SIGMA SYSTEMS GROUP (CANADA) INC. AMENDEDAND RESTATED 2002 STOCK INCENTIVE PLAN

EX-10.59 3 a2100392zex-10_59.htm EXHIBIT 10.59

EXHIBIT 10.59

SIGMA SYSTEMS GROUP (CANADA) INC.

AMENDED AND RESTATED 2002 STOCK INCENTIVE PLAN

1.             Purpose

The purpose of this Amended and Restated 2002 Stock Incentive Plan (the “Plan”) of SIGMA SYSTEMS GROUP (CANADA) INC. (the “Company”), a corporation incorporated under the Business Corporations Act (Ontario) (the “OBCA”), is to advance the interests of the Company’s shareholders by enhancing the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing such persons with equity ownership opportunities and performance-based incentives and thereby better aligning the interests of such persons with those of the Company’s shareholders.  Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future subsidiaries, as such term is defined under the OBCA, and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).  When applied in connection with Participants (as defined below) who are citizens, residents or other persons subject to the federal income tax laws of the United States of America (“U.S. Participants”), the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”).

2.             Eligibility

To the extent permitted under applicable law, all of the Company’s employees, officers, directors and consultants are eligible to be granted options, restricted stock awards, or other stock-based awards (each, an “Award”) under the Plan.  Each person who has been granted an Award under the Plan shall be deemed a “Participant”.

3.             Administration and Delegation

(a)           Administration by Board of Directors.  The Plan will be administered by the Board.  The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable.  The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency.  All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.  No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.



 

(b)           Appointment of Committees.  To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”).  All references in the Plan to the “Board” shall mean the Board or a Committee of the Board to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.

4.             Stock Available for Awards.  Subject to adjustment under Section 9, Awards may be made under the Plan for (i) up to 6,485,100 shares of the Company’s Class B Preferred Shares (the “Class B Preferred Shares”) and (ii) up to 6,485,100 shares of the Company’s Non-Voting Common Shares (the “Non-Voting Common Shares”; such Class B Preferred Shares and Non-Voting Common Shares being referred to herein, collectively, as the “Shares”), and such number of Class B Preferred Shares and Non-Voting Common Shares shall be reserved for issuance under the Plan.  Awards under the Plan may, but need not be, based on “units” consisting of a combination of Class B Preferred Shares and Non-Voting Common Shares.  If any Award expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of the Shares subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or results in any Shares not being issued, the unused Shares covered by such Award shall again be available for the grant of Awards under the Plan, subject, however, in the case of Incentive Stock Options (as hereinafter defined) granted to U.S. Participants, to any limitations under the Code.

5.             California Residents.  At no time while there is any Option (as defined below) outstanding and held by a Participant who was a resident of the State of California on the date of grant of such Option, shall the total number of Shares issuable upon exercise of all outstanding options and the total number of Shares provided for under any stock bonus or similar plan of the Company exceed the applicable percentage as calculated in accordance with the conditions and exclusions of Section 260.140.45 of the California Code of Regulations, based on the shares of the Company which are outstanding at the time the calculation is made.

6.             Stock Options

(a)           General.  The Board may grant options to purchase Shares (each, an “Option”) and determine the number of Class B Preferred Shares and/or Non-Voting Common Shares to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal, provincial, state or foreign securities laws, as it considers necessary or advisable.  For U.S. tax purposes, an Option granted to a U.S. Participant which is not intended to be an Incentive Stock Option (as defined below) shall be designated a “Nonstatutory Stock Option”.

(b)           Incentive Stock Options for U.S. Participants.  An Option granted to a U.S. Participant that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to employees of the Company and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code.  The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) which is intended to be an Incentive Stock Option is not an Incentive Stock Option.

 

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(c)           Exercise Price.  The Board shall establish the exercise price at the time each Option is granted and specify it in the applicable option agreement.

(d)           Duration of Options.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement.

(e)           Exercise of Option.  Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board, together with payment in full as specified in Section 6(f) for the number of Class B Preferred Shares and/or Non-Voting Common Shares for which the Option is exercised.

(f)            Payment Upon Exercise.  Shares purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

(1)           in cash or by check, payable to the order of the Company, it being permissible for the Company, at its discretion, to lend such cash or the funds for such check to the Participant pursuant to a promissory note in form and substance acceptable to the Company;

(2)           except as the Board may, in its sole discretion, otherwise provide in an option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

(3)           if and when the Class B Preferred Shares or the Non-Voting Common Shares are registered under the Securities Exchange Act of 1934 (the “Exchange Act”), by delivery of Class B Preferred Shares or Non-Voting Common Shares, as the case may be, owned by the Participant valued at their fair market value as determined by (or in a manner approved by) the Board in good faith (“Fair Market Value”), provided (i) such method of payment is then permitted under applicable law and (ii) such Class B Preferred Shares or Non-Voting Common Shares, as the case may be, if acquired directly from the Company, were owned by the Participant at least six months prior to such delivery;

(4)           to the extent permitted by the Board, in its sole discretion, by payment of such other lawful consideration as the Board may determine; or

(5)           by any combination of the above permitted forms of payment.

(g)           Substitute Options.  In connection with a merger or consolidation (or similar transaction) of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Options in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof.  Substitute Options may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Options contained in the other sections of this Section 6 or in Section 2.

 

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7.             Restricted Stock

(a)           Grants.  The Board may grant Awards entitling recipients to acquire Class B Preferred Shares and/or Non-Voting Common Shares, subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award (each, a “Restricted Stock Award”).

(b)           Terms and Conditions.  The Board shall determine the terms and conditions of any such Restricted Stock Award, including the conditions for repurchase and the issue price, if any.

(c)           Stock Certificates.  Any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power of attorney endorsed in blank, with the Company (or its designee).  At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”).  In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.

8.             Other Stock-Based Awards

The Board shall have the right to grant other Awards in accordance with applicable laws based upon Class B Preferred Shares and/or Non-Voting Common Shares having such terms and conditions as the Board may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Class B Preferred Shares and/or Non-Voting Common Shares and the grant of stock appreciation rights.

9.             Adjustments for Changes in Capitalization and Certain Other Events

(a)           Changes in Capitalization.  In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares (including, without limitation, the automatic conversion of the Class B Common Shares and the Non-Voting Common Shares into shares of the Company’s Voting Common Shares pursuant to the terms of the Company’s Articles of Incorporation), spin-off or other similar change in capitalization or event, or any distribution to holders of Class B Preferred Shares or Non-Voting Common Shares, as the case may be, other than a normal cash dividend, (i) the number and class of securities available under this Plan, (ii) the number and class of securities and exercise price per Share subject to each outstanding Option, (iii) the repurchase price per Share subject to each outstanding Restricted Stock Award, and (iv) the terms of each other outstanding Award shall be appropriately adjusted by the Company (or substituted Awards may be made, if applicable) to the extent the Board shall determine, in good faith, that such an adjustment (or substitution) is

 

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necessary and appropriate.  If this Section 9(a) applies and Section 9(c) also applies to any event, Section 9(c) shall be applicable to such event, and this Section 9(a) shall not be applicable.

(b)           Liquidation or Dissolution.  In the event of a proposed liquidation or dissolution of the Company, the Board shall upon written notice to the Participants provide that all then unexercised Options will (i) become exercisable in full as of a specified time at least 10 business days prior to the effective date of such liquidation or dissolution and (ii) terminate effective upon such liquidation or dissolution, except to the extent exercised before such effective date.  The Board may specify the effect of a liquidation or dissolution on any Restricted Stock Award or other Award granted under the Plan at the time of the grant of such Award.

(c)           Reorganization Events

(1)           Definition.  A “Reorganization Event” shall mean:  (A) any amalgamation, merger, arrangement, consolidation or similar transaction of the Company with or into another entity as a result of which all of the shares of the Company are converted into or exchanged for the right to receive cash, securities or other property; or (B) any exchange of all of the shares of the Company for cash, securities or other property pursuant to a share exchange transaction.

(2)           Effect on Options.  Upon the occurrence of a Reorganization Event, or the execution by the Company of any agreement with respect to a Reorganization Event, the Board shall provide that all outstanding Options shall be assumed, or equivalent options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof).  For purposes hereof, an Option shall be considered to be assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase, for each Share subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Class B Preferred Shares or Non-Voting Common Shares, as the case may be, for each Share held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Class B Preferred Shares or Non-Voting Common Shares, as the case may be; provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in fair market value to the per Share consideration received by holders of Class B Preferred Shares or Non-Voting Common Shares, as the case may be, as a result of the Reorganization Event.

Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an affiliate thereof) does not agree to assume, or substitute for, such Options, then the Board shall, upon written notice to the Participants, provide that all then unexercised Options will become exercisable in full as of a specified time prior to the Reorganization Event and will terminate immediately prior to the consummation of such Reorganization Event, except to the extent exercised by the Participants before the consummation of such Reorganization Event; provided, however, that in the event of a Reorganization Event under the terms of which holders of the

 

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Class B Preferred Shares or the Non-Voting Common Shares, as the case may be, will receive upon consummation thereof a cash payment for each Class B Preferred Share or Non-Voting Common Share, as the case may be, surrendered pursuant to such Reorganization Event (the “Acquisition Price”), then the Board may instead provide that all outstanding Options shall terminate upon consummation of such Reorganization Event and that each Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Acquisition Price multiplied by the number of Shares subject to such outstanding Options (whether or not then exercisable), exceeds (B) the aggregate exercise price of such Options.  To the extent all or any portion of an Option becomes exercisable solely as a result of the first sentence of this paragraph, upon exercise of such Option, the Participant shall receive Shares subject to a right of repurchase by the Company or its successor at the Option exercise price.  Such repurchase right (1) shall lapse at the same rate as the Option would have become exercisable under its terms and (2) shall not apply to any Shares subject to the Option that were exercisable under its terms without regard to the first sentence of this paragraph.

If any Option provides that it may be exercised for Shares which remain subject to a repurchase right in favor of the Company, upon the occurrence of a Reorganization Event, any Shares of restricted stock received upon exercise of such Option shall be treated in accordance with Section 9(c)(3) as if they were a Restricted Stock Award.

(3)           Effect on Restricted Stock Awards.  Upon the occurrence of a Reorganization Event, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Company’s successor and shall apply to the cash, securities or other property which the Shares subject to such Restricted Stock Award were converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to such Shares.

(4)           Consequences of a Reorganization Event on Other Awards.  The Board shall specify the effect of a Reorganization Event on any other Award granted under the Plan at the time of the grant of such Award.

10.          General Provisions Applicable to Awards

(a)           Transferability of Awards.  Except as the Board may otherwise determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant.  References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

(b)           Documentation.  Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine in its sole and absolute discretion.  Each Award may contain terms and conditions in addition to those set forth in the Plan.

(c)           Board Discretion.  Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award.  The terms of each Award need not be identical, and the Board need not treat Participants uniformly.  The granting of an

 

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Award to a Participant at any time shall neither entitle such Participant to receive, nor preclude such Participant from receiving, any subsequent Awards.

(d)           Termination of Status.  The Board shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence, termination or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award.

(e)           Withholding.  Each Participant shall pay to the Company, or make provision satisfactory to the Board for payment of, any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax liability.  Except as the Board may otherwise provide in an Award, when the class of securities to which an Award relates is registered under the Exchange Act, Participants may satisfy such tax obligations in whole or in part by delivery of shares of such class, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, that the total tax withholding where shares are being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income).  The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant.  Other than compliance with its withholding obligations under applicable federal, provincial, state or foreign laws, the Company does not assume any responsibility for the income or other tax consequences arising from any Awards to any Participants.

(f)            Amendment of Award.  The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and, for U.S. Participants, converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

(g)           Conditions on Delivery of Shares.  The Company will not be obligated to deliver any Shares pursuant to the Plan or to remove restrictions from Shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

(h)           Acceleration.  The Board may at any time provide that any Award shall become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

 

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11.           Miscellaneous

(a)           No Right To Employment or Other Status.  No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company.  The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

(b)           No Rights as Shareholder.  Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a shareholder with respect to any Shares to be distributed with respect to an Award until becoming the record holder of such Shares.  Notwithstanding the foregoing, in the event the Company effects a split of the Class B Preferred Shares and/or the Non-Voting Common Shares by means of a stock dividend and the exercise price of and the number of Class B Preferred Shares or Non-Voting Common Shares, as the case may be, subject to such Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the Shares acquired upon such Option exercise, notwithstanding the fact that such Shares were not outstanding as of the close of business on the record date for such stock dividend.

(c)           Effective Date and Term of Plan.  The Plan shall become effective on the date on which it is adopted by the Board.  No Awards shall be granted under the Plan after the completion of ten years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Company’s shareholders, but Awards previously granted may extend beyond that date.

(d)           Amendment of Plan.  The Board may amend, suspend or terminate the Plan or any portion thereof at any time in its sole and absolute discretion.

(e)           Authorization of Sub-Plans.  The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions.  The Board shall establish such sub-plans by adopting supplements to this Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable.  All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.

(f)            Compliance with Applicable Laws.  If any provision of the Plan or any Award contravenes any law, rules or regulations of any governmental authority, regulatory authority, stock exchange or similar entity, then such provision shall be deemed to be amended to the extent required to bring such provision into compliance with such law, rule or regulation.

 

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(g)           Amendment and Restatement.  This Amended and Restated 2002 Stock Incentive Plan amends and restates and supersedes in all respects the 2002 Stock Incentive Plan previously adopted by the Board.

(h)           Governing Law.  The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

 

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