreement between the Company and
the Participant). An approved leave of
absence shall include sick leave, military leave, or any other authorized personal leave. For
purposes of an ISO, no
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such leave may exceed 90 days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract;
“Corporate Transaction” means a Sale Transaction resulting in a Change of Control (as defined
below). A “Change of Control” shall occur in the event of either (A) an acquisition of voting
securities of the Company to which are attached in excess of 50% of the votes attaching to all
outstanding voting securities of the Company or (B) if the Company is not the surviving corporation
following completion of a Corporate Transaction, a transaction whereby the shareholders of the
Company immediately before the transaction hold less than 50% of the shares of the surviving
corporate entity or purchaser;
“Date of Grant”of an Option means the date the Option is granted to a Participant under the Plan;
“Designated Number”has the meaning ascribed to it in Subsection 3.2(a) hereof;
“Effective Date”means the 12th day of September, 2006, when this Plan was approved by
the Board;
“Eligible Person”has the meaning ascribed to it in Section 3.1 hereof;
“Exercise Notice”has the meaning ascribed to it in Subsection 3.6 hereof;
“Exercise Notice Deadline”means the earlier of (i) 5:00 p.m. (Toronto time) on the date which is
the 180th day following the date of the death of the Participant and (ii) the Expiry Time.
“Exercise Price”has the meaning ascribed to it in Subsection 3.2(b) hereof;
“Expiry Date”means, in respect of an Option, the latest date on which the Option may be exercised,
provided that if at any time the date should be determined to occur either during a period in which
the holder of the Option is restricted from trading in securities of the Company under the insider
trading policy or other policy of the Company or within ten Business Days following such a period,
such date shall be deemed to be the date that is the tenth Business Day following the date of
expiry of such period;
“Expiry Time”means, in relation to an Option, 5:00 p.m. (Toronto time) on the Expiry Date;
“Fair Market Value”with respect to the Shares as at any date means the closing price for the
Shares on the day immediately prior to such date on the stock exchange on which the highest
aggregate volume of Shares have traded on such date. In the event that the Shares are not listed
and posted for trading on any stock exchange, the Fair Market Value shall be the fair market value
of the Shares as determined by the Company in its sole discretion, acting reasonably and in good
faith;
“Insider”means:
(i)
an insider as defined in the Securities Act (Ontario), other than a person who falls within
that definition solely by virtue of being a director or senior officer of a subsidiary of the
Company; and
(ii) an Associate of any person who is an insider by virtue of (i), above;
“ISO”has the meaning ascribed to it in Section 8.1 hereof;
“Liquid Securities”means securities of an issuer that are listed for trading on one or more of the
TSX, the Nasdaq Global Market, the New York Stock Exchange or a stock exchange of similar stature,
that have a market
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capitalization of at least $200 million, and that are not subject to any
restriction on sale, pursuant to Applicable Law or otherwise;
“Non-Executive Director”means any director of the Company who is not an employee or officer of the
Company or any Affiliate;
“Option”means a right granted under the Plan to a Participant to purchase Shares in accordance
with the Plan;
“Optionee”means an Eligible Person to whom an Option has been granted and who continues to hold
such Option;
“Outstanding Issue”means the aggregate number of Shares that are outstanding immediately prior to
the Share issuance in question, excluding Shares which have been issued pursuant to Share
Compensation Arrangements within the preceding one year period;
“Participant”means an Eligible Person who has agreed to participate in the Plan on such terms as
the Company may specify at the time he or she is designated as an Eligible Person;
“Plan”means this Stock Option Plan, as amended and restated from time to time;
“Qualified IPO”means an underwritten public offering of Shares in which immediately following the
closing, the Shares are listed for trading on one or more of the TSX, the Nasdaq Global Market, the
New York Stock Exchange or a stock exchange or quotation system of similar stature and have a
market capitalization of at least $200 million;
“Sale Transaction”means any merger, amalgamation or plan of arrangement involving the Company,
acquisition or take-over bid for the Shares of the Company, or similar transaction, or the sale of
all or substantially all of the assets of the Company excluding any asset sale transaction in
connection with which all holders of Shares are not entitled to receive cash or Liquid Securities
in consideration for their Shares, provided that a Sale Transaction shall exclude: (i) any share
transfer, reorganization, asset transfer, or similar transaction to which the parties are limited
to the Company and/or any of its present or future Affiliates; (ii) the completion of a treasury
offering of securities of the Company or an Affiliate of the Company; or (iii) the public offering
or the dividend or other distribution by ATS or one of its Affiliates of shares in the capital of
the Company;
“SAR”has the meaning ascribed to it in Section 4.3 hereof;
“Shares”means common shares of the Company, and include any shares of the Company into which such
shares may be converted, reclassified, subdivided, consolidated, exchanged or otherwise changed,
whether pursuant to a reorganization, amalgamation, merger, arrangement or other form of
reorganization;
“Share Compensation Arrangement”means a stock option, stock option plan, stock purchase plan where
the issuer provides financial assistance or matches the whole or a portion of the purchase price of
the securities being purchased, stock appreciation rights involving the issuance of securities from
treasury, or any other compensation or incentive mechanism involving the issuance or potential
issuance of securities to one or more of an employee, Insider or Consultant of the Company or any
Affiliate, including a share purchase from treasury which is financially assisted by the Company by
way of a loan, guaranty or otherwise;
“Stock Exchange Rules”means the applicable rules of any stock exchange or quotation system upon
which shares of the Company are listed or quoted, as applicable;
“Successor Corporation”has the meaning ascribed to it in Section 6.1 hereof;
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“TSX”means the Toronto Stock Exchange;
“US Optionee”has the meaning ascribed to it in Section 8.1 hereof; and
“Vesting Rights”refers to the terms on which the Option may be exercised.
2.2 In this Plan, unless the context requires otherwise, references to the male gender include the
female gender, words importing the singular number may be construed to extend to and include the
plural number, and words importing the plural number may be construed to extend to and include the
singular number.
3. GRANT OF OPTIONS AND TERMS
3.1 The Company may, from time to time, designate any persons, including one or more directors of
the Company, bona fide full-time employees of the Company or Consultants, as “Eligible Persons” for
the purposes of the Plan. If an Eligible Person executes and delivers to the Company a letter
agreement substantially in the form of Schedule “A” and thereby agrees to participate in the Plan
on the terms and conditions specified by the Company, he or she shall become a Participant in the
Plan. The Company shall have no obligation at any time after the delivery of such a letter
agreement to a Participant to notify the Participant of the Expiry Date of any Options granted
under this Plan.
3.2 The Company may, from time to time, grant an Option to a Participant to acquire Shares in
accordance with the Plan. In granting such Option, subject to the provisions hereof, the Company
shall designate,
(a)
the maximum number (the “Designated Number”) of Shares which the Participant
may purchase under the Option;
(b)
the price (the “Exercise Price”) per Share at which the Participant may
purchase his or her Shares under the Option, which price shall be determined by the
Company in accordance with Section 3.3 hereof;
(c)
the conditions to be met to establish Vesting Rights attaching to the Option,
which may include performance conditions relating to the market price of the Shares;
the return on investment to holders of Shares, with or without reference to other
comparable companies; the financial performance or results of the Company or business
unit thereof; other performance criteria relating to the Company or business unit
thereof; ownership of Shares by a Participant; and any other terms and conditions the
Company may in its discretion determine with respect to vesting;
(d)
the Expiry Date of the Option, which shall be no later than the date that is
seven years after the Date of Grant; and
(e)
with respect to Options granted pursuant to Section 8 hereof, whether the
Option is intended to constitute an ISO.
3.3 The Exercise Price in respect of an Option shall be determined by the Company, but shall be not
less than the Fair Market Value of the Shares on the Date of Grant of the Option.
3.4 Except as otherwise set out in any written agreement between a Participant and the Company in
respect of an Option, and notwithstanding any other provision of this Stock Option Plan, in the
event of a Corporate Transaction, each Option will be deemed terminated immediately prior to the
specified effective date of the Corporate Transaction, unless either the Option is assumed by the
successor corporation or parent thereof in connection with the Corporate Transaction or the Board
determines otherwise. Upon Board approval of a Sale
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Transaction, the Company may give notice to
each Participant which will set forth requirements in respect of outstanding Options or any Shares
acquired through the exercise of Options following the date of such notice that must be complied
with as a condition to each Participant’s participation in the Sale Transaction.
3.5 The Board or the Committee, as the case may be, may, in its sole discretion and subject to such
conditions as the Board or Committee considers appropriate, at any time after the Date of Grant of
a Option, determine the acceleration, if any, of the Vesting Provisions for any Option and permit
an Optionee to exercise any or all of the unvested Options then outstanding and granted to the
Optionee under this Plan, in which event all such unvested Options then outstanding and granted to
the Optionee shall be deemed to be immediately exercisable during such period of time as may be
specified by the Board or the Committee.
3.6 If a Participant should die and the circumstances specified in Section 3.7 had not occurred in
relation to such Participant and such Participant, at the time of his or her death, held an
Option(s) in respect of which the Expiry Time had not then occurred, then in the case of each
Option so held by the deceased Participant which had vested and was exercisable with respect to
some or all of the Shares forming the subject matter thereof as at the date of the death of the
deceased Participant, the legal representatives of the deceased Participant shall be entitled to
send a notice in writing (an “Exercise Notice”) to the Company advising that they wish to exercise
such Option which notice, to be effective, must be actually received by the Company by no later
than the Exercise Notice Deadline and must specify the number of Shares in respect of which such
Option is wished to be exercised (provided that such exercise can only be in respect of up to that
number of Shares that the deceased Participant could have exercised such Option as at the date of
his or her death), accompanied by a certified cheque or other means of cash payment satisfactory to
the Company in the amount of the aggregate Exercise Price for such number of Shares. In the event
that:
(i)
an effective Exercise Notice is actually received by the
Company by no later than the Exercise Notice Deadline, then the Company shall
issue to the estate of the deceased Participant that number of Shares as were
specified in the Exercise Notice (provided that the maximum number of Shares
which can be issued shall not exceed that number of Shares for which the
deceased Participant could have exercised such Option as at the date of his or
her death), which issuance shall occur as soon as practicable thereafter. If
the Exercise Notice so received is in respect of less than the maximum number
of Shares for which the deceased Participant could have exercised such Option
as at the date of his or her death, such Option shall in all respects terminate
and be of no further force or effect as to such of the Shares in respect of
which such Option has not been exercised pursuant to the Exercise Notice; and
(ii)
an effective Exercise Notice is not actually received by the
Company by the Exercise Notice Deadline, such Option shall in all respects
terminate and be of no further force or effect.
3.7
(a)
Except as otherwise provided in Section 3.6 or subsection 3.7(b) or in a written
agreement with the Company and approved by the Board, if a Participant’s Continuous Service
shall terminate then (A) any Option granted to such Participant under the Plan that has not
vested shall in all respects terminate and be of no further force or effect immediately after
such termination of Continuous Service (and without the requirement for any further act or
formality including, without limitation, the giving of any notices) and (B) immediately after
the earlier of 5:00 p.m. (Toronto time) on the 30th day following the date of the occurrence
of any such resignation, discharge, removal or termination other than by reason of death as
contemplated in Section 3.6 (and without the requirement for any further act or formality
including, without limitation, the giving of any notices) and the Expiry Time, each and every
Option granted to such Participant
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under the Plan that has not been exercised by said time
shall in all respects immediately terminate and be of no further force or effect.
(b)
Except as otherwise provided in a written agreement with the Company, and
approved by the Board, if a Participant:
(i)
is discharged or terminated as an employee or officer of the
Company for cause; or
(ii)
is removed as a director of the Company by action of the Board
or the shareholders of the Company; or
(iii)
was engaged as a Consultant and is not an employee or director
or officer of the Company, and the engagement is terminated by the Company for
cause or breach of duty,
immediately upon the occurrence of any such discharge, removal or termination other
than by reason of death as contemplated in Section 3.6 (and without the requirement
of any further act or formality including, without limitation, the giving of any
notices), each and every Option granted to such Participant under the Plan that had
not been exercised prior to such occurrence shall in all respects immediately
terminate and be of no further force or effect as to Shares in respect of such
Options, regardless of whether or not such Option had vested with respect to such
Shares.
For greater certainty, the Company shall in its sole and absolute discretion determine whether
“cause” or a “breach of duty” exists with respect to a discharge or termination.
3.8 Participation in the Plan shall be entirely voluntary and any decision not to participate shall
not affect the employment or engagement of any Eligible Person with the Company.
3.9 The Company shall in its sole discretion, subject only to the terms of this Plan, determine the
terms of all Options.
3.10 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
Company, cease and terminate and be of no further force or effect whatsoever.
4. EXERCISE OF PARTICIPANTS’ OPTIONS
4.1 Subject to earlier termination as provided for in Sections 3.6 and 3.7, a Participant’s Option
shall terminate and may not be exercised after the Expiry Date.
4.2 Other than as provided for in Sections 3.4, 3.6, and 3.7, the exercise of an Option under the
Plan shall be made by submitting to the Company a notice substantially similar to that attached as
Schedule “B”, specifying and subscribing for the number of Shares in respect of which the Option is
being exercised at that time and accompanied by a certified cheque or other means of cash payment
satisfactory to the Company in the amount of the aggregate Exercise Price for such number of
Shares.
4.3 At the discretion of the Company, an Option granted under the Plan may have connected
therewith, at or after the time of grant, a number of stock appreciation rights (a “SAR” or “SARs”)
equal to the Designated Number of Shares in respect of the Option. Each such SAR in respect of a
Share shall entitle the
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Participant to surrender to the Company, unexercised, the right to
subscribe for such Share pursuant to the related Option and to receive from the Company cash in an
amount equal to the excess of the Fair Market Value at the time of exercise of the SAR over the
Exercise Price of the related Option. Upon exercise of a SAR in respect of a Share covered by a
related Option, that Option in respect of such Share shall immediately cease and terminate and be
of no further force or effect. Unexercised SARs shall terminate when the related Option is
exercised or the Option terminates.
4.4 Upon the exercise of any Option, the Company shall have the right to require the Participant to
remit to the Company, in addition to the Exercise Price, an amount sufficient to satisfy all
federal, provincial, state and local withholding tax requirements, if any, prior to the issuance of
the Shares. The Company shall also have the right in its discretion to satisfy any such
withholding tax liability by retaining any Shares which would otherwise be issued to a Participant
hereunder.
4.5 Upon the disposition of any Shares acquired through the exercise of an Option, the Company
shall have the right to require the Participant to remit to the Company an amount sufficient to
satisfy all federal, provincial, state and local withholding tax requirements, if any, as a
condition to the registration of the transfer of such Shares on its books.
4.6 A term of grant of each Option shall be that if the holder is requested in writing by the
Company and the lead underwriters for a proposed public offering of securities of the Company, the
holder shall not (as evidenced by such form as may be reasonably requested) sell or otherwise
dispose of or enter into a transaction providing the economic consequences of a sale in respect of
any Shares acquired or that may be acquired pursuant to the exercise of the Option without the
prior written consent of such underwriters, for a period not to exceed 180 days following the
closing of such public offering.
5. MAXIMUM NUMBER OF SHARES TO BE ISSUED UNDER THE PLAN
5.1 The maximum number of Shares that may be issued by the Company to Participants pursuant to
Options granted and outstanding under this Plan and other Share Compensation Arrangements is, prior
to a Qualified IPO, 4,000,000, and after a Qualified IPO, a number equal to 10% of the number of
the Outstanding Issue immediately following completion of the Qualified IPO.
5.2 Following completion of a Qualified IPO, 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.
5.3 Notwithstanding any of the other provisions of this Plan, following completion of a Qualified
IPO, no Options shall be granted to any Optionee if such grant could result, at any time, in:
a)
the aggregate number of Shares issuable to Insiders at any time and issued to Insiders
within the one-year period prior to such time pursuant to Options or other Share
Compensation Arrangements exceeding 10% of the issued and outstanding Shares;
b)
the aggregate number of Shares reserved for issuance pursuant to Options granted under
this Plan or any other stock option plan to Non-Executive Directors exceeding 0.5% of the
issued and outstanding Shares; and
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c)
the issuance to any one Insider and such Insider’s Associates, within a one-year
period, pursuant to Options or other Share Compensation Arrangements of an aggregate number
of Shares exceeding 5% of the issued and outstanding Shares.
5.4 If any Option is terminated, cancelled or has expired without being fully exercised, any
unissued Shares which have been reserved to be issued upon the exercise of the Option shall become
available to be issued upon the exercise of Options subsequently granted under the Plan, provided
that any such termination or cancellation of Options shall be conducted in accordance with the
applicable rules of any stock exchange upon which the Shares of the Company are listed.
6. ANTI-DILUTION
6.1 In the event that the Shares are at any time changed or affected as a result of the declaration
of a stock dividend or other distribution thereon or their subdivision or consolidation, the number
of Shares reserved for issuance under this Plan shall be adjusted accordingly by the Board or the
Committee to such extent as they deem proper in their discretion. In such event, the number of,
and the price payable for, any Shares that are then subject to Option may also be adjusted by the
Board or the Committee to such extent, if any, as they deem proper in their discretion.
Subject to Section 3.4, if at any time after the grant of an Option 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 the preceding paragraph, or the Company shall merge,
combine, enter into a plan of arrangement or amalgamate with or into another corporation (the
corporation resulting or continuing from such merger, combination, plan of arrangement or
amalgamation being herein called the “Successor Corporation”), 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 number of shares
of the appropriate class and/or other securities of the Company or the Successor Corporation (as
the case may be) and/or other consideration from the Company 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, of such merger, combination, arrangement or
amalgamation, if on the record date or effective date (as the case may be) of such
reclassification, reorganization or other change or such merger, combination, plan of arrangement
or amalgamation (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.
6.2 The Company shall not be required to issue fractional shares in satisfaction of its obligations
hereunder. Any fractional interest in a Share that would, except for the provisions of this
Section 6.2, be deliverable upon the exercise of any Option shall be cancelled and not be
deliverable by the Company.
7. ACCOUNTS AND STATEMENTS
7.1 The Company shall maintain records of the details of each Option granted to each Participant
under the Plan, including the Date of Grant, the Designated Number, the Exercise Price of each
Option, the Vesting Rights, the Expiry Date, the number of Shares in respect of which the Option
has been exercised and the maximum number of Shares which the Participant may still purchase under
the Option, which records shall, absent manifest error, be considered conclusively determinative of
all information contained therein. Upon request therefor from a Participant and at such other
times as the Company shall determine, the Company shall furnish the Participant with a statement
setting forth the details of his Options. Subject to the first sentence of this Section 7.1, such
statement shall be deemed to have been accepted by the Participant as correct unless written notice
to the contrary is provided to the Company within 30 days after such statement is given to the
Participant.
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8. OPTIONS GRANTED TO US RESIDENTS OR CITIZENS
8.1 Any Option granted under this Plan to a Participant who is a citizen or resident of the United
States (including its territories, possessions and all areas subject to the jurisdiction) (a “U.S.
Optionee”) may be an incentive stock option (an “ISO”) within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, of the United States (the “Code”), but only if so
designated by the Company in the agreement evidencing such Option. No provision of this Plan, as it
may be applied to a US Optionee, shall be construed so as to be inconsistent with any provision of
Section 422 of the Code. Grants of Options to US Optionees which are not ISO’s may be granted
pursuant to Section 3 hereof. Notwithstanding anything in this Plan contained to the contrary, the
following provisions shall apply to ISO’s granted to each US Optionee:
(a)
ISO’s shall only be granted to US Optionees who are employees at the time of
grant;
(b)
the aggregate fair market value (determined as of the time an ISO is granted)
of the Shares subject to ISO’s exercisable for the first time by a US Optionee during
any calendar year under this Plan and all other equity plans, within the meaning of
Section 422 of the Code, of the Company shall not exceed One Hundred Thousand Dollars
in US funds (US $100,000); provided that options for Shares which exceed such aggregate
fair market value shall not be void, but shall instead be options which are granted
under Section 3 hereof and are not ISOs;
(c)
the Exercise Price for Shares under each ISO granted to a US Optionee pursuant
to this Plan shall be not less than the fair-market-value of such Shares at the time
the Option is granted;
(d)
if any US Optionee to whom an ISO is to be granted under the Plan at the time
of the grant of such ISO is the owner of shares possessing more than ten percent (10%)
of the total combined voting power of all classes of shares of the Company, then the
following special provisions shall be applicable to the ISO granted to such individual:
(i)
the Exercise Price (per Share) subject to such ISO shall not be
less than one hundred ten percent (110%) of the Fair Market Value of one Share
at the time of grant; and
(ii)
for the purposes of this Section 8.1 only, the option exercise
period shall not exceed five (5) years from the Date of Grant; and
(e)
no Option may be granted hereunder to a US Optionee following the expiration of
ten (10) years after the date on which this Plan is adopted by the Company or the date
on which the Plan is approved by the shareholders of the Company, whichever is earlier.
8.2 The maximum number if ISOs that may be issued under this Plan is 200,000, subject to adjustment
in accordance with Section 6.1, mutatis mutandis.
9. NOTICES
9.1 Any payment, notice, statement, certificate or other instrument required or permitted to be
given to a Participant or any person claiming or deriving any rights through him or her shall be
given by:
(a)
delivering it personally to the Participant or to the person claiming or
deriving rights through him or her, as the case may be; or
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(b)
mailing it postage paid (provided that the postal service is then in operation)
or delivering it to the address which is maintained for the Participant in the
Company’s records.
9.2 Any payment, notice, statement, certificate or instrument required or permitted to be given to
the Company shall be given by mailing it postage prepaid (provided that the postal service is then
in operation) or delivering it to the Company at the following address:
Photowatt Technologies Inc.
25 Reuter Drive
Cambridge, Ontario N3E 1A9
Attention: President and Chief Executive Officer
Fax No.: (519) 650-6535
9.3 Any payment, notice, statement, certificate or other instrument referred to in Section 9.1 or
Section 9.2 hereof, if delivered, shall be deemed to have been given or delivered on the date on
which it was delivered or, if mailed (provided that the postal service is then in operation), shall
be deemed to have been given or delivered on the second Business Day following the date on which it
was mailed.
10. GENERAL
10.1 The Company shall have the power to, at any time and from time to time either prospectively or
retrospectively, amend, suspend or terminate the Plan or any Option granted under the Plan;
provided, however, that:
(a)
any such amendment, suspension or termination is subject to any approvals
required under Applicable Law;
(b)
no such amendment, suspension or termination shall be made at any time to the
extent such action would materially adversely affect the existing rights of a
Participant with respect to any then outstanding Option, as determined by the Board
acting in good faith, without his or her consent in writing, except to the extent
required by Applicable Law; and
(c)
following completion of a Qualified IPO, any such amendment in respect of the
following shall become effective only upon shareholder approval thereof:
(i)
any amendment to the maximum number of Shares specified in
Sections 5.1 and 8.2 in respect of which Options may be granted under this
Plan (other than pursuant to Article 6);
(ii)
any amendment that would reduce the Exercise Price at which
Options may be granted below the price provided for in Section 3.3 (other
than pursuant to Article 6)
(iii)
any amendment that would increase any of the percentage
limits in Sections 5.2 and 5.3;
(iv)
any amendment to Section 3.2(d) having the effect of
extending the maximum term of an Option beyond the date that is seven years
after the Date of Grant;
(v)
any amendment that would extend the term of any outstanding
Option granted to an Insider to a date beyond the Expiry Date;
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(vi)
any amendment that would reduce the Exercise Price of an
outstanding Option (other than pursuant to Article 6);
(vii)
any amendment that would permit assignments to persons not
currently permitted under the Plan; and
(viii)
any amendment to the definition of “Eligible Persons” or any defined term
used therein that would expand the scope of the term “Eligible Persons”.
10.2 The Company shall have the power to make such rules and regulations for the administration of
this Plan, and to interpret the provisions hereof and of such rules and regulations, as it shall in
its sole discretion determine to be appropriate.
10.3 The determination by the Company of any question which may arise as to the interpretation or
implementation of the Plan or any of the Options granted hereunder shall be final and binding on
all Participants and other persons claiming or deriving rights through any of them.
10.4 The Board or Committee may from time to time delegate all or any of its powers under the Plan
to one or more directors or officers of the Company who shall thereupon exercise such of the powers
herein given to the Board or the Committee as may be delegated by it in accordance with any express
directions of the Board or Committee from time to time.
10.5 The Plan shall enure to the benefit of and be binding upon the Company, its successors and
assigns. The interest of any Participant under the Plan or in any Option shall not be transferable
or alienable by him or her either by pledge, assignment or in any other manner whatsoever and,
during his lifetime, shall be vested
only in him or her, but shall thereafter enure to the benefit of and be binding upon the legal
personal representatives of the Participant in accordance with the terms hereof.
10.6 The Company’s obligation to issue Shares in accordance with the terms of this Plan and the
grant or right of exercise of any Option hereunder are subject to compliance with all Applicable
Laws and to receipt of any applicable approval under Applicable Laws in respect of the grant or
right of exercise or any securities filing that discloses the grant or right of exercise. As a
condition of participating in the Plan, each Participant agrees (for such period as the Participant
holds any Option, including any period subsequent to termination of Continuous Service of the
Participant), in connection with the exercise of all Options held and the sale of any Shares
acquired upon the exercise of such Options, to comply with all Applicable Laws as well as the
restrictions respecting disclosure of information or trading in securities of the Company
established in the Company’s insider trading policy or such other policies as are established from
time to time, and to furnish to the Company all information, representations and undertakings as
may be necessary to demonstrate compliance with Applicable Laws by the Company, as determined by
the Company, acting reasonably.
10.7 Each Participant is subject to all applicable tax laws in connection with the ownership and
exercise of Options and the acquisition and disposition of Shares underlying any Options, and no
representation or warranty is made by the Company respecting any tax deduction, credit or other
favourable tax treatment in connection therewith.
10.8 No Participant shall have any rights as a shareholder in respect of Shares subject to an
Option until such Shares have been paid for in full and issued.
10.9 No Participant or other person shall have any claim or right to be granted Options under the
Plan. Neither the Plan nor any action taken thereunder shall interfere with the right of the
employer of a Participant to terminate that Participant’s employment at any time. Neither any
period of notice nor any payment in lieu thereof
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upon termination of employment shall be considered
as extending the period of employment for the purposes of the Plan.
10.10 The Board or Committee shall be entitled to make such rules, regulations and determinations
as it deems appropriate under the Plan in respect of any leave of absence or disability of any
Participant.
10.11 This Plan and any Options granted hereunder shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
10.12 This Plan is hereby instituted and in effect as of the Effective Date.
* * *
SCHEDULE “A”
[LETTERHEAD OF PHOTOWATT TECHNOLOGIES INC.]
TO: [Name of Eligible Person]
You have been designated as an Eligible Person under the Stock Option Plan of Photowatt
Technologies Inc. (the “Plan”), and assuming that you become a Participant in the Plan by signing
this letter, the details of the non-assignable Option which has been granted to you under the Plan
are as follows:
(a)
Date of Grant:
(b)
Designated Number (maximum
number of Shares which you
may purchase under this Option):
(c)
Exercise Price (price per Share):
(d)
Expiry Date:
Subject to the terms of the Stock Option Plan, the conditions to be met to establish Vesting
Rights attaching to the Option are as follows:
If you agree to participate in the Plan and comply with its terms and conditions, please sign
one copy of this letter and return it to by 20.
PHOTOWATT TECHNOLOGIES INC.
By:
I have read the Photowatt Technologies Inc. Stock Option Plan and agree to comply with, and
agree that my participation is subject in all respects to, its terms and conditions:
(Signature)
(Date)
SCHEDULE “B”
PHOTOWATT TECHNOLOGIES INC.
STOCK OPTION PLAN
NOTICE OF INTENT TO EXERCISE OPTION
I,
, hereby exercise my option to purchase ___ Common Shares of Photowatt
Technologies Inc. (the “Company”) at a purchase price of $ per Common Share.
This Notice is delivered in respect of the option to purchase
___ Common Shares of the
Company which was granted to me on the ___ day of , 20___.
In connection with the foregoing, I enclose a certified cheque or other means of cash payment
payable to the Company in the amount of $ in full payment for the Common Shares to be
received by me following receipt by the Company of this Notice and such payment.
