EXHIBIT (d)(7)
United States Resident - Individual ISO
THIS 724 SOLUTIONS STOCK OPTION AGREEMENT made as of the o day
of o, 2002.
B E T W E E N:
724 SOLUTIONS INC., a company
amalgamated under the laws of the
Province of Ontario,
(hereinafter called the "Company")
OF THE FIRST PART
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NAME
(hereinafter called the "Optionee")
OF THE SECOND PART
WHEREAS the Optionee is a U.S. Employee eligible to
participate in the 724 Solutions Inc. 2000 United States Incentive Stock Option
Program, a copy of which is attached hereto as Schedule A (the "Program");
AND WHEREAS the Company has determined that it is in the best
interests of the Company to grant to the Optionee an option to purchase common
shares of the Company as a performance incentive upon the terms and conditions
contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration
of the mutual covenants contained herein, the parties hereto agree as follows:
1. DEFINED TERMS
All capitalized terms used herein and not otherwise defined
have the same meaning as in the 724 Solutions Inc. 2000 Stock Option Plan and
the Program authorized under Section 3.6 of such Plan, all as amended from time
to time (collectively, the "Plan"). All references herein to the Plan shall be
deemed to include a reference to the terms of the Plan as amended from time to
time.
2. COMMON SHARE PURCHASE OPTION
Subject to the terms hereof and the provisions of the Plan,
the Company hereby grants to the Optionee an irrevocable option (the "Option")
to purchase up to o Shares (hereinafter collectively called the "Optioned
Shares") at the purchase price of U.S. $o per Share.
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THIS OPTION IS INTENDED TO HAVE THE TAX STATUS OF AN INCENTIVE
STOCK OPTION. This Option is intended to be an Incentive Stock Option within the
meaning of Section 422(b) of the United States Internal Revenue Code of 1986, as
amended (the Code"), but the Company does not represent or warrant that this
Option qualifies as such. The Optionee should consult with the Optionee's own
tax advisor regarding the tax effect of this Option and the requirements
necessary to obtain favourable income tax treatment under Section 422 of the
Code, including, but not limited to, holding period requirements. (NOTE TO
OPTIONEE: If the Option is exercised more than three (3) months after the date
on which you cease to be a U.S. Employee (other than by reason of your death or
permanent and total disability as defined Section 22(e)(3) of the Code), the
Option will be treated as a Non-Qualified Stock Option and not as an Incentive
Stock Option to the extent required by Section 422 of the Code.)
INCENTIVE STOCK OPTION FAIR MARKET VALUE LIMITATION. To the
extent that this Option (together with all Incentive Stock Options granted to
the Optionee under all stock option plans of the Company or any Subsidiary or
Parent, including the Plan) becomes exercisable for the first time during any
calendar year for Shares having a Fair Market Value (as defined below) greater
than One Hundred Thousand United States Dollars (U.S. $100,000), the portion of
such Option which exceeds such amount will be treated as a Non-Qualified Stock
Option. For purposes of this Section 2, options designated as Incentive Stock
Options are taken into account in the order in which they were granted, and the
Fair Market Value of Shares is determined as of the date the option with respect
to such Shares is granted. If the Code is amended to provide for a different
limitation from that set forth in this Section 2, such different limitation
shall be deemed incorporated herein effective as of the date required or
permitted by such amendment to the Code. If this Option is treated as an
Incentive Stock Option in part and as a Non-Qualified Stock Option in part by
reason of the limitation set forth in this Section 2, the Optionee may designate
which portion of such Option the Optionee is exercising. In the absence of such
designation, the Optionee shall be deemed to have exercised the Incentive Stock
Option portion of the Option first. Separate certificates representing each such
portion shall be issued upon the exercise of the Option. No Incentive Stock
Option shall be granted to an Optionee if, at the time the Option is granted,
such Optionee owns shares possessing more than ten percent (10%) of the total
combined voting power of all classes of shares of the Company or of its Parent
or a Subsidiary, unless (i) at the time such Option is granted the Option
exercise price is at least one hundred ten percent (110%) of the Fair Market
Value of the Shares subject to the Option and (ii) such Option by its terms is
not exercisable after the expiration of five years from the date of grant. (NOTE
TO OPTIONEE: If the aggregate exercise price of the Option (that is, the
exercise price multiplied by the number of Optioned Shares) plus the aggregate
exercise price of any other Incentive Stock Options you hold (whether granted
pursuant to the Plan or any other stock option plan of the Company or any
Subsidiary) is greater than U.S. $100,000, you should contact the Director,
Human Resources of the Company to ascertain whether the entire Option qualifies
as an Incentive Stock Option.)
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FAIR MARKET VALUE. In this Agreement, "Fair Market Value"
shall mean as of any specified date, the closing price of the Shares of the
Company on the TSE or The NASDAQ Stock Market, Inc. (or if the Shares of the
Company are not listed on such exchanges, such other national securities
exchange on which the Shares are then listed) on that date, or if no prices are
reported on that date, on the last preceding date on which such prices of the
Shares are still reported. If the Shares of the Company are not then listed on
any national securities exchange but are traded over the counter at the time the
determination of its Fair Market Value is required to be made hereunder, its
Fair Market Value shall be deemed to be equal to the average between the
reported high and low sales prices of the Shares of the Company on the most
recent date on which the Shares were publicly traded. If the Shares of the
Company are not publicly traded at the time a determination of its value is
required to be made hereunder, the determination of its Fair Market Value shall
be made by the Board or Committee in such manner as it deems appropriate (such
determination will be made in good-faith as required by Section 422(c)(1) of the
Code and may be based on the advice of an independent investment banker or
appraiser recognized to be an expert in making such evaluations).
3. OPTION TERM
Subject to the vesting rules contained in Section 4 hereof,
the Option hereby granted may be exercised with respect to all or any part of
the Optioned Shares at any time or from time to time prior to the earlier of:
(i) the close of business on o (the "Expiry Date"); or
(ii) such earlier termination time as may be prescribed by the
provisions of Sections 5, 6, 7, 8 and 9 hereof or pursuant to
the Plan.
At the time of termination, as prescribed by the immediately
preceding sentence, the Option hereby granted shall forthwith expire and
terminate and be of no force or effect whatsoever as to such of the Optioned
Shares in respect of which the Option hereby granted has not then been
exercised.
4. VESTING
During the term of the Option (as prescribed by Section 3
hereof), the Optionee may purchase up to but not exceeding:
(i) o Shares at any time after the date of this Agreement;
(ii) an additional o Shares at any time after the first
anniversary of the date of this Agreement;
(iii) an additional o Shares at any time after the second
anniversary of the date of this Agreement; and
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(iv) an additional o Shares at any time after the third
anniversary of the date of this Agreement.
If the Optionee shall, during any such year, not exercise his
or her right to purchase all of the Optioned Shares purchasable during such
year, then the Optionee shall have the right, at any time or from time to time
thereafter but prior to the expiry of the Option (as prescribed by Section 3
hereof), to purchase the Optioned Shares which were purchasable but not
purchased by him or her during the particular year.
For greater certainty, subject to the provisions of Section 9
hereof and the Plan, the aggregate number of Optioned Shares which may be
purchased by the Optionee at any time or from time to time during the term of
the Option (as prescribed by Section 3 hereof) shall be as stated below:
=====================================================================
VESTING DATE CUMULATIVE AGGREGATE
NUMBER OF OPTIONED
SHARES PURCHASABLE ON
OR AFTER THE INDICATED
DATE
=====================================================================
Date of this Agreement o
---------------------------------------------------------------------
o o
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o o
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o o
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Further, for greater certainty, the Optionee may purchase all
or any part of the Optioned Shares not theretofore purchased by him or her at
any time or from time to time on or after o and on or prior to the Expiry Date
(subject to earlier termination in accordance with the provisions of Sections 5,
6, 7, 8 and 9 hereof and the provisions of the Plan).
5. TERMINATION OF OPTION RIGHTS IN CERTAIN CIRCUMSTANCES
Subject to the immediately following paragraph, if the
Optionee shall: (i) retire, resign, be terminated or otherwise be involuntarily
removed from his employment, office, directorship or consulting relationship
with the Company or any Affiliate, as the case may be; or (ii) if such
employment, office, directorship or consulting relationship shall otherwise
terminate (including as a result of death or Disability) at any time while the
Optionee holds the Option which has not been fully exercised, the Optionee may
thereafter only exercise the Option at any time on or prior to the earlier of:
(i) the Expiry Date; or (ii) the close of business on the day
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which is 30 days from the date of termination of the employment, office,
directorship or consulting relationship in question (one calendar year in the
event of termination due to death or Disability), however the Option may be
exercised only to the same extent to which the Optionee could have exercised the
Option immediately before the date on which such employment, office,
directorship or consulting relationship shall have terminated, in accordance
with the vesting rules prescribed by Section 4 hereof.
However, if the Optionee otherwise remains an Eligible Person
(i.e. the Optionee or related Eligible Individual otherwise remains eligible to
participate in the Plan as a result of other directorship, office, employment or
consulting relationship), and provided that the termination of employment or
other relationship was not for "cause", then the term of the Option shall be
unaffected. For purposes of this paragraph, a determination by the Company that
the Optionee was discharged or other relationship terminated for "cause" shall
be binding upon the Optionee.
6. EFFECT OF EMPLOYER CEASING TO BE ASSOCIATED WITH THE COMPANY
If the Optionee is an Eligible Person solely as a result of
being (or the related Eligible Individual being) a director, officer, employee
or consultant of an Affiliate of the Company and such Affiliate ceases to be an
Affiliate while the Optionee holds the Option which has not been fully
exercised, then, provided that the Optionee does not otherwise remain an
Eligible Person, the Optionee may thereafter only exercise the Option on or
prior to the earlier of: (i) the Expiry Date; or (ii) the close of business on
the day which is 30 days from the date (the "Severance Date") on which the
Affiliate ceased to be an Affiliate of the Company, however the Option may be
exercised only to the same extent to which the Optionee could have exercised the
Option immediately before the Severance Date, in accordance with the vesting
rules prescribed by Section 4 hereof.
7. DISCRETION TO EXTEND EARLY TERMINATION IN CERTAIN CIRCUMSTANCES
Notwithstanding the provisions of Sections 5 and 6 hereof,
subject to the receipt of all required regulatory approvals, the Board or the
Committee may elect to extend the term of the Option from the date on which it
would otherwise have expired pursuant to the provisions of Section 5 or Section
6 hereof to a date no later than the earlier of: (i) the Expiry Date; and (ii)
the close of business on the day which is one year from the date on which the
directorship, office, employment or consulting relationship of the Optionee (or
the related Eligible Individual) is terminated, for purposes of Section 5, or
one year from the Severance Date, for purposes of Section 6.
Such authority of the Board or the Committee shall not be
considered an entitlement of the Optionee and may be exercised or not exercised
by the Board
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or the Committee in their sole and absolute discretion and may be subject to
such conditions or policies as they may implement from time to time.
8. BANKRUPTCY
In the event that the Optionee commits an act of bankruptcy or
any proceeding is commenced against the Optionee under the applicable bankruptcy
or insolvency legislation in force at the time of such bankruptcy and such
proceeding remains undismissed or unstayed for a period of 30 days, the Optionee
may exercise the Option on or prior to the earlier of: (i) the Expiry Date; and
(ii) the close of business on the day which is 30 days from the date on which
the such proceeding was commenced, however the Option may be exercised only to
the same extent to which the Optionee could have exercised the Option
immediately before such proceeding was commenced, in accordance with the vesting
rules prescribed by Section 4.
9. SALE OR REORGANIZATION
(a) If, prior to the Expiry Date, an offeror is entitled to acquire all of
the remaining shares held by dissenting offerees, upon complying with
the provisions of Section 188 of the BUSINESS CORPORATIONS ACT, R.S.O.
1990, c. B.16 (Ontario) as amended or substituted from time to time
(the "Legislation") then the Board may, notwithstanding the terms
hereof, resolve that the Option hereby granted may be exercised as to
any or all of the Optioned Shares in respect of which such Option has
not previously been exercised; provided, however, that the right to
acquire Optioned Shares may only be exercised by the Optionee as
aforesaid for a period expiring on the earlier of: (i) the Expiry Date;
and (ii) the close of business on the day which 30 days from the date
of the offeror's notice as contemplated under Subsection 188(2) of the
Legislation. In this Subsection 9(a), all terms which are defined or
have meanings attributed thereto shall take their meanings from the
provisions hereof or from the Legislation. For greater certainty, the
Company may accelerate the time for the exercise of the Option hereby
granted in other circumstances in accordance with the provisions of the
Plan.
(b) If: (i) the Company proposes to enter into a transaction contemplated
in Subsection 182(1) of the Legislation; (ii) the Company proposes to
make an issuer bid directed to all or substantially all holders of its
shares or proposes to enter into a merger, amalgamation or other
corporate arrangement or reorganization or to liquidate, dissolve or
wind-up; (iii) an offer to purchase all or substantially all of the
outstanding shares of the Company is made by a third party; or (iv)
there occurs or is proposed a sale or transfer of all, or substantially
all, of the undertaking, property or assets of the Company, the Board
may, with appropriate notice and in a fair and equitable manner,
determine
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(unconditionally or conditionally) the manner in which all
unexercised Option rights granted hereunder shall be treated
including, for example, requiring the acceleration of the time for
the exercise of such rights by the Optionee and of the time for
the fulfilment of any conditions or restrictions on such
exercise, and/or declaring that the Option hereby granted shall
be automatically vested and exercisable in full. All determinations
of the Board under this Subsection 9(b) shall be conclusive and
final.
10. EXERCISE OF OPTION
Subject to the provisions hereof and the Plan, the Option
hereby granted shall be exercisable, at any time or from time to time as
aforesaid, during the lifetime of the Optionee, by the Optionee only, or in the
case of the Optionee's death, his or her legal personal representatives, heirs
or legatees, to the extent permitted in the Plan, delivering a notice in writing
addressed to the Director, Human Resources of the Company at its principal
office in the City of Toronto, Ontario (or to such other person or address as
the Company may in writing direct), which notice shall specify therein the
number of Optioned Shares in respect of which this Option is being exercised and
which shall be accompanied by payment in full of the purchase price for the
number of Optioned Shares specified therein. The type of consideration payable
shall be as provided in Section 11 below. Upon any such exercise of this Option
as aforesaid (and providing that all applicable procedures for a valid exercise
under the Plan and this Agreement are complied with) the Company shall forthwith
cause the transfer agent and registrar of the Company to deliver to the
Optionee, his or her legal personal representatives, heirs or legatees or
(subject to the Plan and applicable law and regulatory requirements) as he, she
or they may otherwise direct in the notice of exercise of option a share
certificate or certificates in the name of the Optionee or his or her legal
personal representatives, heirs or legatees, or as he or they may have otherwise
directed, representing in the aggregate such number of Optioned Shares as shall
have been specified in such notice and paid for.
An Optionee shall not have any rights as a shareholder of the
Company with respect to any of the Shares covered by such Option until the date
of issuance of the Shares on the records of the Company maintained by its
registrar and transfer agent upon the exercise of such Option, in full or in
part, and then only with respect to the Shares being issued. Without in any way
limiting the generality of the foregoing, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
Shares are issued.
11. CONSIDERATION
The Optionee may satisfy the purchase price for the Optioned
Shares in respect of which an Option is exercised by:
(a) cash;
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(b) certified cheque;
(c) bank draft;
(d) subject to the prior consent of the Board or the Committee,
surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Board or Committee
may require (including withholding of Shares otherwise
deliverable upon exercise of the Option) which have a Fair
Market Value on the date of surrender or attestation equal to
the aggregate Option Price of the Shares as to which the
Option is exercised (but only to the extent that such exercise
of the Option would not result in a compensation charge for
financial reporting purposes with respect to the Shares used
to pay the exercise price, unless otherwise determined by the
Board or Committee);
(e) subject to the prior consent of the Board or the Committee,
payment through a broker-dealer sale and remittance procedure
(including, if approved by the Board and subject to regulatory
approval, a loan facility to be provided by the Company)
pursuant to which the Optionee: (i) shall provide written
instructions to the Company designated brokerage firm to
effect the immediate sale of some or all of the purchased
Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased Shares;
and (ii) shall provide written directions to the Company to
deliver the certificates for the purchased Shares directly to
such brokerage firm in order to complete the sale transaction;
or
(f) any combination of the foregoing methods of payment.
Unless the Board or Committee determines otherwise, cash,
certified cheques and bank drafts provided by U.S. Employees may be denominated
in U.S. dollars or Canadian dollars. The Board or the Committee may prescribe
one or more published exchange rates for use in connection with exercises using
a currency other than the one specified in the grant agreement.
12. NO OBLIGATION TO PURCHASE
Nothing herein contained or contemplated shall obligate the
Optionee to purchase and/or pay for any Optioned Shares, except those Optioned
Shares in respect of which the Optionee shall have exercised his option to
purchase hereunder in the manner hereinbefore provided.
13. TAXES
No Optioned Shares will be delivered to the Optionee or other
person pursuant to the exercise of the Option until the Optionee or other person
has made arrangements acceptable to the Board or Committee for the satisfaction
of
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applicable income tax, employment tax, and social security tax withholding
obligations, including, without obligation, obligations incident to the receipt
of Optioned Shares or the disqualifying disposition of Optioned Shares received
on exercise of an Incentive Stock Option. Upon the exercise of the Option, the
Company or the Optionee's employer may offset or withhold from any amount owed
by the Company or the Optionee's employer to the Optionee or collect from the
Optionee or other person an amount sufficient to satisfy such tax obligations or
the employer's withholding obligations.
14. SUBDIVISION, CONSOLIDATION OR AMALGAMATION
(a) In the event of any subdivision, redivision, or other alteration of the
share capital of the Company at any time at which the Option granted
hereby shall be exercisable in accordance with the foregoing which
change results in a greater number of Shares, the Company shall
deliver, at the time of any subsequent exercise of the Option hereby
granted, such additional number of Shares as would have resulted from
such subdivision, redivision, or change if the particular exercise of
the Option hereby granted had been made prior to the date of such
subdivision, redivision, or change.
(b) In the event of any consolidation or other alteration of the share
capital of the Company at any time at which the Option granted hereby
shall be exercisable in accordance with the foregoing which change
results in a lesser number of Shares, the number of Shares deliverable
by the Company on any subsequent exercise of the Option hereby granted
shall be reduced to such number of Shares as would have resulted from
such consolidation or change if the particular exercise of the Option
hereby granted had been made prior to the date of such consolidation or
change.
(c) In the event of any consolidation, merger or amalgamation of the
Company with or into another corporation, the Optionee shall, after
such consolidation, merger or amalgamation, be entitled to receive upon
any exercise of the Option hereby granted after the consolidation,
merger or amalgamation, in lieu of Shares of the Company, the number
and class of shares or other securities of the corporation continuing
from such amalgamation to which he would have been entitled pursuant to
the agreement of amalgamation (or other applicable documentation,
however designated) if, at the effective date of the consolidation,
merger or amalgamation, the Optionee had been the holder of record of a
number of Shares of the Company equal to the number of Shares in
respect of which such Option was then being exercised.
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(d) In the event that the foregoing provisions of this Section 14 become
applicable, the purchase price per Optioned Share shall be
proportionately adjusted.
15. NO ADDITIONAL RIGHTS IMPLIED
The Optionee shall have no rights whatsoever as a shareholder
of the Company in respect of any Optioned Shares (including, but without
limitation, any voting rights or any right to receive dividends or other
distributions therefrom or thereon), other than in respect of Optioned Shares
for which the Optionee shall have exercised the Option and which the Optionee
shall have actually taken up and paid for.
Nothing in the Plan or in this Agreement shall confer upon the
Optionee any right to continue or be re-elected as a director, officer or
consultant or confer any right to continue in the employ, of the Company or any
Affiliate, or affect in any way the right of the Company or any Affiliate to
terminate his employment or to terminate any contract any time; nor shall
anything in the Plan or in this Agreement be deemed or construed to constitute
an agreement, or an expression of intent, on the part of the Company or any
Affiliate to extend the employment, or office, directorship or consulting
relationship of any Optionee beyond the time which he would normally be retired
pursuant to the provisions of any present or future retirement plan or policy of
any such entity or beyond the time at which he would otherwise be retired
pursuant to the provisions of any contract of employment with any such entity.
Except as shall be specifically provided in the contract of
employment or contract for provision of services, the granting of Options is at
the full discretion of the Company and shall, therefore, not qualify as part of
the terms of employment of the Optionee. In consideration for the grant of the
Option, the Optionee acknowledges and agrees that the value or potential value
of the Option hereby granted which is forfeited as a result of the Optionee
(including, without limitation, the related Eligible Individual) ceasing to be
an Eligible Person, shall not constitute damages in respect of loss of office or
employment and no claim may be made by or on behalf of the Optionee against the
Company or any of its Affiliates in respect thereof.
16. TIME OF THE ESSENCE
Time shall be of the essence of this Agreement and of every
part hereof.
17. NOTICES
Any notice, request, payment or other communication required
or permitted to be given hereunder by either the Company or the Optionee to the
other of them, shall be in writing and shall be given, made, or communicated by
delivering the same personally or by commercial courier, or by sending same by
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registered or certified mail, first-class postage fees prepaid, return receipt
requested, addressed as follows:
(a) to the Company at:
00 Xxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Xxxxxx
Attention: Director, Human Resources
(b) to the Optionee at:
U.S.A.
or at such other address as either party hereto may designate from time to time
by giving notice to the other to that effect as herein provided. Any notice,
request, payment, or other communication shall be deemed to have been given,
made or communicated, as the case may be, at the time that the same is
personally delivered or delivered by commercial courier, or, if delivered by
certified or registered mail as aforesaid, on the third business day (excluding
Saturdays, Sundays, statutory holidays, and periods during which strikes or
other occurrences interfere with normal mail service) next following the date
when the same is so mailed.
18. REGULATORY REQUIREMENTS
The Option, and the rights of the Optionee herein, shall be
subject to the requirement that, if at any time counsel to the Company shall
determine that the listing, registration, or qualification of the Optioned
Shares 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 the Option or the issuance or purchase of the
Optioned Shares, the Option may not be 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 Company. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration, qualification, consent or approval.
19. OPTIONEE REPRESENTATIONS AND ACKNOWLEDGEMENTS
The Optionee represents and agrees that if the Optionee
exercises this Option in whole or in part at a time when there is not in effect
under the SECURITIES ACT of 1933 a registration statement relating to the shares
issuable upon exercise hereof and there is not available for delivery a
prospectus meeting the requirements of Section 10(a)(3) of the said Act, (i) the
Optionee will acquire the shares upon such
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exercise for the purpose of investment and not with a view to the distribution
thereof, (ii) that upon each such exercise of this Option, the Optionee will
furnish to the Company an investment letter in form and substance satisfactory
to the Company, (iii) prior to selling or offering for sale any such shares, the
Optionee will furnish the Company with an opinion of counsel satisfactory to the
Company to the effect that such sale may lawfully be made and will furnish it
with such certificates as to factual matters as it may reasonably request, and
(iv) that certificates representing such shares may be marked with an
appropriate legend describing such conditions precedent to sale or transfer. Any
executor, trustee, administrator or legal personal representative entitled to
exercise such Option shall furnish to the Company letters, opinions, and
certificates to the same effect as would otherwise be required of the Optionee.
The Optionee shall dispose of the Optioned Shares only in
accordance with the provisions of this Agreement. In addition, the Optionee
shall (i) promptly notify the Director, Human Resources of the Company if the
Optionee disposes of any of the Optioned Shares within one (1) year after the
date the Optionee exercises all or part of the Option or within two (2) years
after the date of Option grant and (ii) provide the Company with a description
of the circumstances of such disposition. Until such time as the Optionee
disposes of such Optioned Shares in a manner consistent with the provisions of
this Agreement, unless otherwise expressly authorized by the Company, the
Optionee shall hold all Optioned Shares in the Optionee's name (and not in the
name of any nominee) for the one-year period immediately after the exercise of
the Option and the two-year period immediately after the date of Option grant.
At any time during the one-year or two-year periods set forth above, the Company
may, subject to the consent of any applicable stock exchange, place a legend on
any certificate representing Optioned Shares requesting the transfer agent for
the Company's Shares to notify the Company of any such transfers. The obligation
of the Optionee to notify the Company of any such transfer shall continue
notwithstanding that a legend has been placed on the certificate pursuant to the
preceding sentence.
20. ENTIRE AGREEMENT
Subject to the provisions of any written employment contracts
to which the Company is a party, this Agreement contains the entire
understanding of the parties hereto with respect to the matters herein
contained. There are no representations, warranties, promises, covenants, or
undertakings, other than those expressly stated herein.
21. MODIFICATIONS/WAIVERS
No waiver or modification of any of the terms of this
Agreement shall be valid unless the same is reduced to writing and signed by the
parties hereto. The waiver by either of the parties of a breach or default by
the other of them shall not be deemed to constitute a waiver of any preceding or
subsequent breach or default of the same or any other provision of this
Agreement.
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22. HEADINGS
The headings contained in this Agreement are for convenience
of reference only and do not form any part hereof and in no manner modify,
interpret, or construe the Agreement between the parties hereto.
23. BINDING UPON SUCCESSORS/NON-TRANSFERABILITY AND NON-ASSIGNABILITY BY
OPTIONEE
This Agreement shall enure to the benefit of and be binding
upon the Company, its successors and assigns, and the Optionee and, in the case
of the Optionee's death, his legal personal representatives. Subject to the
terms hereof and the terms of the Plan, this Option shall be non-transferable
and non-assignable by the Optionee other than by will or by the laws of descent
or distribution, and may be exercisable during the lifetime of the Optionee only
by the Optionee; provided, however, that the Optionee may designate a
beneficiary of the Optionee's Option in the event of the Optionee's death on a
beneficiary designation form provided by the Board or Committee. After the death
of the Optionee, this Option may be exercised prior to its termination by the
Optionee's legal representatives, heir or legatee, to the extent permitted in
the Plan or this Agreement. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this Option, or of any right or privilege
conferred hereby, contrary to the provisions hereof, or upon any attempted sale
under any execution, attachment or similar process of the rights and privileges
conferred hereby, this Option and the rights and privileges conferred hereby
shall, at the Company's election, immediately become null and void. Until
written notice of any permitted passage of rights under this Option shall have
been given to, and received by, the Director, Human Resources of the Company,
the Company may, for all purposes, regard the Optionee as the holder of this
Option.
24. CONSTRUCTION
This Agreement shall be governed, construed, and enforced
exclusively in accordance with the laws of the Province of Ontario and the
parties hereto hereby irrevocably attorn to the jurisdiction of the Courts of
the said Province.
- 14 -
IN WITNESS WHEREOF the parties hereto have executed this
Agreement, as of the o day of o, 2002.
SIGNED, SEALED AND 724 SOLUTIONS INC.
DELIVERED
Per: ______________________________ c/s
Title:
---------------------------------- ----------------------------------- l/s
Witness NAME
Canadian Resident - Individual
THIS 724 SOLUTIONS STOCK OPTION AGREEMENT made as of the o day
of o, 2002.
B E T W E E N:
724 SOLUTIONS INC., a company
amalgamated under the laws of the
Province of Ontario,
(hereinafter called the "Company")
OF THE FIRST PART
- and -
[o]
(hereinafter called the "Optionee")
OF THE SECOND PART
WHEREAS the Optionee is an Eligible Individual pursuant to the
Plan (as defined below);
AND WHEREAS the Company has determined that it is in the best
interests of the Company to grant to the Optionee an option to purchase common
shares of the Company as a performance incentive upon the terms and conditions
contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration
of the mutual covenants contained herein, the parties hereto agree as follows:
1. DEFINED TERMS
All capitalized terms used herein and not otherwise defined
have the same meaning as in the 724 Solutions Inc. 2000 Stock Option Plan as
amended from time to time (the "Plan"). All references herein to the Plan shall
be deemed to include a reference to the terms of the Plan as amended from time
to time. In addition, where the context requires, references to "Optionee"
include references to the particular Eligible Individual related to the Eligible
Investment Vehicle which holds the Option (as defined below).
- 2 -
2. COMMON SHARE PURCHASE OPTION
Subject to the terms hereof and the provisions of the Plan,
the Company hereby grants to the Optionee an irrevocable option (the "Option")
to purchase up to o Shares (hereinafter collectively called the "Optioned
Shares") at the purchase price of Cdn. $o per Share.
3. OPTION TERM
Subject to the vesting rules contained in Section 4 hereof,
the Option hereby granted may be exercised with respect to all or any part of
the Optioned Shares at any time or from time to time prior to the earlier of:
(i) the close of business on o (the "Expiry Date"); or
(ii) such earlier termination time as may be prescribed by the
provisions of Sections 5, 6, 7, 8 and 9 hereof or pursuant to
the Plan.
At the time of termination, as prescribed by the immediately
preceding sentence, the Option hereby granted shall forthwith expire and
terminate and be of no force or effect whatsoever as to such of the Optioned
Shares in respect of which the Option hereby granted has not then been
exercised.
4. VESTING
During the term of the Option (as prescribed by Section 3
hereof), the Optionee may purchase up to but not exceeding:
(a) o Shares at any time after the date of this Agreement;
(b) an additional o Shares at any time after the first anniversary of the
date of this Agreement;
(c) an additional o Shares at any time after the second anniversary of the
date of this Agreement; and
(d) an additional o Shares at any time after the third anniversary of the
date of this Agreement.
If the Optionee shall, during any such year, not exercise his
or her right to purchase all of the Optioned Shares purchasable during such
year, then the Optionee shall have the right, at any time or from time to time
thereafter but prior to the expiry of the Option (as prescribed by Section 3
hereof), to purchase the Optioned Shares which were purchasable but not
purchased by him or her during the particular year.
For greater certainty, subject to the provisions of Section 9
hereof and the Plan, the aggregate number of Optioned Shares which may be
purchased by the Optionee at any time
- 3 -
or from time to time during the term of the Option (as prescribed by Section 3
hereof) shall be as stated below:
======================================================================
VESTING DATE CUMULATIVE AGGREGATE
NUMBER OF OPTIONED SHARES
PURCHASABLE ON OR AFTER
THE INDICATED DATE
======================================================================
Date of this Agreement o
----------------------------------------------------------------------
o o
----------------------------------------------------------------------
o o
----------------------------------------------------------------------
o o
======================================================================
Further, for greater certainty, the Optionee may purchase all
or any part of the Optioned Shares not theretofore purchased by him or her at
any time or from time to time on or after o and on or prior to the Expiry Date
(subject to earlier termination in accordance with the provisions of Sections 5,
6, 7, 8 and 9 hereof and the provisions of the Plan).
5. TERMINATION OF OPTION RIGHTS IN CERTAIN CIRCUMSTANCES
Subject to the immediately following paragraph, if the
Optionee shall: (i) retire, resign, be terminated or otherwise involuntarily
removed from his employment, office, directorship or consulting relationship
with the Company or any Affiliate, as the case may be; or (ii) if such
employment, office, directorship or consulting relationship shall otherwise
terminate (including as a result of death or Disability) at any time while the
Optionee holds the Option which has not been fully exercised, the Optionee may
thereafter only exercise the Option at any time on or prior to the earlier of:
(i) the Expiry Date; or (ii) the close of business on the day which is 30 days
from the date of termination of the employment, office, directorship or
consulting relationship in question (one calendar year in the event of
termination due to death or Disability), however the Option may be exercised
only to the same extent to which the Optionee could have exercised the Option
immediately before the date on which such employment, office, directorship or
consulting relationship shall have terminated, in accordance with the vesting
rules prescribed by Section 4 hereof.
However, if the Optionee otherwise remains an Eligible Person
(i.e. the Optionee or related Eligible Individual otherwise remains eligible to
participate in the Plan as a result of other directorship, office, employment or
consulting relationship), and provided that the
- 4 -
termination of employment or other relationship was not for "cause" (as
construed under the laws of the Province of Ontario, including pursuant to any
relevant employment or service contract), then the term of the Option shall be
unaffected. For purposes of this paragraph, a determination by the Company that
the Optionee was discharged or other relationship terminated for "cause" shall
be binding upon the Optionee.
6. EFFECT OF EMPLOYER CEASING TO BE ASSOCIATED WITH THE COMPANY
If the Optionee is an Eligible Person solely as a result of
being (or the related Eligible Individual being) a director, officer, employee
or consultant of an Affiliate of the Company and such Affiliate ceases to be an
Affiliate while the Optionee holds the Option which has not been fully
exercised, then, provided that the Optionee does not otherwise remain an
Eligible Person, the Optionee may thereafter only exercise the Option on or
prior to the earlier of: (i) the Expiry Date; or (ii) the close of business on
the day which is 30 days from the date (the "Severance Date") on which the
Affiliate ceased to be an Affiliate of the Company, however the Option may be
exercised only to the same extent to which the Optionee could have exercised the
Option immediately before the Severance Date, in accordance with the vesting
rules prescribed by Section 4 hereof.
7. DISCRETION TO EXTEND EARLY TERMINATION IN CERTAIN CIRCUMSTANCES
Notwithstanding the provisions of Sections 5 and 6 hereof,
subject to the receipt of all required regulatory approvals, the Board or the
Committee may elect to extend the term of the Option from the date on which it
would otherwise have expired pursuant to the provisions of Section 5 or Section
6 hereof to a date no later than the earlier of: (i) the Expiry Date; and (ii)
the close of business on the day which is one year from the date on which the
directorship, office, employment or consulting relationship of the Optionee (or
the related Eligible Individual) is terminated, for purposes of Section 5, or
one year from the Severance Date, for purposes of Section 6.
Such authority of the Board or the Committee shall not be
considered an entitlement of the Optionee and may be exercised or not exercised
by the Board or the Committee in their sole and absolute discretion and may be
subject to such conditions or policies as they may implement from time to time.
8. BANKRUPTCY
In the event that the Optionee commits an act of bankruptcy or
any proceeding is commenced against the Optionee under the BANKRUPTCY AND
INSOLVENCY ACT (Canada) or other applicable bankruptcy or insolvency legislation
in force at the time of such bankruptcy and such proceeding remains undismissed
or unstayed for a period of 30 days, the Optionee may thereafter only exercise
the Option at any time on or prior to the earlier of: (i) the Expiry Date; or
(ii) the close of business which is one calendar year from the date such
proceeding was commenced, however the Option may be exercised only to the same
extent to which the Optionee could have exercised the Option immediately before
the date on which such proceeding was commenced, in accordance with the vesting
rules prescribed by Section 4 hereof.
- 5 -
9. SALE OR REORGANIZATION
(a) If, prior to the Expiry Date, an offeror is entitled to acquire all of
the remaining shares held by dissenting offerees, upon complying with
the provisions of Section 188 of the BUSINESS CORPORATIONS ACT, R.S.O.
1990, c. B.16 (Ontario) as amended or substituted from time to time
(the "Legislation") then the Board may, notwithstanding the terms
hereof, resolve that the Option hereby granted may be exercised as to
any or all of the Optioned Shares in respect of which such Option has
not previously been exercised; provided, however, that the right to
acquire Optioned Shares may only be exercised by the Optionee as
aforesaid for a period expiring on the earlier of: (i) the Expiry Date;
and (ii) the close of business on the day which 30 days from the date
of the offeror's notice as contemplated under Subsection 188(2) of the
Legislation. In this Subsection 9(a), all terms which are defined or
have meanings attributed thereto shall take their meanings from the
provisions hereof or from the Legislation. For greater certainty, the
Company may accelerate the time for the exercise of the Option hereby
granted in other circumstances in accordance with the provisions of the
Plan.
(b) If: (i) the Company proposes to enter into a transaction contemplated
in Subsection 182(1) of the Legislation; (ii) the Company proposes to
make an issuer bid directed to all or substantially all holders of its
shares or proposes to enter into a merger, amalgamation or other
corporate arrangement or reorganization or to liquidate, dissolve or
wind-up; (iii) an offer to purchase all or substantially all of the
outstanding shares of the Company is made by a third party; or (iv)
there occurs or is proposed a sale or transfer of all, or substantially
all, of the undertaking, property or assets of the Company, the Board
may, with appropriate notice and in a fair and equitable manner,
determine (unconditionally or conditionally) the manner in which all
unexercised Option rights granted hereunder shall be treated including,
for example, requiring the acceleration of the time for the exercise of
such rights by the Optionee and of the time for the fulfilment of any
conditions or restrictions on such exercise, and/or declaring that the
Option hereby granted shall be automatically vested and exercisable in
full. All determinations of the Board under this Subsection 9(b) shall
be conclusive and final.
10. EXERCISE OF OPTION
Subject to the provisions hereof and the Plan, the Option
hereby granted shall be exercisable, at any time or from time to time as
aforesaid, by the Optionee, or in the case of the Optionee's death, his or her
legal personal representatives, heirs or legatees delivering a notice in writing
addressed to the Director, Human Resources of the Company at its principal
office in the City of Toronto, Ontario (or to such other person or address as
the Company may in writing direct), which notice shall specify therein the
number of Optioned Shares in respect of which this Option is being exercised
and, subject to Section 11 hereof, which shall be accompanied by payment in full
of the purchase price for the number of Optioned Shares specified therein. Upon
- 6 -
any such exercise of this Option as aforesaid (and provided that all applicable
terms and provisions of the Plan and this Agreement have been satisfied), the
Company shall cause the transfer agent and registrar of the Company to deliver
to the Optionee, his or her legal personal representatives, heirs or legatees or
(subject to the Plan and applicable law and regulatory requirements) as he, she
or they may otherwise direct in the notice of exercise of option, a share
certificate or certificates in the name of the Optionee or his or her legal
personal representatives, heirs or legatees, or as he or they may have otherwise
directed, representing in the aggregate such number of Optioned Shares as shall
have been specified in such notice and paid for.
An Optionee shall not have any rights as a shareholder of the
Company with respect to any of the Shares covered by such Option until the date
of issuance of the Shares on the records of the Company maintained by its
Registrar and Transfer Agent upon the exercise of such Option, in full or in
part, and then only with respect to the Shares being issued. Without in any way
limiting the generality of the foregoing, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
Shares are issued.
11. CONSIDERATION
The Optionee may satisfy the purchase price for the Optioned
Shares in respect of which an Option is exercised by:
(a) cash;
(b) certified cheque;
(c) bank draft;
(d) subject to the prior consent of the Board or the Committee,
surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Board or Committee
may require (including withholding of Shares otherwise
deliverable upon exercise of the Option) which have a Market
Price on the date of surrender or attestation equal to the
aggregate Option Price of the Shares as to which the Option is
exercised (but only to the extent that such exercise of the
Option would not result in a compensation charge for financial
reporting purposes with respect to the Shares used to pay the
exercise price, unless otherwise determined by the Board or
Committee);
(e) subject to the prior consent of the Board or the Committee,
payment through a broker-dealer sale and remittance procedure
(including, if approved by the Board and subject to regulatory
approval, a loan facility to be provided by the Company)
pursuant to which the Optionee: (i) shall provide written
instructions to the Company designated brokerage firm to
effect the immediate sale of some or all of the purchased
Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased Shares;
and (ii) shall provide written directions to the
- 7 -
Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale
transaction; or
(f) any combination of the foregoing methods of payment.
Unless the Board or Committee determines otherwise, cash,
certified cheques and bank drafts provided by Optionees who are resident
Canadians as consideration for Shares shall be denominated in Canadian dollars;
cash, certified cheques and bank drafts provided by all other Optionees may be
denominated in U.S. dollars or Canadian dollars. The Board or the Committee may
prescribe one or more published exchange rates for use in connection with
exercises using a currency other than the one specified in the grant agreement.
12. NO OBLIGATION TO PURCHASE
Nothing herein contained or contemplated shall obligate the
Optionee to purchase and/or pay for any Optioned Shares, except those Optioned
Shares in respect of which the Optionee shall have exercised his option to
purchase hereunder in the manner hereinbefore provided.
13. SUBDIVISION, CONSOLIDATION OR AMALGAMATION
(a) In the event of any subdivision, redivision, or other
alteration of the share capital of the Company at any time at
which the Option granted hereby shall be exercisable in
accordance with the foregoing which change results in a
greater number of Shares, the Company shall deliver, at the
time of any subsequent exercise of the Option hereby granted,
such additional number of Shares as would have resulted from
such subdivision, redivision, or change if the particular
exercise of the Option hereby granted had been made prior to
the date of such subdivision, redivision, or change.
(b) In the event of any consolidation or other alteration of the
share capital of the Company at any time at which the Option
granted hereby shall be exercisable in accordance with the
foregoing which change results in a lesser number of Shares,
the number of Shares deliverable by the Company on any
subsequent exercise of the Option hereby granted shall be
reduced to such number of Shares as would have resulted from
such consolidation or change if the particular exercise of the
Option hereby granted had been made prior to the date of such
consolidation or change.
(c) In the event of any consolidation, merger or amalgamation of
the Company with or into another corporation, the Optionee
shall, after such consolidation, merger or amalgamation, be
entitled to receive upon any exercise of the Option hereby
granted after the consolidation, merger or amalgamation, in
lieu of Shares of the Company, the number and class of shares
or other securities of the corporation continuing from such
amalgamation to which he would have been entitled pursuant to
the agreement of amalgamation (or other applicable
documentation,
- 8 -
however designated) if, at the effective date of the
consolidation, merger or amalgamation, the Optionee had been
the holder of record of a number of Shares of the Company
equal to the number of Shares in respect of which such Option
was then being exercised.
(d) In the event that the foregoing provisions of this Section 13
become applicable, the purchase price per Optioned Share shall
be proportionately adjusted.
14. NO ADDITIONAL RIGHTS IMPLIED
The Optionee shall have no rights whatsoever as a shareholder
of the Company in respect of any Optioned Shares (including, but without
limitation, any voting rights or any right to receive dividends or other
distributions therefrom or thereon), other than in respect of Optioned Shares
for which the Optionee shall have exercised the Option and which the Optionee
shall have actually taken up and paid for.
Nothing in the Plan or in this Agreement shall confer upon the
Optionee any right to continue or be re-elected as a director, officer or
consultant or confer any right to continue in the employ, of the Company or any
Affiliate, or affect in any way the right of the Company or any Affiliate to
terminate his employment or to terminate any contract at any time; nor shall
anything in the Plan or in this Agreement be deemed or construed to constitute
an agreement, or an expression of intent, on the part of the Company or any
Affiliate to extend the employment, or office, directorship or consulting
relationship of any Optionee beyond the time which he would normally be retired
pursuant to the provisions of any present or future retirement plan or policy of
any such entity or beyond the time at which he would otherwise be retired
pursuant to the provisions of any contract of employment with any such entity.
Except as shall be specifically provided in the contract of
employment or contract for provision of services, the granting of Options is at
the full discretion of the Company and shall, therefore, not qualify as part of
the terms of employment of the Optionee. In consideration for the grant of the
Option, the Optionee acknowledges and agrees that the value or potential value
of the Option hereby granted which is forfeited as a result of the Optionee
(including, without limitation, the related Eligible Individual) ceasing to be
an Eligible Person, shall not constitute damages in respect of loss of office or
employment and no claim may be made by or on behalf of the Optionee against the
Company or any of its Affiliates in respect thereof.
15. TIME OF THE ESSENCE
Time shall be of the essence of this Agreement and of every
part hereof.
16. NOTICES
Any notice, request, payment or other communication required
or permitted to be given hereunder by either the Company or the Optionee to the
other of them, shall be in writing and shall be given, made, or communicated by
delivering the same personally or by commercial
- 9 -
courier, or by sending same by registered or certified mail, first-class postage
fees prepaid, return receipt requested, addressed as follows:
(a) to the Company at:
00 Xxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Xxxxxx
Attention: Director, Human Resources
(b) to the Optionee at: [o]
or at such other address as either party hereto may designate from time to time
by giving notice to the other to that effect as herein provided. Any notice,
request, payment, or other communication shall be deemed to have been given,
made or communicated, as the case may be, at the time that the same is
personally delivered or delivered by commercial courier, or, if delivered by
certified or registered mail as aforesaid, on the third business day (excluding
Saturdays, Sundays, statutory holidays, and periods during which strikes or
other occurrences interfere with normal mail service) next following the date
when the same is so mailed.
17. REGULATORY REQUIREMENTS
The Option, and the rights of the Optionee herein, shall be
subject to the requirement that, if at any time counsel to the Company shall
determine that the listing, registration, or qualification of the Optioned
Shares 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 the Option or the issuance or purchase of the
Optioned Shares, the Option may not be 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 Company. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration, qualification, consent or approval.
18. ENTIRE AGREEMENT/STOCK OPTION PLAN
Subject to the provisions of any written employment contracts
to which the Company is a party, this Agreement, subject to the Plan, contains
the entire understanding of the parties hereto with respect to the matters
herein contained. There are no representations, warranties, promises, covenants,
or undertakings, other than those expressly stated herein. The undersigned
acknowledges and agrees that he or she has received a copy of the Plan.
19. MODIFICATIONS/WAIVERS
No waiver or modification of any of the terms of this
Agreement shall be valid unless the same is reduced to writing and signed by the
parties hereto. The waiver by either of
- 10 -
the parties of a breach or default by the other of them shall not be deemed to
constitute a waiver of any preceding or subsequent breach or default of the same
or any other provision of this Agreement.
20. HEADINGS
The headings contained in this Agreement are for convenience
of reference only and do not form any part hereof and in no manner modify,
interpret, or construe the Agreement between the parties hereto.
21. BINDING UPON SUCCESSORS/NON-ASSIGNABILITY BY OPTIONEE
This Agreement shall enure to the benefit of and be binding
upon the Company, its successors and assigns, and the Optionee and, in the case
of the Optionee's death, his legal personal representatives. Subject to the
terms hereof and the terms of the Plan, this Option shall be non-transferable
and non-assignable by the Optionee other than by will or the laws of descent and
distribution, and shall be exercisable during the lifetime of the Optionee only
by the Optionee or by the Optionee's guardian or legal representative. After the
death of the Optionee, this Option may be exercised prior to its termination by
the Optionee's legal representatives, heir or legatee, to the extent permitted
in the Plan or this Agreement. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this Option, or of any right or privilege
conferred hereby, contrary to the provisions hereof, or upon any attempted sale
under any execution, attachment or similar process of the rights and privileges
conferred hereby, this Option and the rights and privileges conferred hereby
shall, at the Company's election, immediately become null and void. Until
written notice or any permitted passage of rights under this Option shall have
been given to, and received by, the Secretary of the Company, the Company may,
for all purposes, regard the Optionee as the holder of this Option.
22. CONSTRUCTION/LANGUAGE
This Agreement shall be governed, construed, and enforced
exclusively in accordance with the laws of the Province of Ontario and the
parties hereto hereby irrevocably attorn to the jurisdiction of the Courts of
the said Province.
The parties hereto have required that this Agreement and all
documents and notices related thereto and/or resulting therefrom be drawn up in
English.
Les parties aux presentes ont exige que la presente convention
ainsi que tous les documents et avis qui s'y rattachent et/ou qui en decouleront
soient rediges en langue anglaise.
- 11 -
IN WITNESS WHEREOF the parties hereto have executed this
Agreement, as of the o day of o, 2002.
SIGNED, SEALED AND 724 SOLUTIONS INC.
DELIVERED
Per: ________________________________c/s
Title:
---------------------------------- ------------------------------------ l/s
Witness NAME
