SIGMA SYSTEMS GROUP (CANADA) INC. AMENDEDAND RESTATED 2002 CALIFORNIA STOCK INCENTIVE PLAN
EX-10.60 4 a2100392zex-10_60.htm EXHIBIT 10.60
EXHIBIT 10.60
SIGMA SYSTEMS GROUP (CANADA) INC.
AMENDED AND RESTATED 2002 CALIFORNIA STOCK INCENTIVE PLAN
1. Purpose
The purpose of this Amended and Restated 2002 California 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 are residents of the State of California and 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
(a) Subject to subsection (b) below, and to the extent permitted under applicable law, all of the Company’s employees, officers, directors and consultants who are residents of the State of California 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”.
(b) Notwithstanding subsection (a) above, the number of Participants under this Plan that are not “accredited investors” (as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended) shall in no event exceed 35.
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 300,000 shares of the Company’s Class B Preferred Shares (the “Class B Preferred Shares”) and (ii) up to 300,000 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”.
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(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.
(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
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(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.
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
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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 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
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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 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.
